Regional lender PacWest Bancorp said on Monday it agreed to sell a portfolio of 74 real estate construction loans with an aggregate principal outstanding balance of around $2.6 billion to a unit of Kennedy-Wilson Holdings.
PacWest said in a filing it will also sell an additional six real estate construction loans with an aggregate principal balance of around $363 million to Kennedy-Wilson.
Shares in the bank rose 3.3% in premarket trading.
The Los Angeles-based lender had indicated in May it was in talks with potential partners and investors about strategic options. PacWest had, earlier this month, said its deposits declined and it had posted more collateral to the U.S. Federal Reserve to boost the bank's liquidity.
PacWest is one of several U.S. regional lenders whose shares have been hit by investor concerns over the health of the banking sector following the collapse of three banks since March, the latest being the San Francisco-based First Republic Bank, whose assets were sold to JPMorgan Chase.
PacWest, established in 1999, has recently been sharpening its focus on core products such as homeowners' association (HOA) banking. The bank had said in February it was restructuring its lending unit Civic to improve its profitability.
The construction loans transaction is expected to close in multiple tranches during the second quarter and early part of the third quarter of 2023.