What happened

PacWest Bancorp (PACW) was having a very good day Monday, as its stock price was up about 21.6% as of 2:50 p.m. ET. It had been up as much as 24.8% on the day. The stock was trading at about $7 per share at that time, down roughly 69% year to date.

The market was mixed on Monday as the S&P 500 was up 11 points (0.3%), the Dow Jones Industrial Average was down 44 points (0.1%), and the Nasdaq Composite had gained 95 points (0.8%) as of 2:50 p.m. ET.

So what

The battered bank stock, the holding company for Pacific Western Bank based in Beverly Hills, California, got a boost Monday after it announced that it was selling off about $2.7 billion in real estate construction loans.

In a Securities and Exchange Commission (SEC) filing posted Monday, PacWest officials said they were selling the construction loans to Kennedy-Wilson Holdings, which will assume all future funding obligations. The regional bank said it will also sell Kennedy-Wilson an additional six real estate construction loans with an aggregate principal balance of approximately $363 million. 

The filing said the sale was "consistent with the previously announced strategy of PacWest Bancorp to pursue strategic assets sales and focus on our core community banking business."

The transaction is expected to close in multiple tranches during the second and third quarters of this year.

Investors were keen on the move, as it will help provide additional liquidity after the bank was hit with significant deposit outflows in the first quarter, following the failure of two major banks.

Now what

PacWest's stock price is still down almost 70% year to date, even with today's gains. But it moved higher in recent weeks when one of its competitors, Western Alliance Bancorporation, announced on May 11 that it had grown deposits by $1.8 billion since the end of the first quarter.

On today's PacWest news, Western Alliance soared about 9.2% to $37 per share.

In early May, PacWest released its own deposit update, saying deposits had declined 9.5% during the week of May 5, after the collapse and sale of another bank, First Republic Bank. 

Look for second-quarter earnings next month to get a broader sense of where it stands. Until then, it is a volatile time for regional banks, particularly PacWest, which had a higher percentage of uninsured deposits than most and suffered significant deposit outflows.