PacWest Bank, Shedding Billions in Deposits, Enters Renewed Market Spiral
Pacific Western Bank said on Thursday it had lost nearly 10% of its deposits over the past week, triggering further declines in its already depressed stock, and another mid-sized bank also faced a crisis of confidence.
Billions of dollars’ worth of deposit escapes are detailed in regulatory filings that point to new problems at the Los Angeles-based financier. The bank’s stock has fallen more than 20% in early trading, more than other banks that have become the focus of investor concerns following the recent failures of Silicon Valley Bank, Signature Bank and First Republic Bank. fell sharply.
PacWest said in a regulatory filing on Thursday that the foreclosure and sale of First Republic in early May “increased market and customer fears of further bank failures involving PacWest.” The bank, which has $44 billion in assets and branches primarily in California, confirmed last week that it was considering a self-sale or raising more capital. The move sent the company’s stock price plummeting and increased customers’ “concerns about the safety of their deposits,” the bank said.
Pacwest currently has about $25 billion in deposits, up from just over $28 billion at the end of March.
The renewed pressure on PacWest is a reminder that midsize financial institutions continue to come under pressure, two months after the banking crisis sparked by SVB’s collapse. The main reason is that the tattered stock price is making customers uneasy.
Pacwest has taken the brunt of the brunt, unlike in recent weeks when midsize bank stocks were smashed. Other pressured financial firms including Comerica, Western Alliance and Zions Bank posted modest losses in Thursday’s trading. The S&P 500 fell less than 0.5%.
Western Alliance is a Phoenix Bank primarily for businesses, said in a statement In fact, its deposits have grown by $600 million (1%) in the past week to nearly $50 billion, he said.