PacWest Bancorp.’s stock jumped 3% premarket Monday, after the bank announced asset sales that would allow it to focus on its core community banking business.
The regional bank PACW, -1.88% said it has entered an agreement to sell a portfolio of 74 real estate construction loans with a principal balance of about $2.6 billion to a unit of real-estate investment company Kennedy Wilson Holdings.
“Kennedy Wilson or its designees will also assume all remaining future funding obligations under the acquired loans of approximately $2.7 billion,” PacWest said in a regulatory filing.
The bank has also agreed to sell an additional six real estate construction loans to Kennedy Wilson with a principal balance of about $363 million.
The sale of the loans is subject to Kennedy Wilson’s satisfactory due diligence. The company will place $20 million into a third-party escrow account that will be refundable.
The deal is expected to close in several tranches in the second and third quarters. “There can be no assurance that the transaction will be completed in part or at all,” said the filing.
See also: FDIC set to levy big banks to pay for $15.8 billion bailout of Silicon Valley, Signature Banks
PacWest shares are down 75% in the year to date, after being caught up in the regional-bank stock rout that followed the collapse of Silicon Valley Bank in March.
The bank said it lost 9.5% of deposits during the week ending May 5 amid market volatility following JPMorgan’s JPM, -0.23% rescue of First Republic Bank.
See:Here’s why people are still worried about regional banks and commercial real estate
Other regional banks were also rising premarket. Western Alliance Bancorp. was up 0.4% and KeyCorp. was up 1.7%.
The S&P 500 SPX, -0.14% has gained 9% in the year to date.
This article was originally published by Marketwatch.com. Read the original article here.
