Pacific Western Bank says it faced ‘elevated’ cash outflows after bank closure

“While net outflows have declined sharply since Monday, March 13, 2023, deposit volatility has largely stabilized,” Pacific Western Bank said in a statement.

Read also: an explanation of the global banking turmoil; What’s happening at SVB, Credit Suisse

Pacific Western Bank’s statement came late on Friday after shares of its parent company PacWest Bankcorp plunged 19% in a week hit by the crisis in the banking industry.

According to Pacific Western Bank, insured deposits represent more than 62% of total deposits, with insured enterprise-specific deposits accounting for more than 77% of total enterprise deposits as of March 16. The bank also emphasized on the fact that it has a diversified deposit base with enterprise deposits forming around 25% of the total deposits.

Commenting on the bank’s situation, Paul W. Taylor, CEO and President of Pacific Western Bank, said, “After a challenging week, we are encouraged that much of the volatility over the past several days has calmed down.” He also said that the bank took various steps like using available collateral to strengthen its liquidity during this period in order to continue ‘distributing’ to its customers.

Read also: How Deep Is the Rot in America’s Banking Industry?

The CEO also praised the efforts made by the US government and regulators during this time of crisis, Taylor said, “We are also encouraged by the specific message from government officials, regulatory agencies and industry leaders, who express clear commitment are communicating. The banking system and its depositors.”

Two major US lenders, Silicon Valley Bank and Signature Bank, collapsed last week, triggering panic in the banking sector. The Silicon Valley bank was the 16th largest lender in the US before it was shut down by regulators last week due to liquidity and bankruptcy-related issues.

(with inputs from Reuters)