—Net Earnings of $13.3
Million— —Credit Loss Reserve at 3.34% of Net
Non-Covered Loans and 161% of Non-Covered Nonaccrual
Loans— —Noninterest-Bearing Deposits at 36% of
Total Deposits and Core at 77%— —Net Interest
Margin of 5.15%— —Tangible Common Equity Increases
by 6.5% or $29.5 Million—
PacWest Bancorp (Nasdaq:PACW) today announced net
earnings for the third quarter of 2011 of $13.3 million, or $0.36
per diluted share, compared to net earnings for the second quarter
of 2011 of $12.8 million, or $0.35 per diluted share.
This press release contains certain non-GAAP financial
disclosures for tangible common equity and pre-credit, pre-tax
earnings. The Company uses certain non-GAAP financial measures to
provide meaningful supplemental information regarding the Company's
operational performance and to enhance investors' overall
understanding of such financial performance. Given the use of
tangible common equity amounts and ratios is prevalent among
banking regulators, investors and analysts, we disclose our
tangible common equity ratios in addition to equity-to-assets
ratios. Also, as analysts and investors view pre-credit, pre-tax
earnings as an indicator of the Company's ability to absorb credit
losses, we disclose this amount in addition to net earnings. Please
refer to the table at the end of this release for a presentation of
performance ratios in accordance with GAAP and a reconciliation of
the non-GAAP financial measures to the GAAP financial measures.
THIRD QUARTER RESULTS |
|
|
|
|
|
|
Three
Months Ended |
|
September 30, |
June 30, |
|
2011 |
2011 |
|
(Dollars in thousands,
except per share data) |
Financial Highlights: |
|
|
Net earnings |
$ 13,304 |
$ 12,841 |
Diluted earnings per share |
$ 0.36 |
$ 0.35 |
Annualized return on average assets |
0.97% |
0.94% |
Annualized return on average equity |
10.11% |
10.31% |
Net interest margin |
5.15% |
5.57% |
Efficiency ratio (1) |
67.9% |
58.2% |
|
|
|
At Quarter End: |
|
|
Allowance for credit losses to
non-covered loans, net of unearned income (2) |
3.34% |
3.52% |
Allowance for credit losses to
non-covered nonaccrual loans (2) |
161.0% |
157.0% |
Equity to assets ratios: |
|
|
PacWest Bancorp Consolidated |
9.82% |
9.49% |
Pacific Western Bank |
11.59% |
11.27% |
Tangible common equity ratios: |
|
|
PacWest Bancorp Consolidated |
8.85% |
8.47% |
Pacific Western Bank |
10.64% |
10.26% |
|
|
|
(1) FDIC loss sharing income and
net covered OREO costs increased the third quarter 2011
efficiency ratio by 589 bps and reduced the second quarter
2011 efficiency ratio by 254 bps. |
(2) Non-covered loans exclude
loans covered by loss sharing agreements with the FDIC. |
The $463,000 increase in net earnings for the linked quarters
was due to a lower provision for credit losses of $11.0 million
($6.4 million after tax), offset partially by lower net interest
income of $4.2 million ($2.5 million after tax), lower FDIC loss
sharing income of $4.4 million ($2.5 million after tax), and higher
covered OREO costs of $3.6 million ($2.1 million after
tax).
Net interest income declined due to lower accelerated accretion
of discounts on covered loan payoffs and lower average loans,
offset partially by higher interest income on investment securities
from portfolio purchases and lower interest expense on
deposits. FDIC loss sharing income declined principally due to
the lower provision for credit losses on covered
loans. Covered OREO costs increased due to higher write-downs
in the current quarter, offset by higher gains on sales. Net credit
costs on a pre-tax basis are shown in the following table:
|
Three Months
Ended |
|
September 30, |
June 30, |
|
2011 |
2011 |
|
(In
thousands) |
Provision for credit losses on non-covered
loans |
$ -- |
$ 5,500 |
Non-covered OREO expense, net |
2,293 |
2,300 |
Total non-covered credit costs |
2,293 |
7,800 |
|
|
|
Provision for credit losses on covered
loans |
348 |
5,890 |
Covered OREO expense, net |
4,813 |
1,205 |
Total covered net credit costs |
5,161 |
7,095 |
Less: FDIC loss sharing income, net |
963 |
5,316 |
Adjusted covered net credit costs |
4,198 |
1,779 |
|
|
|
Total net credit costs |
$ 6,491 |
$ 9,579 |
The provision for credit losses for the third quarter had two
components: $0 for non-covered loans and $348,000 for covered
loans. The third quarter non-covered credit loss provision of
$0 was based on our allowance methodology which reflected (a)
non-covered loan net charge-offs of $6.0 million, (b) the levels
and trends of nonaccrual and classified loans, (c) the migration of
loans into various risk classifications, and (d) a decline in
outstanding non-covered loans. During the third quarter,
nonaccrual loans declined by $5.3 million to $60.0 million,
classified loans decreased by $37.7 million to $177.7 million, and
gross non-covered loans declined $19.4 million to $2.90 billion.
The covered loan credit loss provision was driven by decreases in
expected cash flows on covered loan pools compared to those
previously estimated. The covered loan credit loss provision
and covered net OREO expense are offset partially by an increase in
FDIC loss sharing income, which represents the FDIC's share of
these net costs. FDIC loss sharing income also includes reductions
of the FDIC loss sharing asset when expected cash flows on covered
loan pools improve.
Matt Wagner, Chief Executive Officer, commented, "We are pleased
to post another profitable quarter with net earnings reaching $13.3
million for the third quarter and $36.8 million
year-to-date. We continue to generate significant core
earnings, which strengthens our balance sheet, gives us operating
flexibility, and enables us to take advantage of opportunities when
they present themselves."
Mr. Wagner continued, "Credit quality metrics continued to
improve in the third quarter, with loan loss provisions, nonaccrual
loans and classified loans all decreasing. Our legacy credit
loss reserve represented 3.34% of legacy loans and 161% of legacy
nonaccruals at the end of September. Although loan portfolio
growth remains tepid, we are pleased that C&I loans increased
$32 million during the quarter. We continue to retain many
maturing lending relationships that contribute positively to our
profitability and net interest margin."
Vic Santoro, Executive Vice President and Chief Financial
Officer, stated, "The Company had a sound third quarter, posting a
continued strong net interest margin, lower overhead costs,
improved credit metrics, ongoing deposit generation and a strong
capital base. Although our net interest margin declined during
the quarter, at 5.15% it remains one of the highest in the
nation. Our third quarter loan yield was a respectable 6.87%,
and all-in deposit cost dropped 5 basis points to
0.44%. Operating costs continue to be controlled, demonstrated
by a $1.6 million decline in noninterest expense when OREO costs
are excluded. The lower nonaccrual and classified loan levels
we experienced in the third quarter translated into reduced credit
loss provisions. Core deposits were up almost $102 million,
including a $29 million increase in non-interest bearing demand
deposits. The Company's and the Bank's capital positions
remain well in excess of the well-capitalized regulatory minimums,
and the Company's tangible capital increased to $12.91 per share at
September 30 compared to $12.12 at the end of June."
YEAR TO DATE RESULTS |
|
|
|
Nine Months
Ended |
|
September
30, |
|
2011 |
2010 |
|
(Dollars in thousands,
except per share data) |
Financial Highlights: |
|
|
Net earnings (loss) |
$ 36,821 |
$ (54,328) |
Diluted earnings (loss) per share |
$ 0.99 |
$ (1.55) |
Annualized return on average assets |
0.90% |
(1.37%) |
Annualized return on average equity |
9.81% |
(14.74%) |
Net interest margin |
5.35% |
4.95% |
Efficiency ratio |
61.5% |
62.7% |
The higher net earnings for the nine months ended September 30,
2011 compared to the same period last year was due mostly to a
lower provision for credit losses. The provision for the prior
year period included $71.4 million related to the Company's sale of
$323.6 million of non-covered classified loans in the first quarter
of 2010; there was no similar sale of classified loans in the
current year. When compared to the same period for 2010,
the current 2011 period shows higher net interest income of $18.1
million ($10.5 million after tax), lower provision for credit
losses of $155.8 million ($90.4 million after tax), lower FDIC loss
sharing income of $22.1 million ($12.8 million after tax), and
lower noninterest expense of $3.0 million ($1.7 million after
tax). The increase in net interest income was due to (a)
higher interest income on investment securities from purchases of
$495.3 million during the current year-to-date period, (b) higher
interest income on loans due to higher loan yield, and (c) lower
interest expense on deposits from reduced pay rates. The
decline in noninterest expense reflects lower non-covered net OREO
costs and insurance and assessment costs, offset by higher
compensation and covered net OREO costs.
