By Scott Kanowsky
Investing.com -- Pacific Western Bank (NASDAQ:PACW) has said that it has decided not to pursue a capital raise from potential investors, as the regional lender reaffirmed its financial strength despite a fall in deposits.
In an update on Wednesday, California-based PacWest said it had explored issuing equity as part of a range of possible "liquidity-enhancing measures," but chose not to go ahead with the move due to market volatility and a sharp slide in the share prices of regional banks.
"[T]he Company determined it would not be prudent to move forward with a transaction at this time," PacWest noted.
The business added that its liquidity position remains "solid," while deposit balances have "stabilized" despite shrinking by a fifth since the end of 2022. As of March 20, PacWest had total deposits of $27.1 billion, down from $33.9B on the final day of last December.
PacWest also said it had cash in hand of $11.4B, topping the $9.5B in total uninsured deposits it currently holds on its books. Customer deposits of up to $250,000 are typically insured by the U.S. Federal Deposit Insurance Corporation.
Its cash position was bolstered as well by $1.4B in proceeds from global investment firm Atlas SP Partners through a new senior asset-backed financing facility.
"As we look ahead, we have continued confidence in the strength of PacWest and are encouraged by the stability we have seen in our deposits and liquidity over the past week," said President and Chief Executive Officer Paul W. Taylor in a statement.
Shares in PacWest slipped by more than 3% in early U.S. trading. The stock, along with other smaller players like First Republic Bank (NYSE:FRC) and Western Alliance (NYSE:WAL), have come under pressure after the failure of Silicon Valley Bank led to a spike in withdrawals.