The regional bank lost 9.5 percent of depositors last week.
Shares of the bank dropped by 23 percent on Thursday.
Troubles in the American banking industry continue as the shares of PacWest Bancorp (NASDAQ: PACW) decrease 23 percent on Thursday after the regional bank disclosed a massive deposit outflow.
Troubles at PacWest
The California-based lender disclosed in a filing on Thursday with the Securities and Exchange Commission (SEC) that it had lost 9.5 percent of its deposits last week. The filing highlighted that the ongoing news headlines around PacWest fueled the outflow from the bank.
"On the afternoon of May 3, 2023, PacWest was featured prominently in the financial news headlines with reports that PacWest was 'exploring all of its options and having talks with potential investors and partners.' The news headlines increased our customers' fears of the safety of their deposits," the lender stated in the filing.
The bank said that most of its deposits were withdrawn on May 4 and 5.
To tackle this stressed situation, PacWest pledged $5.1 billion to the Federal Reserve's discount window on Wednesday, opening up an additional borrowing capacity of $3.9 billion. Now, the bank has $15 billion in immediately available liquidity, exceeding its uninsured deposits of $5.2 billion.
"We pledged additional assets as collateral for borrowings to increase our liquidity position for potential deposit outflows," the bank stated in the filing, adding that it will consider selling some assets in the second quarter to improve liquidity and capital position. Additionally, last week, the bank slashed dividend distribution to strengthen its financial position.
The Grim Condition of the American Banking System
PacWest's operational troubles are alarming, especially after the collapse of the three American banks in recent months. Depositors of the Silicon Valley Bank and Signature Bank were rescued by the American government in March with a bailout package, while JPMorgan Chase recently bought assets of the collapsed Californian bank, First Republic.
PacWest has been facing investors' fury for a while, as its shares dropped 80 percent since March 8. However, its share prices recovered from bottoming out on May 4.
The PacWest situation exploded after top figures on Wall Street and Washington showed optimism, saying the worst of the crisis was over. US President Joe Biden also stated that the American banks are now "safe and sound."
Meanwhile, other American regional banks are facing the investors' squeeze with the ongoing situation. Shares of several other regional banks fell on Thursday, with the KBW Nasdaq Regional Banking Index dropping 2.4 percent.
Troubles in the American banking industry continue as the shares of PacWest Bancorp (NASDAQ: PACW) decrease 23 percent on Thursday after the regional bank disclosed a massive deposit outflow.
Troubles at PacWest
The California-based lender disclosed in a filing on Thursday with the Securities and Exchange Commission (SEC) that it had lost 9.5 percent of its deposits last week. The filing highlighted that the ongoing news headlines around PacWest fueled the outflow from the bank.
"On the afternoon of May 3, 2023, PacWest was featured prominently in the financial news headlines with reports that PacWest was 'exploring all of its options and having talks with potential investors and partners.' The news headlines increased our customers' fears of the safety of their deposits," the lender stated in the filing.
The bank said that most of its deposits were withdrawn on May 4 and 5.
To tackle this stressed situation, PacWest pledged $5.1 billion to the Federal Reserve's discount window on Wednesday, opening up an additional borrowing capacity of $3.9 billion. Now, the bank has $15 billion in immediately available liquidity, exceeding its uninsured deposits of $5.2 billion.
"We pledged additional assets as collateral for borrowings to increase our liquidity position for potential deposit outflows," the bank stated in the filing, adding that it will consider selling some assets in the second quarter to improve liquidity and capital position. Additionally, last week, the bank slashed dividend distribution to strengthen its financial position.
The Grim Condition of the American Banking System
PacWest's operational troubles are alarming, especially after the collapse of the three American banks in recent months. Depositors of the Silicon Valley Bank and Signature Bank were rescued by the American government in March with a bailout package, while JPMorgan Chase recently bought assets of the collapsed Californian bank, First Republic.
PacWest has been facing investors' fury for a while, as its shares dropped 80 percent since March 8. However, its share prices recovered from bottoming out on May 4.
The PacWest situation exploded after top figures on Wall Street and Washington showed optimism, saying the worst of the crisis was over. US President Joe Biden also stated that the American banks are now "safe and sound."
Meanwhile, other American regional banks are facing the investors' squeeze with the ongoing situation. Shares of several other regional banks fell on Thursday, with the KBW Nasdaq Regional Banking Index dropping 2.4 percent.
Arnab is an electronics engineer-turned-financial editor. He entered the industry covering the cryptocurrency market for Finance Magnates and later expanded his reach to forex as well. He is passionate about the changing regulatory landscape on financial markets and keenly follows the disruptions in the industry with new-age technologies.
Standard Chartered Partners with Clearstream to Support UAE Domiciled Funds
Hannelรฉ De Necker, CEO, IFX Brokers | FMAS:24
Hannelรฉ De Necker, CEO, IFX Brokers | FMAS:24
1 week to go until FMAS:24 kicks off and we couldn't skip our interviews with some of this year's sponsors ๐คฉ Starting off strong with Hannelรฉ De Necker, CEO OF IFX Brokers.
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1 week to go until FMAS:24 kicks off and we couldn't skip our interviews with some of this year's sponsors ๐คฉ Starting off strong with Hannelรฉ De Necker, CEO OF IFX Brokers.
See you there!
#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
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Get ready to mark your calendars for FMAS:24, returning this May! Take a quick glimpse of what awaits at the Sandton Convention Centre in Sandton, South Africa from May 20-22, 2024.
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Get ready to mark your calendars for FMAS:24, returning this May! Take a quick glimpse of what awaits at the Sandton Convention Centre in Sandton, South Africa from May 20-22, 2024.
Don't miss out on this 5-second invite packed with energy and urgency!
Secure your free ticket now ๐ https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
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FMAS:24 | Sneak Peak
FMAS:24 | Sneak Peak
Here's a sneak peek into the FMAS:24 vibrant atmosphere! Join us at Africaโs premium financial event for a transformative experience that combines the best of finance and technology.
From May 20-22, 2024, the Sandton Convention Centre in Sandton, South Africa, will be the hub for over 3,500 attendees to engage in unparalleled networking opportunities, learn from over 150 industry-leading speakers, and explore innovations from 120+ exhibitors.
Secure your free ticket now ๐ https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
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Here's a sneak peek into the FMAS:24 vibrant atmosphere! Join us at Africaโs premium financial event for a transformative experience that combines the best of finance and technology.
From May 20-22, 2024, the Sandton Convention Centre in Sandton, South Africa, will be the hub for over 3,500 attendees to engage in unparalleled networking opportunities, learn from over 150 industry-leading speakers, and explore innovations from 120+ exhibitors.
Secure your free ticket now ๐ https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
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Join 3500+ Attendees at FMAS:24 | Africa's Premium Financial Event
Join 3500+ Attendees at FMAS:24 | Africa's Premium Financial Event
Looking to expand your network in #Africa? Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
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Join 3500+ Attendees at FMAS:24 - Africa's Premium Financial Event
Join 3500+ Attendees at FMAS:24 - Africa's Premium Financial Event
Looking to expand your network in #Africa?
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20-22 MAY 2024
Sandton Convention Center, Sandton, South Africa
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#fmas #fmas24 #fmevents #networking #finance #africa
Looking to expand your network in #Africa?
Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
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#fmas #fmas24 #fmevents #networking #finance #africa