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Pacific Western Bank raises $1.4 billion, says deposits have stabilized
Pacific Western Bank raises $1.4 billion, says deposits have stabilized By Reuters
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Stock Markets 1 hour ago (Mar 22, 2023 11:51AM ET)
(C) Reuters
By Manya Saini and Jaiveer Shekhawat
(Reuters) – Pacific Western Bank has raised $1.4 billion from investment firm Atlas (NYSE:ATCO) SP Partners, the lender said on Wednesday, as the crisis-hit sector scrambles to limit the damage from the recent collapse of two mid-sized lenders.
Shares of the bank were down 10% in morning trading, even as the lender tried to allay investor worries by saying it had more than $11.4 billion in cash as of March 20.
Los Angeles-based PacWest also said it had explored the idea of raising new capital, but decided against the move due to a rout in bank stocks. “Any time that you know a bank talks about having considered a capital raise, especially in this environment where there’s so much skittishness from the markets, it’s bound to have a negative impact of the stock,” said Gary Tenner, analyst at brokerage D.A. Davidson & Co.
Reuters first reported last week that PacWest was in talks with investment firms including Atlas SP Partners for ways to boost its liquidity.
The bank said deposits insured by the Federal Deposit Insurance Corp, including accounts eligible for pass-through insurance, exceeded 65% of its total deposits, as of March 20.
Total deposits at the bank fell 20% to $27.1 billion from $33.9 billion as of Dec. 31.
“The update that put out today versus the update that put out last Friday, the read on it is a little bit more negative,” Tenner said.
Regional banks, whose stocks have been battered since the collapse of two mid-sized U.S. lenders this month, have tried to assure customers their deposits are secure after the recent bank runs whipsawed the global financial ecosystem.
Graphic: PacWest shares plummet in the aftermath of bank runs – https://www.reuters.com/graphics/GLOBAL-BANKS/egpbyjjgavq/chart_eikon.jpg
“We will continue to see flows away from regionals and into systemically important banks that are too big to fail,” said Thomas Hayes, chairman and managing member of Great Hill Capital.
Pacific Western Bank raises $1.4 billion, says deposits have stabilized
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