PacWest Leads Losses In Regional Bank Stocks  

• Shares of PacWest Bancorp led the declines in U.S. regional lenders at market open on Tuesday as investors feared the ongoing banking crisis could deepen. PacWest dropped 5% in early trading, a day after the Los Angeles-based lender's decision to cut its quarterly dividend failed to stem worries about its financial stability.
• PacWest and Western Alliance, which have been at the heart of the sell-off in regional banks, saw the steepest decline in deposits in the first quarter after First Republic, according to S&P Global Market Intelligence data.
• "The ones that have been hit the hardest are the ones that continue to see the most amount of stress," said Randy Frederick, managing director of trading and derivatives at the Schwab Center for Financial Research. "If banks want to get their stock prices back up, if they want to remain solvent, they have to make sure that any new loans they make are of high credit quality so that they don't worsen their position."
• Adding to the banking woes, U.S. firms of all sizes were showing less demand for credit relative to three months ago, according to a Federal Reserve survey. This survey is among the first measures of sentiment across the sector since the recent bank failures. The tightening credit conditions for U.S. businesses and households in the first quarter, however, was likely due to the impact of higher interest rates rather than the cliff-like decline in credit demand, after the March collapse of Silicon Valley Bank, the Fed's quarterly survey showed.
• Wall Street executives and bank analysts last week called on regulators to quickly provide more protection for bank deposits and consider other backstops, arguing only an intervention could stop the crisis. 

(Source: Reuters)