Highlights
- CapitalSource Merger Closed April 7, 2014; Deposit
System Converted April 12, 2014
- Net Earnings of $10.6 Million or $0.10 Per Diluted
Share; Adjusted Net Earnings of $63.8 Million or $0.64 Per Diluted
Share
- Net Interest Margin at 6.24%
- Loan and Lease Production of $881.3 Million; $143.0
Million of Organic Loan and Lease Growth in the
Quarter
- Demand Deposits Increased $0.3 Billion in the Second
Quarter and are 23% of Total Deposits
- Core Deposits Increased $1.0 Billion in the Second
Quarter and are 49% of Total Deposits
PacWest Bancorp (Nasdaq:PACW) today announced net
earnings for the second quarter of 2014 of $10.6 million, or $0.10
per diluted share, compared to net earnings for the first quarter
of 2014 of $25.1 million, or $0.55 per diluted share. When certain
income and expense items described below are excluded, adjusted net
earnings are $63.8 million, or $0.64 per diluted share.
Matt Wagner, President and CEO, commented, "The benefits of the
CapitalSource merger are apparent in our second quarter results:
record adjusted net earnings of $64 million, new loan and lease
fundings of $881 million, organic loan and lease growth of $143
million, and significant progress in meeting our deposit
transformation and cost savings targets. Our loan fundings were
strong across both divisions, with the national lending platform
embodied in the CapitalSource division originating $745 million in
loans and leases and our Community Bank division originating $137
million in loans. Loan refinancings by other lenders at liberal
pricing metrics continued, and the improving economy in our market
areas enabled borrowers to either sell their properties or use
excess cash balances to reduce outstandings. Nevertheless, our
pipelines are robust and we expect continued high levels of loan
and lease fundings."
Mr. Wagner continued, "PacWest Bancorp is a very strong and
well-positioned company. Our second quarter adjusted return on
assets and adjusted return on tangible equity stood at 1.70% and
16.05%. Our tangible common equity ratio was 12.14% at June 30,
well above the 10% target we set when we initiated the
CapitalSource merger. The strengths of these financial metrics
position us to support asset growth and produce solid
earnings."
Vic Santoro, Executive Vice President and CFO, stated, "Our core
net interest margin was 5.74% for the quarter, right about where we
expected it to be. We have made great strides in reaching our cost
savings targets, with our adjusted efficiency ratio at 43%. Our
Deposit Solutions Team, which concentrates on generating core
deposits from legacy CapitalSource borrowers, has achieved
significant success so far with new core deposits of $95 million
and a pipeline of almost $175 million. Overall, organic core
deposit growth was $200 million in the second quarter, and our
teams remain focused on gathering new deposits from all
sources."
FINANCIAL HIGHLIGHTS
|
|
|
|
|
|
|
|
At or For the
Three Months Ended |
At or For the Six
Months Ended |
|
June 30, |
March 31, |
|
June 30, |
June 30, |
|
|
2014 |
2014 |
Change |
2014 |
2013 |
Change |
|
(Dollars in thousands, except
per share data) |
Financial Highlights:
(1) |
|
|
|
|
|
|
Total Assets |
$ 15,684,866 |
$ 6,517,853 |
$ 9,167,013 |
$ 15,684,866 |
$ 6,709,102 |
$ 8,975,764 |
Gross Loans and Leases |
11,200,524 |
4,161,085 |
7,039,439 |
11,200,524 |
4,420,619 |
6,779,905 |
Total Deposits |
11,667,797 |
5,369,408 |
6,298,389 |
11,667,797 |
5,523,000 |
6,144,797 |
|
|
|
|
|
|
|
Net Earnings |
10,555 |
25,080 |
(14,525) |
35,635 |
17,843 |
17,792 |
Diluted Earnings Per Share |
$ 0.10 |
$ 0.55 |
$ (0.45) |
$ 0.49 |
$ 0.47 |
$ 0.02 |
Annualized Return on Average Assets |
0.28% |
1.56% |
(1.28) |
0.67% |
0.65% |
0.02 |
|
|
|
|
|
|
|
Adjusted Net Earnings (2) |
$ 63,814 |
$ 22,570 |
$ 41,244 |
$ 86,384 |
$ 33,797 |
$ 52,587 |
Adjusted Diluted Earnings Per Share |
$ 0.64 |
$ 0.48 |
$ 0.16 |
$ 1.18 |
$ 0.90 |
$ 0.28 |
Annualized Adjusted Return on Average
Assets (2) |
1.70% |
1.41% |
0.29 |
1.61% |
1.22% |
0.39 |
Annualized Return on Average Tangible
Equity(2) |
2.65% |
17.10% |
(14.45) |
6.55% |
