Western Alliance is exploring strategic options including the potential sale of all or part of its business, according to two people briefed on the matter, as it becomes the latest US regional bank to look for a lifeline amid the turmoil gripping the industry.
The Arizona-based bank, which had $71 billion in assets at the end of March, has hired advisers to explore its options, the people said, adding that the bank’s deliberations were at an early stage and may not lead to anything.
Western Alliance did not respond to a request for comment.
Western Alliance shares traded down 25 percent before the Financial Times reported the potential sale and fell 45 percent after the article was published. BackWest Bank, another bank that spooked investors, announced that it, too, was exploring its options.
US regional banking stocks came under heavy selling pressure this week after the regulator-brokered takeover of First Republic by JPMorgan Chase failed to restore confidence in the sector.
At a press conference on Wednesday, US Federal Reserve Chairman Jay Powell tried to allay concerns about bank turmoil, saying conditions across the sector had “improved broadly” since a period of “extreme stress” in early March and that the system as a whole was “healthy”.
“Dissolving and selling First Republic is an important step toward drawing a line under this period of great stress,” he said before PacWest announced plans to explore a potential sale.
The Western Alliance has been managed for most of the past two decades by Robert Sarver, former owner of the NBA’s Phoenix Suns basketball franchise.
Earlier this year, Sarver was forced to sell the Suns after an investigation found evidence that the team under his leadership created an environment hostile to both blacks and women. Sarver was fined $10 million and suspended from the NBA and WNBA for a year.
Sarver, who has held the key position in the Western Alliance since 2003, stepped down as president of the bank last year as controversy swirled around the NBA.