Regional bank PacWest Bancorp (PACW) surged by more than 15% in morning trading at the time of writing on Tuesday and led a strong rally in regional banking stocks including Western Alliance Bancorp (WAL), Zions Bancorp (ZION) and Comerica (CMA).
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PACW’s surge has been due to its announcement of the sale of its real estate loans and the stock has rallied by more than 50% in the past five trading sessions alone.
Top-rated D.A. Davidson analyst Gary Tenner seemed to approve of this sale as he reiterated a Hold rating on the stock but more than doubled his price target to $8 from $3 earlier. The analyst commented, “The transaction furthers [PacWest’s] progress in refocusing on its core, relationship-based community bank segment, and away from non-core, non-deposit national transactions.”
Meanwhile, the SPDR S&P Regional Banking ETF (KRE) has gained more than 6% in the past five trading sessions.