6.97% |
(0.42) |
Annualized Adjusted Return on Average
Tangible Equity(2) |
16.05% |
15.39% |
0.66 |
15.88% |
13.21% |
2.67 |
|
|
|
|
|
|
|
Noninterest-Bearing Deposits as a
Percentage of Total Deposits |
23% |
45% |
(22) |
23% |
41% |
(18) |
Core Deposits as a Percentage of Total
Deposits |
49% |
88% |
(39) |
49% |
85% |
(36) |
Tangible Common Equity Ratio (2) |
12.14% |
9.68% |
2.46 |
12.14% |
8.83% |
3.31 |
Tangible Book Value Per Share(2) |
$ 16.43 |
$ 13.31 |
$ 3.12 |
$ 16.43 |
$ 12.42 |
$ 4.01 |
Net Interest Margin |
6.24% |
5.95% |
0.29 |
6.14% |
5.30% |
0.84 |
Core Net Interest Margin (2) |
5.74% |
5.42% |
0.32 |
5.64% |
5.27% |
0.37 |
Efficiency Ratio |
84.5% |
56.1% |
28.4 |
75.7% |
79.0% |
(3.3) |
Adjusted Efficiency Ratio (2) |
43.1% |
57.1% |
(14.0) |
47.4% |
62.9% |
(15.5) |
Annualized Operating Expense as a
Percentage of Average Assets |
2.14% |
3.15% |
(1.01) |
2.44% |
3.26% |
(0.82) |
|
(1) Includes the acquisition of
First California Financial Group, Inc. on May 31, 2013 and
CapitalSource Inc. on April 7, 2014. |
(2) Non-GAAP measure. |
|
|
|
|
|
|
|
ADJUSTED EARNINGS
In evaluating its earnings, the Company removes certain items to
arrive at Adjusted Net Earnings and Adjusted Diluted Earnings Per
Share, as detailed below:
|
|
|
|
|
|
|
Three Months
Ended |
Six Months
Ended |
|
June 30, |
March 31, |
June 30, |
June 30, |
June 30, |
|
2014 |
2014 |
2013 |
2014 |
2013 |
|
(Dollars in thousands) |
|
|
|
|
|
|
Reported net earnings |
$ 10,555 |
$ 25,080 |
$ 4,349 |
$ 35,635 |
$ 17,843 |
Subtract: Tax benefit on discontinued
operations |
(476) |
(588) |
(34) |
(1,064) |
(34) |
Add: Tax expense on continuing
operations |
14,846 |
14,576 |
1,906 |
29,422 |
9,625 |
Reported pre-tax earnings |
24,925 |
39,068 |
6,221 |
63,993 |
27,434 |
Add: Acquisition, integration and
reorganization costs |
86,242 |
2,200 |
17,997 |
88,442 |
18,689 |
Subtract: FDIC loss sharing expense, net |
(8,525) |
(11,430) |
(5,410) |
(19,955) |
(8,547) |
(Loss) gain on sale of loans and
leases |
(485) |
106 |
279 |
(379) |
504 |
Gain on securities |
89 |
4,752 |
— |
4,841 |
409 |
Covered OREO income, net |
185 |
1,615 |
94 |
1,800 |
907 |
Gain on sale of owned office
building |
— |
1,570 |
— |
1,570 |
— |
Adjusted pre-tax earnings before accelerated
discount accretion on acquired loan payoffs |
119,903 |
44,655 |
29,255 |
164,558 |
52,850 |
Subtract: Accelerated discount accretion
resulting from payoffs of acquired loans |
15,290 |
7,655 |
177 |
22,945 |
854 |
Adjusted pre-tax earnings |
104,613 |
37,000 |
29,078 |
141,613 |
51,996 |
Tax expense (1) |
(40,799) |
(14,430) |
(10,177) |
(55,229) |
(18,199) |
Adjusted net earnings |
$ 63,814 |
$ 22,570 |
$ 18,901 |
$ 86,384 |
$ 33,797 |
|
|
|
|
|
|
Annualized adjusted return on average
assets |
1.70% |
1.41% |
1.31% |
1.61% |
1.22% |
|
|
|
|
|
|
Adjusted diluted earnings per share |
$ 0.64 |
$ 0.48 |
$ 0.48 |
$ 1.18 |
$ 0.90 |
|
|
|
|
|
|
(1) Full-year expected effective
rate of 39% used in 2014 periods and actual effective rate of 35%
used in 2013 periods. |
|
|
|
|
|
|
INCOME STATEMENT HIGHLIGHTS
Net Interest Income
Net interest income increased by $106.5 million to $192.5
million for the second quarter of 2014 compared to $86.0 million
for the first quarter of 2014 due to the significant increase in
interest-earning assets from the CapitalSource merger. Net interest
margin ("NIM") for the second quarter of 2014 was 6.24%, compared
to 5.95% for the first quarter of 2014. The 29 basis point increase
in NIM was driven by the increase in interest-earning assets, which
resulted from loans and leases added with the CapitalSource merger
and organic loan growth during the quarter. Loan yield for the
second quarter of 2014 was 7.34%, compared to 7.42% for the first
quarter of 2014. The impact on the loan yield from accelerated
discount accretion resulting from acquired loan payoffs was 58
basis points in the second quarter compared to 74 basis points in
the first quarter. The total cost of deposits increased to 0.26%
from 0.09% in the prior quarter due primarily to the higher-cost
time deposits acquired in the CapitalSource merger.
