PacWest Bancorp (NASDAQ:PACW) stock dropped 7.8% after hours on Thursday after the bank reported Q4 results below estimates, hurt by higher interest expense.
The firm also announced a strategic plan to maximize shareholder value by strengthening community banking, exiting non-core products and services, and improving operational efficiency.
PacWest (PACW) will wind down operations in its premium finance and multi-family lending groups in Q4. It is also restructuring its lending unit Civic to improve profitability and risk profile. For this, PacWest (PACW) recorded a goodwill impairment of $29M.
The firm opportunistically sold $1B of available-for-sale securities at a loss in Q4 and used the proceeds to pay down FHLB borrowings.
For 2023, PacWest (PACW) aims for capital to CET1 of over 10%, low cost core deposits equal to 40% of portfolio, return on assets of 1.5%, non-performing asset ratio of less than 50 bps and top quartile EPS growth.
PacWest (PACW) reported Q4 EPS of $0.33 and revenue of $303.9M, up 25.1% Y/Y, both missing estimates.
Net interest income slid 3.7% to $322.9M due to higher interest expense on deposits and borrowings. Provision for credit losses stood at $10M vs. $3M in Q3.
Earlier, PacWest (PACW) announced senior executive appointments.