BANC - PacWest Bancorp upgraded to Buy at D.A. Davidson post-BANC deal

2023-07-31 15:29:13 ET

D.A. Davidson upgraded PacWest Bancorp ( NASDAQ: PACW ) stock to Buy from Neutral on Monday to align it with the same rating as Banc of California ( NYSE: BANC ), which had agreed to buy PacWest last week.

"We think that transaction is beneficial to shareholders of both companies, and accelerates the recovery of value for PACW shareholders in the wake of the March bank liquidity crisis," analyst Gary Tenner wrote in a note.

Tenner reckons there's "minimal risk" of the deal not closing, "as regulators should welcome the capital infusion and post-deal stability."

The Buy rating disagrees with the SA Quant system of Strong Sell, as well as the average SA analyst rating and the average sell-side analyst rating, both at Hold.

Bank of America analyst Ebrahim Poonawala had weighed in on the broader implications of the PACW-BANC deal, noting it marked "a turn for the positive" as PACW common and preferred shareholders didn't get wiped out, nor did the Federal Deposit Insurance Corp. have to intervene.

PACW slipped 1.6% in mid-afternoon trading. Since July 25, when the all-stock merger was announced, the stock has jumped 22.9% .

More on PacWest Bancorp and Banc of California:

• PacWest Merger Is A Win For Shareholders But I Call A Hold On Limited Upside
• PacWest Bancorp And Banc of California: A Perfect Merger Deal
• JPMorgan Chase said to buy $1.8B of mortgages in PACW-BANC deal

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