In addition, the company announced that CIVIC will not be originating any new loans for a 30 day period to reduce loan growth. CIVIC, however, will continue operations and funding loans, executive vice president of operations Merced Cohen confirmed.
In an update from the CIVIC senior leadership team’s meeting with PWB’s executive team back in January, Cohen said that “while the details are unknown at this time, expected guidelines and rate changes are on the horizon, and some loans in the system may be impacted by those changes.” The email was shared with Mortgage Professional America.
The decision to pause originating new loans comes as PacWest takes steps to focus on relationship-based community banking and to improve capital, liquidity, and operational efficiency. Last month, PWB recorded a goodwill impairment of $29 million to improve CIVIC’s profitability and risk profile.
The restructuring comes on the heels of the departure of CEO and president William Tessar and general council Alan Dettlebach on January 18. The executives reportedly left the company after months of negotiating with PWB that would’ve “spun CIVIC out from under the bank.”
“In recent days, those conversations have stalled. The bank is no longer interested in pursuing those discussions and has decided to take the company in a different direction,” Tessar said in his email to staff.