PacWest (PACW) stock jumped more than 8% Monday morning as the embattled regional bank offloaded real estate loans.The lender will sell a $2.7 billion portfolio of 74 real estate construction loans to Kennedy Wilson Holdings, according to a filing. Kennedy Wilson will be buying the real estate at a $300 million discount, per the company’s filing.
The deal will also include six more loans totaling $363 million, pending approvals. The bank said the agreement is "consistent with the previously announced strategy of PacWest Bancorp to pursue strategic assets sales and focus on our core community banking business."
The move comes after several regional banks have struggled during a period of turmoil triggered by rising interest rates, deposit outflows and precipitous pressure on their stocks following the collapse of Silicon Valley Bank, Signature Bank and First Republic.
Those fears have lessened in the last week, though. Last week, Western Alliance announced it grew deposits by more than $2 billion since the end of the first quarter.
The news sent regional banks higher. PacWest's announcement has had a similar effect, with shares of Western Alliance (WAL) and Zions (ZION) following the lender higher. Those stocks have individually risen no less than 20% in the last five days.