Highlights
- Net Earnings of $5.3 Million or $0.14 Per Diluted
Share
- Net Interest Margin Increases to 5.41%
- $243.6 Million in Debt Repaid in March
- Credit Loss Reserve at 2.85% of Net Non-Covered Loans
and Leases and 170% of Non-Covered Nonaccrual Loans and
Leases
- Noninterest-Bearing Deposits at 39% and Core Deposits
at 80% of Total Deposits
PacWest Bancorp (Nasdaq:PACW) today announced net
earnings for the first quarter of 2012 of $5.3 million, or $0.14
per diluted share, compared to net earnings for the fourth quarter
of 2011 of $13.9 million, or $0.38 per diluted share. First quarter
of 2012 includes after-tax debt termination expense of $13.1
million, or $0.37 per diluted share, related to the prepayment of
$225.0 million of fixed-rate term FHLB advances and the early
redemption of $18.6 million of fixed-rate trust preferred
securities.
This press release contains certain non-GAAP financial
disclosures for tangible common equity, earnings before credit,
debt termination and tax expenses, which we refer to as
"pre-credit, pre-debt termination, pre-tax earnings", and
efficiency ratios adjusted to exclude credit-related and debt
termination expenses. 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 ratio in addition to equity-to-assets ratio.
Also, as analysts and investors view pre-credit, pre-debt
termination, pre-tax earnings as an indicator of the Company's
ability to absorb credit losses, we disclose this amount in
addition to net earnings. We disclose the adjusted efficiency ratio
as it eliminates (a) the volatile FDIC loss income and OREO income
and (b) debt termination expense from the base efficiency ratio,
and shows the trend in overhead-related noninterest expense
relative to net revenues. Please refer to the tables 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.
FIRST QUARTER RESULTS
|
Three Months
Ended |
|
March 31, |
December 31, |
|
2012 |
2011 |
|
(Dollars in thousands,
except per share data) |
Financial Highlights: |
|
|
Net earnings |
$ 5,264 |
$ 13,883 |
Diluted earnings per share |
$ 0.14 |
$ 0.38 |
Pre-credit, pre-debt termination, and
pre-tax earnings (1) |
$ 30,867 |
$ 27,831 |
Annualized return on average assets |
0.38% |
1.00% |
Annualized return on average equity |
3.83% |
10.22% |
Net interest margin |
5.41% |
5.00% |
Efficiency ratio (2) |
97.1% |
60.4% |
|
|
|
At Quarter End: |
|
|
Allowance for credit losses to
non-covered loans and leases, net of unearned income (3) |
2.85% |
3.34% |
Allowance for credit losses to
non-covered nonaccrual loans and leases (3) |
169.7% |
161.0% |
Equity to assets ratios: |
|
|
PacWest Bancorp Consolidated |
10.09% |
9.88% |
Pacific Western Bank |
11.56% |
11.35% |
Tangible common equity ratios: |
|
|
PacWest Bancorp Consolidated |
8.86% |
8.95% |
Pacific Western Bank |
10.35% |
10.43% |
|
|
|
(1) Represents net earnings
excluding credit related costs, debt termination expense, and
taxes. |
(2) Excluding net credit
costs and debt termination expense, the efficiency ratio is 58.6%
for March 31, 2012 and 59.9% for December 31, 2011. See GAAP
to Non-GAAP Reconciliation table. |
(3) Non-covered loans exclude
loans covered by loss sharing agreements with the FDIC. |
The $8.6 million decline in net earnings for the linked quarters
was due primarily to $22.6 million ($13.1 million after-tax) of
debt termination expense incurred on the prepayment of $225.0
million of fixed-rate term FHLB advances and the early redemption
of $18.6 million of fixed-rate trust preferred securities. In
addition, the provision for credit losses on non-covered loans
declined $10.0 million ($5.8 million after tax) and FDIC loss
sharing income declined $6.2 million ($3.6 million after-tax) for
the linked quarters. The operations of Pacific Western
Equipment Finance, or PWE Finance, (formerly Marquette Equipment
Finance) have been included since the January 3, 2012 acquisition
date.
Net credit costs on a pre-tax basis are shown in the following
table:
|
Three Months
Ended |
|
March 31, |
December 31, |
|
2012 |
2011 |
|
(In
thousands) |
Negative provision for credit losses on
non-covered loans and leases |
$ (10,000) |
$ -- |
Non-covered OREO expense, net |
1,821 |
1,714 |
Total non-covered net credit costs |
(8,179) |
1,714 |
|
|
|
Provision for credit losses on covered
loans |
3,926 |
4,122 |
Covered OREO expense, net |
822 |
226 |
|
4,748 |
4,348 |
Less: FDIC loss sharing income
(expense), net |
(3,579) |
2,667 |
Total covered net credit costs |
8,327 |
1,681 |
|
|
|
Total net credit costs |
$ 148 |
$ 3,395 |
The provision for credit losses for the first quarter had two
components: a $10.0 million negative provision for non-covered
loans and leases and a $3.9 million provision for covered
loans. The negative first quarter non-covered credit loss
provision was based on our allowance methodology which reflected
(a) lower net charge-offs, (b) declining levels and improving
trends of nonaccrual and classified loans and leases, (c) the
migration of loans and leases into various risk classifications,
and (d) a decline in non-covered loans when acquisition activity is
excluded. During the first quarter, nonaccrual loans and
leases declined by $10.1 million to $48.2 million and classified
loans and leases decreased by $39.6 million to $145.9 million.
Gross non-covered loans and leases declined $97.7 million when the
acquired PWE Finance lease receivables are excluded.
The covered loans credit loss provision was driven by decreases
in expected cash flows on covered loan pools compared to those
previously estimated. The covered loans credit loss provision
and covered OREO expense are offset 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 covered loans are resolved or expected
to be resolved at amounts higher than their carrying values.
Matt Wagner, Chief Executive Officer, commented, "We are pleased
with our continued strong net earnings generated in the first
quarter and with the overall improvement in our credit
quality. Our pre-credit, pre-debt termination, and pre-tax
earnings grew during the first quarter, reaching $30.9
million. This level of earnings strengthens our balance sheet
and allows us to pursue attractive growth and acquisition
opportunities as they arise. Credit quality metrics improved
nicely during the first quarter, with declines in nonaccrual and
classified loans. Our legacy credit loss reserve provides good
coverage of our legacy loan and lease portfolio at 2.85% and of our
legacy nonaccrual loans and leases at 170%. Core deposits
continued their positive trend, with $26.5 million growth in the
first quarter, reaching 80% of total deposits. Our
noninterest-bearing demand deposits grew by nearly $100 million and
represent 39% of total deposits."
Mr. Wagner continued, "At the beginning of the first quarter, we
completed the acquisition of Pacific Western Equipment Finance, an
equipment leasing company. PWE Finance's lease receivables and
leases in process totaled $167.7 million at March 31, 2012, up from
$162.2 million at the acquisition date. We are also pleased to
announce that on April 3, 2012, we acquired Celtic Capital
Corporation, an asset-based lender located here in Southern
California. At that date, Celtic had $56.2 million in gross
loans outstanding. Both of these acquisitions diversify our
portfolio, expand our product line, deploy our excess liquidity
into higher-yielding assets and provide solid platforms for future
growth."
Vic Santoro, Executive Vice President and Chief Financial
Officer, stated, "The first quarter prepayment of FHLB advances and
trust preferred securities, although negatively impacting our net
earnings with an after-tax cost of $13.1 million, provides for
significant interest savings and margin improvement beginning in
the second quarter. The annual after-tax interest cost savings
is $5.1 million, with $3.9 million in after-tax savings for the
remainder of 2012.
