(Bloomberg) -- PacWest Bancorp led a renewed slide in regional banks after a report that it’s weighing strategic options including a sale heightened concerns that the turmoil engulfing smaller lenders is far from over.

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The Beverly Hills-based lender plunged as much as 60% in postmarket trading, while Western Alliance Bancorp fell as much as 38%. PacWest has been working with a financial adviser and has also been considering a breakup or a capital raise, according to people familiar with the matter.

The upheaval that has claimed multiple banks and erased more than 75% from PacWest’s share price since early March is persisting, despite the lender reporting last month that deposits had stabilized. Federal Reserve Chair Jerome Powell said Wednesday that bank conditions had “broadly improved” since early March, though he noted that the sector’s strains “appear to be resulting in even tighter credit conditions for households and businesses.”

The sector has been under pressure as rising interest rates lowered the value of their longer-term investments while increasing the cost of funding and spurring depositors to move cash into higher-yielding money market funds.

First Republic Bank, acquired by JPMorgan Chase & Co. on Monday in a government-led deal, became the fourth US lender to collapse this year, following Silvergate Capital Corp., SVB Financial Group’s Silicon Valley Bank and Signature Bank in March.

“This group faces huge earnings question marks going forward as funding and deposit costs rise alongside provisions just as the regulatory environment turns more stringent,” Adam Crisafulli, analyst at Vital Knowledge, said in a note. “However, it’s important to remember that Silicon Valley and First Republic were unique, and investors shouldn’t simply extrapolate what happened to them to the whole regional landscape.”

The SPDR S&P Regional Banking ETF sank by more than 5% in postmarket trading, while Comerica Inc. and Zions Bancorp fell more than 10% each.

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