PacWest sells real-estate lending unit to Roc360
11:03 pm Tuesday, May 23rd, 2023
By Anirban Sen and Saeed Azhar
(Reuters) -PacWest Bancorp has sold its property lending division to real estate financing firm Roc360 for an undisclosed amount, in a bid to bolster investor confidence amid concerns about the finances of U.S. regional lenders.
Roc360 said on Tuesday it agreed to acquire PacWest’s Civic Financial Services (“CIVIC”) unit, which is known for extending loans to landlords and investors interested in purchasing homes for renovation and resale.
Previously originated loans and loan-servicing operations will not be part of the deal, Roc360 said, adding that it would use the brand name CIVIC.
PacWest is one of the several U.S. regional lenders whose shares were hit by investor concerns over the financial health of the sector following the collapse of three regional banks in the United States since March.
However, PacWest and other regional U.S. banks have rallied in the past two weeks as investors increasingly believe the worst of the crisis is largely over and that many lenders are fundamentally sound.
On Monday, the Los Angeles-based bank said it would sell $2.6 billion worth of its loan portfolio to bolster its finances, a move that helped the stock surge by about 20%.
Earlier this month, PacWest had said it was exploring strategic asset sales to sharpen focus on its core business segments as the regional banking sector grapples with its biggest crisis since 2008.
The Wall Street Journal first reported the Roc360-CIVIC deal on Tuesday.
(Reporting by Anirban Sen, Shivani Tanna and Akriti Sharma; Additional reporting by Urvi Dugar and Gursimran Kaur; Editing by Anil D’Silva and Subhranshu Sahu)