Mr. Santoro continued, "Our net interest margin reached 5.41%
for the first quarter, propelled by the PWE Finance
acquisition. PWE Finance's lease receivables yielded 12%
during the first quarter and added approximately 25 basis points to
the net interest margin. The debt repayments are expected to
add approximately 25 basis points to the net interest margin
beginning in the second quarter, and the Celtic Capital Corporation
acquisition will likely add another 13 basis points."
BALANCE SHEET CHANGES
Total assets decreased $80.1 million during the first quarter
due to a lower balance in interest-earning deposits in financial
institutions, offset by higher securities available-for-sale and
higher loans and leases. During the first quarter,
interest-earning deposits in financial institutions declined $169.0
million due to the purchase of PWE Finance for $35.0 million and
the repayment of $128.7 million of its debt. Securities
available-for-sale increased $54.5 million due to purchases of
$134.5 million. The non-covered gross loan and lease portfolio
increased $56.1 million due to the lease receivables gained in the
PWE Finance acquisition. When the lease receivables from the PWE
Finance acquisition are excluded, however, non-covered gross loans
declined $97.7 million; such decline is centered in the real estate
mortgage loan portfolio. The covered loan portfolio declined
$42.7 million due to repayments and resolution activities. At
March 31, 2012, non-covered gross loans and leases totaled $2.9
billion and the covered loan portfolio was $660.3 million.
Total deposits declined $20.8 million during the first quarter
to $4.6 billion at March 31, 2012. Core deposits grew $26.5
million during the first quarter with increases of $99.9 million,
$15.3 million, and $5.6 million in noninterest-bearing demand
deposits, interest checking deposits and savings deposits,
respectively, offset by a decline of $94.3 million in money market
deposits. Time deposits decreased $47.3 million during the
first quarter to $920.6 million at March 31, 2012. At March 31,
2012, core deposits totaled $3.6 billion, or 80% of total deposits
at that date. Noninterest-bearing demand deposits were $1.8
billion at March 31, 2012 and represented 39% of total deposits at
that date.
SECURITIES AVAILABLE-FOR-SALE
The following table presents the components, yields, and
durations related to our securities available-for-sale portfolio as
of March 31, 2012:
|
March 31,
2012 |
|
Amortized |
Carrying |
Book |
Duration |
Security Type |
Cost |
Value |
Yield |
(in
years) |
|
(Dollars in
thousands) |
Residential mortgage-backed securities: |
|
|
|
|
Government and government-sponsored
entity pass through securities |
$ 1,000,280 |
$ 1,033,909 |
2.66% |
3.8 |
Government and government-sponsored
entity collateralized mortgage obligations |
100,250 |
102,220 |
2.25% |
3.5 |
Covered private label collateralized
mortgage obligations |
39,910 |
45,274 |
11.23% |
5.5 |
Municipal securities (1) |
144,127 |
147,641 |
3.16% |
6.2 |
Corporate debt securities |
43,202 |
43,149 |
5.88% |
12.3 |
Other securities |
6,384 |
8,685 |
-- |
-- |
Total securities available-for-sale
(1) |
$ 1,334,153 |
$ 1,380,878 |
3.05% |
4.4 |
|
|
|
|
|
(1) The tax equivalent yield was
4.54% and 3.20% for municipal securities and total securities
available-for-sale, respectively. |
|
|
|
|
|
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:
|
March 31, |
December 31, |
Covered Assets |
2012 |
2011 |
|
(In
thousands) |
Loans, net |
$ 660,297 |
$ 703,023 |
Investment securities |
45,274 |
45,149 |
Other real estate owned, net |
29,888 |
33,506 |
Total covered assets |
$ 735,459 |
$ 781,678 |
|
|
|
Percentage of total assets |
13.5% |
14.1% |
|
|
|
NET INTEREST INCOME
Net interest income was $67.7 million for the first quarter of
2012 compared to $63.8 million for the fourth quarter of
2011. The $3.9 million increase was due to a $3.1 million
increase in loan and lease interest income; such increase is
attributed to a higher yield on average loans and leases and due
mainly to the yield earned on PWE Finance's lease
portfolio. In addition, interest expense declined $420,000 due
to lower rates on all interest-bearing deposits and lower average
time deposits.
NET INTEREST MARGIN
Our net interest margin for the first quarter of 2012 was 5.41%,
an increase of 41 basis points from the 5.00% reported for the
fourth quarter of 2011. This increase is due mostly to an increase
in loan and lease yield as the first quarter includes income on
$146.4 million of average lease receivables with a 12%
yield. The addition of the lease portfolio increased the net
interest margin approximately 25 basis points, assuming such excess
liquidity would have otherwise been deployed in investment
securities. In addition, the net interest margin is impacted by the
accelerated accretion of discounts on covered loan payoffs which
increased the margin 18 basis points for the linked
quarters. Average outstanding loans and leases were unchanged
quarter over quarter.
The yield on average loans and leases increased 44 basis points
to 7.31% for the first quarter of 2012 from 6.87% for the fourth
quarter of 2011. The addition of PWE Finance's lease portfolio
increased the loan and lease yield 21 basis points and the
accelerated accretion of discounts on covered loan payoffs
increased the loan and lease yield 29 basis points.
All-in deposit cost declined 4 basis points to 0.32%. The
cost of interest-bearing deposits declined 6 basis points to 0.51%
due to lower rates on interest-bearing deposits and lower average
time deposits. The cost of total interest-bearing liabilities
declined 3 basis points to 0.85% for the first quarter of 2012.
In March 2012, the Company prepaid $18.6 million in fixed-rate
trust preferred securities and $225.0 million in fixed-rate term
FHLB advances. The resulting debt termination expense incurred
was $22.6 million; the interest expense savings is estimated to be
$6.8 million for the remainder of 2012 and $8.8 million annually
through 2016. The Company used a combination of excess cash and
collateralized overnight borrowings to repay these debt
instruments. These repayments are expected to expand the net
interest margin beginning in the second quarter by approximately 25
basis points from a combination of lower average earning assets and
the reduced borrowing costs.
NONINTEREST INCOME
Noninterest income for the first quarter of 2012 totaled $3.3
million compared to $8.3 million for the fourth quarter of
2011. The $5.0 million decrease was due to lower net FDIC loss
sharing income of $6.2 million and higher gain on sale of leases of
$990,000, the latter item relating to PWE Finance's
operations. The first quarter includes net FDIC loss sharing
expense of $3.6 million due to a higher level of write-downs and
amortization of the loss sharing asset as the estimated amount of
losses collectible from the FDIC decreased; this compares to net
FDIC loss sharing income of $2.7 million in the fourth quarter.
