PacWest Bancorp shares slid even after its subsidiary Pacific Western Bank raised 1.4 billion from Atlas SP Partners. The Los Angeles-based financial group said it explored the idea of raising new capital but decided against the move due to a rout in bank stocks.
In a statement issued by the bank on Wednesday, Paul Taylor, Pacific Western Bank president and CEO, said the bank was encouraged by "the clear message from government officials, regulatory agencies, and industry leaders, including Secretary [Janet] Yellen’s recent remarks regarding the protection of smaller bank depositors."
"As we look ahead, we have continued confidence in the strength of PacWest and are encouraged by the stability we have seen in our deposits and liquidity over the past week," he said.
Pacific Western continues to benefit from solid liquidity and stabilized deposit balances, with over $11.4 billion in available cash as of Mar. 20, which exceeds total uninsured deposits of $9.5 billion, the company announced.
A general view of Pacific Western Bank in Huntington Beach, Calif., Mar. 22, 2023. (Reuters/Mike Blake / Reuters Photos)
Shares opened down more than 9% Wednesday after the banking holdinig company reported deposits fell 20% to $27.1 billion on Mar. 20 from $33.9 billion on Dec. 31, 2022.
The bank said deposits insured by the Federal Deposit Insurance Corporation exceeded 65% of total deposits, including accounts eligible for pass-through insurance, while venture-specific deposits made up over 82% of total venture-specific deposits, including accounts eligible for pass-through insurance.
Another $600 million in deposits were backed by other tradable securities.
The bank offers a broad range of loan and lease and deposit products and services through full-service branches throughout California and in Durham, N.C. and Denver, Colo., and loan production offices around the country.
People queue up outside the headquarters of Silicon Valley Bank to withdraw their funds on Mar. 13, 2023 in Santa Clara, Calif. (Liu Guanguan/China News Service/VCG via Getty Images / Getty Images)
Major banks and private equity firms are balking at offering capital infusions to regional lenders amid concerns from potential buyers and investors about looming losses in their assets, five sources told Reuters on Sunday.
Already, the U.S. banking crises has claimed both Silicon Valley and Signature Bank, while forcing Republic Bank to secure a $30 billion lifeline from 11 U.S. financial institutions including Bank of America, Citigroup, JPMorgan Chase and Wells Fargo.
Reuters contributed to this report.