Net interest margin information is presented in the following
table for the periods indicated:
|
Three Months
Ended |
|
June 30, |
March 31, |
Net Interest Margin |
2014 |
2014 |
|
(Dollars in thousands) |
Average Assets: |
|
|
Loans and leases |
$ 10,500,521 |
$ 4,231,319 |
Investment securities |
1,606,848 |
1,512,694 |
Deposits in financial institutions |
276,095 |
118,682 |
Average interest-earning assets |
12,383,464 |
5,862,695 |
Other assets |
2,653,637 |
650,681 |
Average total assets |
$ 15,037,101 |
$ 6,513,376 |
|
|
|
Average Liabilities: |
|
|
Interest-bearing deposits |
$ 8,629,482 |
$ 2,968,994 |
Borrowings |
39,931 |
18,176 |
Subordinated debentures |
409,934 |
132,696 |
Average interest-bearing liabilities |
9,079,347 |
3,119,866 |
Noninterest-bearing demand deposits |
2,546,540 |
2,374,325 |
Other liabilities |
178,196 |
198,937 |
Average total liabilities |
11,804,083 |
5,693,128 |
Average stockholders' equity |
3,233,018 |
820,248 |
Average liabilities and stockholders'
equity |
$ 15,037,101 |
$ 6,513,376 |
|
|
|
Average time deposits |
$ 5,613,601 |
$ 666,463 |
Average total deposits |
$ 11,176,022 |
$ 5,343,319 |
Average funding sources |
$ 11,625,887 |
$ 5,494,191 |
|
|
|
Yield on: |
|
|
Average loans and leases |
7.34% |
7.42% |
Average investment securities |
2.99% |
2.90% |
Average interest-earning
assets |
6.62% |
6.11% |
|
|
|
Cost of: |
|
|
Average total deposits cost |
0.26% |
0.09% |
Average time deposits |
0.42% |
0.31% |
Average interest-bearing
deposits |
0.34% |
0.17% |
Average borrowings |
2.00% |
1.76% |
Average subordinated
debentures |
4.22% |
3.18% |
Average interest-bearing
liabilities |
0.52% |
0.30% |
Average funding sources |
0.41% |
0.17% |
|
|
|
Net interest rate
spread |
6.10% |
5.81% |
Net interest margin |
6.24% |
5.95% |
The NIM and loan and lease yield are impacted by accelerated
accretion of acquisition discounts resulting from acquired loan
payoffs that cause volatility. The effects of this item are shown
in the following table for the periods indicated:
|
|
|
|
|
|
Three Months
Ended |
Three Months
Ended |
|
June 30,
2014 |
March 31,
2014 |
|
|
Loan and |
|
Loan and |
|
NIM |
Lease Yield |
NIM |
Lease Yield |
|
|
|
|
|
Reported |
6.24% |
7.34% |
5.95% |
7.42% |
Less: Accelerated accretion of acquisition
discounts resulting from acquired loan payoffs |
(0.50)% |
(0.58)% |
(0.53)% |
(0.74)% |
Core (non-GAAP measure) |
5.74% |
6.76% |
5.42% |
6.68% |
|
|
|
|
|
Noninterest Income
Noninterest income increased by $3.8 million to $8.5 million for
the second quarter of 2014 from $4.7 million for the first quarter
of 2014. The increase was due mostly to income streams gained in
the CapitalSource merger, including certain other commissions and
fees and leased equipment income, and lower FDIC loss sharing
expense offset by lower gain on asset sales and other income. The
increase in other commissions and fees is due to higher unused
commitment fees, letter of credit fees and prepayment fees of $3.1
million, all attributed to the added CapitalSource operations. FDIC
loss sharing expense, which relates to four loss sharing agreements
with the FDIC, decreased due to lower gain on sales of covered OREO
and lower losses on the FDIC loss sharing asset. Covered
assets totaled $399.0 million at June 30, 2014 and $421.2 million
at March 31, 2014.
The following table presents details of noninterest income for
the periods indicated:
|
|
|
|
|
Three Months
Ended |
|
June 30, |
March 31, |
Increase |
Noninterest
Income |
2014 |
2014 |
(Decrease) |
|
(In thousands) |
|
|
|
|
Service charges on deposit accounts |
$ 2,719 |
$ 3,002 |
$ (283) |
Other commissions and fees |
5,743 |
1,932 |
3,811 |
Leased equipment income |
5,672 |
— |
5,672 |
(Loss) gain on sale of loans and leases |
(485) |
106 |
(591) |
Gain on securities |
89 |
4,752 |
(4,663) |
FDIC loss sharing expense, net |
(8,525) |
(11,430) |
2,905 |
Other income: |
|
|
|
Income recognized on early repayment of
leases |
961 |
3,505 |
(2,544) |
Gain on sale of owned office
building |
— |
1,570 |
(1,570) |
Other |
2,305 |
1,254 |
1,051 |
Total noninterest
income |
$ 8,479 |
$ 4,691 |
$ 3,788 |
|
|
|
|
The following table presents the details of FDIC loss sharing
expense for the periods indicated:
|
|
|
|
|
Three Months
Ended |
|
June 30, |
March 31, |
Increase |
FDIC Loss Sharing Expense,
Net |
2014 |
2014 |
(Decrease) |
|
(In thousands) |
|
|
|
|
Gain (loss) on FDIC loss sharing asset |
$ (991) |
$ (2,206) |
$ 1,215 |
FDIC loss sharing asset amortization,
net |
(7,270) |
(7,912) |
642 |
Net reimbursement (to) from FDIC for covered
OREOs |
(175) |
(1,224) |
1,049 |
Other |
(89) |
(88) |
(1) |
FDIC loss sharing expense, net |
$ (8,525) |
$ (11,430) |
$ 2,905 |
|
|
|
|
Noninterest Expense
Noninterest expense increased by $119.0 million to $169.9
million for the second quarter of 2014 compared to $50.9 million
for the first quarter of 2014. The increase was due mostly to
higher acquisition, integration and reorganization costs related to
the CapitalSource merger, which increased $84.0 million, and higher
operating expenses of $29.5 million. The second quarter
acquisition, integration and reorganization costs of $86.2 million
included CapitalSource merger expenses, such as investment banking,
legal and accounting fees, lease terminations, and change in
control payments, as well as $7.5 million to write off goodwill and
other intangibles relating to the reorganization of the legacy
PacWest asset financing segment, which included the sale of certain
of its assets.
