Insiders Were Buying Up PacWest (PACW) Stock Ahead of Bank Stocks Crash
Following the collapse of SVB Financial’s (NASDAQ:SIVB) subsidiary Silicon Valley Bank, attention gravitated toward other bank and financial stocks, such as PacWest Bancorp (NASDAQ:PACW) stock. Last Friday, the bank holding company publi…
Following the collapse of SVB Financial’s (NASDAQ:SIVB) subsidiary Silicon Valley Bank, attention gravitated toward other bank and financial stocks, such as PacWest Bancorp (NASDAQ:PACW) stock. Last Friday, the bank holding company published a press release of its updated financial figures to reassure shareholders of its health.
As of March 9, PacWest’s wholly-owned subsidiary, Pacific Western Bank, had total deposits of $33.2 billion, compared to $33.9 billion as of Dec. 31. On top of that, the bank’s risk-based capital ratios, including the Common Equity Tier 1 (CET1), have increased during the past three quarters. PacWest’s Tier 1 risk-based capital ratio was 10.61% as of Dec. 31, while the Federal Reserve requires a CET1 of at least 4.5% for large banks.
PacWest also had a cash balance of $1.9 billion as of March 9 and a loan balance of $28.3 billion, which fell by $384 million compared to Dec. 31.
“We have taken numerous strategic steps over the past four quarters to improve the balance sheet, including exiting non-core products, executing bond sales, a preferred stock offering, and a credit-linked notes transaction, and commenced a cost-reduction initiative designed to increase earnings,” said the bank.
Another positive sign for PacWest is that several insiders have purchased shares on the open market this year. Let’s get into the details.
PacWest Insiders Load Up on PACW Stock
Since Jan. 1, insiders, like Directors William Hosler and Stephanie Mudick, have purchased a total of 26,250 shares at average prices ranging between $26.48 and $20.57. William Black, PacWest’s Executive Vice President, Strategy and Corporate Development, also joined in on the fun, purchasing 13,000 shares at an average price of $20.57 on March 9. The most recent purchase is attributed to Hosler, who bought 4,250 shares at average prices between $20.66 and $21.96 on March 9 and 10.
These purchases, amid the collapse of Silicon Valley Bank, spell heavy conviction for the insiders. Adding on to the positive signal is that none of these buys were enacted through a prearranged 10b5-1 trading plan. It’s often said that insiders know their company best, and shareholders should take note when they’re buying during difficult times.
Furthermore, insiders haven’t just been buying in 2023. In the past year, insiders have purchased 356,564 shares and sold out of 250,410 shares. That adds up to a net activity of 106,154 shares purchased.
On the date of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Eddie Pan specializes in institutional investments and insider activity. He writes for InvestorPlace’s Today’s Market team, which centers on the latest news involving popular stocks.
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