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).
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.