Operating expenses increased to $80.1 million for the second
quarter of 2014 compared to $50.5 million for the first quarter of
2014 due to including the CapitalSource operations after the April
7, 2014 merger date. As a result of the merger, the number of
employees increased to approximately 1,450 at June 30 from
approximately 1,100 at March 31, and nine branch locations and
administrative offices were added.
The following table presents details of noninterest expense for
the periods indicated:
|
|
|
|
|
Three Months
Ended |
|
June 30, |
March 31, |
Increase |
Noninterest
Expense |
2014 |
2014 |
(Decrease) |
|
(In thousands) |
|
|
|
|
Compensation |
$ 45,081 |
$ 28,627 |
$ 16,454 |
Occupancy |
11,078 |
7,595 |
3,483 |
Data processing |
4,099 |
2,540 |
1,559 |
Other professional services |
2,843 |
1,523 |
1,320 |
Insurance and assessments |
3,179 |
1,593 |
1,586 |
Intangible asset amortization |
1,677 |
1,364 |
313 |
Other expense: |
|
|
|
Loan expense |
3,024 |
1,194 |
1,830 |
Communications |
1,421 |
737 |
684 |
Other |
7,670 |
5,357 |
2,313 |
Total operating
expense |
80,072 |
50,530 |
29,542 |
Leased equipment depreciation |
3,095 |
— |
3,095 |
Foreclosed assets expense (income), net |
497 |
(1,861) |
2,358 |
Acquisition, integration and reorganization
costs |
86,242 |
2,200 |
84,042 |
Total noninterest expense |
$ 169,906 |
$ 50,869 |
$ 119,037 |
|
|
|
|
Income Taxes
Our overall effective income tax rate was 57.7% for the second
quarter of 2014 and 35.8% for the first quarter of 2014. The second
quarter effective tax rate was driven higher than normal by the
non-deductibility and tax treatment of certain acquisition,
integration and reorganization costs. When these items are
excluded, our adjusted effective tax rate was 40.2% for the second
quarter.
BALANCE SHEET HIGHLIGHTS
Loans and Leases
Total loans and leases increased $7.0 billion in the second
quarter to $11.2 billion at June 30, 2014. Excluding the $6.9
billion of loans and leases acquired in the CapitalSource merger,
loans and leases increased by $143.0 million in the second
quarter.
The following table presents a roll forward of the loan and
lease portfolio for the periods indicated:
|
|
|
|
Three Months
Ended |
Loan and Lease Roll
Forward (1) |
June 30,
2014 |
March 31,
2014 |
|
(In thousands) |
|
|
|
Beginning balance |
$ 4,161,067 |
$ 4,312,352 |
Loans and leases originated and
purchased |
881,281 |
167,986 |
Existing loans and leases: |
|
|
Principal repayments, net (2) |
(715,422) |
(316,686) |
Loan and lease sales |
(21,371) |
(1,022) |
Transfers to foreclosed assets |
(655) |
(13) |
Charge-offs |
(830) |
(1,550) |
Loans and leases acquired through
acquisition |
6,886,035 |
— |
Ending balance |
$ 11,190,105 |
$ 4,161,067 |
|
|
|
(1) Includes direct financing
leases but excludes equipment leased to others under operating
leases. |
(2) Includes principal repayments
on existing loans, changes in revolving lines of credit (repayments
and draws) and other changes within the loan portfolio. |
|
|
|
The following table presents a roll forward of the loan and
lease portfolio by segment for the period indicated:
|
|
|
|
|
Three Months
Ended June 30, 2014 |
|
Community |
National |
|
Loan and Lease Roll Forward by
Segment |
Banking |
Lending |
Total |
|
(In thousands) |
Beginning balance |
$ 4,161,067 |
$ — |
$ 4,161,067 |
|
|
|
|
Loans and leases originated and
purchased |
136,724 |
744,557 |
881,281 |
Existing loans and leases: |
|
|
|
Transfers between segments |
(523,416) |
523,416 |
— |
Principal repayments, net |
(243,382) |
(472,040) |
(715,422) |
Loan and lease sales |
