PacWest Bancorp on Tuesday posted better-than-expected Q1 earnings, while deposits stabilized toward the end of the quarter and grew further this month, sending its stock 18.33% higher in premarket trading.
Q1 adj. EPS was $0.66 vs. $0.54 in Q1 2022, and revenue increased 94.7% Y/Y to $315.69M. Net interest income declined 13.5% sequentially to $279.3M due to higher interest expense on deposits and borrowings.
Total deposits increased $1.1B to $28.2B at March 31, from the lender's recent update of $27.1B as of March 20. Deposit balances further grew ~$700M as of April 24.
Total insured deposits, including accounts eligible for pass-through insurance, represented ~73% of total deposits as of April 24, up from 48% at December 31, 2022.
Immediately-available liquidity stood at $12.4B, which exceeded uninsured deposits of $8.1B, with a coverage ratio of 153% at March 31.
PacWest (PACW) recorded a goodwill impairment of $1.38B due to the recent stock selloff. This is a non-cash charge and has no impact on regulatory capital ratios or liquidity position.
"We expect our total assets will be closer to $35B within the next few months, after we complete certain asset sales and bring down liquidity to more normal levels," said Paul Taylor, President and CEO. "These actions will improve our liquidity position and are expected to increase our CET1 capital ratio to above 10%."
Shares of PacWest (PACW), which ended 8.9% lower on Tuesday, dropped ~55% YTD. SA Quant flashed Sell on PACW as it is at high risk of performing badly.