The comparability of financial information is affected by our
acquisitions. Operating results include the operations of Los
Padres Bank, which was acquired in August 2010 and added $824
million in assets and nine branch offices.
BALANCE SHEET CHANGES
Total assets grew $99.2 million during the third quarter due to
higher investment securities and interest-earning deposits in
financial institutions, offset mostly by lower loans. During
the third quarter, investment securities available-for-sale grew
$203.8 million due to purchases. The non-covered loan
portfolio declined $19.4 million on a gross basis, although this
was net of a $32.1 million increase in commercial
loans. Excluding commercial loans, the loan portfolio
continues to decline generally due to repayments, resolution
activities, and low loan demand. The covered loan portfolio
declined $44.9 million. At September 30, 2011, non-covered
loans, net of unearned income, totaled $2.9 billion and the covered
loan portfolio was $761.1 million.
Total deposits grew $67.9 million during the third quarter to
$4.6 billion at September 30, 2011. Time deposits decreased
$33.7 million during the third quarter to $1.0 billion at September
30, 2011. Core deposits, which include noninterest-bearing
demand, interest checking, money market, and savings accounts, grew
$101.6 million during the third quarter due to increases of $44.9
million, $28.8 million, and $20.9 million in money market deposits,
noninterest-bearing demand deposits, and interest checking
deposits, respectively. At September 30, 2011, core deposits
totaled $3.5 billion, or 77% of total deposits at that
date. Noninterest-bearing demand deposits were $1.6 billion at
September 30, 2011 and represented 36% of total deposits at that
date.
COVERED ASSETS
As part of the Los Padres and Affinity acquisitions we entered
into loss sharing agreements with the FDIC that cover a substantial
portion of losses incurred after the acquisition dates on covered
loans and other real estate owned, and in the case of the Affinity
acquisition, certain investment securities.
A summary of covered assets is shown in the following table as
of the dates indicated:
|
September 30, |
June 30, |
Covered
Assets |
2011 |
2011 |
|
(In
thousands) |
Loans, net |
$ 761,059 |
$ 805,952 |
Investment securities |
47,213 |
49,501 |
Other real estate owned, net |
32,301 |
40,949 |
Total covered assets |
$ 840,573 |
$ 896,402 |
NET INTEREST INCOME
Net interest income was $64.4 million for the third quarter of
2011 compared to $68.7 million for the second quarter of
2011. The $4.3 million decline was due to a $4.7 million
decrease in interest income, which was attributed to lower
accelerated accretion of discounts on covered loan payoffs and
lower average loans. Offsetting the decline in net interest income
was a reduction in interest expense of $430,000 due to lower rates
on money market deposits and a decline in average time
deposits.
Net interest income grew by $18.1 million to $198.9 million
during the nine months ended September 30, 2011 compared to the
same period last year. This change was due to a $12.0 million
increase in interest income and a $6.1 million decrease in interest
expense. The increase in interest income was due to purchases
of investment securities and an increase in accelerated accretion
of discounts on covered loan payoffs. The decrease in interest
expense was due to lower rates on money market deposits and lower
average borrowing balances as $260 million of FHLB advances were
repaid in the first half of 2010 and another $50 million were
repaid in December 2010.
NET INTEREST MARGIN
Our net interest margin for the third quarter of 2011 was 5.15%,
a decrease of 42 basis points from the 5.57% reported for the
second quarter of 2011. The decrease reflected lower
accelerated accretion of discounts on covered loan payoffs and a
shift in the mix of average interest-earning assets to lower
yielding investment securities from higher yielding
loans. Average interest-earning assets increased $19.7 million
for the linked quarters including a $162.8 million increase in
average investment securities. The net interest margin has been
impacted by the accelerated accretion of discounts on covered loan
payoffs and loans being placed on or removed from nonaccrual
status. The effects of such items on the net interest margin
are shown in the following table:
|
|
|
Nine |
|
|
|
Months |
|
Three
Months Ended |
Ended |
|
September 30, |
June 30, |
September 30, |
|
2011 |
2011 |
2011 |
Net interest margin as reported |
5.15% |
5.57% |
5.35% |
Less: |
|
|
|
Accelerated accretion of
purchase discounts on covered loan payoffs |
0.10% |
0.38% |
0.23% |
Nonaccrual loan interest |
0.03% |
0.02% |
0.02% |
Net interest margin as adjusted |
5.02% |
5.17% |
5.10% |
The yield on average loans was 6.87% for the third quarter of
2011 compared to 7.18% for the prior
quarter. The combination of accelerated accretion of
discounts on covered loan payoffs and nonaccrual loan interest
positively impacted the loan yield for the third quarter by 17
basis points and the second quarter by 52 basis points. The
cost of interest-bearing deposits declined six basis points to
0.69% and all-in deposit cost declined five basis points to 0.44%
due to lower rates on money market deposits and lower average time
deposits.
The net interest margin for the first nine months of 2011 was
5.35% compared to 4.95% for the same period last year. The
increase was due to a higher yield on loans, lower costs for money
market deposits and subordinated debentures, and a lower average
balance of FHLB advances, offset by lower average loans and an
increase in the average balance of lower-yielding investment
securities.
NONINTEREST INCOME
Noninterest income for the third quarter of 2011 totaled $7.1
million compared to $11.2 million for the second quarter of
2011. The $4.1 million decline was due to lower FDIC loss
sharing income stemming from a lower provision for credit losses on
covered loans. FDIC loss sharing income also includes
reductions of the FDIC loss sharing asset when the estimated amount
of losses collectible from the FDIC decreases; this occurs when
expected cash flows on covered loan pools improve during a
reporting period causing the carrying value of the FDIC loss
sharing asset to be reduced.
Noninterest income declined by $18.6 million to $23.2 million
during the nine months ended September 30, 2011 compared to the
same period last year. This reduction was attributable to a
decrease in FDIC loss sharing income.
NONINTEREST EXPENSE
Noninterest expense grew $2.1 million to $48.6 million during
the third quarter of 2011 compared to $46.5 million for the second
quarter of 2011. This change was due to an increase in covered
OREO costs. Covered OREO costs increased by $3.6 million due
to higher write-downs of $7.0 million, offset by higher gains on
sales of $3.5 million. Other expense declined $1.0
million due to director stock awards in the second quarter not
repeated in the third quarter, write-downs of CRA investments in
the second quarter also not repeated in the third quarter, and
lower net loan collection expenses.
Noninterest expense includes amortization of time-based
restricted stock, which is included in compensation, and intangible
asset amortization. Amortization of restricted stock totaled
$2.1 million for each of the third and second quarters of 2011.
Intangible asset amortization totaled $2.0 million and $2.3
million for the third and second quarters of 2011,
respectively.
Noninterest expense declined by $3.0 million to $136.5 million
during the nine months ended September 30, 2011 compared to the
same period last year. This reduction was attributable
to a decrease in non-covered OREO costs and lower insurance and
assessments expense. Non-covered OREO costs declined $5.9
million due to lower write-downs of $7.4 million, offset by lower
gains on sales of OREO of $1.9 million. The declines were
offset by increases in almost all other expense categories for the
additional operating costs arising from the Los Padres acquisition
in August 2010. Covered OREO costs increased by $1.7 million
due to higher write-downs, offset by higher gains on sales of OREO.
