PacWest Bancorp's (PACW) earnings are likely to decline next year mostly due to expected pressure on net interest margin that will be worsened by the high proportion of variable loans in PACW's total loans. On the other hand, growth in earning assets is expected to somewhat soften the downward pressure on PACW's bottom-line. The market appears to have over discounted PACW's price in light of the prospects of earnings decline, as my target price implies a double digit upside from the stock's current price.
Economic Growth to Keep Loan Expansion Upbeat
PACW is