PacWest Bancorp of San Diego slashed its quarterly dividend to a nominal 1 cent a share, from 32 cents a share, and reported that it eked out a first-quarter profit despite surging loan problems.

The dividend cut will save the company $38 million a year.

PacWest reported net income of $1.4 million, or 5 cents a share. For the year-earlier period it reported a net loss of $272.7 million, or $10.05 a share. The loss included a $275 million goodwill writeoff. On average, analysts surveyed by Thomson Reuters projected earnings of 19 cents a share.

The provision for loan losses fell 46%, to $14 million. But nonperforming assets continued to surge, climbing to 4.69% of the total from 0.96% a year earlier and 2.6% in the fourth quarter. The company's loan concentration is in Southern California, currently one of the worst housing markets.

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