Western Alliance Bank denied reports that it’s exploring a sale or has hired an advisor to explore strategic options.
Shares of the regional bank tumbled 36% Thursday, slightly paring back its losses after plunging over 50% at one point on reports that the company is the regional bank latest to explore a potential sale. It also dragged down the broader stock market: The Dow fell 400 points, or 1.2%, and the S&P 500 sank 0.9%.
The Financial Times, citing two anonymous sources, reported Thursday that the Arizona-based bank is exploring strategic options.
“This story is absolutely false, there is no truth to this,” a Western Alliance spokesperson told CNN in an email.
The bank also said it is exploring legal options in response to the Financial Times’ article.
“There is not a single element of the article that is true. Western Alliance is not exploring a sale, nor has it hired an advisor to explore strategic option. It is shameful and irresponsible that the Financial Times has allowed itself to be used as an instrument of short sellers and as a conduit for spreading false narratives about a financially sound and profitable bank,” a spokesperson told CNN in an email.
Shares of the regional lender are down about 68% for the year, and currently trade at about $19 per share.
Regional banks have been under pressure since March, when the collapses of Silicon Valley Bank and Signature Bank raised fears about the banking sector’s instability. Those concerns were renewed last week when First Republic Bank shares plunged after the bank reported seeing $100 billion of deposit outflows during the first quarter.
The bank collapsed, and JPMorgan Chase bought it immediately after. CEO Jamie Dimon assured investors on Monday that the banking sector is safe, as did Federal Reserve Chair Jerome Powell on Wednesday after the central bank raised interest rates by a quarter point.
But that failed to soothe spooked investors, and regional bank shares fell sharply.
Western Alliance is the latest regional lender to explore options for a lifeline after PacWest Bank said Thursday that it is exploring “all strategic options” after its share price plunged over 50% on Wednesday.
“In accordance with normal practices the company and its board of directors continuously review strategic options,” PacWest said in a statement Thursday. “Recently, the company has been approached by several potential partners and investors — discussions are ongoing. The company will continue to evaluate all options to maximize shareholder value.”
– CNN’s Matt Egan contributed to the article.