Another mid-sized bank faced a crisis of confidence on Thursday, when Pacific Western Bank said it had lost nearly 10 percent of its deposits in the past week, triggering a further decline in its already depressed share price.
The evasion of deposits, which runs into the billions of dollars, was detailed in a regulatory filing that hints at new problems at the Los Angeles lender. The bank’s shares were down more than 20 percent in early trading, a much steeper decline than other banks that have been the focus of investor concerns after the recent collapses of Silicon Valley Bank, Signature Bank and First Republic Bank.
In Thursday’s regulatory filing, PacWest said the seizure and sale of First Republic in early May “increased market and customer fears of additional bank failures, including PacWest.” Last week, the bank, with $44 billion in assets and branches mainly in California, confirmed it intends to sell itself or raise more money. This sent its shares down sharply, which increased its customers’ “fear for the safety of their deposits”, the bank said.
PacWest now has about $25 billion in deposits, compared with just over $28 billion at the end of March.
The new pressure on PacWest is a reminder that, two months after the beginning of the banking crisis triggered by the bankruptcy of Silicon Valley Bank, mid-sized lenders remain under pressure, mainly because their share prices are causing concern among customers. .
Unlike in recent weeks, when midsize bank stocks sold en masse, PacWest took the brunt of the damage. Other hard-pressed creditors, including Comerica, Western Alliance and Zions Bank, traded at small losses on Thursday. The S&P 500 is down less than half a percent.
Western Alliance, a Phoenix-based bank that primarily serves businesses, said in a statement that its deposits actually increased last week by $600 million, or 1 percent, to nearly $50 billion.