PacWest Bancorp Stock Is Trading Higher: What's Going On?

PacWest Bancorp PACW shares are rising Monday after the bank entered into a loan purchase and sale agreement.

What Happened: According to a new regulatory filing, 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 also 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.

The entire regional banking sector has faced heavy selling pressure since March when rising rates led to a bank run on Silicon Valley Bank, which ultimately collapsed.

Signature Bank went under soon after and at the beginning of the month, JP Morgan acquired a substantial majority of assets and assumed deposits of First Republic from the FDIC.

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PACW Price Action: PacWest shares are down more than 72% since the start of the year.

The stock was up 9.95% at $6.30 Monday morning, per Benzinga Pro.

Photo: Thomas Breher from Pixabay.