PacWest Bancorp (PACW), a California-based regional bank, is expected to report a drop in profits of about a third in the first quarter due to significantly higher interest costs. Analysts estimate that the bank’s interest expenses increased 20-fold, while net interest income likely dropped by 9%. Total deposits are projected to have fallen 17%, but interest-bearing deposits may have risen slightly compared to the same period last year. Inflationary impacts may have also contributed to a 15% rise in non-interest expenses.
PacWest is expected to have set aside $10 million for loan losses, compared to none a year ago. The bank’s shares have fallen by 50% this year.
