Western Alliance is exploring strategic options including a 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 seek a lifeline amid the turmoil sweeping through the industry.
The Arizona-based bank, which had $71bn of 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 might not come to anything.
Western Alliance did not respond to a request for comment.
Shares of Western Alliance were trading down 25 per cent before the FT reported the potential sale and were 45 per cent lower after the article was published. PacWest, another bank that has unnerved investors, announced that it too was exploring its options.
Shares of US regional banks have come under heavy selling pressure this week after the regulator-brokered takeover of First Republic by JPMorgan Chase failed to restore confidence in the sector.
In a press conference on Wednesday, Jay Powell, chair of the US Federal Reserve, tried to soothe concerns about the bank turmoil, saying conditions across the sector had “broadly improved” since the period of “severe stress” in early March and that the system as a whole was “sound”.
“The resolution and sale of First Republic is an important step toward drawing a line under that period of severe stress,” he said before PacWest announced plans to explore a potential sale.
Western Alliance for much of the past two decades was run by Robert Sarver, the former owner of the NBA basketball franchise Phoenix Suns.
Earlier this year, Sarver was forced to sell the Suns after an investigation found evidence that under his leadership the team had created a hostile environment for both black people and women. Sarver was found $10mn and suspended from both the NBA and the WNBA for a year.
Sarver, who had held the top role at Western Alliance since 2003, stepped down as chairman of bank last year as the NBA controversy unfolded.