Shares of PacWest Bancorp shot up toward a three-week high Tuesday, as part of a broader rally for the regional bank sector.
The Beverly Hills, Calif.-based bank’s stock
PACW,
climbed 17.4% in premarket trading.
That extended its recent surge, which included Monday’s 19.6% jump after the bank unveiled a plan to sell $2.6 billion worth of loans. It has rocketed 49.9% over the past four sessions.
D.A. Davidson analyst Gary Tenner reiterated his neutral rating on the stock but boosted his price target by 167%, to $8 from $3.
Tenner said that while loans sale was part of a strategy to divest non-core, non-relationship assets put in place in early 2023, the recent deposit pressures experienced after the closing of several regional banks have increased the importance of asset sales as it relates to removing funding pressure.
“The transaction furthers [PacWest’s] progress in refocusing on its core, relationship-based community bank segment, and away from non-core, non-deposit national transactions,” Tenner wrote in a note to clients.
Meanwhile, the SPDR S&P Regional Banking exchange-traded fund
KRE,
rose 0.5% ahead of Tuesday’s open, also toward a three-week high. That bucked declines in the broader stock market, as futures
ES00,
for the S&P 500 index
SPX,
fell 0.3%.
Among the regional banking ETF’s more-active components, shares of Western Alliance Bancorp
WAL,
climbed 2.4%; First Horizon Corp.
FHN,
shares advanced 2.4%; Zions Bancorporation
ZION,
tacked on 2.7%; Huntington Bancshares Inc. shares
HBAN,
were up 1.0%; and of Regions Financial Corp.
RF,
shares were up 0.4%.
The regional bank ETF has dropped 31.1% year to date through Monday, while the Financial Select Sector SPDR ETF
XLF,
has slipped 4.5% and the S&P 500 has gained 9.2%.
