PacWest, Western Alliance shares slip as regional bank woes resume

Investing.com -- Regional bank stocks in the U.S. dropped in early trading on Tuesday, putting them on course to end two straight sessions in the green, in a potential sign that the turmoil in the sector may not be abating.

Los Angeles-based PacWest (NASDAQ:PACW) slipped by more than 7%. On Monday, the shares pared back gains after the bank cut its dividend, sparking fresh concerns over the state of its finances. PacWest said last week that it was mulling over its strategic options, including a possible sale.

Peer Western Alliance (NYSE:WAL), meanwhile, lost over 5%. The Arizona-based lender has stressed that it has not seen elevated deposit outflows since the collapse of First Republic Bank. It also denied media reports that it is considering a sale and bringing on advisors to explore its options.

Meanwhile, First Horizon (NYSE:FHN) moved down by nearly 6% and Zions Bancorporation (NASDAQ:ZION) shed more than 2.5%. The KBW regional bank index, a tracker of these companies, fell by a little above 0.7%.

The declines come after a new survey of bank loan officers from the Federal Reserve showed that lending standards to U.S. households and businesses were tightening, although the responses from those who participated in the study suggested that this was due more to concerns over rising interest rates instead of the recent volatility surrounding regional banks.

Even still, midsize lenders - which the study defined as banks with assets between $50 billion to $250 billion - were making access to credit more stringent in response to fears over their financial health, the Fed's Senior Loan Officer Opinion Survey seemed to indicate.

"[O]ther and mid-sized banks reported concerns about their liquidity positions, deposit outflows, and funding costs more frequently than the largest banks," the survey noted.