Western Alliance shares see wild swings as the bank denies report of possible sale that sparked 62% plunge

• Western Alliance Bank plunged as much as 62% on Thursday after the FT reported that the bank was exploring a potential sale.
• Western Alliance denied the report and said no sale was under consideration, helping the stock pare its losses to 32%.
• Regional banks have been embroiled in an ongoing crisis after the collapse of Silicon Valley Bank, Signature Bank, and First Republic Bank.

Western Alliance Bank stock plunged as much as 62% after the Financial Times reported that the company was exploring a potential sale amid the ongoing regional banking crisis.

Western Alliance Bank was swift to deny the report, helping its stock rebound and pare losses to 32%. 

The reported and denied deal talks comes amid a regional banking crisis that has led to three sizable bank failures that had a combined asset base of nearly $550 billion.

The downfall of Silicon Valley Bank, Signature Bank, and First Republic Bank has created a crisis of confidence among smaller banks that are at risk to falling deposits and large unrealized losses on their long-term debt holdings.

According to the FT report, which cited two people briefed on the matter, Western Alliance Bank "hired advisers to explore its options, the people said, adding that the bank's deliberations were at an early stage and might not come to anything."

But Western Alliance Bank said in a statement that the FT story is "categorically false."

"The Financial Times' report today that Western Alliance is considering a potential sale of all or part of its business is categorically false in all respects. There is not a single element of the article that is true. Western Alliance is not exploring a sale, nor has it hired an advisor to explore strategic options," the bank said.

The bank blamed short sellers for spreading false narratives about the bank and said it would consider all legal options in response to the article. 

Western Alliance isn't the only bank stock that plunged on Thursday. First Horizon sank 40% after it and TD Bank canceled their $13.4 billion merger deal due to regulatory obstacles, and PacWest Bank crashed 40% after the company said it was exploring its strategic options, which could include a sale. 

Not helping matters is the fact that the Federal Reserve moved forward with its 10th consecutive interest rate hike on Wednesday, increasing the federal funds rate to above 5% for the first time in 16 years.