PacWest Sells Lending Unit Civic Financial

It’s been a busy week for troubled Pacific Western Bank.

In its second massive deal in as many days, the bank is selling a real estate lending arm, the Wall Street Journal reported. Roc360, a real estate financing firm, will buy the bank’s Civic Financial Services business.

The company will assume Civic’s business operations, but not previously extended loans or loan servicing operations.

Roc360 co-founder and president Maksim Stavinsky told the outlet that the deal closed Tuesday, but didn’t provide terms.

Civic, which was acquired by PacWest in 2021, largely provides loans to landlords and investors targeting home purchases for renovation and resale.

The division, which extended some $3 billion in loans last year, was hit with layoffs in February when the bank cut 200 employees and announced it would slow loan growth and trim product offerings.

The Civic sale comes after PacWest sold $2.6 billion in construction loans to Kennedy-Wilson Holdings for $2.4 billion, more than half of the residential and commercial construction loans on its books in the first quarter.

The company’s stock rose 20 percent in the aftermath of the sale, and nearly 8 percent after the Roc360 deal was confirmed, but is still down by more than 70 percent since March 8.

PacWest was reported earlier this month to be looking at a range of strategic options, including a sale, in the wake of the collapse of other regional lenders Silicon Valley Bank, Signature Bank and First Republic Bank.

Investors had grown concerned with PacWest, which had 80 percent of its obligations tied to commercial real estate-backed loans and residential mortgages, The Real Deal reported.

Civic is the latest pickup for Roc360, which last year originated about $3 billion in loans to real estate investors and in February bought Finance of America’s real estate investor business. Stavinsky told the Journal that the Civic deal expands the company geographically.