PacWest shares tumbled on Thursday after the bank said it lost nearly 10% of deposits in the first week of May following reports it was reviewing strategic options following the sale of First Republic to JPMorgan.
PacWest had $28 billion in deposits as of May 2, but disclosed in a Thursday filing that those deposits fell about 9.5% in the week to May 5. Most of the withdrawals were made on May 4 and 5 following reports that the bank was working with financial advisers to explore strategic options including a sale, which the California-based lender later confirmed.
Shares of PacWest have fallen more than 70% so far in 2023, and were down about 20% in premarket trading.
The outflow from PacWest underscores the recent outflow of deposits from small U.S. banks after three midsize banks – Silicon Valley Bank, Signature Bank and First Republic – collapsed in less than two months.
“News headlines have increased our customers’ concerns about the safety of their deposits,” PacWest said in its 10-Q regulatory filing.
PacWest, while much smaller than SVB and First Republic, has drawn negative attention due to its similarities to SVB, including ties to the tech world, large uninsured deposits, and paper losses on its portfolio of securities.
PacWest said it cashed out the withdrawals through funds available on its balance sheet, and said it had immediate access to an additional $15 billion, which topped the $5.2 billion in deposits not covered by FDIC insurance.
The PacWest update also weighed on other regional bank stocks, including Western Alliance , which fell 6.75 percent, and Comerica , which fell 3.4 percent in premarket trading Thursday.
Beverly Hills-based PacWest reported in April that customers had withdrawn more than $5 billion in deposits.
Since last year, the Fed’s aggressive tightening has crippled banks that depend on cheap deposit funding.