Pacific Western Bank Bolsters Liquidity and Reports Deposit Stability

Pacific Western Bank has bolstered its liquidity after its deposits dipped 20% over three months.

The subsidiary of PacWest Bancorp has borrowed $3.7 billion from Federal Home Loan Bank (FHLB), $10.5 billion from the Federal Reserve Discount Window and $2.1 billion from the Bank Term Funding Program, PacWest Bancorp said in a Wednesday (March 22) press release.

It has also secured a new senior asset-backed financing facility from Atlas SP Partners, according to the press release.

“I am proud of the efforts the entire PacWest team has taken in these challenging times to enhance our liquidity and preserve franchise value,” Pacific Western Bank President and CEO Paul W. Taylor said in the release. “We have remained steadfast in our commitment to our customers and our communities, and we are grateful for their support and loyalty.”

The bank’s deposits slipped from $33.9 billion on Dec. 31, 2022 to $27.1 billion on March 20.

This report comes at a time when regional banks have continued to slip amid a wave of worries over bank runs.

Pacific Western Bank reported that as of March 20, it has $11.4 billion in available cash, exceeding its total $9.5 billionin uninsured deposits; that its deposit base is diversified, and that 65% of its total deposits are insured by the Federal Deposit Insurance Corporation (FDIC).

“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,” Taylor said in the release. “Additionally, we continue to be encouraged by the clear message from government officials, regulatory agencies and industry leaders, including Secretary Yellen’s recent remarks regarding the protection of smaller bank depositors.”

Treasury Secretary Janet Yellen said Tuesday (March 21) that the U.S. could take steps similar to the ones it took to shore up Signature and Silicon Valley banks if other smaller lenders are in danger.

Earlier this month, regulators took emergency actions to restore confidence following the collapse of the two banks by guaranteeing both uninsured and insured deposits at both lenders.

“What I’m focused on is stabilizing our system and restoring the confidence of our depositors,” Yellen said while speaking at an American Bankers Association summit.