What happened

PacWest Bancorp (PACW) made a bit of a rebound in June with a 26.4% gain, according to S&P Global Market Intelligence. However, PacWest is still down by about 65% year to date, trading at just over $8 per share as of July 7.

June was a good month for the market overall, as the S&P 500 jumped 6.5%, the Dow Jones Industrial Average gained 4.6%, and the Nasdaq Composite surged 6.6%.

So what

PacWest Bancorp is the 49th-largest bank in the country with about $44 billion in assets as of March 31. Given that it's a regional bank that was a major lender to start-ups and venture capital investors, the market drew parallels between PacWest and the trio of banks that failed this year -- Silicon Valley, Signature, and First Republic. But PacWest did not have the same level of uninsured deposits that those institutions did --  only about 30% of its deposits were uninsured as of the end of the first quarter. In fact, in early May, the company reported that deposits had increased since March 31.

Nonetheless, the stock price tanked earlier this year, dropping by almost 90% from March 8, when it traded at $27 per share, to just over $3 per share on May 4. Since then, the bank has made a series of moves to shore up its liquidity and refocus its business on community banking, and the stock price has climbed back up to $8 per share.

One of the moves in its strategic plan was selling off $2.7 billion in real estate construction loans in late May. Then in late June, it sold off its $3.5 billion lender finance loan portfolio to Ares Capital (ARCC 0.36%). Both of these moves led to investors bidding up its share price significantly.

Another catalyst for banks in general was the Federal Reserve Board's decision to pause interest rate hikes at its June 13-14 meeting. This ended a streak of 10 straight federal funds rate hikes by the Fed and signaled that its interest rate hiking may be winding down as inflation rates continue to fall.

Now what

This remains a difficult environment for regional banks like PacWest, and it faces both regulatory and macroeconomic uncertainty. The stock now trades at a dirt cheap price-to-earnings ratio of just 5.9 and a price-to-book-value ratio of 0.45, but given the recent turmoil in the regional banking space as well as the above-mentioned uncertainties, its earnings power could diminish.

The bank will report its second-quarter results on July 19, so interested investors should definitely tune in for more insight into how it is navigating this market.