PacWest Bancorp (NASDAQ:PACW) shares are rising Tuesday on continued momentum after the bank entered into a loan purchase and sale agreement on Monday.
What Happened: Pacific Western Bank entered into an agreement with a subsidiary of Kennedy-Wilson Holdings Inc to sell a portfolio of 74 real estate construction loans with an approximate principal balance of $2.6 billion. Kennedy Wilson will assume all remaining future funding obligations under the acquired loans.
Pacific Western Bank will also sell six additional real estate construction loans to Kennedy Wilson with an aggregate principal balance of approximately $363 million. The transaction is currently expected to close in multiple tranches during the second and early part of the third quarter.
PacWest shares are up more than 80% over the last week as the stock continues to recover after being decimated in March. The entire regional banking sector has faced heavy selling pressure since the collapse of Silicon Valley Bank and Signature Bank.
In early May, JP Morgan acquired a substantial majority of assets and assumed deposits of First Republic from the FDIC. Around the same time, PacWest said it was weighing strategic options. The bank noted on Monday that the loan purchase and sale agreement was consistent with the company’s previously announced strategy surrounding the pursuit of strategic asset sales.
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PACW Price Action: PacWest shares are down more than 60% year-to-date.
The stock was up 19.6% at $8.18 at the time of publication, according to Benzinga Pro.
Photo: Klarinette71 from Pixabay.