The following table presents the details of FDIC loss sharing
income (expense), net for the periods indicated:
|
Three Months
Ended |
|
March 31, |
December 31, |
Increase |
|
2012 |
2011 |
(Decrease) |
|
(In
thousands) |
FDIC Loss Sharing Income (Expense),
Net: |
|
|
|
Gain (loss) on FDIC loss sharing asset
(1) |
$ (3,380) |
$ 2,560 |
$ (5,940) |
Loan recoveries shared with FDIC |
(839) |
-- |
(839) |
Net reimbursement from FDIC for covered
OREO write-downs and sales |
634 |
102 |
532 |
Other |
6 |
5 |
1 |
Total FDIC loss sharing income (expense),
net |
$ (3,579) |
$ 2,667 |
$ (6,246) |
|
|
|
|
(1) Includes increases related to
covered loan loss provisions and decreases for net loss share asset
amortization and write-offs for covered loans resolved or expected
to be resolved at amounts higher than their carrying value. |
|
NONINTEREST EXPENSE
Noninterest expense increased $25.4 million to $68.9 million
during the first quarter of 2012 compared to $43.5 million for the
fourth quarter of 2011. The increase was due mostly to $22.6
million in debt termination expense for the early repayment of
$225.0 million of fixed-rate term FHLB advances and $18.6 million
of fixed-rate trust preferred securities. Excluding the debt
termination expense, noninterest expense increased $2.8 million, of
which $2.3 million relates to the PWE Finance acquisition which
closed on January 3, 2012. Compensation cost increased $3.5
million quarter-over-quarter when the fourth quarter of 2011
severance cost of $885,000 is excluded. The leasing company
acquisition accounted for $1.6 million of that increase. The
remainder of the compensation increase was attributable to higher
payroll taxes due to the start of the new year and higher incentive
compensation. Covered OREO costs increased due to higher
write-downs of $1.3 million offset by higher gains on sales of
$692,000. These increases were offset by declines in other
professional services, insurance and assessments, and acquisition
costs for approximately $1.0 million in total. Other professional
services declined due to lower legal costs and insurance and
assessments are lower as a result of the revised deposit insurance
assessment formula.
Noninterest expense includes amortization of time-based
restricted stock, which is included in compensation, and intangible
asset amortization. Amortization of restricted stock totaled
$1.6 million and $1.4 million for the first quarter of 2012 and
fourth quarter of 2011, respectively. Intangible asset amortization
totaled $1.7 million and $1.8 million for the first quarter of 2012
and fourth quarter of 2011, respectively.
CREDIT QUALITY
|
March 31, |
December 31, |
March 31, |
|
2012 |
2011 |
2011 |
|
(Dollars in
thousands) |
Non-Covered Credit Quality
Metrics: |
|
|
|
Allowance for credit losses to loans and
leases, net of unearned income |
2.85% |
3.34% |
3.41% |
Allowance for credit losses to nonaccrual
loans and leases |
169.7% |
161.0% |
135.6% |
Nonperforming assets to loans and leases,
net of unearned income, and other real estate owned |
3.24% |
3.73% |
4.03% |
Nonaccrual loans and leases |
$ 48,162 |
$ 58,260 |
$ 76,849 |
Classified loans and leases (1) |
145,933 |
185,560 |
207,012 |
Performing restructured loans |
110,062 |
116,791 |
71,669 |
Net charge-offs (for the quarter) |
2,046 |
2,752 |
7,889 |
|
|
|
|
(1) Classified loans and leases
are those with a credit risk rating of substandard or
doubtful. |
|
|
|
|
Credit Loss Provisions
The Company recorded a negative provision for credit losses of
$6.1 million in the first quarter of 2012 compared to a provision
for credit losses of $4.1 million in the fourth quarter of
2011. The negative provision in the first quarter was composed
of a $10.0 million negative provision for credit losses on
non-covered loans and a $3.9 million provision for credit losses on
covered loans. The provision for credit losses in the fourth
quarter related only to the covered loan portfolio. The
provision level on the non-covered portfolio is generated by our
allowance methodology and reflects net charge-offs, the levels of
nonaccrual and classified loans and leases, the migration of loans
and leases into various risk classifications, and the level of
outstanding loans and leases. 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.
First quarter of 2012 net charge-offs on non-covered loans and
leases totaled $2.0 million compared to fourth quarter of 2011 net
charge-offs of $2.8 million. The allowance for credit losses
on the non-covered portfolio totaled $81.7 million and $93.8
million at March 31, 2012 and December 31, 2011, respectively, and
represented 2.85% and 3.34% of the non-covered loan and lease
balances, respectively. The allowance for credit losses as a
percent of nonaccrual loans and leases was 170% at March 31, 2012
and 161% at December 31, 2011.
Non-covered Nonaccrual Loans and Other Real Estate
Owned
Non-covered nonperforming assets include non-covered nonaccrual
loans and leases and non-covered OREO and totaled $94.4 million at
March 31, 2012 compared to $106.7 million at December 31,
2011. The $12.3 million decline in non-covered nonperforming
assets was due to reductions of $10.1 million in nonaccrual loans
and leases and $2.2 million in OREO. The ratio of non-covered
nonperforming assets to non-covered loans and leases and
non-covered OREO decreased to 3.24% at March 31, 2012 from 3.73% at
December 31, 2011.
The amount of new nonaccrual loans and leases slowed
significantly in 2011 and continued to decline in 2012 as shown in
the following chart:
http://media.globenewswire.com/cache/13824/file/13361.pdf
The following table presents our non-covered nonaccrual loans
and leases and accruing loans and leases past due between 30 and 89
days by portfolio segment and class as of the dates indicated:
|
Nonaccrual Loans
and Leases (1) |
Accruing
and |
|
March 31,
2012 |
December 31,
2011 |
30 - 89 Days Past
Due (1) |
|
|
% of |
|
% of |
March 31, |
December 31, |
|
|
Loan |
|
Loan |
2012 |
2011 |
|
Balance |
Category |
Balance |
Category |
Balance |
Balance |
|
(Dollars in
thousands) |
Real estate mortgage: |
|
|
|
|
|
|
Hospitality |
$ 7,165 |
5.0% |
$ 7,251 |
5.0% |
$ -- |
$ -- |
SBA 504 |
2,354 |
4.1% |
2,800 |
4.8% |
1,165 |
-- |
Other |
14,171 |
0.8% |
21,286 |
1.2% |
973 |
13,237 |
Total real estate mortgage |
23,690 |
1.2% |
31,337 |
1.6% |
2,138 |
13,237 |
Real estate construction and land: |
|
|
|
|
|
|
Residential |
1,075 |
4.2% |
1,086 |
6.1% |
-- |
-- |
Commercial |
4,524 |
4.9% |
6,194 |
6.5% |
-- |
2,290 |
Total real estate construction |
5,599 |
4.7% |
7,280 |
6.4% |
-- |
2,290 |
Commercial: |
|
|
|
|
|
|
Collateralized |
8,030 |
1.9% |
8,186 |
2.0% |
478 |
593 |
Unsecured |
2,608 |
3.8% |
3,057 |
3.9% |
-- |
4 |
Asset-based |
88 |
0.1% |
14 |
0.0% |
-- |
-- |
SBA 7(a) |
7,416 |
26.8% |
7,801 |
26.9% |
252 |
434 |
Total commercial |
18,142 |
2.7% |
19,058 |
2.8% |
730 |
1,031 |
Leases |
233 |
0.2% |
-- |
-- |
-- |
-- |
Consumer |
498 |
3.1% |
585 |
2.5% |
220 |
31 |
Total non-covered loans and leases |
$ 48,162 |
1.7% |
$ 58,260 |
2.1% |
$ 3,088 |
$ 16,589 |
|
|
|
|
|
|
|
(1) Excludes covered loans. |
The $10.1 million decline in non-covered nonaccrual loans and
leases during the first quarter was attributable to (a)
foreclosures of $1.8 million, (b) other reductions, payoffs and
returns to accrual status of $12.1 million, (c) charge-offs of $2.5
million, and (d) additions of $6.3 million.
