Two years after acquiring Civic Financial Services amid the housing boom of 2021, Los Angeles-based PacWest is cutting 200 jobs.
In a Securities and Exchange Commission filing Friday, PacWest said it’s also “reducing the number of loan products offered, reducing loan growth compared to 2022 levels, and transferring the management of most Civic functions to company executives.”
Its Civic subsidiary, which lends in 30 states and Washington, D.C., won’t originate any new loans for 30 days following the filing in an effort to reduce loan growth.
The bank expects to save between $30 million and $40 million with its layoffs, which will start next week and are on-trend for the sector amid rising mortgage rates.
The market is in a very different spot today than it was when PacWest acquired Civic, which specializes in “business-purpose residential non-owner-occupied investment properties,” according to the SEC filing.
The goal of the restructuring is to "improve its profitability and risk profile," according to the SEC filing, and it “aligns with the company's strategy to focus on relationship-based community banking and to improve capital, liquidity and operational efficiency.”
In a January earnings call, PacWest CEO Paul Taylor said there was "a lot more overhead than there should be" at Civic. PacWest recorded a $29 million goodwill impairment last quarter as part of a strategy to restructure Civic.
“We believe these actions will result in an improvement in the profitability and risk profile of Civic going forward,” Taylor said at the time.
PacWest did not return a request for comment by press time.