PacWest Bancorp, the holding company for PacWest Bank, saw its stock price fall by over 6% on Thursday, amid renewed concerns about deposit growth. The decline in the stock price comes as investors worry about the bank’s ability to maintain its deposit base amid growing competition from online and mobile banks.
PacWest is a regional bank based in California, with over 80 branches across the state. The bank has been growing rapidly in recent years, thanks in part to a series of acquisitions, but its ability to attract and retain deposits has been a persistent concern for investors.
According to a report from Bloomberg, some investors are worried that PacWest’s deposit growth may have peaked, and that the bank could face challenges in maintaining its deposit base as competition from online and mobile banks heats up.
The report cited data from the Federal Deposit Insurance Corp., which showed that PacWest’s deposits grew by just 0.3% in the third quarter, compared to an industry average of 1.7%.
Investors are also concerned about the bank’s exposure to the real estate market, particularly in California, where home prices have been rising rapidly in recent years. Some analysts have warned that the bank’s loan portfolio could be at risk if there is a downturn in the housing market.
Despite these concerns, PacWest CEO Matt Wagner expressed confidence in the bank’s ability to weather any challenges that may arise. In a statement to Bloomberg, Wagner said that the bank was “well-positioned for growth,” and that it remained committed to “providing value to our customers, shareholders and communities.”
The decline in PacWest’s stock price on Thursday comes amid a broader sell-off in the banking sector, as investors grow increasingly concerned about the outlook for interest rates and economic growth. The KBW Nasdaq Bank Index, which tracks the performance of large U.S. banks, fell by over 3% on Thursday, its biggest one-day decline since June 2020.