Pacwest Stock Plummets Over 35% Following Release of Q1 Earnings Report Amidst Turmoil in Banking Industry

Bitcoin News

Following the acquisition of First Republic Bank by JPMorgan Chase, several regional banks such as Pacwest and Western Alliance experienced a significant drop in their stock prices. On Tuesday afternoon, all four major U.S. benchmark stock indexes are in decline as regional bank stocks hit new lows.

Banking Industry on Edge as Pacwest Shares Sink Causing Trading Halt

Pacwest, a regional bank based in Beverly Hills, California, is facing challenges after the release of its 2023 first quarter earnings report. Following the publication of the earnings, the bank’s stock price plummeted by 35% on Tuesday at 11:00 a.m. Eastern Time. The earnings report revealed a “net loss available to common stockholders of $1.21 billion, or a loss of $10.22 per diluted share.”

The upheaval at Pacwest comes on the heels of First Republic Bank’s recent collapse and three major bank failures that occurred in March. Despite three out of these four banks representing the largest bank failures in the United States, President Joe Biden reassured the public on Monday that the banking industry is on track toward “stabilization.”

Besides Pacwest shares dropping over 35%, trading was halted due to volatility concerns. Other banks experiencing losses on Tuesday include Western Alliance and Metropolitan Bank, whose stocks have also seen sharp declines during today’s trading sessions. Amidst this turmoil within bank equities, CFRA analyst Alexander Yokum told Marketwatch that while taxpayers will not be responsible for these failures, financial institutions are likely to increase fees.

“All the costs of bank failures will be borne by banks and not taxpayers, although we expect banks to indirectly pass along many of these costs to customers through higher fees and higher interest rates on loans,” Yokum stated.

The collapse of First Republic Bank has left Wall Street investors uneasy, even though JPMorgan Chase CEO Jamie Dimon declared on Monday that “this part of the crisis is over” after taking over the struggling bank. While conventional equity markets are down, cryptocurrencies and precious metals have experienced growth amidst the banking industry’s tribulations.

Notably, the top two leading cryptocurrencies, bitcoin (BTC) and ethereum (ETH) increased by 1.1% to 1.5% in the wake of Wall Street’s turmoil. Concurrently, the precious metals gold and silver have also surged in value against the U.S. dollar, with gains ranging between 1.4% and 1.54%.

After sinking more than 35% on Tuesday, Pacwest shares rebounded and are currently down between 22% to 27% against the greenback.

Tags in this story
bank failures, Banking Industry, Cryptocurrencies, Customers, First Republic Bank, JPMorgan Chase, Pacwest, Pacwest Bancorp, Pacwest stock, Precious Metals, Q1 earnings report, regional banks, stock prices, Wall Street

What do you think the future holds for the U.S. banking industry? Share your thoughts in the comments section below.

Jamie Redman

Jamie Redman is the News Lead at Bitcoin.com News and a financial tech journalist living in Florida. Redman has been an active member of the cryptocurrency community since 2011. He has a passion for Bitcoin, open-source code, and decentralized applications. Since September 2015, Redman has written more than 7,000 articles for Bitcoin.com News about the disruptive protocols emerging today.




Image Credits: Shutterstock, Pixabay, Wiki Commons, JHVEPhoto / Shutterstock.com

Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.

Read disclaimer

Products You May Like

Leave a Reply

Your email address will not be published. Required fields are marked *