(8,675) |
(12,696) |
(21,371) |
Transfers to foreclosed assets |
(655) |
— |
(655) |
Charge-offs |
(296) |
(534) |
(830) |
Loans and leases acquired through
acquisition |
— |
6,886,035 |
6,886,035 |
Ending balance |
$ 3,521,367 |
$ 7,668,738 |
$ 11,190,105 |
|
|
|
|
The following table presents the composition of our loan and
lease portfolio as of the dates indicated:
|
|
|
Loan and Lease
Portfolio |
June 30,
2014 |
March 31,
2014 |
|
(In thousands) |
Real estate mortgage: |
|
|
Hospitality |
$ 560,832 |
$ 172,012 |
SBA |
352,492 |
42,318 |
Other |
4,682,258 |
2,427,756 |
Total
real estate mortgage |
5,595,582 |
2,642,086 |
Real estate
construction: |
|
|
Residential |
73,488 |
62,115 |
Commercial |
235,018 |
187,804 |
Total
real estate construction |
308,506 |
249,919 |
Commercial: |
|
|
Collateralized |
446,754 |
580,742 |
Unsecured |
145,632 |
143,624 |
Asset-based |
1,488,267 |
200,574 |
Cash flow |
2,167,135 |
— |
Equipment finance |
932,554 |
249,736 |
SBA |
42,333 |
27,339 |
Total
commercial |
5,222,675 |
1,202,015 |
Consumer |
63,342 |
67,047 |
Total Loans and
Leases |
$ 11,190,105 |
$ 4,161,067 |
|
|
|
Deposits
The following table presents the composition of our deposit
portfolio as of the dates indicated:
|
|
|
|
|
|
June 30,
2014 |
March 31,
2014 |
|
|
% of |
|
% of |
Deposit Category |
Amount |
Total |
Amount |
Total |
|
(Dollars in thousands) |
|
|
|
|
|
Noninterest-bearing demand deposits |
$ 2,701,434 |
23% |
$ 2,391,609 |
45% |
Interest checking deposits |
587,418 |
5% |
613,144 |
11% |
Money market deposits |
1,688,773 |
14% |
1,489,068 |
28% |
Savings deposits |
760,553 |
7% |
226,012 |
4% |
Total core deposits |
5,738,178 |
49% |
4,719,833 |
88% |
Time deposits under $100,000 |
2,251,473 |
19% |
209,512 |
4% |
Time deposits of $100,000 and over |
3,678,146 |
32% |
440,063 |
8% |
Total time deposits |
5,929,619 |
51% |
649,575 |
12% |
Total
deposits |
$ 11,667,797 |
100% |
$ 5,369,408 |
100% |
|
|
|
|
|
The following table summarizes the maturities of our time
deposits as of the date indicated:
|
|
|
|
|
|
|
June 30,
2014 |
|
Time Deposits |
Time Deposits |
Total |
|
Estimated |
|
Under |
$100,000 |
Time |
Contractual |
Effective |
Time Deposit
Maturities |
$100,000 |
or More |
Deposits |
Rate |
Rate |
|
(Dollars in thousands) |
|
|
|
|
|
|
Due in three months or less |
$ 842,413 |
$ 1,467,897 |
$ 2,310,310 |
0.84% |
0.62% |
Due in over three months through six
months |
548,254 |
845,683 |
1,393,937 |
0.88% |
0.70% |
Due in over six months through twelve
months |
630,769 |
983,575 |
1,614,344 |
0.91% |
0.78% |
Due in over 12 months through 24 months |
169,043 |
264,693 |
433,736 |
1.05% |
0.73% |
Due in over 24 months |
60,994 |
116,298 |
177,292 |
1.02% |
0.72% |
Total |
$ 2,251,473 |
$ 3,678,146 |
$ 5,929,619 |
0.89% |
0.69% |
|
|
|
|
|
|
At June 30, 2014, core deposits totaled $5.7 billion, or 49% of
total deposits, and noninterest-bearing demand deposits, which
totaled $2.7 billion, were 23% of total deposits. Total deposits
increased $6.3 billion during the second quarter to $11.7 billion
at June 30, 2014, including an increase in core deposits of $1.0
billion. The increase in the quarter was due to $6.2 billion of
deposits acquired in the CapitalSource merger, including $5.3
billion of time deposits with a weighted average rate of 98 basis
points and a weighted average effective cost of 70 basis points.
The purchase accounting discount on acquired time deposits totaled
$17.2 million, and the remaining unamortized time deposit discount
at June 30, 2014 was $11.6 million with a weighted average life of
seven months.
