PacWest’s latest bid to restore investor confidence

PacWest (PACW) sold some assets of a real-estate lending business as it tries to bolster investor confidence following a period of extreme turmoil for regional banks.

Roc360, a New York City firm that lends to real-estate investors, said Wednesday that it had purchased the “origination assets” of PacWest subsidiary Civic Financial Services.

Civic lends to landlords and house renovators. Roc360 said it didn’t purchase loans already made or loan-servicing operations. Pricing terms weren’t disclosed.

The transaction is the second real-estate-related transaction for PacWest this week. On Monday the Beverly Hills, Calif.-based institution said it would sell a $2.7 billion real-estate construction loan portfolio to Kennedy Wilson Holdings.

The new deal announced Wednesday, however, failed to lift PacWest’s stock. It was down more than 3% in morning trading. Stocks of other regional lenders were also lower, including Western Alliance (WAL) and Zions (ZION).

PacWest was among the regional banks that came under intense pressure following the March 10 failure of Silicon Valley Bank as depositors pulled money and investors punished its stock.

It lost 17% of its deposits in the first quarter and posted a loss of $1.2 billion. Earlier this month it said it was exploring strategic actions such as asset sales.

It has also become a favorite among short sellers placing bets that the value of its shares would decline. PacWest stock currently has the most short interest among regional banks as a percentage of its publicly available shares, according to market analytics firm S3.

But PacWest and other regional banks have rallied in recent weeks as some investors became more convinced the worst of the industry chaos might be over.

Pacwest’s stock has now rallied more than 33% in the last five days. Year to date it is still down 68% through Tuesday’s close.

The bank said earlier this month that it has plenty of liquidity to cover additional depositor flight, with about $15 billion in available cash and $5.2 billion in uninsured deposits.

Investment bank Piper Sandler advised PacWest in its sale to Roc360, which was earlier reported by The Wall Street Journal.

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