PacWest (NASDAQ:PACW) stock is taking a beating on Thursday after the regional bank revealed details on deposits and available funds.
PacWest notes that the company saw deposits decrease 9.5% last week and that’s not sitting well with investors. The company points out that this mostly happened on May 4 and May 5, which was shortly after the media revealed the company was “exploring options.”
In addition to that, the company pledged more assets as collateral to the U.S. Federal Reserve. This will allow PacWest to borrow more money, which should give it enough funds to continue operations over the next 12 months.
PacWest says that pledging assets is necessary to increase its available liquidity. The company wants more borrowing power in case it has to deal with deposit outflows. Pledging assets gives the bank $15 billion in liquidity to work with, which is “more than enough” to cover the company’s “$5.2 billion of uninsured deposits.”
Should Investors Worry About PACW Stock?
Cherry Lane Investments partner Rick Meckler said the following about the PacWest news to Reuters:
“It ($15 billion liquidity) is not necessarily viewed as negative. It’s the fact that they have to keep reassuring the market […] Investors have seen in the past, banks that are constantly forced to issue statements to shore up confidence suggests there are issues that require them to do that.”
PACW stock is seeing strong trading this morning following the deposits and funding news. This has some 15 million units on the move as investors sell their shares. For the record, this is catching up to the company’s daily average trading volume of about 24 million shares.
PACW stock is down 28.8% as of Thursday morning.
Investors looking for more of the most recent stock market news will want to stick around!
InvestorPlace is home to all of the hottest stock market stories worth reading about on Thursday! Among that is what’s happening with shares of Polestar (NASDAQ:PSNY), Neptune Wellness Solutions (NASDAQ:NEPT) and Guardforce AI (NASDAQ:GFAI) stock today. All of that news is ready to go at the links below!
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On the date of publication, William White did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