Below is a summary of the ten largest lending relationships on
nonaccrual status, excluding SBA-related loans, at March 31,
2012:
Nonaccrual |
|
Amount |
Description |
(In thousands) |
|
|
|
7,165 |
Two loans, each secured by a hotel in San
Diego County, California. The borrower is paying according to
the restructured terms of each loan. (1) |
|
|
3,726 |
Four loans, each secured by an industrial
warehouse building in Riverside County, California. The
borrower is paying according to the restructured terms of each
loan. (1) |
|
|
3,442 |
This loan is unsecured. The borrower is
paying according to the restructured terms of the loan. (1) |
|
|
2,476 |
This loan is secured by a strip retail center
in Riverside County, California. The borrower is paying
according to the restructured terms of the loan. (1) |
|
|
1,963 |
This loan is secured by a multi-tenant
industrial building in Riverside County, California. The
borrower is not paying currently. (1) |
|
|
1,875 |
This loan is unsecured and has a specific
reserve for 95% of the balance. The borrower is paying
according to the restructured terms of the loan. (1) |
|
|
1,725 |
This loan is secured by a single family
residence in Riverside County, California. The borrower is not
paying currently. |
|
|
1,701 |
Two unsecured loans which are fully reserved.
The borrower is not paying currently. (1) |
|
|
1,469 |
This loan is secured by a medical-related
office building in Los Angeles County, California. The
borrower is paying according to the restructured terms of the loan.
(1) |
|
|
1,425 |
This loan is secured by a retail/industrial
building in Riverside County, California. The borrower is
paying according to the restructured terms of the
loan. (1) |
|
|
$ 26,967 |
Total |
|
|
(1) On nonaccrual status at
December 31, 2011 |
|
|
The following table presents the details of non-covered and
covered OREO as of the dates indicated:
|
March 31,
2012 |
December 31,
2011 |
|
Non-Covered |
Covered |
Non-Covered |
Covered |
Property Type |
OREO |
OREO |
OREO |
OREO |
|
(In
thousands) |
Commercial real estate |
$ 20,885 |
$ 13,868 |
$ 23,003 |
$ 15,053 |
Construction and land development |
25,321 |
13,143 |
24,788 |
15,461 |
Single family residences |
-- |
2,877 |
621 |
2,992 |
Total OREO, net |
$ 46,206 |
$ 29,888 |
$ 48,412 |
$ 33,506 |
|
|
|
|
|
The following table presents non-covered and covered OREO
activity for the first quarter:
|
Three Months
Ended |
|
March 31,
2012 |
|
Non-Covered |
Covered |
Total |
|
OREO |
OREO |
OREO |
|
(In
thousands) |
Beginning of period |
$ 48,412 |
$ 33,506 |
$ 81,918 |
Foreclosures |
1,839 |
7,241 |
9,080 |
Payments to third parties (1) |
622 |
-- |
622 |
Provision for losses |
(752) |
(2,229) |
(2,981) |
Reductions related to sales |
(3,915) |
(8,630) |
(12,545) |
End of period |
$ 46,206 |
$ 29,888 |
$ 76,094 |
|
|
|
|
Net (loss) gain on sale |
$ (42) |
$ 1,476 |
$ 1,434 |
|
|
|
|
(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 March 31, 2012 as shown in
the following table:
|
March 31,
2012 |
|
Well |
Pacific |
PacWest |
|
Capitalized |
Western |
Bancorp |
|
Requirement |
Bank |
Consolidated |
Tier 1 leverage capital ratio |
5.00% |
9.76% |
10.15% |
Tier 1 risk-based capital ratio |
6.00% |
14.60% |
15.15% |
Total risk-based capital ratio |
10.00% |
15.87% |
16.42% |
Tangible common equity ratio |
N/A |
10.35% |
8.86% |
|
|
|
|
CELTIC CAPITAL COPORATION ACQUISITION
On April 3, 2012, Pacific Western Bank completed the acquisition
of Celtic Capital Corporation, or Celtic, an asset-based lending
company based in Santa Monica, CA. Celtic focuses on providing
asset-based loans to borrowers in the $5 million and under loan
market in the United States. Pacific Western Bank acquired all
of the capital stock of Celtic for $18 million in cash. Celtic's
tangible net assets at March 31, 2012 on a pro forma basis totaled
approximately $9 million.
At April 3, 2012, Celtic had approximately $56 million in gross
loans outstanding, with no loans on nonaccrual status. In
addition, Pacific Western Bank assumed $47 million in outstanding
debt, which was repaid on the closing date. The weighted average
yield on Celtic's loan portfolio as of the acquisition date was
approximately 18% and its weighted average remaining maturity was
seven months.
Celtic will operate under the name Celtic Capital Corporation as
a subsidiary of Pacific Western Bank. Pacific Western has
retained all 26 of Celtic employees.
ABOUT PACWEST BANCORP
PacWest Bancorp ("PacWest") is a bank holding company with $5.4
billion in assets as of March 31, 2012, with one wholly-owned
banking subsidiary, Pacific Western Bank ("Pacific Western").
Through 76 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 throughout
California in Los Angeles, Orange, Riverside, San Bernardino, Santa
Barbara, San Diego, San Francisco, San Luis Obispo, San Mateo and
Ventura Counties. Through its subsidiaries, BFI Business
Finance and Celtic Capital Corporation, and its divisions First
Community Financial and Pacific Western Equipment Finance, Pacific
Western also provides working capital financing and equipment
leasing to growing companies located throughout the United States,
with a focus on the Southwestern U.S., primarily in Arizona,
California, Utah 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
arrangements from 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 and leases 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) |
|
|
|
|
March 31, |
December 31, |
|
2012 |
2011 |
|
(In thousands, except
per share and share data) |
ASSETS |
|
|
Cash and due from banks |
$ 99,471 |
$ 92,342 |
Interest-earning deposits in financial
institutions |
34,290 |
203,275 |
Total cash and cash
equivalents |
133,761 |
295,617 |
|
|
|
Non-covered securities
available-for-sale |
1,335,604 |
1,281,209 |
