PacWest shares slide as bank tries to calm investors
The price of PacWest’s shares has seen a nearly 72% dip since the start of 2023
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Pacific Western, or PacWest, is trying to calm spooked investors as the stock continues to slide.
On Thursday, the bank, in a statement said:
"Recently, the Company has been approached by several potential partners and investors - discussions are ongoing. The company will continue to evaluate all options to maximize shareholder value.
The bank has not experienced out-of-the-ordinary deposit flows following the sale of First Republic Bank and other news."
Pacific Western
This followed a Bloomberg report Wednesday that said the bank is mulling options including a sale. The outlet attributed the information to unnamed sources "familiar with the matter." Those sources reportedly indicated selling all of the bank’s businesses as one hasn’t been attractive to many entities.
The other options PacWest is looking at include raising capital or breaking its businesses up, according to Bloomberg.
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Pacific Western Bank in Huntington Beach, Calif., Mar. 22, 2023. (Reuters/Mike Blake / Reuters Photos)
FOX Business reached out to PacWest for comment.
In April, the bank said its total deposits had come in at $28.19 billion for the first quarter, marking a nearly 17% decrease from the fourth quarter and an approximately 15% decline from the first quarter in 2022. Deposits had risen from March 20 when they were at $27.1 billion, and CEO Paul Taylor described them as stabilizing and rebounding.
Pacific Western Bank in Huntington Beach, Calif., Mar. 22, 2023. (Reuters/Mike Blake / Reuters Photos)
Taylor also said at the time that PacWest executives "took immediate steps to maximize liquidity, including the exploration of strategic asset sales, which has led to the transfer of our $2.7 billion lender finance loan portfolio to be held for sale."
In the quarter, the company recorded a $1.38 billion non-cash goodwill impairment "due to decline in our stock price as a result of recent market volatility." The charge, which affected first-quarter results, "has no impact on [PacWest’s] regulatory capital ratios, cash flows, or liquidity position," the bank said in its earnings release.
The price of PacWest’s shares has dropped nearly 72% since the start of 2023.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| PACW | NO DATA AVAILABLE | - | - | - |
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The report of PacWest’s strategic option exploration comes not long after the Federal Deposit Insurance Corporation (FDIC) accepted JPMorgan Chase’s bid to buy First Republic Bank.
In this photo illustration, the First Republic Bank logo is seen on a smartphone and the FDIC logo is on a PC screen. (Pavlo Gonchar/SOPA Images/LightRocket via Getty Images / Getty Images)
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Two banks, Silicon Valley Bank and Signature Bank, were taken over by the FDIC in March. Another, Silvergate, folded not long prior to that. Those collapses were followed by turbulence in the market, particularly among some banking stocks, and stirred worries of additional failures.
Breck Dumas contributed to this report.
This story, published on 5-3-23, has been updated to reflect the company's statement.