Are PacWest Bancorp Shares Going To $27 — Or $32? Stephens And Wedbush Weigh In

PacWest Bancorp PACW released a mid-quarter update highlighting trends as of March 9, following the recent volatility with its stock on Friday in the wake of the collapse of SVB Financial Group's SIVB Silicon Valley Bank.

The update indicated a modest decline in both loan and deposit balances since year-end, though analysts at Stephens and Wedbush believe the trends were better than feared.

The Stephens Analyst: Andrew Terrell issued an Overweight rating on PacWest with a $32 price target.

The company's liquidity position remains solid, Chiaverini said and the analyst noted the company's aggregate disclosed borrowing capacity of $12.2 billion, which is greater than exposure to VC-related deposits.

Check out more analyst ratings here. 

The Wedbush Analyst: On the other hand, Wedbush analysts said PacWest’s venture deposits came near to those VC-related deposits, totaling approximately $11 billion, or 33% of total deposits as of Dec 31, 2022.

Wedbush's David Chiaverini reiterated a Neutral rating with a $27 price target on the stock.

Chiaverini noted PACW has ~$14 billion of available liquidity as of March 9, including cash on hand, its FHLB credit facility, discount window availability and unpledged, liquid securities, which the analyst believed should be enough to cover the $11 billion of venture deposits at year-end in the event of outflows.

The company's liquidity position remained firm, Chiaverini said, as it had cash on the balance sheet of approximately $1.9 billion, a fully collateralized FHLB credit facility of $4.9 billion, discount window availability of $2.0 billion, and unpledged, liquid securities of $5.3 billion as of March 9.

Loan balances as of its update totaled $28.3 billion, indicating a decline of $384 million since year-end, as a result of the bank executing on its previously announced strategy to slow loan growth and strengthen its balance sheet.

Despite the decline in loan and deposit balances, Wedbush said the company's asset quality trends remained strong.

PACW Price action: Shares of PacWest are trading 21.05% lower at $9.75 Monday at market close, according to data from Benzinga Pro.

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Photo: Pavel Kapysh via Shutterstock