PacWest (NASDAQ:PACW, NASDAQ:PACWP) stock is on the move Monday after the company revealed a dividend cut to bolster funds.
According to a press release, PacWest is paying a dividend of 1 cent per share payable on May 31, 2023. The company also announced a “quarterly cash dividend of $0.4845 per depositary share on its 7.75% Fixed Rate Reset Non-Cumulative Perpetual Preferred Stock, Series A,” which will be payable on June 1, 2023.
Paul Taylor, President and CEO of PacWest, explained the reason behind the dividend cut:
“Given current economic uncertainty, recent volatility in the banking sector and potential changes in regulatory capital requirements, we view reducing the dividend as a prudent step to accelerate our plans to build capital to CET1 of 10%+. Our business remains fundamentally sound, and we will continue with our strategy to focus on our relationship-based community banking model.”
PACW Stock Reactions Today
Shareholders of PACW stock are getting a morale boost from today’s dividend cut and reaffirmation from Taylor. As a result, shares are seeing heavy trading with some 32 million shares changing hands. For the record, that’s already above the company’s daily average trading volume of about 21.7 million shares.
This also comes at a time when regional banks are facing increasing scrutiny from investors. The banking crisis earlier this year rattled investor confidence in the sector and sent many bank stocks falling.
PACW stock is up 18.4% as of Monday morning!
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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.