Amortization of restricted stock totaled $6.2 million and $6.6
million for the nine months ended September 30, 2011 and 2010,
respectively. Intangible asset amortization totaled $6.6
million for the first nine months of 2011 compared to $7.3 million
for the same period last year.
CREDIT QUALITY |
|
|
|
|
|
|
|
|
September 30, |
June 30, |
December 31, |
|
2011 |
2011 |
2010 |
|
(Dollars in
thousands) |
Non-Covered Credit Quality
Metrics: |
|
|
|
Allowance for credit losses to loans, net
of unearned income |
3.34% |
3.52% |
3.30% |
Allowance for credit losses to nonaccrual
loans |
161.0% |
157.0% |
110.8% |
Nonperforming assets to loans, net of
unearned income, and other real estate owned |
3.68% |
3.96% |
3.76% |
Nonaccrual loans |
$ 59,968 |
$ 65,300 |
$ 94,183 |
Classified loans (1) |
$ 177,745 |
$ 215,437 |
$ 214,009 |
|
|
|
|
(1) Classified loans are those
with a credit risk rating of substandard or doutbtful. |
|
Credit Loss Provisions
The third quarter of 2011 provision for credit losses totaled
$348,000 and was comprised of $0 on the non-covered loan portfolio
and $348,000 on the covered loan portfolio. The second quarter
of 2011 provision for credit losses totaled $11.4 million and was
composed of $5.5 million on the non-covered loan portfolio and $5.9
million on the covered loan portfolio. The provision on the
non-covered portfolio is generated by our allowance methodology and
reflects net charge-offs, the levels of nonaccrual and classified
loans, and the migration of loans into various risk
classifications. The provision for credit losses on the
covered loans increases the covered loan allowance for credit
losses and results from decreases in expected cash flows on covered
loans compared to those previously estimated. There has been
an overall improvement in credit quality during the third
quarter.
Third quarter of 2011 net charge-offs on non-covered loans
totaled $6.0 million compared to second quarter net charge-offs of
$7.2 million. The allowance for credit losses on the non-covered
portfolio totaled $96.5 million and $102.6 million at September 30,
2011 and June 30, 2011, respectively, and represented 3.34% and
3.52% of the non-covered loan balances at those respective
dates. The allowance for credit losses as a percent of
nonaccrual loans was 161% and 157% at September 30, 2011 and June
30, 2011, respectively.
Non-covered Nonaccrual Loans and Other Real Estate
Owned
Non-covered nonperforming assets include non-covered nonaccrual
loans and non-covered OREO and totaled $108.2 million at September
30, 2011 compared to $117.5 million at June 30, 2011. The
$9.3 million decline in non-covered nonperforming assets is due to
reductions of $5.3 million and $4.0 million in nonaccrual loans and
OREO, respectively. The ratio of non-covered
nonperforming assets to non-covered loans and non-covered OREO
decreased to 3.68% at September 30, 2011 from 3.96% at June 30,
2011.
The amount of new nonaccrual loans has slowed over the last
several quarters as shown in the following chart:
http://media.globenewswire.com/cache/13824/file/11754.pdf
The following table presents the types and balances of
non-covered loans included in the categories of nonaccrual and
accruing loans past due between 30 and 89 days as of the dates
indicated:
|
Nonaccrual Loans
(1) |
Accruing
and |
|
September 30,
2011 |
June 30,
2011 |
30 - 89 Days Past
Due (1) |
|
|
% of |
|
% of |
September 30, |
June 30, |
|
|
Loan |
|
Loan |
2011 |
2011 |
Loan Category |
Balance |
Category |
Balance |
Category |
Balance |
Balance |
|
(Dollars in
thousands) |
Real estate mortgage: |
|
|
|
|
|
|
Hospitality |
$ 7,336 |
5.0% |
$ 7,451 |
5.0% |
$ -- |
$ 865 |
SBA 504 |
2,895 |
4.9% |
3,304 |
5.3% |
3,168 |
-- |
Other commercial |
19,378 |
1.2% |
25,710 |
1.5% |
14,664 |
8,197 |
Residential |
2,315 |
1.3% |
3,026 |
1.9% |
400 |
-- |
Total real estate mortgage |
31,924 |
1.6% |
39,491 |
1.9% |
18,232 |
9,062 |
Real estate construction and
land: |
|
|
|
|
|
Residential |
1,091 |
5.4% |
1,099 |
3.3% |
-- |
-- |
Commercial |
9,399 |
7.1% |
5,976 |
4.7% |
-- |
2,136 |
Total real estate construction |
10,490 |
6.9% |
7,075 |
4.4% |
-- |
2,136 |
Commercial: |
|
|
|
|
|
|
Collateralized |
4,769 |
1.2% |
5,294 |
1.4% |
396 |
451 |
Unsecured |
4,887 |
6.9% |
6,558 |
8.0% |
73 |
158 |
Asset-based |
15 |
0.0% |
15 |
0.0% |
-- |
-- |
SBA 7(a) |
7,318 |
24.4% |
6,122 |
19.9% |
828 |
199 |
Total commercial |
16,989 |
2.5% |
17,989 |
2.8% |
1,297 |
808 |
Consumer |
565 |
2.7% |
745 |
3.3% |
53 |
40 |
Total non-covered loans |
$ 59,968 |
2.1% |
$ 65,300 |
2.2% |
$ 19,582 |
$ 12,046 |
|
|
|
|
|
|
(1) Excludes covered loans. |
|
|
|
|
|
The $5.3 million decline in non-covered nonaccrual loans during
the third quarter was attributable to (a) foreclosures of $2.4
million, (b) other reductions, payoffs and returns to accrual
status of $5.7 million, (c) charge-offs of $6.0 million, and (d)
additions of $8.8 million.
Below is a summary of the ten largest lending relationships on
nonaccrual status, excluding SBA-related loans, at September 30,
2011:
Nonaccrual |
|
Amount |
Description |
(In thousands) |
|
|
|
$ 10,360 |
This loan is secured by three airplane hangar
structures and two office buildings in Los Angeles County,
California. (1) |
$ 7,336 |
Two hotels in San Diego County,
California. The borrower is paying as agreed. (1) |
$ 3,899 |
Four industrial warehouse loans in Riverside
County, California. The borrower is paying as agreed. (1) |
$ 2,564 |
Strip retail center in Riverside County,
California. The borrower is paying as agreed. |
$ 2,563 |
This loan is secured by a medical-related
office building in Los Angeles County, California. (1) |
$ 2,338 |
This loan is unsecured and has a specific
reserve for 50% of the balance. The borrower is paying as
agreed. (1) |
$ 2,091 |
Land in Riverside County,
California. The borrower is paying as agreed. |
$ 2,000 |
Unsecured loan that is fully reserved for.
(1) |
$ 1,701 |
Two unsecured loans that are fully reserved
for. (1) |
$ 1,553 |
Loan secured by unimproved land in Imperial
County, California. (1) |
|
|
(1) On nonaccrual status at June
30, 2011 |
The following table presents the details of non-covered and
covered OREO as of the dates indicated:
|
September 30,
2011 |
June 30,
2011 |
Property Type |
Non-covered
OREO |
Covered OREO |
Non-covered
OREO |
Covered OREO |
|
(In
thousands) |
Commercial real estate |
$ 21,431 |
$ 14,151 |
$ 23,408 |
$ 18,130 |
Construction and land development |
26,093 |
14,676 |
26,446 |
19,461 |
Multi-family |
-- |
1,656 |
-- |
515 |
Single family residences |
736 |
1,818 |
2,340 |
2,843 |
Total OREO |
$ 48,260 |
$ 32,301 |
$ 52,194 |
$ 40,949 |
The following table presents non-covered and covered OREO
activity for the third quarter:
|
Three Months
Ended |
|
September 30,
2011 |
|
Non-Covered |
Covered |
|
OREO |
OREO |
|
(In
thousands) |
Beginning of period |
$ 52,194 |
$ 40,949 |
Foreclosures |
2,393 |
6,361 |
Payments to third parties (1) |
259 |
-- |
Provision for losses |
(1,676) |
(8,601) |
Reductions related to sales |
(4,910) |
(6,408) |
End of period |
$ 48,260 |
$ 32,301 |
|
|
|
Net gain on sale |
$ 22 |
$ 3,925 |
|
|
|
(1) Represent amounts due to
participants and for guarantees, property taxes or any other prior
lien positions. |
REGULATORY CAPITAL MEASURES ARE ABOVE THE
WELL-CAPITALIZED MINIMUMS
PacWest and its wholly-owned banking subsidiary, Pacific Western
Bank, each remained well capitalized at September 30, 2011 as shown
in the following table.
