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The
lender pledged an additional $5.1 billion of its loans to the
central bank on Wednesday, which PacWest said resulted in an
additional borrowing capacity of $3.9 billion.
"We pledged additional assets as collateral for borrowings to
increase our liquidity position for potential deposit outflows,"
the bank said in a filing.
The $15 billion liquidity is more than enough to cover the $5.2
billion of uninsured deposits at the Los Angeles,
California-based bank, it said.
During the week ended May 5, deposits declined about 9.5%, the
bank said, adding the majority of those outflows happened on May
4 and May 5 after news reports said PacWest was exploring
options.
Worries about the stability of mid-sized banks have deepened in
recent days with investors punishing stocks even of seemingly
healthy lenders, despite reassurances from regulators the
banking sector is financially sound.
Shares of other lenders including Western Alliance Bancorp,
KeyCorp and Zions Bancorp also fell in premarket trade.
So far this month, PacWest shares have lost nearly 40%. The
bank's shares plunged to a record low last week after it said it
was exploring strategic asset sales.
The bank said it intends to complete the asset sales in the
second quarter of 2023.
At the end of the first quarter, PacWest had $341.7 million in
cash and cash equivalents, which it said would be sufficient to
fund cash flow needs over the next 12 months.
Wall Street executives and bank analysts have urged regulators
to provide greater protection for bank deposits and consider
other backstops, arguing only a strong intervention could put an
end to the crisis.
(Reporting by Niket Nishant in Bengaluru; Editing by Krishna
Chandra Eluri)
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