PacWest Bancorp. (NASDAQ:PACW) has agreed to divest its real-estate lending business, Civic Financial Services (CIVIC), to Roc360, as per The Wall Street Journal. This demonstrates the company’s attempts to strengthen investor trust in the bank while concentrating on its core business activities.
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Reportedly, Roc360, a real estate lending firm, acquired CIVIC’s origination assets, excluding already originated loans and loan servicing activities. However, the financial terms of the deal were not disclosed.
In addition, in an SEC filing published on May 22, PacWest disclosed that it will sell 74 real estate construction loans to a division of Kennedy-Wilson Holdings (KW). As a result, the stock gained about 8% yesterday.
The fall of Silicon Valley Bank, Signature Bank, and First Republic Bank has impacted investors’ confidence in all regional banks. Following their collapse, investors are keeping an eye on the unrealized losses on bonds and loans declared by banks.
Some people had concerns about PacWest’s exposure to commercial real estate loans, which the bank allayed with the transaction. Furthermore, it’s likely that both transactions will improve PacWest’s liquidity situation.
What is the Forecast for PACW?
Overall, PACW stock has a Hold consensus rating on TipRanks. This is based on two Buy and six Hold recommendations. The average price target of $7.17 implies 132.7% upside potential. The stock is down 67.5% so far in 2023.