|
September 30,
2011 |
|
Well |
Pacific |
PacWest |
|
Capitalized |
Western |
Bancorp |
|
Requirement |
Bank |
Consolidated |
Tier 1 leverage capital ratio |
5.00% |
9.85% |
9.96% |
Tier 1 risk-based capital ratio |
6.00% |
14.63% |
14.70% |
Total risk-based capital ratio |
10.00% |
15.90% |
15.98% |
Tangible common equity ratio |
N/A |
10.64% |
8.85% |
ABOUT PACWEST BANCORP
PacWest Bancorp ("PacWest") is a bank holding company with $5.5
billion in assets as of September 30, 2011, with one wholly-owned
banking subsidiary, Pacific Western Bank ("Pacific Western").
Through 77 full-service community banking branches, Pacific Western
provides commercial banking services, including real estate,
construction and commercial loans, to small and medium-sized
businesses. Pacific Western's branches are located in Los Angeles,
Orange, Riverside, San Bernardino, Santa Barbara, San Diego, San
Francisco, San Luis Obispo, San Mateo and Ventura Counties in
California and Maricopa County in Arizona. Through its
subsidiary BFI Business Finance and its division First Community
Financial, Pacific Western also provides working capital financing
to growing companies located throughout the Southwest, primarily in
the states of Arizona, California and Texas. Additional information
regarding PacWest Bancorp is available on the Internet at
www.pacwestbancorp.com. Information regarding Pacific Western
Bank is also available on the Internet at
www.pacificwesternbank.com.
FORWARD-LOOKING STATEMENTS
This press release contains certain forward-looking information
about PacWest that is intended to be covered by the safe harbor for
"forward-looking statements" provided by the Private Securities
Litigation Reform Act of 1995. All statements other than statements
of historical fact are forward-looking statements. Such statements
involve inherent risks and uncertainties, many of which are
difficult to predict and are generally beyond the control of the
Company. We caution readers that a number of important factors
could cause actual results to differ materially from those
expressed in, implied or projected by, such forward-looking
statements. Risks and uncertainties include, but are not limited
to: lower than expected revenues; credit quality deterioration or a
reduction in real estate values could cause an increase in the
allowance for credit losses and a reduction in net earnings;
increased competitive pressure among depository institutions; the
Company's ability to complete future acquisitions, successfully
integrate such acquired entities, or achieve expected beneficial
synergies and/or operating efficiencies within expected time-frames
or at all; settlements with the FDIC related to our loss-sharing
arrangement and other adjustments related to the Los Padres Bank
and Affinity Bank acquisitions; the possibility that personnel
changes will not proceed as planned; the cost of additional capital
is more than expected; a change in the interest rate environment
reduces net interest margins; asset/liability repricing risks and
liquidity risks; pending legal matters may take longer or cost more
to resolve or may be resolved adversely to the Company; general
economic conditions, either nationally or in the market areas in
which the Company does or anticipates doing business, are less
favorable than expected; environmental conditions, including
natural disasters, may disrupt our business, impede our operations,
negatively impact the values of collateral securing the Company's
loans or impair the ability of our borrowers to support their debt
obligations; the economic and regulatory effects of the continuing
war on terrorism and other events of war, including the conflicts
in the Middle East; legislative or regulatory requirements or
changes adversely affecting the Company's business; changes in the
securities markets; regulatory approvals for any capital activities
cannot be obtained on the terms expected or on the anticipated
schedule; and, other risks that are described in PacWest's public
filings with the U.S. Securities and Exchange Commission (the
"SEC"). If any of these risks or uncertainties materializes or if
any of the assumptions underlying such forward-looking statements
proves to be incorrect, PacWest's results could differ materially
from those expressed in, implied or projected by such
forward-looking statements. PacWest assumes no obligation to update
such forward-looking statements.
For a more complete discussion of risks and uncertainties,
investors and security holders are urged to read PacWest Bancorp's
annual report on Form 10-K, quarterly reports on Form 10-Q and
other reports filed by PacWest with the SEC. The documents
filed by PacWest with the SEC may be obtained at PacWest Bancorp's
website at www.pacwestbancorp.com or at the SEC's website at
www.sec.gov. These documents may also be obtained free of
charge from PacWest by directing a request to: PacWest Bancorp c/o
Pacific Western Bank, 275 North Brea Boulevard, Brea, CA
92821. Attention: Investor Relations. Telephone
714-671-6800.
PACWEST BANCORP AND
SUBSIDIARIES |
|
|
|
CONDENSED CONSOLIDATED BALANCE
SHEETS |
|
|
|
(Unaudited) |
|
|
|
|
|
|
|
|
September 30, |
June 30, |
December 31, |
|
2011 |
2011 |
2010 |
|
(In thousands, except
per share and share data) |
ASSETS |
|
|
|
Cash and due from banks |
$ 94,112 |
$ 91,405 |
$ 82,170 |
Interest-earning deposits in financial
institutions |
73,209 |
59,100 |
26,382 |
Total cash and cash
equivalents |
167,321 |
150,505 |
108,552 |
|
|
|
|
Non-covered securities
available-for-sale |
1,214,563 |
1,008,491 |
823,579 |
Covered securities
available-for-sale |
47,213 |
49,501 |
50,437 |
Total securities available-for-sale, at
estimated fair value |
1,261,776 |
1,057,992 |
874,016 |
Federal Home Loan Bank stock, at
cost |
48,342 |
50,591 |
55,040 |
