Pacific Western Bank reports $11.4B in available cash as of March 20

Consistent with its announcement on March 17, 2023, the Bank continues to benefit from solid liquidity and stabilized deposit balances, with over $11.4 billion in available cash as of March 20, 2023, which exceeds total uninsured deposits of $9.5 billion as of March 20, 2023. The Bank also continues to have a diversified deposit base that includes commercial, community banking, homeowners associations, retail, and venture customers. In total, as of March 20, 2023, FDIC-insured deposits exceeded 65% of total deposits, including accounts eligible for pass-through insurance, and FDIC-insured venture-specific deposits accounted for more than 82% of total venture-specific deposits, including accounts eligible for pass-through insurance. The Bank also has $600 million of deposits that are backed by other tradeable securities. The Bank’s spot deposit rates reflect a modest increase from year-end, increasing from 1.71% at December 31, 2022 to 2.04% at March 20, 2023. Adding to the stabilized deposit levels, the Bank has proactively taken a number of steps to bolster its liquidity. These steps include having drawn on available federal facilities, including $3.7 billion of borrowings from the FHLB, $10.5 billion of borrowings from the Federal Reserve Discount Window, and $2.1 billion in Bank Term Funding Program borrowings, in each case as of March 20, 2023. The Bank has seen validation from the private sector as well, having secured $1.4 billion in fully funded cash proceeds from ATLAS SP Partners through a new senior asset-backed financing facility, which unlocked liquidity from unencumbered, high-quality assets in an expeditious manner. The Bank has also experienced increased account opening in its Venture Banking business line with approximately 130 new accounts opened since March 9, 2023. Market developments and strategic positioning also have affected the Bank favorably, with the Bank’s accumulated other comprehensive loss declining from $791 million at December 31, 2022 to $704 million at March 17, 2023. Through February 28, 2023, the Bank estimates net income of $48.9 million, which includes $8.2 million of pre-tax severance expense primarily related to the previously announced restructuring of Civic Financial Services, a lending subsidiary, and stockholders’ equity of $4.0 billion at February 28, 2023. As previously previewed, gross loans have intentionally decreased to $28.6 billion as of March 20, 2023, and asset quality remains excellent with no significant changes since year-end, including classified assets, non-performing assets, and charge-offs.