Shares of PacWest Bancorp (NASDAQ: PACW) gained in pre-market trading on Wednesday after the regional bank reported strong deposit inflows as total insured deposits, including accounts eligible for pass-through insurance, comprised around 73% of total deposits as of April 24, 2023, up from 48% at December 31, 2022. Adjusted earnings came in at $0.66 per diluted share in Q1 versus $1.01 in the same period last year and beating consensus estimates of $0.61 per share.
Paul Taylor, President, and CEO, PacWest Bancorp commented, “Importantly, deposits stabilized in the latter part of March and rebounded nicely in April, increasing approximately $700 million subsequent to quarter-end. Moreover, in light of the recent events, management took immediate steps to maximize liquidity, including the exploration of strategic asset sales, which has led to the transfer of our $2.7 billion Lender Finance loan portfolio to held for sale.”
The bank’s net interest income declined by 10.5% year-over-year to $279.3 million falling short of analysts’ expectations of $318.9 million.
Looking forward, management expects that its total assets will likely reach $35 billion within the next few months, “after we complete certain asset sales and bring down liquidity to more normal levels. These actions will improve our liquidity position and are expected to increase our CET1 capital ratio to above 10%. “
Overall, Wall Street analysts are cautiously optimistic about PACW stock with a Moderate Buy consensus rating based on three Buys and five Holds.