Total investment
securities |
1,310,118 |
1,108,583 |
929,056 |
|
|
|
|
Non-covered loans, net of unearned
income |
2,893,637 |
2,913,136 |
3,161,055 |
Allowance for loan losses |
(90,110) |
(96,427) |
(98,653) |
Total non-covered loans,
net |
2,803,527 |
2,816,709 |
3,062,402 |
Covered loans, net |
761,059 |
805,952 |
908,576 |
Total loans |
3,564,586 |
3,622,661 |
3,970,978 |
|
|
|
|
Non-covered other real estate owned,
net |
48,260 |
52,194 |
25,598 |
Covered other real estate owned, net |
32,301 |
40,949 |
55,816 |
Total other real estate
owned |
80,561 |
93,143 |
81,414 |
|
|
|
|
Premises and equipment |
22,919 |
23,295 |
22,578 |
Goodwill |
39,141 |
39,141 |
47,301 |
Core deposit and customer relationship
intangibles |
19,251 |
21,228 |
25,843 |
Cash surrender value of life
insurance |
67,004 |
66,645 |
66,182 |
FDIC loss sharing asset |
89,197 |
110,516 |
116,352 |
Other assets |
133,793 |
159,008 |
160,765 |
Total assets |
$ 5,493,891 |
$ 5,394,725 |
$ 5,529,021 |
|
|
|
|
LIABILITIES |
|
|
|
Noninterest-bearing demand deposits |
$ 1,628,253 |
$ 1,599,410 |
$ 1,465,562 |
Interest-bearing deposits |
2,926,143 |
2,887,085 |
3,184,136 |
Total deposits |
4,554,396 |
4,486,495 |
4,649,698 |
Borrowings |
225,000 |
225,000 |
225,000 |
Subordinated debentures |
129,347 |
129,423 |
129,572 |
Accrued interest payable and other
liabilities |
45,680 |
41,843 |
45,954 |
Total liabilities |
4,954,423 |
4,882,761 |
5,050,224 |
STOCKHOLDERS' EQUITY
(1) |
539,468 |
511,964 |
478,797 |
Total liabilities and
stockholders' equity |
$ 5,493,891 |
$ 5,394,725 |
$ 5,529,021 |
|
|
|
|
(1) Includes net unrealized gain on
securities available-for-sale, net |
$ 23,324 |
$ 10,438 |
$ 3,969 |
|
|
|
|
Tangible book value per share |
$ 12.91 |
$ 12.12 |
$ 11.06 |
Book value per share |
$ 14.48 |
$ 13.74 |
$ 13.06 |
|
|
|
|
Shares outstanding (includes unvested
restricted shares of 1,762,870 at September 30, 2011; 1,770,664 at
June 30, 2011; and 1,230,582 at December 31, 2010) |
37,258,832 |
37,251,267 |
36,672,429 |
|
|
|
|
|
|
|
|
|
|
PACWEST BANCORP AND
SUBSIDIARIES |
|
|
|
|
CONDENSED CONSOLIDATED
STATEMENTS OF EARNINGS (LOSS) |
|
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended |
Nine Months
Ended |
|
September 30, |
June 30, |
September 30, |
September
30, |
|
2011 |
2011 |
2010 |
2011 |
2010 |
|
(In thousands, except
per share data) |
Interest income: |
|
|
|
|
|
Loans |
$ 63,347 |
$ 68,331 |
$ 68,480 |
$ 198,459 |
$ 194,539 |
Investment securities |
9,077 |
8,782 |
6,519 |
25,678 |
17,342 |
Deposits in financial
institutions |
94 |
83 |
131 |
234 |
505 |
Total interest
income |
72,518 |
77,196 |
75,130 |
224,371 |
212,386 |
|
|
|
|
|
|
Interest expense: |
|
|
|
|
|
Deposits |
5,072 |
5,518 |
6,375 |
16,546 |
20,209 |
Borrowings |
1,782 |
1,763 |
2,129 |
5,289 |
7,013 |
Subordinated debentures |
1,223 |
1,226 |
1,459 |
3,668 |
4,357 |
Total interest
expense |
8,077 |
8,507 |
9,963 |
25,503 |
31,579 |
|
|
|
|
|
|
Net interest income |
64,441 |
68,689 |
65,167 |
198,868 |
180,807 |
|
|
|
|
|
|
Provision for credit
losses: |
|
|
|
|
|
Non-covered loans |
-- |
5,500 |
17,050 |
13,300 |
143,677 |
Covered loans |
348 |
5,890 |
6,500 |
9,148 |
34,600 |
Total provision for credit
losses |
348 |
11,390 |
23,550 |
22,448 |
178,277 |
|
|
|
|
|
|
Net interest income after provision for
credit losses |
64,093 |
57,299 |
41,617 |
176,420 |
2,530 |
|
|
|
|
|
|
Noninterest income: |
|
|
|
|
|
Service charges on deposit accounts |
3,545 |
3,400 |
2,861 |
10,503 |
8,256 |
Other commissions and fees |
2,052 |
1,980 |
1,760 |
5,752 |
5,395 |
Other-than-temporary impairment loss on
securities |
-- |
-- |
(874) |
-- |
(874) |
Increase in cash surrender value of life
insurance |
359 |
368 |
353 |
1,106 |
1,120 |
FDIC loss sharing income, net |
963 |
5,316 |
5,506 |
5,109 |
27,257 |
Other income |
224 |
176 |
279 |
702 |
632 |
Total noninterest
income |
7,143 |
11,240 |
9,885 |
23,172 |
41,786 |
|
|
|
|
|
|
Noninterest expense: |
|
|
|
|
|
Compensation |
21,557 |
21,717 |
23,060 |
65,203 |
63,539 |
Occupancy |
7,423 |
7,142 |
6,872 |
21,548 |
20,406 |
Data processing |
2,228 |
2,129 |
2,121 |
6,832 |
5,982 |
Other professional services |
2,239 |
2,505 |
2,694 |
7,040 |
6,734 |
Business development |
548 |
595 |
571 |
1,712 |
1,893 |
Communications |
678 |
834 |
811 |
2,371 |
2,410 |
Insurance and assessments |
1,641 |
1,603 |
2,431 |
5,581 |
7,316 |
Non-covered other real estate owned,
net |
2,293 |
2,300 |
2,151 |
5,296 |
11,217 |
Covered other real estate owned, net |
4,813 |
1,205 |
(319) |
3,440 |
1,761 |
Intangible asset amortization |
1,977 |
2,308 |
2,434 |
6,592 |
7,282 |
Other expense |
3,190 |
4,200 |
3,348 |
10,909 |
10,977 |
Total noninterest
expense |
48,587 |
46,538 |
46,174 |
136,524 |
139,517 |
|
|
|
|
|
|
Earnings (loss) before income
taxes |
22,649 |
22,001 |
5,328 |
63,068 |
(95,201) |
Income tax (expense) benefit |
(9,345) |
(9,160) |
(1,828) |
(26,247) |
40,873 |
Net earnings (loss) |
$ 13,304 |
$ 12,841 |
$ 3,500 |
$ 36,821 |
$ (54,328) |
|
|
|
|
|
|
Earnings per share
information: |
|
|
|
|
|
Basic earning (loss) per share |
$ 0.36 |
$ 0.35 |
$ 0.10 |
$ 0.99 |
$ (1.55) |
Diluted earnings (loss) per share |
$ 0.36 |
$ 0.35 |
$ 0.10 |
$ 0.99 |
$ (1.55) |
Basic weighted average shares |
35,488.5 |
35,471.6 |
35,337.3 |
$ 35,471.50 |
$ 35,007.50 |
Diluted weighted average shares |
35,488.5 |
35,471.6 |
35,337.3 |
$ 35,471.50 |
$ 35,007.50 |
|
|
|
|
|
|
|
|
|
|
PACWEST BANCORP AND
SUBSIDIARIES |
|
|
|
|
AVERAGE BALANCE SHEETS
AND YIELD ANALYSIS |
|
|
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended |
Nine Months
Ended |
|
September 30, |
June 30, |
September 30, |
September
30, |
|
2011 |
2011 |
2010 |
2011 |
2010 |
|
(Dollars in
Thousands) |
Average Assets: |
|
|
|
|
|
Loans, net of unearned income |
$ 3,656,184 |
