PacWest shares plummeted 50 per cent in after-hours trading on Wednesday as the teetering California lender became the latest US midsized bank to seek a financial life line amid the worst industry turmoil since 2008.

The bank has instructed boutique investment bank Piper Sandler to help it explore strategic options including a sale, two people briefed on the matter said. No formal sale process has been initiated yet and the bank was also considering raising fresh capital, the people said.

PacWest’s decision to seek a buyer or fresh capital, which was first reported by Bloomberg, comes days after the Federal Deposit Insurance Corporation seized First Republic and sold its deposits and assets to JPMorgan Chase.

It comes six weeks after PacWest said it had shored up its access to cash by raising $1.4bn via a lending facility from Apollo-backed investment firm Atlas SP Partners.

Shares of Western Alliance, which has also become a focus of investor angst following the seizure of three banks by US regulators since March, fell by more than a quarter in after-hours trading. Zions Bancorp and Comerica were down roughly 10 per cent.

Like other regional banks, PacWest has drawn negative attention since the March 10 collapse of Silicon Valley Bank. Attention has focused on it because of its similarities to SVB, including ties to the tech community and large amounts of uninsured deposits and paper losses on its securities portfolio.

Based in Beverly Hills, PacWest reported late last month that it had lost more than $5bn in deposits during the first quarter but said it had stemmed the outflows and received more than $1bn in inflows since March. It said it had nearly $29bn in deposits, making it significantly smaller than either SVB or First Republic.

The bank’s shares have fallen 77 per cent since the start of March, and the short interest in PacWest shares shot from less than 1 per cent at the end of January to 25 per cent this week.

The bank, which had been eking out small profits, reported a net loss of $1.21bn in the first quarter. It also reported $860mn in unrealised losses in its securities portfolio. It said 29 per cent of deposits were not covered by federal insurance, down from 52 per cent.

More than three-quarters of its lending is to real estate, another area of concern in a period of rising interest rates, and 8 per cent is to venture capital. Its venture business had $6bn in deposits at the end of March.

PacWest and Piper Sandler did not immediately respond to a request for comment.