All things considered, I’d say that PacWest Bancorp (PACW) held up well in trading after earnings, given that there were few real positives in the quarter and core pre-provision profits missed by a pretty wide margin. Spread compression was already built into expectations, but instead of the second half loan acceleration bulls were hoping for, deceleration is what they got.
I was cautious on PacWest when I last wrote about the stock because I was worried about the choppy near-term outlook (increasing loan competition, increasing spread pressures, and pressures on credit), and the shares