Pacific Western Bank (PacWest) saw its shares decline by over 50 per cent on Wednesday after Bloomberg News said the bank was exploring a potential sale.

Sources familiar with the matter told the website that the bank has been exploring a sale or a capital raise but that it hadn’t started any formal proceedings.

The Beverly Hills-based bank previously announced that it was looking at strategic asset sales, including moving its $2.7 billion lender finance loan portfolio to held for sale in the first quarter of the year.

Following the speculation, the bank said that it had been approached by several potential partners and investors, adding that discussions were ongoing.

“The company will continue to evaluate all options to maximise shareholder value,” it said in a statement.

The bank assured shareholders that it had not experienced “out-of-the-ordinary” deposit flows following the recent collapse and sale of fellow regional bank First Republic. It said that deposits had actually increased since the end of March, adding that its cash and available liquidity “remains solid”.

US regulators seized First Republic this week and sold its assets to JPMorgan Chase in an effort to resolve what has been described as the largest US bank failure since the 2008 financial crisis.

In March, First Citizens Bank agreed to buy $110 billion in assets, $56 billion in deposits and $72 billion in loans from the collapsed Silicon Valley Bank (SVB).

The move came after the entire banking sector took a hit when depositors fled from smaller banks to larger incumbents following the collapse of SVB and Signature Bank.

The impact at First Republic was not thought to be so dramatic, but the bank last week revealed more than $100 billion in outflows in the first quarter of 2023.

Before its collapse, SVB was the sixteenth biggest lender in the US with around $209 billion in assets.

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