PacWest Bancorp PACW Equities are in the spotlight on Wednesday after the stock led regional banks lower on Tuesday after the third major bank failure of 2023 that further increased selling pressure the banking sector.

What happened: After the collapse of SVB Finance Group And signature bankhowever, several banks experienced increased net deposit outflows Bank of the First Republic FRC was most affected.

The regional bank pulled several levers in an attempt to boost depositor confidence, but ultimately JPMorgan Chase & Co JPM thereafter acquired a substantial majority of the assets and assumed deposits and other liabilities of the First Republic from the FDIC win an auction over the weekend.

The acquisition is expected to benefit JPMorgan as it further advances the bank’s wealth strategy and complements JPM overall. However, the ongoing uncertainty about a broader contagion in the banking system persists.

The demise of the First Republic was the largest banking collapse since the 2008 financial crisis. Broader concerns around the banking sector, combined with uncertainty around the Federal Reserve pending tariff decision put the finances under pressure.

The Fed will make a rate decision on Wednesday afternoon. most expect the committee to opt for a further increase of 0.25%.

See also: PacWest Bancorp joins regional bank sell-off, options traders see more downside at store

PACW Price Action: PacWest shares fell 27.8% on Tuesday after being halted several times due to volatility. The stock fell another 1.07% to $6.48 on Wednesday morning Gasoline Pro.

Photo: myfuture.com by Flickr.