(Bloomberg) -- Banc of California Inc., which agreed to acquire rival PacWest Bancorp in a rescue deal earlier this year, saw deposits unexpectedly drop in the third quarter. 

Total deposits dropped 8.8% to $6.64 billion in the three months ending September 30 despite an influx of non-interest bearing funds, according to a statement. That missed the $6.9 billion analysts in a Bloomberg survey were calling for and was down 3.3% from the second quarter. 

Net interest income slumped 13% to $69.2 million, below the $71.6 million average of five analyst estimates compiled by Bloomberg. At PacWest, such revenue slumped to $130.7 million, as deposits also missed estimates, according to a separate statement. 

“As we work toward the completion of the merger, our primary strategic focus is adding new deposit customers,” PacWest Chief Executive Officer Paul Taylor said in a statement. 

Santa Ana, California-based Banc of California agreed to buy PacWest in July. The takeover was meant to stabilize PacWest after the Beverly Hills, California-based company was stung by deposit outflows in the aftermath of the collapse of Silicon Valley Bank. 

The companies continue to expect the transaction will close on November 30, according to the statement Tuesday. Earlier this month, the Federal Reserve gave its approval for the deal. 

Read more: PacWest Bosses Were Trying to Start Over. Then SVB Failed 

Across the country, regional banks are grappling with the impacts of higher interest rates. Customers have increasingly plowed their cash into higher-yielding offerings, leading some banks to offer higher rates to keep those savers even if it erodes earnings.

Rising rates have also depressed the value of bonds they bought when rates were low. As they’ve faced those customer withdrawals, it’s forced some of them to sell those assets at a loss. 

PacWest turned to a series of these asset sales earlier this year as it sought to bolster its finances. 

©2023 Bloomberg L.P.