Covered securities
available-for-sale |
45,274 |
45,149 |
Total securities available-for-sale, at
estimated fair value |
1,380,878 |
1,326,358 |
Federal Home Loan Bank stock, at
cost |
43,902 |
46,106 |
Total investment
securities |
1,424,780 |
1,372,464 |
|
|
|
Non-covered loans and leases, net of
unearned income |
2,865,283 |
2,807,713 |
Allowance for loan and lease losses |
(74,767) |
(85,313) |
Total non-covered loans and
leases, net |
2,790,516 |
2,722,400 |
Covered loans, net |
660,297 |
703,023 |
Total loans and leases,
net |
3,450,813 |
3,425,423 |
|
|
|
Non-covered other real estate owned,
net |
46,206 |
48,412 |
Covered other real estate owned, net |
29,888 |
33,506 |
Total other real estate owned,
net |
76,094 |
81,918 |
|
|
|
Premises and equipment, net |
22,885 |
23,068 |
FDIC loss sharing asset |
79,570 |
95,187 |
Cash surrender value of life
insurance |
67,301 |
67,469 |
Goodwill |
56,144 |
39,141 |
Core deposit and customer relationship
intangibles |
17,380 |
17,415 |
Other assets |
119,380 |
110,535 |
Total assets |
$ 5,448,108 |
$ 5,528,237 |
|
|
|
LIABILITIES |
|
|
Noninterest-bearing demand deposits |
$ 1,785,678 |
$ 1,685,799 |
Interest-bearing deposits |
2,770,992 |
2,891,654 |
Total deposits |
4,556,670 |
4,577,453 |
Borrowings |
193,104 |
225,000 |
Subordinated debentures |
108,250 |
129,271 |
Accrued interest payable and other
liabilities |
40,439 |
50,310 |
Total liabilities |
4,898,463 |
4,982,034 |
STOCKHOLDERS' EQUITY
(1) |
549,645 |
546,203 |
Total liabilities and
stockholders' equity |
$ 5,448,108 |
$ 5,528,237 |
|
|
|
(1) Includes net unrealized gain on
securities available-for-sale, net |
$ 27,101 |
$ 22,803 |
|
|
|
Tangible book value per share |
$ 12.77 |
$ 13.14 |
Book value per share |
$ 14.74 |
$ 14.66 |
|
|
|
Shares outstanding (includes unvested
restricted shares of 1,617,760 at March 31, 2012 and 1,675,730 at
December 31, 2011) |
37,298,138 |
37,254,318 |
|
|
|
PACWEST BANCORP AND
SUBSIDIARIES |
CONDENSED CONSOLIDATED
STATEMENTS OF EARNINGS |
(Unaudited) |
|
|
Three Months
Ended |
|
March 31, |
December 31, |
March 31, |
|
2012 |
2011 |
2011 |
|
(In thousands, except
per share data) |
Interest income: |
|
|
|
Loans and leases |
$ 64,752 |
$ 61,684 |
$ 66,781 |
Investment securities |
9,580 |
9,107 |
7,819 |
Deposits in financial
institutions |
68 |
122 |
57 |
Total interest
income |
74,400 |
70,913 |
74,657 |
|
|
|
|
Interest expense: |
|
|
|
Deposits |
3,604 |
4,103 |
5,956 |
Borrowings |
1,925 |
1,782 |
1,744 |
Subordinated debentures |
1,191 |
1,255 |
1,219 |
Total interest
expense |
6,720 |
7,140 |
8,919 |
|
|
|
|
Net interest income |
67,680 |
63,773 |
65,738 |
|
|
|
|
Provision for credit
losses: |
|
|
|
Non-covered loans and leases |
(10,000) |
-- |
7,800 |
Covered loans |
3,926 |
4,122 |
2,910 |
Total provision for credit
losses |
(6,074) |
4,122 |
10,710 |
|
|
|
|
Net interest income after provision for
credit losses |
73,754 |
59,651 |
55,028 |
|
|
|
|
Noninterest income: |
|
|
|
Service charges on deposit accounts |
3,353 |
3,326 |
3,558 |
Other commissions and fees |
1,883 |
1,864 |
1,720 |
Gain (loss) on sale of leases |
990 |
-- |
-- |
Increase in cash surrender value of life
insurance |
365 |
337 |
379 |
FDIC loss sharing income (expense),
net |
(3,579) |
2,667 |
(1,170) |
Other income |
250 |
60 |
302 |
Total noninterest
income |
3,262 |
8,254 |
4,789 |
|
|
|
|
Noninterest expense: |
|
|
|
Compensation |
24,187 |
21,597 |
21,929 |
Occupancy |
7,288 |
7,137 |
6,983 |
Data processing |
2,280 |
2,132 |
2,475 |
Other professional services |
1,770 |
1,946 |
2,296 |
Business development |
638 |
609 |
569 |
Communications |
608 |
640 |
859 |
Insurance and assessments |
1,293 |
1,590 |
2,337 |
Non-covered other real estate owned,
net |
1,821 |
1,714 |
703 |
Covered other real estate owned, net |
822 |
226 |
(2,578) |
Intangible asset amortization |
1,735 |
1,836 |
2,307 |
Acquisition costs |
25 |
600 |
-- |
Debt termination |
22,598 |
-- |
-- |
Other expenses |
3,830 |
3,442 |
3,519 |
Total noninterest
expense |
68,895 |
43,469 |
41,399 |
|
|
|
|
Earnings before income taxes |
8,121 |
24,436 |
18,418 |
Income tax expense |
(2,857) |
(10,553) |
(7,742) |
Net earnings |
$ 5,264 |
$ 13,883 |
$ 10,676 |
|
|
|
|
Earnings per share
information: |
|
|
|
Basic earnings per share |
$ 0.14 |
$ 0.38 |
$ 0.29 |
Diluted earnings per share |
$ 0.14 |
$ 0.38 |
$ 0.29 |
Basic weighted average shares |
35,630.0 |
35,548.0 |
35,454.1 |
Diluted weighted average shares |
35,630.0 |
35,548.0 |
35,454.1 |
|
|
|
|
PACWEST BANCORP AND
SUBSIDIARIES |
AVERAGE BALANCE SHEETS
AND YIELD ANALYSIS |
(Unaudited) |
|
|
Three Months
Ended |
|
March 31, |
December 31, |
March 31, |
|
2012 |
2011 |
2011 |
|
(Dollars in
Thousands) |
Average Assets: |
|
|
|
Loans and leases, net of unearned
income |
$ 3,562,766 |
$ 3,562,766 |
$ 3,992,204 |
Investment securities |
1,363,067 |
1,309,931 |
913,613 |
Interest-earning deposits in financial
institutions |
103,557 |
186,147 |
89,248 |
Average interest-earning
assets |
5,029,390 |
5,058,844 |
4,995,065 |
Other assets |
471,177 |
463,328 |
515,717 |
Average total assets |
$ 5,500,567 |
$ 5,522,172 |
$ 5,510,782 |
|
|
|
|
Average liabilities: |
|
|
|
Interest checking deposits |
$ 513,190 |
$ 488,783 |
$ 495,950 |
Money market deposits |
1,199,226 |
1,229,387 |
1,240,524 |
Savings deposits |
160,958 |
157,617 |
141,027 |
Time deposits |
942,501 |
1,003,939 |
1,167,468 |
Average interest-bearing
deposits |
2,815,875 |
2,879,726 |
3,044,969 |
Borrowings |
239,779 |
225,011 |
227,122 |
Subordinated debentures |
123,393 |
129,319 |
129,545 |
Average interest-bearing
liabilities |
3,179,047 |
3,234,056 |
3,401,636 |
Noninterest-bearing demand deposits |
1,719,003 |
1,702,543 |
1,582,720 |
Other liabilities |
49,731 |
46,777 |
43,501 |
Average total liabilities |
