Loan growth has been relatively disappointing across the
banking sector during this rate cycle, but several banks have reported
improving momentum in the fourth quarter, and with better than 20%
growth in originations in the fourth quarter, I’d say PacWest (PACW)
certainly qualifies. Rising deposit costs are going to be an issue in
2019, but PacWest’s low expense ratio and niche commercial lending
franchises should offer some cover.
The attempted acquisition of El Dorado Savings
didn’t work out, but I fully expect this highly acquisitive bank to
remain on the hunt for opportunities to grow its core deposit base
and/or expand its footprint beyond its Southern California base. PacWest
isn’t wildly undervalued, but I like the risk/reward/quality
combination and the company’s position in niche commercial lending.
Read more here:
Strong Growth In Niche Commercial Lending Taking PacWest Into 2019
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