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PacWest Bancorp has transferred ownership of its property lending division to Roc360, a real estate financing company, in an effort to enhance investor trust amidst worries about the financial stability of regional lenders in the United States. Roc360 announced on Tuesday that it has reached an agreement to purchase PacWest's Civic Financial Services ("CIVIC") unit. CIVIC is renowned for providing loans to landlords and investors who are interested in buying houses for the purpose of renovating and reselling them. The exact amount of the transaction has not been disclosed.
According to Roc360, the agreement does not include the loans that were previously issued and the operations related to loan servicing. Roc360 also stated that it intends to retain the brand name CIVIC.
PacWest is among several regional lenders in the United States that experienced a decline in their stock prices due to investor apprehension regarding the financial stability of the sector. This concern arose following the collapse of three regional banks in the country since March.
However, PacWest and other regional banks in the United States have experienced a recovery in the past two weeks, as investors increasingly believe that the worst of the crisis is mostly behind us and that many lenders have strong underlying financial foundations. On Monday, the bank based in Los Angeles announced its plan to sell a loan portfolio worth $2.6 billion in order to strengthen its finances. This move resulted in a significant surge of approximately 20% in the bank's stock value.
Earlier this month, PacWest had stated its intention to explore strategic asset sales in order to focus more on its core business segments. This decision was made in response to the significant challenges faced by the regional banking sector, which is considered the most severe since the financial crisis of 2008.The Wall Street Journal reported on the Kocso?-CIVIC deal on Tuesday.
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