The Financial Times reported Thursday that Phoenix, Arizona-based Western Alliance Bank was also exploring a sale, crediting two people briefed on the matter. However, Western Alliance Chief Marketing Officer Stephanie Whitlow told Bloomberg shortly after the report that the story was “absolutely false.”
“There is no truth to this,” Whitlow told Bloomberg via email.
Neither bank has experienced unusual deposit outflows following this week’s seizure and acquisition of First Republic, according to separate announcements from the banks.
Core customer deposits at PacWest have increased since March 31, with deposits totaling $28 billion as of May 2, according to the bank. Total deposits at Western Alliance were $48.8 billion as of May 2, up from $48.2 billion the day before. To date, Western Alliance deposits are up $1.2 billion from $47.6 billion as of March 31.
Both banks emphasized the strength of their insured deposits, with PacWest noting that the company recently paid back $1 billion it had previously borrowed.
The regional banking sector has been rocked by a recent series of large bank failures — most notably Silicon Valley Bank and Signature Bank in March, and First Republic Bank this week.
First Republic, Silicon Valley Bank and Signature’s collapses rank as the second-, third- and fourth-largest bank failures in U.S. history, respectively.
An outright sale for PacWest hasn’t materialized because few want to purchase the entire bank, which includes commercial and consumer lending businesses in addition to the community lender, Bloomberg reported Wednesday. A buyer would potentially incur a “big loss marking down some of its loans,” sources told the wire sevice, speaking on condition of anonymity.
Last month, PacWest said it accessed a $1.4 billion lending facility from investment firm Atlas SP Partners after losing 20% of its deposits, according to the Financial Times.
In response to Thursday’s FT report on Western Alliance, the bank told Bloomberg that not only had it not hired an adviser and was not exploring options for a sale, but that it was now “considering all of our legal options in response to the story.”
“[The story] is categorically false in all respects. There is not a single element of the article that is true,” Western Alliance said, according to Bloomberg.