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- Shares of PacWest and Western Alliance each fell more than 25%, leading bank stocks lower on Tuesday.
- The slide follows First Republic being seized by regulators and taken over by JPMorgan this week.
- "This part of the crisis is over," JPMorgan's Jamie Dimon said after his bank took over First Republic.
PacWest Bancorp and Western Alliance Bancorp each plunged by more than 25% on Tuesday amid a broader sell-off in regional bank stocks a day after JPMorgan chief Jamie Dimon's said that the latest leg of the crisis is over.
Shares of PacWest and Western Alliance fell as much as 26% and 27%, respectively. The S&P Regional Banks Select Industry Index fell 7%, while the KBW Regional Banking ETF fell 6%. Other banks caught in the sell-off include Zions Bancorp, which was down as much as 23%, and Fifth Third Bancorp, which fell 7%.
The crash in regional bank shares comes a few days after First Republic Bank failed and was taken over by the Federal Deposit Insurance Corporation and its assets sold to JPMorgan. The collapse followed weeks of uncertainty about the bank's health following the failures in March of Silicon Valley Bank and Signature Bank.
After the announcement, Dimon looked to soothe lingering concerns of more banking sector trouble, saying that "this part of the crisis is over."
"There are only so many banks that were offsides this way," Dimon said on Monday. "There may be another smaller one, but this pretty much resolves them all."
Citigroup CEO Jane Fraser echoed similar sentiments. In an interview with Yahoo Finance Live on Monday, the bank exec described the news as "a palpable sense of relief from everybody this morning because it's sad to see a bank fail, for sure."
Fraser added: "This was the last remaining main uncertainty of the small handful of banks that did not do a good job with asset liability management and also were the victim of the steepest rate curve increase you've seen in 40 years."