Consolidation as salvation: America has found a cure for default

Consolidation as salvation: America has found a cure for defaultAfter the collapse of the SVB, PacWest, a Beverly Hills bank, remained under scrutiny by the Fed. A large regional lender decided to merge through a share swap with a smaller competitor from Santa Ana. PacWest (NASDAQ: PACW) shares fell 27% and Banc of California (NYSE: BANC) rose 11% after the WSJ reported the deal.Recall: in the spring, the bankruptcy of Silicon Valley Bank, Signature Bank and the First Republic provoked panic in the US financial system. PacWest was actively reducing its balance sheet in an attempt to retain depositors. In particular, the sale of the bank's loan portfolio for $2.7 billion and the portfolio of consumer loans, mortgage loans and other assets in the amount of $3.5 billion was completed.Banc of California, which began operations in 1941 as a Rohr Aircraft credit union, has fared much better since the winter crisis: its stock has fallen only 8% since the start of the year, and its first-quarter deposit outflow was much smaller than PacWest's. So the current collaboration is beneficial for both banks.At the close of trading on Tuesday, PacWest had a market value of $924 million compared to $842 million for Banc of California. Private equity groups Warburg Pincus and Centerview were able to raise $400 million in new capital from investors in the deal and will own approximately 20% of the combined bank. The deal is expected to close in December this year or early 2024.PacWest shareholders will receive 0.6569 Banc of California shares for each bank share. Such a business alliance means the emergence of a serious player in the market with a capital of $ 36 billion, headquartered in Los Angeles and with more than 70 branches in California. The structure will be managed by Banc of California CEO Jared Wolf and will focus on banking services to large clients.Let's see what happens.Profits to yall!#ForexChief #nyse #forexnews #StopLoss #stocks #market #profit #Traders #nasdaq