$ 3,815,414 |
$ 4,123,684 |
$ 3,820,036 |
$ 4,018,697 |
Investment securities |
1,168,822 |
1,006,008 |
757,945 |
1,030,416 |
605,071 |
Interest-earning deposits in financial
institutions |
142,691 |
126,568 |
208,074 |
119,698 |
263,196 |
Average interest-earning
assets |
4,967,697 |
4,947,990 |
5,089,703 |
4,970,150 |
4,886,964 |
Other assets |
486,276 |
505,632 |
455,323 |
502,435 |
429,116 |
Average total assets |
$ 5,453,973 |
$ 5,453,622 |
$ 5,545,026 |
$ 5,472,585 |
$ 5,316,080 |
|
|
|
|
|
|
Average liabilities: |
|
|
|
|
|
Interest checking deposits |
$ 489,988 |
$ 489,952 |
$ 466,366 |
$ 491,942 |
$ 446,702 |
Money market deposits |
1,222,787 |
1,217,406 |
1,246,585 |
1,226,840 |
1,205,893 |
Savings deposits |
154,922 |
149,553 |
124,132 |
148,552 |
115,918 |
Time deposits |
1,049,805 |
1,092,614 |
1,281,423 |
1,102,865 |
1,132,489 |
Average interest-bearing
deposits |
2,917,502 |
2,949,525 |
3,118,506 |
2,970,199 |
2,901,002 |
Borrowings |
225,022 |
225,044 |
276,543 |
225,722 |
341,438 |
Subordinated debentures |
129,395 |
129,469 |
129,683 |
129,469 |
129,731 |
Average interest-bearing
liabilities |
3,271,919 |
3,304,038 |
3,524,732 |
3,325,390 |
3,372,171 |
Noninterest-bearing demand deposits |
1,616,012 |
1,608,455 |
1,472,366 |
1,602,518 |
1,403,370 |
Other liabilities |
43,983 |
41,683 |
55,450 |
43,057 |
47,786 |
Average total liabilities |
4,931,914 |
4,954,176 |
5,052,548 |
4,970,965 |
4,823,327 |
Average stockholders'
equity |
522,059 |
499,446 |
492,478 |
501,620 |
492,753 |
Average liabilities and
stockholders' equity |
$ 5,453,973 |
$ 5,453,622 |
$ 5,545,026 |
$ 5,472,585 |
$ 5,316,080 |
|
|
|
|
|
|
Average deposits |
$ 4,533,514 |
$ 4,557,980 |
$ 4,590,872 |
$ 4,572,717 |
$ 4,304,372 |
|
|
|
|
|
|
Yield on: |
|
|
|
|
|
Average loans |
6.87% |
7.18% |
6.59% |
6.95% |
6.47% |
Average investment securities |
3.08% |
3.50% |
3.41% |
3.33% |
3.83% |
Average interest-earning deposits |
0.26% |
0.26% |
0.25% |
0.26% |
0.26% |
Average interest-earning
assets |
5.79% |
6.26% |
5.86% |
6.04% |
5.81% |
|
|
|
|
|
|
Cost of: |
|
|
|
|
|
Average interest-bearing deposits |
0.69% |
0.75% |
0.81% |
0.74% |
0.93% |
Average borrowings |
3.14% |
3.14% |
3.05% |
3.13% |
2.75% |
Average subordinated debentures |
3.75% |
3.80% |
4.46% |
3.79% |
4.49% |
Average interest-bearing
liabilities |
0.98% |
1.03% |
1.12% |
1.03% |
1.25% |
|
|
|
|
|
|
Interest rate spread
(1) |
4.81% |
5.23% |
4.74% |
5.01% |
4.56% |
Net interest margin (2) |
5.15% |
5.57% |
5.08% |
5.35% |
4.95% |
|
|
|
|
|
|
Cost of average deposits/all-in deposit cost
(3) |
0.44% |
0.49% |
0.55% |
0.48% |
0.63% |
|
|
|
|
|
|
(1) Interest rate spread is
calculated as the yield on average interest-earning assets less the
cost of average interest-bearing liabilities. |
(2) Net interest margin is
calculated as annualized net interest income divided by average
interest-earning assets. |
|
(3) Cost of average
deposits/all-in deposit cost is calculated as annualized interest
expense on deposits divided by average deposits. |
|
|
|
|
|
|
|
|
|
|
PACWEST BANCORP AND
SUBSIDIARIES |
|
|
|
|
NON-COVERED LOAN
CONCENTRATION |
|
|
|
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
September 30, |
June 30, |
March 31, |
December 31, |
September 30, |
Loan Category |
2011 |
2011 |
2011 |
2010 |
2010 |
|
(In
thousands) |
Domestic: |
|
|
|
|
|
Real estate mortgage |
$ 2,031,893 |
$ 2,073,868 |
$ 2,172,923 |
$ 2,274,733 |
$ 2,368,943 |
Commercial |
671,963 |
640,805 |
667,401 |
663,557 |
708,329 |
Real estate construction |
152,411 |
160,254 |
176,758 |
179,479 |
192,595 |
Consumer |
20,621 |
22,248 |
21,815 |
25,058 |
28,328 |
Foreign: |
|
|
|
|
|
Commercial |
19,532 |
18,633 |
21,808 |
21,057 |
22,948 |
Other, including real estate |
1,400 |
1,442 |
1,488 |
1,551 |
1,595 |
Total gross non-covered loans |
$ 2,897,820 |
$ 2,917,250 |
$ 3,062,193 |
$ 3,165,435 |
$ 3,322,738 |
|
|
|
|
PACWEST BANCORP AND
SUBSIDIARIES |
|
|
|
COVERED LOAN
CONCENTRATION |
|
|
|
(Unaudited) |
|
|
|
|
|
|
|
|
September 30, |
June 30, |
December 31, |
Loan Category |
2011 |
2011 |
2010 |
|
(In
thousands) |
Multi-family |
$ 267,892 |
$ 286,615 |
$ 321,650 |
Commercial real estate |
386,326 |
407,257 |
444,244 |
Single family |
129,692 |
139,238 |
157,424 |
Construction and land |
57,601 |
67,343 |
87,301 |
Commercial and industrial |
22,869 |
24,135 |
34,828 |
Home equity lines of credit |
6,287 |
6,235 |
5,916 |
Consumer |
603 |
864 |
1,378 |
Total gross covered loans |
871,270 |
931,687 |
1,052,741 |
Less: discount |
(80,920) |
(92,847) |
(110,901) |
Covered loans, net of discount |
790,350 |
838,840 |
941,840 |
Less: allowance for loan losses |
(29,291) |
(32,888) |
(33,264) |
Covered loans, net |
$ 761,059 |
$ 805,952 |
$ 908,576 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PACWEST BANCORP AND
SUBSIDIARIES |
|
|
|
|
|
|
NON-COVERED LOAN
CONCENTRATION |
|
|
|
|
|
|
REAL ESTATE MORTGAGE
LOANS |
|
|
|
|
|
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30,
2011 |
June 30,
2011 |
December 31,
2010 |
|
|
% of |
|
% of |
|
% of |
Loan Category |
Balance |
Total |
Balance |
Total |
Balance |
Total |
|
(Dollars in
thousands) |
Commercial real estate mortgage: |
|
|
|
|
|
|
Industrial/warehouse |
$ 362,049 |
17.8% |
$ 374,502 |
18.1% |
$ 432,263 |
19.0% |
Retail |
299,100 |
14.7% |
310,588 |
15.0% |
374,027 |
16.4% |
Office buildings |
314,352 |
15.5% |
322,972 |
15.6% |
350,192 |
15.4% |
Owner-occupied |
250,772 |
12.3% |
263,686 |
12.7% |
263,603 |
11.6% |
Hotel |
145,783 |
7.2% |
149,043 |
7.2% |
156,614 |
6.9% |
Healthcare |
114,277 |
5.6% |
114,805 |
5.5% |
102,227 |
4.5% |
Mixed use |
56,507 |
2.8% |
56,810 |
2.7% |
57,230 |
2.5% |
Gas station |
35,743 |
1.8% |
35,998 |
1.7% |
38,502 |
1.7% |
Self storage |
23,260 |
1.1% |
26,163 |
1.3% |
26,432 |
1.2% |
Restaurant |
23,585 |
1.2% |
23,410 |
