PacWest Bancorp's shares rose nearly 38% in premarket trading on Wednesday, a day after smaller rival Banc of California agreed to buy the lender for $1.1 billion in an all-stock deal.
PacWest has signed a few asset sale agreements to pacify jittery investors and reassure depositors, after it came under pressure following the collapse of three regional lenders earlier this year that prompted the worst industry turmoil since the 2008 financial crisis.
"PacWest just could not recover from its wounds quickly enough," said Omar Fahmy, analyst at global research firm Third Bridge. "Despite the sale announcement, our experts largely believe that the 'banking panic' we saw around U.S. regional banks earlier this year has subsided now we have seen reasonably positive earnings from PNC and Western Alliance," Fahmy added.
On Tuesday, Los Angeles, California-based PacWest reported its total deposits fell $290.5 million or 1% in the second quarter. Private equity firms Warburg Pincus and Centerbridge Partners have agreed to invest $400 million in Banc of California's buyout deal.Niket NishantNiket Nishant reports on breaking news and the quarterly earnings of Wall Street's largest banks, card companies, financial technology upstarts and asset managers. He also covers the biggest IPOs on U.S. exchanges, and late-stage venture capital funding alongside news and regulatory developments in the cryptocurrency industry.
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