ALLOWANCE FOR CREDIT LOSSES
The allowance for Non-PCI credit losses was $72.4 million or
0.67% of Non-PCI loans and leases at June 30, 2014, compared to
$67.0 million, or 1.75% of Non-PCI loans and leases at March 31,
2014. We made a provision for credit losses of $5.0 million in the
second quarter of 2014 in accordance with our loan methodology,
which takes into consideration new loan and lease fundings,
commitments to make loans and leases, and underlying credit quality
trends. The decrease in the credit loss ratio was due to the
loans acquired in the CapitalSource merger for which there is no
initial credit loss allowance. All acquired loans are initially
recorded at their estimated fair value with such initial fair value
including an estimate of credit losses. We present the two
additional credit coverage ratios shown in the table below to give
an indication of overall credit risk coverage:
|
|
|
|
|
|
|
|
June 30,
2014 |
March 31,
2014 |
|
Non-PCI |
|
|
Non-PCI |
|
|
Credit Risk Coverage
Ratios |
Loans and |
Allowance/ |
Coverage |
Loans and |
Allowance/ |
Coverage |
(Excludes PCI
Loans) |
Leases |
Discount |
Ratio |
Leases |
Discount |
Ratio |
|
(Dollars in thousands) |
|
|
|
|
|
|
|
Ending balance |
$ 10,791,634 |
$ 72,367 |
0.67% |
$ 3,828,569 |
$ 66,955 |
1.75% |
Acquired loans |
(7,327,541) |
(500)(1) |
|
(1,001,248) |
(737) (1) |
|
Adjusted balance |
$ 3,464,093 |
$ 71,867 |
2.07% |
$ 2,827,321 |
$ 66,218 |
2.34% |
|
|
|
|
|
|
|
Ending Balance |
$ 10,791,634 |
$ 72,367 |
0.67% |
$ 3,828,569 |
$ 66,955 |
1.75% |
Unamortized net discount |
184,927 |
184,927(2) |
|
31,607 |
31,607(2) |
|
Adjusted balance |
$ 10,976,561 |
$ 257,294 |
2.34% |
$ 3,860,176 |
$ 98,562 |
2.55% |
|
|
|
|
|
|
|
|
(1) Allowance attributed to $7.3
billion and $1.0 billion of acquired Non-PCI loans at June 30, 2014
and March 31, 2014, based on the allowance calculation that
includes an amount for credit deterioration on acquired loans and
leases since their acquisition dates. |
(2) Unamortized net discount
relates to $7.3 billion and $1.0 billion of acquired loans at June
30, 2014 and March 31, 2014, and is assigned specifically to those
loans only. Such discount represents the acquisition date fair
value adjustment based on market, liquidity and interest rate risk
in addition to credit risk and is being accreted to interest income
over the remaining life of the respective loans. |
|
|
|
|
|
|
|
CREDIT QUALITY
The following table presents our Non-PCI loan and lease credit
quality metrics as of the dates indicated:
|
|
|
|
June 30, |
March 31, |
Non-PCI Credit Quality
Metrics |
2014 |
2014 |
|
(Dollars in thousands) |
|
|
|
Allowance for credit losses |
$ 72,367 |
$ 66,955 |
Nonaccrual loans and leases (1) |
96,802 |
58,121 |
Classified loans and leases (2) |
304,627 |
150,517 |
Performing restructured loans |
33,741 |
35,101 |
Net charge-offs (recoveries) (for the
quarter) |
(412) |
861 |
Provision for credit losses (for the
quarter) |
5,000 |
— |
Allowance for credit losses to loans and
leases |
0.67% |
1.75% |
Allowance for credit losses to nonaccrual
loans and leases |
74.8% |
115.2% |
Nonperforming assets to loans and leases and
foreclosed assets |
1.39% |
2.81% |
Classified loans and leases to loans and
leases |
2.82% |
3.93% |
|
(1) At June 30, 2014, includes
$37,515 of acquired loans and leases with no allowance due to fair
value accounting. |
(2) Classified loans and leases
are those with a credit risk rating of substandard or
doubtful. |
|
|
|
The following table presents our nonperforming assets as of the
dates indicated:
|
|
|
|
June 30, |
March 31, |
|
2014 |
2014 |
|
(Dollars in thousands) |
|
|
|
Nonaccrual Non-PCI loans and leases |
$ 96,802 |
$ 58,121 |
Nonaccrual PCI loans (1) |
38,467 |
— |
Foreclosed assets, net |
53,821 |
50,895 |
Total nonperforming assets |
$ 189,090 |
$ 109,016 |
Nonperforming assets to loans and leases and
foreclosed assets |
1.68% |
2.64% |
|
(1) Represents four legacy
CapitalSource borrowing relationships placed on nonaccrual status
as of the acquisition date. |
|
|
|
The following table presents our 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 |
Accruing
and |
|
June 30,
2014 |
March 31,
2014 |
30 - 89 Days Past
Due |
|
|
% of |
|
% of |
June 30, |
|
March 31, |
|
|
|
Loan |
|
Loan |
2014 |
|
2014 |
|
|
Balance |
Category |
Balance |
Category |
Balance |
|
Balance |
|
|
(Dollars in thousands) |
|
Real estate mortgage: |
|
|
|
|
|
|
|
|
Hospitality |
$ 6,552 |
1% |
$ 6,639 |
4% |
$ — |
|
$ — |
|
SBA |
8,032 |
2% |
2,519 |
6% |
1,233 |
|
1,092 |
|
Other |
28,098 |
1% |
29,701 |
1% |
1,427 |
|
1,831 |
|
Total real estate
mortgage |
42,682 |
1% |
38,859 |
2% |
2,660 |
|
2,923 |
|
Real estate construction: |
|
|
|
|
|
|
|
|
Residential |
927 |
1% |
387 |
1% |
— |
|
— |
|
Commercial |
2,737 |
1% |
3,353 |
2% |
— |
|
— |
|
Total real estate
construction |
3,664 |
1% |
3,740 |
2% |
— |
|
— |
|
Commercial: |
|
|
|