1.1% |
26,463 |
1.2% |
Land acquisition/development |
9,514 |
0.5% |
9,559 |
0.5% |
9,649 |
0.4% |
Unimproved land |
1,415 |
0.1% |
1,449 |
0.1% |
1,494 |
0.1% |
Other |
216,206 |
10.6% |
225,712 |
10.9% |
250,068 |
11.0% |
Total commercial real estate
mortgage |
1,852,563 |
91.2% |
1,914,697 |
92.3% |
2,088,764 |
91.8% |
|
|
|
|
|
|
|
Residential real estate mortgage: |
|
|
|
|
|
|
Multi-family |
91,588 |
4.5% |
64,735 |
3.1% |
81,880 |
3.6% |
Single family owner-occupied |
31,439 |
1.5% |
36,369 |
1.8% |
38,025 |
1.7% |
Single family nonowner-occupied |
20,059 |
1.0% |
20,449 |
1.0% |
26,618 |
1.2% |
HELOCs |
36,244 |
1.8% |
37,618 |
1.8% |
38,823 |
1.7% |
Unimproved land |
-- |
0.0% |
-- |
0.0% |
623 |
0.0% |
Total residential real
estate mortgage |
179,330 |
8.8% |
159,171 |
7.7% |
185,969 |
8.2% |
|
|
|
|
|
|
|
Total gross non-covered real estate
mortgage loans |
$ 2,031,893 |
100.0% |
$ 2,073,868 |
100.0% |
$ 2,274,733 |
100.0% |
|
|
|
|
|
|
|
|
|
|
|
|
PACWEST BANCORP AND
SUBSIDIARIES |
|
|
|
|
|
NON-COVERED LOAN
CONCENTRATION |
|
|
|
|
|
REAL ESTATE CONSTRUCTION
LOANS |
|
|
|
|
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30,
2011 |
June 30,
2011 |
December 31,
2010 |
|
|
% of |
|
% of |
|
% of |
Loan Category |
Balance |
Total |
Balance |
Total |
Balance |
Total |
|
(Dollars in
thousands) |
Commercial real estate construction: |
|
|
|
|
|
|
Retail |
$ 18,678 |
12.3% |
$ 20,123 |
12.6% |
$ 20,378 |
11.4% |
Industrial/warehouse |
16,020 |
10.5% |
8,460 |
5.3% |
11,329 |
6.3% |
Office buildings |
6,313 |
4.1% |
6,354 |
4.0% |
3,805 |
2.1% |
Owner-occupied |
2,227 |
1.5% |
2,000 |
1.2% |
2,000 |
1.1% |
Healthcare |
-- |
0.0% |
-- |
0.0% |
4,305 |
2.4% |
Self storage |
19,148 |
12.6% |
19,169 |
12.0% |
13,191 |
7.3% |
Land acquisition/development |
35,323 |
23.2% |
35,513 |
22.2% |
16,983 |
9.5% |
Unimproved land |
27,857 |
18.3% |
29,726 |
18.5% |
26,032 |
14.5% |
Other |
6,539 |
4.3% |
5,116 |
3.2% |
9,062 |
5.0% |
Total commercial real estate
construction |
132,105 |
86.7% |
126,461 |
78.9% |
107,085 |
59.7% |
|
|
|
|
|
|
|
Residential real estate construction: |
|
|
|
|
|
|
Multi-family |
4,475 |
2.9% |
18,346 |
11.4% |
26,474 |
14.8% |
Single family owner-occupied |
90 |
0.1% |
-- |
0.0% |
-- |
0.0% |
Single family nonowner-occupied |
1,165 |
0.8% |
1,161 |
0.7% |
1,026 |
0.6% |
Land acquisition/development |
3,275 |
2.1% |
3,238 |
2.0% |
1,482 |
0.8% |
Unimproved land |
11,301 |
7.4% |
11,048 |
6.9% |
43,412 |
24.2% |
Total residential real estate
construction |
20,306 |
13.3% |
33,793 |
21.1% |
72,394 |
40.3% |
|
|
|
|
|
|
|
Total gross non-covered real estate
construction loans |
$ 152,411 |
100.0% |
$ 160,254 |
100.0% |
$ 179,479 |
100.0% |
|
|
|
|
|
|
|
|
PACWEST BANCORP AND
SUBSIDIARIES |
|
|
|
NON-COVERED NONCLASSIFIED
AND CLASSIFIED LOANS |
|
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
September 30,
2011 |
|
|
Nonclassified |
Classified |
Total |
|
|
(In
thousands) |
Real estate mortgage: |
|
|
|
|
Hospitality |
|
$ 124,346 |
$ 21,437 |
$ 145,783 |
SBA 504 |
|
51,838 |
7,386 |
59,224 |
Other |
|
1,749,840 |
77,046 |
1,826,886 |
Total real estate mortgage |
|
1,926,024 |
105,869 |
2,031,893 |
Real estate construction: |
|
|
|
|
Residential |
|
16,908 |
3,398 |
20,306 |
Commercial |
|
98,819 |
33,286 |
132,105 |
Total real estate construction |
|
115,727 |
36,684 |
152,411 |
Commercial: |
|
|
|
|
Collateralized |
|
396,393 |
17,133 |
413,526 |
Unsecured |
|
65,214 |
5,967 |
71,181 |
Asset-based |
|
157,270 |
48 |
157,318 |
SBA 7(a) |
|
18,716 |
11,222 |
29,938 |
Total commercial |
|
637,593 |
34,370 |
671,963 |
Consumer |
|
19,799 |
822 |
20,621 |
Foreign |
|
20,932 |
-- |
20,932 |
Total non-covered loans |
|
$ 2,720,075 |
$ 177,745 |
$ 2,897,820 |
|
|
|
|
|
June 30,
2011 |
|
|
Nonclassified |
Classified |
Total |
|
|
(In
thousands) |
Real estate mortgage: |
|
|
|
|
Hospitality |
|
$ 127,463 |
$ 21,580 |
$ 149,043 |
SBA 504 |
|
55,269 |
7,417 |
62,686 |
Other |
|
1,747,117 |
115,022 |
1,862,139 |
Total real estate mortgage |
|
1,929,849 |
144,019 |
2,073,868 |
Real estate construction: |
|
|
|
|
Residential |
|
30,749 |
3,044 |
33,793 |
Commercial |
|
96,406 |
30,055 |
126,461 |
Total real estate construction |
|
127,155 |
33,099 |
160,254 |
Commercial: |
|
|
|
|
Collateralized |
|
355,557 |
17,597 |
373,154 |
Unsecured |
|
74,390 |
7,616 |
82,006 |
Asset-based |
|
152,765 |
2,154 |
154,919 |
SBA 7(a) |
|
20,639 |
10,087 |
30,726 |
Total commercial |
|
603,351 |
37,454 |
640,805 |
Consumer |
|
21,383 |
865 |
22,248 |
Foreign |
|
20,075 |
-- |
20,075 |
Total non-covered loans |
|
$ 2,701,813 |
$ 215,437 |
$ 2,917,250 |
|
|
|
|
|
Note: Nonclassified loans are
those with a credit risk rating of either pass or special mention,
while classified loans are those with a credit risk rating of
either substandard or doubtful. |
|
|
|
|
|
|
|
|
|
|
PACWEST BANCORP AND
SUBSIDIARIES |
|
|
|
|
ALLOWANCE FOR CREDIT
LOSSES ROLLFORWARD |
|
|
|
AND NET CHARGE-OFF RATIOS
FOR |
|
|
|
|
NON-COVERED LOANS
(1) |
|
|
|
|
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended |
Nine Months
Ended |
|
|
September 30, |
June 30, |
September 30, |
September
30, |
|
|
2011 |
2011 |
2010 |
2011 |
2010 |
|
|
(Dollars in
thousands) |
Allowance for credit losses,
beginning of period |
$ 102,552 |
$ 104,239 |
$ 93,434 |
$ 104,328 |
$ 124,278 |
Loans charged-off: |
|
|
|
|
|
|
Real estate
mortgage |
(4,293) |
(4,354) |
(4,601) |
(9,859) |
(94,438) |
Real estate
construction |
-- |
(1,193) |
(3,032) |
(5,838) |
(62,114) |
Commercial |
|
(2,237) |
(2,609) |
(2,074) |
(7,967) |
(11,237) |
Consumer |
|
(54) |
(1,165) |
(218) |
(1,379) |
(2,280) |
Foreign |
|
-- |
-- |
(113) |
-- |
(113) |
Total loans charged
off |
(6,584) |
(9,321) |
(10,038) |
(25,043) |
(170,182) |
Recoveries on loans
charged-off: |
|
|
|
|
|
Real estate
