Another midsize bank faced a crisis of confidence on Thursday, as Pacific Western Bank said that it had lost nearly 10 percent of its deposits over the last week, sparking a renewed decline in its already depressed share price.
The deposit flight, which amounts to billions of dollars, was detailed in a regulatory filing that suggested new trouble at the Los Angeles-based lender. The bank’s stock fell more than 20 percent in early trading, a much steeper decline than other banks that have been the focus of investors’ worries after the recent collapses of Silicon Valley Bank, Signature Bank and First Republic Bank.
In the regulatory filing Thursday, PacWest said that the seizure and sale of First Republic at the beginning of May “heightened market and customer fears of additional bank failures, including PacWest.” Last week, the bank, with $44 billion in assets and branches primarily in California, confirmed that it was looking to sell itself or raise more money. That sent its shares down sharply, which increased its customers’ “fears of 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 into the banking crisis set off by the failure of Silicon Valley Bank, midsize lenders remain under pressure, largely because their battered share prices are leading to worries among customers.
In a deviation from recent weeks, when the shares of midsize banks were whipsawed en mass, PacWest took the brunt of the damage. Other pressured lenders, including Comerica, Western Alliance and Zions Bank, traded with small losses on Thursday. The S&P 500 fell by less than half a percent.
Western Alliance, a Phoenix bank that primarily caters to businesses, said in a statement that its deposits had actually risen over the past week by $600 million, or 1 percent, to nearly $50 billion.
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