Pacific Western bank says it faced ‘elevated’ cash outflow after bank closures
1 min read . Updated: 18 Mar 2023, 03:12 PM IST
PremiumPacific Western Bank on Friday said it recorded ‘elevated net deposit outflow’ after the closure of Silicon Valley Bank and Signature Bank was announced
Los Angeles-based Pacific Western Bank on Friday said it had observed "elevated" withdrawals in its venture banking business line after the recent collapses of Silicon Valley Bank and Signature Bank. However, the bank noted that deposit movements had stabilized since Monday and it maintained a solid liquidity position, with more than $10.8 billion in available cash as of Friday.
In a statement, Pacific Western Bank said, "Since Monday, March 13, 2023, net outflows have fallen sharply, with deposit balance fluctuations substantially stabilizing."
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The statement by Pacific Western Bank came late on Friday after its parent company PacWest Bankcorp's shares had dropped by 19% in a week dominated by a crisis in the banking industry.
According to Pacific Western Bank, insured deposits represented over 62% of total deposits, with insured venture-specific deposits accounting for over 77% of total venture deposits as of March 16. The bank also laid emphasis on the fact that it has a diversified deposit base with close to 25% of total deposits being venture deposits.
Pacific Western Bank CEO and President Paul W. Taylor while commenting on the bank's situation said, “After a challenging week, we are encouraged that much of the volatility seems to have calmed over the past several days." He also said that the bank has taken various steps such as utilizing available collateral, to strengthen its liquidity during this period in order to continue ‘delivering’ for its customers.
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The CEO also praised the efforts taken by the US government and regulators in this time of crisis, Taylor said, “We are also encouraged by the distinct message that government officials, regulatory agencies, and industry leaders have been communicating, expressing a clear commitment to the banking system and its depositors."
Two major US lenders, Silicon Valley Bank and Signature Bank collapsed last week leading to panic in the banking sector. Silicon Valley Bank was the 16th largest lender in the US before being shut down by regulators last week owing to issues related to liquidity and insolvency.
(With inputs from Reuters)
