Western Alliance Bancorp announced on Wednesday that it had not experienced any unusual deposit outflows following the recent sale of collapsed lender First Republic Bank to JPMorgan Chase & Co. The news sent shares of several regional lenders tumbling in after-market trading, with PacWest seeing a 52% plunge and Western Alliance experiencing a 23% decline.
The company stated that as of Tuesday, more than 74% of its total deposits were insured, and it was releasing this update to reaffirm its financial strength in response to recent industry events. Furthermore, Western Alliance Bancorp reported its total deposits at $48.8 billion as of Tuesday, an increase from $48.2 billion on Monday.
Ken Vecchione, CEO of Western Alliance Bancorp, commented on the situation: "We want our shareholders and customers to know that we have maintained stability during these turbulent times for some regional banks." He added that the bank's strong capital position and liquidity profile allow them "to continue providing excellent service while pursuing strategic growth opportunities."
Analysts believe these events highlight concerns over smaller banks' exposure to potential risks within the financial sector amid economic uncertainty. However, they also note that many regional banks are better positioned than their larger counterparts due to conservative lending practices and stronger balance sheets.
Emily Morrisson-Smith, a banking analyst at Financial Insights Group Inc., said: "While some investors may be spooked by recent headlines involving small- to mid-sized lenders like First Republic Bank collapsing or being sold off, it is important not to paint all regional banks with the same brush." She emphasized that many such institutions remain well-capitalized and maintain healthy loan portfolios despite ongoing challenges faced by certain players in the market.
In closing remarks during an earnings call held earlier this week with investors and analysts alike present online or via phone lines - Ken Vecchione reiterated his confidence in Western Alliance Bancorp's ability to navigate the current environment successfully. He assured stakeholders that the bank would continue striving for growth while maintaining a strong commitment to risk management and shareholder value.