4,947,781 |
4,983,376 |
5,027,857 |
Average stockholders'
equity |
552,786 |
538,796 |
482,925 |
Average liabilities and stockholders'
equity |
$ 5,500,567 |
$ 5,522,172 |
$ 5,510,782 |
|
|
|
|
Average deposits |
$ 4,534,878 |
$ 4,582,269 |
$ 4,627,689 |
|
|
|
|
Yield on: |
|
|
|
Average loans and leases |
7.31% |
6.87% |
6.78% |
Average investment securities |
2.83% |
2.76% |
3.47% |
Average interest-earning deposits |
0.26% |
0.26% |
0.26% |
Average interest-earning
assets |
5.95% |
5.56% |
6.06% |
|
|
|
|
Cost of: |
|
|
|
Average deposits/all-in deposit cost
(1) |
0.32% |
0.36% |
0.52% |
Average interest-bearing deposits |
0.51% |
0.57% |
0.79% |
Average borrowings |
3.23% |
3.14% |
3.11% |
Average subordinated debentures |
3.88% |
3.85% |
3.82% |
Average interest-bearing
liabilities |
0.85% |
0.88% |
1.06% |
|
|
|
|
Interest rate spread
(2) |
5.10% |
4.68% |
5.00% |
Net interest margin (3) |
5.41% |
5.00% |
5.34% |
|
|
|
|
(1) Cost of average
deposits/all-in deposit cost is calculated as annualized interest
expense on deposits divided by average deposits. |
(2) Interest rate spread is
calculated as the yield on average interest-earning assets less the
cost of average interest-bearing liabilities. |
(3) Net interest margin is
calculated as annualized net interest income divided by average
interest-earning assets. |
|
|
|
|
PACWEST BANCORP AND
SUBSIDIARIES |
LOAN
CONCENTRATION |
(Unaudited) |
|
|
March 31,
2012 |
|
Total
Loans |
Non-Covered
Loans |
Covered
Loans |
|
|
% of |
|
% of |
|
% of |
|
Amount |
Total |
Amount |
Total |
Amount |
Total |
|
(Dollars in
thousands) |
Real estate mortgage: |
|
|
|
|
|
|
Hospitality |
$ 143,491 |
4% |
$ 143,491 |
5% |
$ -- |
0% |
SBA 504 |
57,560 |
2% |
57,560 |
2% |
-- |
0% |
Other |
2,394,654 |
66% |
1,695,001 |
59% |
699,653 |
92% |
Total real estate mortgage |
2,595,705 |
72% |
1,896,052 |
66% |
699,653 |
92% |
Real estate construction: |
|
|
|
|
|
|
Residential |
41,367 |
1% |
25,454 |
1% |
15,913 |
2% |
Commercial |
118,128 |
3% |
92,850 |
3% |
25,278 |
3% |
Total real estate construction |
159,495 |
4% |
118,304 |
4% |
41,191 |
5% |
|
|
|
|
|
|
|
Total real estate loans |
2,755,200 |
76% |
2,014,356 |
70% |
740,844 |
97% |
|
|
|
|
|
|
|
Commercial: |
|
|
|
|
|
|
Collateralized |
442,145 |
12% |
421,996 |
15% |
20,149 |
3% |
Unsecured |
69,284 |
2% |
68,543 |
2% |
741 |
0% |
Asset-based |
147,181 |
4% |
147,181 |
5% |
-- |
0% |
SBA 7(a) |
27,721 |
1% |
27,721 |
1% |
-- |
0% |
Total commercial |
686,331 |
19% |
665,441 |
23% |
20,890 |
3% |
Leases |
153,845 |
4% |
153,845 |
5% |
-- |
0% |
Consumer |
16,511 |
0% |
15,826 |
1% |
685 |
0% |
Foreign |
18,752 |
1% |
18,752 |
1% |
-- |
0% |
Total gross loans |
$ 3,630,639 |
100% |
$ 2,868,220 |
100% |
762,419 |
100% |
Covered loans: |
|
|
|
|
|
|
Discount |
|
|
|
|
(66,312) |
|
Allowance for loan losses |
|
|
|
|
(35,810) |
|
Covered loans, net |
|
|
|
|
$ 660,297 |
|
|
|
|
|
|
|
|
PACWEST BANCORP AND
SUBSIDIARIES |
NON-COVERED LOAN
CONCENTRATION |
REAL ESTATE MORTGAGE
LOANS |
(Unaudited) |
|
|
March 31,
2012 |
December 31,
2011 |
|
|
% of |
|
% of |
Loan Category |
Amount |
Total |
Amount |
Total |
|
(Dollars in
thousands) |
Commercial real estate mortgage: |
|
|
|
|
Industrial/warehouse |
$ 352,033 |
18.6% |
$ 367,494 |
18.5% |
Retail |
266,411 |
14.1% |
286,691 |
14.5% |
Office buildings |
288,105 |
15.2% |
290,074 |
14.6% |
Owner-occupied |
210,055 |
11.1% |
226,307 |
11.4% |
Hotel |
143,491 |
7.6% |
144,402 |
7.3% |
Healthcare |
117,440 |
6.2% |
131,625 |
6.6% |
Mixed use |
52,510 |
2.8% |
53,855 |
2.7% |
Gas station |
30,545 |
1.6% |
33,715 |
1.7% |
Self storage |
23,036 |
1.2% |
23,148 |
1.2% |
Restaurant |
21,670 |
1.1% |
22,549 |
1.1% |
Land acquisition/development |
13,953 |
0.7% |
14,015 |
0.7% |
Unimproved land |
12,137 |
0.6% |
1,369 |
0.1% |
Other |
193,920 |
10.2% |
206,504 |
10.4% |
Total commercial real estate
mortgage |
1,725,306 |
91.0% |
1,801,748 |
90.9% |
|
|
|
|
|
Residential real estate mortgage: |
|
|
|
|
Multi-family |
95,263 |
5.0% |
93,866 |
4.7% |
Single family owner-occupied |
33,749 |
1.8% |
32,209 |
1.6% |
Single family nonowner-occupied |
8,314 |
0.4% |
19,341 |
1.0% |
HELOCs |
33,420 |
1.8% |
35,300 |
1.8% |
Total residential real estate
mortgage |
170,746 |
9.0% |
180,716 |
9.1% |
|
|
|
|
|
Total gross non-covered real estate
mortgage loans |
$ 1,896,052 |
100.0% |
$ 1,982,464 |
100.0% |
|
|
|
|
|
PACWEST BANCORP AND
SUBSIDIARIES |
COVERED LOAN
CONCENTRATION |
REAL ESTATE MORTGAGE
LOANS |
(Unaudited) |
|
|
March 31,
2012 |
December 31,
2011 |
|
|
% of |
|
% of |
Loan Category |
Amount |
Total |
Amount |
Total |
|
(Dollars in
thousands) |
Commercial real estate mortgage: |
|
|
|
|
Industrial/warehouse |
$ 31,942 |
4.6% |
$ 33,755 |
4.6% |
Retail |
109,654 |
15.7% |
114,475 |
15.5% |
Office buildings |
75,540 |
10.8% |
77,767 |
10.6% |
Owner-occupied |
24,663 |
3.5% |
24,837 |
3.4% |
Hotel |
2,931 |
0.4% |
2,944 |
0.4% |
Healthcare |
15,410 |
2.2% |
16,851 |
2.3% |
Mixed use |
7,757 |
1.1% |
7,817 |
1.1% |
Gas station |
5,972 |
0.9% |
6,001 |
0.8% |
Self storage |
52,529 |
7.5% |
52,793 |
7.2% |
Restaurant |
2,492 |
0.4% |
2,532 |
0.3% |
Unimproved land |
1,743 |
0.2% |
1,752 |
0.2% |
Other |
15,582 |
2.2% |
16,535 |
2.2% |
Total commercial real estate
mortgage |
346,215 |
49.5% |
358,059 |
48.6% |
|
|
|
|
|
Residential real estate mortgage: |
|
|
|
|
Multi-family |
233,865 |
33.4% |
250,633 |
34.0% |
Single family owner-occupied |
87,345 |
12.5% |
95,248 |
12.9% |
Single family nonowner-occupied |
26,373 |
3.8% |
25,624 |
3.5% |
HELOCs |
5,855 |
0.8% |
6,794 |
0.9% |
Total residential real estate
mortgage |
353,438 |
50.5% |
378,299 |
51.4% |
|
|
|
|
|
Total gross covered real estate mortgage
loans |
$ 699,653 |
100.0% |
$ 736,358 |
100.0% |
|
|
|
|
|
PACWEST BANCORP AND
SUBSIDIARIES |
