Pacific Western Bank shares fall after unit raises 1.4 billion

PacWest Bancorp shares fell 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. He said that 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.

Pacific Western has over $11.4 billion in available cash as of Mar due to solid liquidity and stabilized deposit balances. The company announced that the total uninsured deposits of $9.5 billion are over 20, which is more than 20 percent of total uninsured deposits.

After the banking holdinig company reported deposits fell 20% to $27.1 billion on Mar, shares opened down more than 9%. On December 31, 20 from $33.9 billion.

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.

Other tradable securities were backed by 600 million in deposits.

The bank offers a wide 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.

Five sources told Reuters on Sunday that major banks and private equity firms are balking at offering capital infusions to regional lenders due to concerns from potential buyers and investors about looming losses in their assets.

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.