PacWest Bancorp Explores Sale of Its Lender Finance Division

(Bloomberg) — PacWest Bancorp, a regional bank left reeling following the collapse of two rival lenders last month, is exploring a sale of its lender finance arm, according to people familiar with the matter.

Most Read from Bloomberg

The Beverly Hills, California-based bank is working with a financial adviser to solicit interest in the business, said the people, who asked to not be identified because the matter isn’t public. An agreement could be reached within two months, one of the people said.

Unloading the unit would shrink PacWest’s balance sheet while freeing up capital, the people said. No final decision has been made and PacWest could opt to hold onto the business, the people added.

The lender finance business, which had about $3 billion of loans at the end of 2022, provides revolving credit lines to small business and commercial real estate lenders that are used to purchase finance receivables, according to PacWest’s most recent annual report.

A representative for PacWest declined to comment.

PacWest had to shore up liquidity last month after customers pulled about 20% of their deposits following the failures of Silicon Valley Bank and Signature Bank.

The bank, whose shares have tumbled 60% since the beginning of March, obtained $1.4 billion from a financing facility last month from the investment firm Atlas SP Partners, which is owned by Apollo Global Management Inc. PacWest is scheduled to report earnings on April 25.