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Share prices for several regional U.S. banks fell after hours on Wednesday, despite Federal Reserve Chairman Jerome Powell calling the banking sector “robust” and “robust” just hours earlier.
One such regional bank, PacWest Bancorp, fell a whopping 52.5% after hours after Bloomberg reported the bank would explore strategic options on May 4. Some see it as another bank that could fall amid the US banking crisis.
The bank is reportedly considering selling or raising capital, Bloomberg reported, citing people familiar with the matter.
Meanwhile, Western Alliance Bancorp (22.4%), Metropolitan Bank (16.2%) and HomeStreet (7.8%) were among the other hardest hit regional banks.
Metropolitan Bank once offered services to crypto firms, but closed its digital asset vertical in January because the firm was not happy with how the crypto industry was developing.
Western Alliance Bancorp has also integrated blockchain-based payment solutions for its client base from the firm’s Blockchain and Digital Assets division.
cryptocurrency gaining momentum as US Regional Bank stocks tumble after hours:
pacwest, $PACW: ⬇️60%
Western Alliance, $WAL: ⬇️30%
Metropolitan Bank, $MCB: ⬇️20%
Valley National, $VLY: ⬇️15%
HomeStreet, $HMST: ⬇️11%
Zion Bank, $ZION: ⬇️10%
KeyCorp, $KEY: ⬇️8%Seems like time to #HODL
— Acquire.Fi (@Acquire_Fi) May 4, 2023
Powell’s attempt to allay concerns about the banking sector came after he announced that the Federal Reserve would raise interest rates by another 25 basis points:
“Conditions in [банковском] the sector as a whole have improved since the beginning of March, and the US banking system is sound and resilient. We will continue to monitor the situation in the sector.
Powell added that they are “strive to learn the right lessons from this episode” and we will work to ensure that events like this don’t happen again.”
The bankruptcy of First Republic Bank was the bank’s second-biggest bankruptcy in recent memory, first resurfacing on April 26 when news of a government liquidation broke, sending the bank’s share price down 20% in a matter of hours.
Powell was ridiculed by several cryptocurrency Twitter participants for stating that conditions in the banking sector have “improved significantly” since early March.
Related: Fed runs low on ammo as $30K Bitcoin price becomes key battle line
Will Clemente, founder of digital asset analysis firm Reflexivity Research, mocked Powell in front of his 680,300 Twitter followers, saying that the collapse of five banks – SVB, Silvergate, Signature, First Republic and PacWest – “sounds like a very sound and resilient banking system” .…”
FED Chair Jerome Powell says “banking system is sound, resilient.”
*two hours later* : PacWest, Western Alliance, and Metropolitan bank down a combined +100%$PACW $WAL $MCB pic.twitter.com/YBPk0LtYVh
— Mohegan ₿TC (@MoheganBTC) May 3, 2023
Twitter user “zerohedge” ridiculed Powell, pointing out to his 1.6 million followers that more than $500 billion has been wiped out in “bank failures” in the last month alone.
A 52% drop in PacWest Bancorp would see a loss of about $340 million in its market capitalization, which stood at $772 million as of Wednesday’s close, according to Google Finance.