mortgage |
225 |
27 |
-- |
349 |
1,197 |
Real estate
construction |
33 |
896 |
-- |
1,021 |
708 |
Commercial |
|
235 |
308 |
319 |
1,160 |
1,061 |
Consumer |
|
74 |
890 |
348 |
1,375 |
372 |
Foreign |
|
-- |
13 |
131 |
45 |
133 |
Total recoveries on loans
charged off |
567 |
2,134 |
798 |
3,950 |
3,471 |
Net charge-offs |
|
(6,017) |
(7,187) |
(9,240) |
(21,093) |
(166,711) |
Provision for credit
losses |
-- |
5,500 |
17,050 |
13,300 |
143,677 |
Allowance for credit losses, end
of period |
$ 96,535 |
$ 102,552 |
$ 101,244 |
$ 96,535 |
$ 101,244 |
|
|
|
|
|
|
Charge-offs on loans sold
included in "Loans charged-off" section of table above |
$ -- |
$ -- |
$ -- |
$ -- |
$ 123,705 |
|
|
|
|
|
|
Annualized net charge-off
ratios: |
|
|
|
|
|
Net charge-offs to average
loans |
0.83% |
0.97% |
1.09% |
0.94% |
6.61% |
Net charge-offs, excluding
charge-offs on loans sold, to average loans |
0.83% |
0.97% |
1.09% |
0.94% |
1.71% |
|
|
|
|
|
|
(1) Applies only to non-covered
loans. |
|
|
|
|
|
|
|
|
|
|
|
PACWEST BANCORP AND
SUBSIDIARIES |
|
|
ALLOWANCE FOR CREDIT
LOSSES, NONPERFORMING |
|
ASSETS AND CREDIT QUALITY
RATIOS FOR |
|
|
NON-COVERED LOANS |
|
|
|
(Unaudited) |
|
|
|
|
|
|
|
|
September 30, |
June 30, |
December 31, |
|
2011 |
2011 |
2010 |
|
(Dollars in
thousands) |
Allowance for loan losses (1) |
$ 90,110 |
$ 96,427 |
$ 98,653 |
Reserve for unfunded loan commitments
(1) |
6,425 |
6,125 |
5,675 |
Total allowance for credit losses |
$ 96,535 |
$ 102,552 |
$ 104,328 |
|
|
|
|
Nonaccrual loans (2) |
$ 59,968 |
$ 65,300 |
$ 94,183 |
Other real estate owned (2) |
48,260 |
52,194 |
25,598 |
Total nonperforming assets |
$ 108,228 |
$ 117,494 |
$ 119,781 |
|
|
|
|
Performing restructured loans (1) |
$ 86,406 |
$ 82,487 |
$ 89,272 |
|
|
|
|
Allowance for credit losses to loans, net of
unearned income |
3.34% |
3.52% |
3.30% |
Allowance for credit losses to nonaccrual
loans |
161.0% |
157.0% |
110.8% |
Nonperforming assets to loans, net of
unearned income, and other real estate owned |
3.68% |
3.96% |
3.76% |
Nonaccrual loans to loans, net of unearned
income |
2.07% |
2.24% |
2.98% |
|
|
|
|
(1) Applies to non-covered loans. |
|
|
|
(2) Excludes covered nonperforming
assets. |
|
|
|
|
|
|
|
|
|
|
|
PACWEST BANCORP AND
SUBSIDIARIES |
|
|
|
DEPOSITS |
|
|
|
(Unaudited) |
|
|
|
|
September 30, |
June 30, |
December 31, |
Deposit Category |
2011 |
2011 |
2010 |
|
(Dollars in
thousands) |
Noninterest-bearing demand deposits |
$ 1,628,253 |
$ 1,599,410 |
$ 1,465,562 |
Interest checking deposits |
497,987 |
477,126 |
494,617 |
Money market deposits |
1,234,900 |
1,189,999 |
1,321,780 |
Savings deposits |
158,921 |
151,957 |
135,876 |
Total core deposits |
3,520,061 |
3,418,492 |
3,417,835 |
Time deposits under $100,000 |
345,380 |
359,890 |
436,838 |
Time deposits $100,000 and over |
688,955 |
708,113 |
795,025 |
Total time deposits |
1,034,335 |
1,068,003 |
1,231,863 |
Total deposits |
$ 4,554,396 |
$ 4,486,495 |
$ 4,649,698 |
|
|
|
|
Noninterest-bearing demand deposits as a
percentage of total deposits |
36% |
36% |
32% |
Core deposits as a percentage of total
deposits |
77% |
76% |
74% |
|
|
|
|
|
|
|
|
PACWEST BANCORP AND
SUBSIDIARIES |
|
|
|
GAAP TO NON-GAAP
RECONCILIATIONS |
|
|
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
Three
Months Ended |
Nine Months
Ended |
|
September 30, |
June 30, |
September 30, |
September
30, |
|
2011 |
2011 |
2010 |
2011 |
2010 |
|
(In
thousands) |
PacWest Bancorp
Consolidated: |
|
|
|
|
Net earnings (loss) |
$ 13,304 |
$ 12,841 |
$ 3,500 |
$ 36,821 |
$ (54,328) |
Plus: Total provision for credit
losses |
348 |
11,390 |
23,550 |
22,448 |
178,277 |
Other real estate owned
expense, net |
|
|
|
Non-covered |
2,293 |
2,300 |
2,151 |
5,296 |
11,217 |
Covered |
4,813 |
1,205 |
(319) |
3,440 |
1,761 |
Income tax expense (benefit) |
9,345 |
9,160 |
1,828 |
26,247 |
(40,873) |
Less: FDIC loss sharing income, net |
963 |
5,316 |
5,506 |
5,109 |
27,257 |
Pre-credit, pre-tax earnings |
$ 29,140 |
$ 31,580 |
$ 25,204 |
$ 89,143 |
$ 68,797 |
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30, |
June 30, |
December 31, |
|
|
|
2011 |
2011 |
2010 |
|
|
|
(Dollars in
thousands) |
|
|
PacWest Bancorp
Consolidated: |
|
|
|
|
Stockholders' equity |
$ 539,468 |
$ 511,964 |
$ 478,797 |
|
|
Less: Intangible assets |
58,392 |
60,369 |
73,144 |
|
|
Tangible common equity |
$ 481,076 |
$ 451,595 |
$ 405,653 |
|
|
|
|
|
|
|
|
Total assets |
$ 5,493,891 |
$ 5,394,725 |
$ 5,529,021 |
|
|
Less: Intangible assets |
58,392 |
60,369 |
73,144 |
|
|
Tangible assets |
$ 5,435,499 |
$ 5,334,356 |
$ 5,455,877 |
|
|
|
|
|
|
|
|
Equity to assets ratio |
9.82% |
9.49% |
8.66% |
|
|
Tangible common equity ratio (1) |
8.85% |
8.47% |
7.44% |
|
|
|
|
|
|
|
Pacific Western
Bank: |
|
|
|
|
Stockholders' equity |
$ 635,026 |
$ 606,084 |
$ 570,118 |
|
|
Less: Intangible assets |
58,392 |
60,369 |
73,144 |
|
|
Tangible common equity |
$ 576,634 |
$ 545,715 |
$ 496,974 |
|
|
|
|
|
|
|
|
Total assets |
$ 5,479,173 |
$ 5,378,288 |
$ 5,513,601 |
|
|
Less: Intangible assets |
58,392 |
60,369 |
73,144 |
|
|
Tangible assets |
$ 5,420,781 |
$ 5,317,919 |
$ 5,440,457 |
|
|
|
|
|
|
|
|
Equity to assets ratio |
11.59% |
11.27% |
10.34% |
|
|
Tangible common equity ratio (1) |
10.64% |
10.26% |
9.13% |
|
|
|
|
|
|
|
|
(1) Calculated as tangible common
equity divided by tangible assets. |
|
|
CONTACT: Matthew P. Wagner
Chief Executive Officer
10250 Constellation Boulevard
Suite 1640
Los Angeles, CA 90067
Phone: 310-728-1020
Fax: 310-201-0498
Victor R. Santoro
Executive Vice President and CFO
10250 Constellation Boulevard
Suite 1640
Los Angeles, CA 90067
Phone: 310-728-1021
Fax: 310-201-0498
PacWest Bancorp (NASDAQ:PACW)
Historical Stock Chart
Von Jun 2024 bis Jul 2024
PacWest Bancorp (NASDAQ:PACW)
Historical Stock Chart
Von Jul 2023 bis Jul 2024