NON-COVERED LOAN
CONCENTRATION TREND |
(Unaudited) |
|
|
March 31, |
December 31, |
September 30, |
June 30, |
March 31, |
Loan Segment |
2012 |
2011 |
2011 |
2011 |
2011 |
|
(In
thousands) |
Real estate mortgage |
$ 1,896,052 |
$ 1,982,464 |
$ 2,031,893 |
$ 2,073,868 |
$ 2,172,923 |
Real estate construction |
118,304 |
113,059 |
152,411 |
160,254 |
176,758 |
Commercial |
665,441 |
671,939 |
671,963 |
640,805 |
667,401 |
Leases (1) |
153,845 |
-- |
-- |
-- |
-- |
Consumer |
15,826 |
23,711 |
20,621 |
22,248 |
21,815 |
Foreign: |
|
|
|
|
|
Commercial |
16,747 |
19,531 |
19,532 |
18,633 |
21,808 |
Other, including real estate |
2,005 |
1,401 |
1,400 |
1,442 |
1,488 |
Total gross non-covered loans and
leases |
$ 2,868,220 |
$ 2,812,105 |
$ 2,897,820 |
$ 2,917,250 |
$ 3,062,193 |
|
|
|
|
|
|
(1) Does not include leases in process
of $13.8 million. |
|
|
|
|
|
|
|
|
|
|
|
PACWEST BANCORP AND
SUBSIDIARIES |
COVERED LOAN
CONCENTRATION TREND |
(Unaudited) |
|
|
March 31, |
December 31, |
September 30, |
June 30, |
March 31, |
|
2012 |
2011 |
2011 |
2011 |
2011 |
|
(In
thousands) |
Real estate mortgage |
$ 699,653 |
$ 736,358 |
$ 788,253 |
$ 837,425 |
$ 879,753 |
Real estate construction |
41,191 |
46,918 |
55,464 |
64,868 |
82,992 |
Commercial |
20,889 |
25,610 |
26,729 |
28,550 |
31,699 |
Consumer |
686 |
735 |
824 |
844 |
939 |
Total gross covered loans |
762,419 |
809,621 |
871,270 |
931,687 |
995,383 |
Less: discount |
(66,312) |
(75,323) |
(80,920) |
(92,847) |
(106,512) |
Less: allowance for loan losses |
(35,810) |
(31,275) |
(29,291) |
(32,888) |
(29,438) |
Covered loans, net |
$ 660,297 |
$ 703,023 |
$ 761,059 |
$ 805,952 |
$ 859,433 |
|
|
|
|
|
|
PACWEST BANCORP AND
SUBSIDIARIES |
NON-COVERED NONCLASSIFIED
AND CLASSIFIED LOANS AND LEASES |
(Unaudited) |
|
|
March 31,
2012 |
|
Nonclassified |
Classified |
Total |
|
(In
thousands) |
Real estate mortgage: |
|
|
|
Hospitality |
$ 122,944 |
$ 20,547 |
$ 143,491 |
SBA 504 |
50,611 |
6,949 |
57,560 |
Other |
1,640,177 |
54,824 |
1,695,001 |
Total real estate mortgage |
1,813,732 |
82,320 |
1,896,052 |
Real estate construction: |
|
|
|
Residential |
22,547 |
2,907 |
25,454 |
Commercial |
71,087 |
21,763 |
92,850 |
Total real estate construction |
93,634 |
24,670 |
118,304 |
Commercial: |
|
|
|
Collateralized |
402,904 |
19,092 |
421,996 |
Unsecured |
65,072 |
3,471 |
68,543 |
Asset-based |
145,948 |
1,233 |
147,181 |
SBA 7(a) |
17,152 |
10,569 |
27,721 |
Total commercial |
631,076 |
34,365 |
665,441 |
Leases |
150,220 |
3,625 |
153,845 |
Consumer |
14,873 |
953 |
15,826 |
Foreign |
18,752 |
-- |
18,752 |
Total non-covered loans and leases |
$ 2,722,287 |
$ 145,933 |
$ 2,868,220 |
|
|
|
|
|
December 31,
2011 |
|
Nonclassified |
Classified |
Total |
|
(In
thousands) |
Real estate mortgage: |
|
|
|
Hospitality |
$ 123,071 |
$ 21,331 |
$ 144,402 |
SBA 504 |
51,522 |
6,855 |
58,377 |
Other |
1,690,830 |
88,855 |
1,779,685 |
Total real estate mortgage |
1,865,423 |
117,041 |
1,982,464 |
Real estate construction: |
|
|
|
Residential |
14,743 |
2,926 |
17,669 |
Commercial |
64,667 |
30,723 |
95,390 |
Total real estate construction |
79,410 |
33,649 |
113,059 |
Commercial: |
|
|
|
Collateralized |
395,041 |
18,979 |
414,020 |
Unsecured |
75,017 |
3,920 |
78,937 |
Asset-based |
149,947 |
40 |
149,987 |
SBA 7(a) |
18,045 |
10,950 |
28,995 |
Total commercial |
638,050 |
33,889 |
671,939 |
Consumer |
22,730 |
981 |
23,711 |
Foreign |
20,932 |
-- |
20,932 |
Total non-covered loans |
$ 2,626,545 |
$ 185,560 |
$ 2,812,105 |
|
|
|
|
Note: Nonclassified loans and
leases are those with a credit risk rating of either pass or
special mention, while classified loans and leases 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 AND
LEASES (1) |
(Unaudited) |
|
|
Three Months
Ended |
|
March 31, |
December 31, |
March 31, |
|
2012 |
2011 |
2011 |
|
(Dollars in
thousands) |
Allowance for credit losses, beginning of
period |
$ 93,783 |
$ 96,535 |
$ 104,328 |
Loans charged-off: |
|
|
|
Real estate mortgage |
(2,190) |
(321) |
(1,212) |
Real estate construction |
-- |
(1,048) |
(4,645) |
Commercial |
(871) |
(2,105) |
(3,121) |
Consumer |
(199) |
(43) |
(160) |
Foreign |
-- |
-- |
-- |
Total loans charged off |
(3,260) |
(3,517) |
(9,138) |
Recoveries on loans charged-off: |
|
|
|
Real estate mortgage |
329 |
164 |
97 |
Real estate construction |
10 |
4 |
92 |
Commercial |
824 |
508 |
617 |
Consumer |
31 |
19 |
411 |
Foreign |
20 |
70 |
32 |
Total recoveries on loans charged
off |
1,214 |
765 |
1,249 |
Net charge-offs |
(2,046) |
(2,752) |
(7,889) |
Provision for credit losses |
(10,000) |
-- |
7,800 |
Allowance for credit losses, end of
period |
$ 81,737 |
$ 93,783 |
$ 104,239 |
|
|
|
|
Annualized net charge-offs to average loans
and leases |
0.29% |
0.39% |
1.03% |
|
|
|
|
(1) Applies only to non-covered
loans and leases. |
|
|
|
|
PACWEST BANCORP AND
SUBSIDIARIES |
ALLOWANCE FOR CREDIT
LOSSES, NONPERFORMING |
ASSETS AND CREDIT QUALITY
RATIOS FOR |
NON-COVERED LOANS AND
LEASES |
(Unaudited) |
|
March 31, |
December 31, |
|
2012 |
2011 |
|
(Dollars in
thousands) |
Allowance for loan and lease losses (1) |
$ 74,767 |
$ 85,313 |
Reserve for unfunded loan commitments
(1) |
6,970 |
8,470 |
Total allowance for credit losses |
$ 81,737 |
$ 93,783 |
|
|
|
|
|
|
Nonaccrual loans and leases (2) |
$ 48,162 |
$ 58,260 |
Other real estate owned (2) |
46,206 |
48,412 |
Total nonperforming assets |
$ 94,368 |
$ 106,672 |
|
|
|
Performing restructured loans (1) |
$ 110,062 |
$ 116,791 |
|
|
|
Allowance for credit losses to loans and
leases, net of unearned income |
2.85% |
3.34% |
Allowance for credit losses to nonaccrual
loans and leases |
169.7% |
161.0% |
Nonperforming assets to loans and leases, net
of unearned income, and other real estate owned |
3.24% |
3.73% |
Nonperforming assets to total assets |