|
|
|
|
|
Collateralized |
11,247 |
3% |
7,797 |
1% |
575 |
|
140 |
|
Unsecured |
322 |
—% |
411 |
—% |
145 |
|
— |
|
Asset-based |
4,874 |
—% |
558 |
—% |
— |
|
— |
|
Cash flow |
15,793 |
1% |
— |
—% |
— |
|
— |
|
Equipment finance |
10,576 |
1% |
220 |
—% |
— |
|
4,075 |
|
SBA |
4,096 |
10% |
2,993 |
11% |
75 |
|
387 |
|
Total commercial |
46,908 |
1% |
11,979 |
1% |
795 |
|
4,602 |
|
Consumer |
3,548 |
6% |
3,543 |
5% |
128 |
|
307 |
|
Total Non-PCI loans and
leases |
96,802 |
1% |
58,121 |
2% |
3,583 |
|
7,832 |
|
PCI loans |
38,467 |
10% |
— |
—% |
* |
(1) |
* |
(1) |
Total loans and leases |
$ 135,269 |
1% |
$ 58,121 |
1% |
$ 3,583 |
|
$ 7,832 |
|
|
|
(1) PCI loans,
regardless of the underlying payment status of the borrower, are
generally considered accruing and performing when reasonably
estimable cash flows support the carrying amount of the
loans. At June 30, 2014, the amount of PCI loans with
borrowers past due 30-89 days totaled $53.9 million, of which $24.2
million were on nonaccrual status, and the amount past due 90 or
more days totaled $64.0 million of which $14.2 million were on
nonaccrual s amount of PCI loans with borrowers past due 30-89 days
and past due 90 or more days totaled $3.1 million and $39.5
million,tatus. At March 31, 2014, the respectively, and none
of which were on nonaccrual status. |
|
|
|
|
|
|
|
|
|
CAPITALSOURCE MERGER
On April 7, 2014, PacWest Bancorp ("PacWest") completed the
merger with CapitalSource Inc. ("CapitalSource"). The combined
company is called PacWest Bancorp. As part of the merger,
CapitalSource Bank, a wholly-owned subsidiary of CapitalSource,
merged with and into PacWest's wholly-owned banking subsidiary,
Pacific Western Bank, and the combined subsidiary bank is called
Pacific Western Bank.
Upon closing, PacWest created the CapitalSource division of
Pacific Western Bank. This division operates under the
CapitalSource name and continues to serve businesses nationwide
with a full spectrum of middle-market lending. Pacific Western
Bank, through its combined network of 81 branches throughout
California, continues to serve small and medium-sized businesses
with financing solutions, cash management and deposit services.
In the merger with CapitalSource, each share of CapitalSource
common stock was converted into the right to receive $2.47 in cash
and 0.2837 of a share of PacWest Bancorp common stock. PacWest
issued an aggregate of approximately 56.7 million shares of PacWest
common stock to CapitalSource stockholders. Based on the closing
price of PacWest's common stock on April 7, 2014 of $45.83 per
share, the aggregate consideration paid to CapitalSource common
stockholders and holders of equity awards to acquire CapitalSource
common stock was approximately $3.1 billion.
The integration of CapitalSource Bank's deposit system and the
conversion of CapitalSource Bank's branches to Pacific Western
Bank's operating platform were completed over the weekend of April
12, 2014. CapitalSource had 21 branches, 12 of which were closed in
the consolidation with Pacific Western Bank at the close of
business on April 11, 2014. One overlapping Pacific Western branch
was closed on April 11, 2014 as well. All remaining branches
re-opened on Monday April 14, 2014 as Pacific Western Bank
branches.
The following table shows the various purchase accounting
adjustments at the merger date by category along with
accretion/amortization periods:
|
|
|
|
Purchase |
|
|
Accounting |
Estimated Accretion/ |
Description |
Adjustment |
Amortization
Method |
|
(In thousands) |
|
|
Debit (Credit) |
|
|
|
|
Loans and non-operating leases |
$ (215,019) |
60 months using a level yield method |
Equipment leased to others under operating
leases |
$ (10,352) |
48 months using a level yield method |
Investment in trust preferred securities |
$ (3,352) |
Straight line over 280 months |
Core deposit intangible |
$ 6,720 |
Straight line over 84 months |
Time deposit premium |
$ (17,183) |
60 months using an accelerated method |
Subordinated debentures |
$ 111,235 |
Straight line over 280 months |
ABOUT PACWEST BANCORP
PacWest Bancorp is a bank holding company with over $15 billion
in assets with one wholly-owned banking subsidiary, Pacific Western
Bank ("Pacific Western"). Through 81 full-service branches located
throughout the state of California, Pacific Western provides
commercial banking services, including real estate, construction,
and commercial loans, to small and medium-sized businesses. Its
national lending divisions CapitalSource and Pacific Western
Equipment Finance, and its subsidiary CapitalSource Business
Finance Group (formerly known as BFI Business Finance), deliver the
full spectrum of financing solutions nationwide across numerous
industries and property types. For more information about PacWest
Bancorp, visit www.pacwestbancorp.com, or to learn more about
Pacific Western Bank, visit www.pacificwesternbank.com.
