Several PacWest Bancorp insiders bought the bank’s stock late last week after it started to tumble, as SVB Financial Group’s Silicon Valley Bank’s troubles became public.
But even as the Beverly Hills, Calif.-based bank
PACW,
tried to reassure investors on Friday by saying it was a “well-performing, well-diversified” bank with “excellent” asset quality, the stock continued to sink, enough that the recently purchased shares were worth less than half the price insiders paid to buy them.
The common stock plummeted 26.1% in afternoon trading Monday, and had already been halted for volatility no less than 23 times since the opening bell.
Over the previous two sessions, the stock had plunged 53.7% after the California-based SVB announced moves to bolster finances on Thursday, and was closed by regulators on Friday.
PacWest shares were headed Monday for the lowest close since going public in June 2020, and have now lost 65.8% in the past three days.
In Form 4 filings with the Securities and Exchange Commission disclosed on Monday, the company showed that:
- Paul Burke, board member, spent $44,520 to buy a total of 2,000 shares at a weighted-average price of $22.26 on March 9.
- C. William Hosler, board member, spent $90,730 to buy a total of 4,250 shares on March 9 and March 10 at a weighted average price of $21.35.
- Stephanie Mudick, board member, spent $67,725 to buy 3,250 shares on Thursday at a price of $20.70.
- William Black, executive vice president in strategy and corporate development at PacWest, spent $267,410 to buy 13,000 shares on Thursday at $20.57.
The total spent by those four insiders was $469,935, to buy 22,500 shares at a weighted average price of $20.89.
The stock was recently trading 56.3% below that weighted average price.
“Though the banking industry is experiencing significant volatility in light of recent events, we want to reiterate that Pacific Western Bank is a well-performing, well-diversified, full-service commercial bank with more than twenty years of history,” said PacWest Bancorp Chief Executive Paul Taylor, in a statement on Friday.
Pacific Western Bank is a wholly owned subsidiary of PacWest Bancorp, and is focused on providing banking services to small-, middle-market and venture-backed businesses.
Insiders weren’t the only ones suggesting it was a good time to buy PacWest shares. Analyst Gary Tenner at D.A. Davidson upgraded the bank to buy, after being at neutral for the past five months, saying last week’s selloff in the stock provided “a more attractive entry point for investors.”
He trimmed his stock price target to $29 from $31, but the new target implied a more than tripling, or 218% upside, from current levels.
PacWest shares have plummeted 60.3% year to date, while the SPDR S&P Regional Banking exchange-traded fund
KRE,
has tumbled 21.7% and the S&P 500 index
SPX,
has gained 1.3%.