1.73% |
1.93% |
Nonaccrual loans and leases to loans and
leases, net of unearned income |
1.68% |
2.07% |
|
|
|
(1) Applies to non-covered
loans. |
(2) Excludes covered
nonperforming assets. |
|
|
|
PACWEST BANCORP AND
SUBSIDIARIES |
DEPOSITS |
(Unaudited) |
|
|
March 31, |
December 31, |
Deposit Category |
2012 |
2011 |
|
(Dollars in
thousands) |
Noninterest-bearing demand deposits |
$ 1,785,678 |
$ 1,685,799 |
Interest checking deposits |
516,360 |
500,998 |
Money market deposits |
1,170,960 |
1,265,282 |
Savings deposits |
163,102 |
157,480 |
Total core deposits |
3,636,100 |
3,609,559 |
Time deposits under $100,000 |
310,007 |
324,521 |
Time deposits of $100,000 and over |
610,563 |
643,373 |
Total time deposits |
920,570 |
967,894 |
Total deposits |
$ 4,556,670 |
$ 4,577,453 |
|
|
|
Noninterest-bearing demand deposits as a
percentage of total deposits |
39% |
37% |
Core deposits as a percentage of total
deposits |
80% |
79% |
|
|
|
PACWEST BANCORP AND
SUBSIDIARIES |
TIME
DEPOSITS |
(Unaudited) |
|
March 31,
2012 |
|
Time |
Time |
|
|
|
Deposits |
Deposits |
Total |
|
|
Under |
$100,000 |
Time |
|
Maturity |
$100,000 |
or More |
Deposits |
Rate |
|
(In
thousands) |
|
Due in three months or less |
$ 57,671 |
$ 119,634 |
$ 177,305 |
0.65% |
Due in over three months through six
months |
37,577 |
64,326 |
101,903 |
0.54% |
Due in over six months through twelve
months |
75,283 |
118,986 |
194,269 |
1.39% |
Due in over twelve months |
139,476 |
307,617 |
447,093 |
1.61% |
Total |
$ 310,007 |
$ 610,563 |
$ 920,570 |
1.26% |
|
|
|
|
|
PACWEST BANCORP AND
SUBSIDIARIES |
GAAP TO NON-GAAP
RECONCILIATIONS |
(Unaudited) |
|
|
Three Months
Ended |
Pre-Credit, Pre-Debt Termination,
and |
March 31, |
December 31, |
March 31, |
Pre-Tax Earnings |
2012 |
2011 |
2011 |
|
(In
thousands) |
Net earnings |
$ 5,264 |
$ 13,883 |
$ 10,676 |
Plus: Total provision for credit
losses |
(6,074) |
4,122 |
10,710 |
Other real estate owned expense,
net |
|
|
|
Non-covered |
1,821 |
1,714 |
703 |
Covered |
822 |
226 |
(2,578) |
Debt termination expense |
22,598 |
-- |
-- |
Income tax expense |
2,857 |
10,553 |
7,742 |
Less: FDIC loss sharing income
(expense), net |
(3,579) |
2,667 |
(1,170) |
Pre-credit, pre-debt termination, and pre-tax earnings |
$ 30,867 |
$ 27,831 |
$ 28,423 |
|
|
|
Three Months
Ended |
|
March 31, |
December 31, |
March 31, |
Adjusted Efficiency
Ratio |
2012 |
2011 |
2011 |
|
(Dollars in
thousands) |
Noninterest expense |
$ 68,895 |
$ 43,469 |
$ 41,399 |
Less: Non-covered OREO expense |
1,821 |
1,714 |
703 |
Covered OREO expense |
822 |
226 |
(2,578) |
Debt termination expense |
22,598 |
-- |
-- |
Adjusted noninterest
expense |
$ 43,654 |
$ 41,529 |
$ 43,274 |
|
|
|
|
Net interest income |
$ 67,680 |
$ 63,773 |
$ 65,738 |
Noninterest income |
3,262 |
8,254 |
4,789 |
Net revenues |
70,942 |
72,027 |
70,527 |
Less: FDIC loss sharing income
(expense), net |
(3,579) |
2,667 |
(1,170) |
Adjusted net revenues |
$ 74,521 |
$ 69,360 |
$ 71,697 |
|
|
|
|
Base efficiency ratio (1) |
97.1% |
60.4% |
58.7% |
Adjusted efficiency ratio (2) |
58.6% |
59.9% |
60.4% |
|
|
|
|
(1) Noninterest expense
divided by net revenues. |
(2) Adjusted noninterest
expense divided by adjusted net revenues. |
|
|
|
|
PACWEST BANCORP AND
SUBSIDIARIES |
|
|
GAAP TO NON-GAAP
RECONCILIATIONS |
|
|
(Unaudited) |
|
|
|
|
March 31, |
December 31, |
Tangible Common
Equity |
2012 |
2011 |
|
(Dollars in
thousands) |
PacWest Bancorp
Consolidated: |
|
|
Stockholders' equity |
$ 549,645 |
$ 546,203 |
Less: Intangible assets |
73,524 |
56,556 |
Tangible
common equity |
$ 476,121 |
$ 489,647 |
|
|
|
Total assets |
$ 5,448,108 |
$ 5,528,237 |
Less: Intangible assets |
73,524 |
56,556 |
Tangible assets |
$ 5,374,584 |
$ 5,471,681 |
|
|
|
Equity to assets
ratio |
10.09% |
9.88% |
Tangible common equity
ratio (1) |
8.86% |
8.95% |
|
|
|
Pacific Western Bank: |
|
|
Stockholders' equity |
$ 627,792 |
$ 625,494 |
Less: Intangible assets |
73,524 |
56,556 |
Tangible common
equity |
$ 554,268 |
$ 568,938 |
|
|
|
Total assets |
$ 5,430,107 |
$ 5,512,025 |
Less: Intangible assets |
73,524 |
56,556 |
Tangible assets |
$ 5,356,583 |
$ 5,455,469 |
|
|
|
Equity to
assets ratio |
11.56% |
11.35% |
Tangible common equity
ratio (1) |
10.35% |
10.43% |
|
|
|
(1) Calculated as tangible common
equity divided by tangible assets. |
|
|
|
PACWEST BANCORP AND
SUBSIDIARIES |
EARNINGS PER SHARE
CALCULATIONS |
(Unaudited) |
|
|
Three Months
Ended |
|
March 31, |
December 31, |
March 31, |
|
2012 |
2011 |
2011 |
|
(In thousands, except
per share data) |
Basic Earnings Per
Share: |
|
|
|
Net earnings |
$ 5,264 |
$ 13,883 |
$ 10,676 |
Less: earnings allocated to unvested
restricted stock (1) |
(122) |
(470) |
(386) |
Net earnings allocated to common
shares |
$ 5,142 |
$ 13,413 |
$ 10,290 |
|
|
|
|
Weighted-average basic shares and
unvested restricted stock outstanding |
37,284.0 |
37,260.8 |
36,801.7 |
Less: weighted-average unvested
restricted stock outstanding |
(1,654.0) |
(1,712.8) |
(1,347.6) |
Weighted-average basic shares
outstanding |
35,630.0 |
35,548.0 |
35,454.1 |
|
|
|
|
Basic earnings per share |
$ 0.14 |
$ 0.38 |
$ 0.29 |
|
|
|
|
Diluted Earnings Per
Share: |
|
|
|
Net earnings allocated to common
shares |
$ 5,142 |
$ 13,413 |
$ 10,290 |
|
|
|
|
Weighted-average diluted shares
outstanding |
35,630.0 |
35,548.0 |
35,454.1 |
|
|
|
|
Diluted earnings per share |
$ 0.14 |
$ 0.38 |
$ 0.29 |
|
|
|
|
(1) Represents cash dividends
paid to holders of unvested restricted stock, net of estimated
forfeitures, plus undistributed earnings amounts available to
holders of unvested restricted stock, if any. |
|
|
|
|
CONTACT: Matt Wagner, Chief Executive Officer, (310) 728-1020
Vic Santoro, Executive Vice President and CFO, (310) 728-1021
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