PacWest Bancorp’s net income shot up more than 440% year-over-year as it saw strong loan growth and core deposit growth.
The Los Angeles-based parent company of Pacific Western Bank, which has 15 branches in the tri-county region, recorded net earnings of $180.5 million, or $1.52 per diluted share, in the second quarter of 2021. In the same quarter a year earlier, the bank had net earnings of $33.2 million, or 28 cents per diluted share.
In 2020, the bank’s net earnings were impacted by granting $1.8 billion in loan payment modifications. In the most recent quarter, core deposits were up by $1.5 billion, a 22.9% increase, and loan growth was up $527 million, or 11.1%, excluding Paycheck Protection Program loan activity.
“We continued to experience strong deposit growth in the second quarter driven by outstanding growth from our venture banking as well as our commercial banking clients resulting in increased liquidity,” CEO Matt Wagner said in a news release. “The excess liquidity at the Fed continues to be a drag on our net interest margin, which had a negative impact of approximately 73 basis points in the second quarter. However, net interest income is growing as we continue to deploy the excess liquidity.”