FORWARD LOOKING STATEMENTS
This release contains certain "forward-looking statements" about
the Company and its subsidiaries within the meaning of the Private
Securities Litigation Reform Act of 1995, including certain plans,
strategies, goals, and projections and including statements about
our profitability, return on assets, and Pacific Western Bank loan
and lease portfolio growth and production. All statements contained
in this release that are not clearly historical in nature are
forward-looking, and the words "anticipate," "assume," "intend,"
"believe," "forecast," "expect," "estimate," "plan," "continue,"
"will," "should," "look forward" and similar expressions are
generally intended to identify forward-looking statements. All
forward-looking statements (including statements regarding future
financial and operating results and future transactions and their
results) involve risks, uncertainties and contingencies, many of
which are beyond our control, which may cause actual results,
performance, or achievements to differ materially from anticipated
results, performance or achievements. Actual results could differ
materially from those contained or implied by such forward-looking
statements for a variety of factors, including without
limitation:
- changes in economic or competitive market conditions could
negatively impact investment or lending opportunities or product
pricing and services;
- deteriorations in credit and other markets;
- higher than anticipated loan losses;
- sustained reduction in real estate markets could negatively
impact the value of our collateral and our borrowers' ability to
repay loans;
- a change in the interest rate environment reduces interest
margins;
- loan repayments higher than expected;
- lower than expected revenues;
- asset/liability repricing risks and liquidity risks reduces
interest margins and the value of investments;
- increased costs to manage and sell foreclosed assets;
- higher mix of cash and investments;
- reduced demand for our services;
- our inability to grow deposits and access wholesale funding
sources;
- legislative or regulatory requirements or changes adversely
affected the Company's business, including an increase to capital
requirements;
- regulatory approvals for any capital activities cannot be
obtained on the terms expected or on the anticipated schedule;
and
- other risk factors described in documents filed by PacWest with
the U.S. Securities and Exchange Commission ("SEC").
All forward-looking statements included in this release are
based on information available at the time of the release.
We are under no obligation to (and expressly disclaim any such
obligation to) update or alter our forward-looking statements,
whether as a result of new information, future events or otherwise
except as required by law.
|
|
|
|
PACWEST BANCORP AND
SUBSIDIARIES |
CONDENSED CONSOLIDATED
BALANCE SHEET |
|
|
|
|
|
June 30, |
March 31, |
December 31, |
|
2014 |
2014 |
2013 |
|
(Dollars in thousands, except
per share data) |
ASSETS |
|
|
|
Cash and due from banks |
$ 243,583 |
$ 113,508 |
$ 96,424 |
Interest-earning deposits in financial
institutions |
119,782 |
228,579 |
50,998 |
Total cash and cash
equivalents |
363,365 |
342,087 |
147,422 |
|
|
|
|
Securities available-for-sale, at
estimated fair value |
1,552,115 |
1,477,473 |
1,494,745 |
Federal Home Loan Bank stock, at
cost |
49,983 |
25,000 |
27,939 |
Total investment
securities |
1,602,098 |
1,502,473 |
1,522,684 |
|
|
|
|
Gross loans and leases |
11,200,524 |
4,161,085 |
4,313,335 |
Unearned income |
(10,419) |
(18) |
(983) |
Allowance for loan and lease losses |
(82,149) |
(81,180) |
(82,034) |
Total loans and
leases, net |
11,107,956 |
4,079,887 |
4,230,318 |
|
|
|
|
Equipment leased to others under
operating leases |
127,289 |
— |
— |
Premises and equipment, net |
40,440 |
29,908 |
32,435 |
Foreclosed assets, net |
53,821 |
50,895 |
55,891 |
FDIC loss sharing asset |
28,834 |
34,628 |
45,524 |
Deferred tax asset, net |
342,105 |
72,683 |
77,924 |
Goodwill |
1,725,153 |
208,743 |
208,743 |
Core deposit and customer relationship
intangibles, net |
20,431 |
15,884 |
17,248 |
Other assets |
273,374 |
180,665 |
195,174 |
Total
assets |
$ 15,684,866 |
$ 6,517,853 |
$ 6,533,363 |
|
|
|
|
LIABILITIES |
|
|
|
Noninterest-bearing demand deposits |
$ 2,701,434 |
$ 2,391,609 |
$ 2,318,446 |
Interest-bearing deposits |
8,966,363 |
2,977,799 |
2,962,541 |
Total
deposits |
11,667,797 |
5,369,408 |
5,280,987 |
Borrowings |
4,596 |
5,748 |
113,726 |
Subordinated debentures |
434,878 |
132,790 |
132,645 |
Accrued interest payable and other
liabilities |
139,663 |
176,205 |
196,912 |
Total
liabilities |
12,246,934 |
5,684,151 |
5,724,270 |
|
|
|
|
STOCKHOLDERS' EQUITY
(1) |
3,437,932 |
833,702 |
809,093 |
Total liabilities and
stockholders' equity |
$ 15,684,866 |
$ 6,517,853 |
$ 6,533,363 |
|
|
|
|
(1) Includes net unrealized gain (loss) on
securities available-for-sale, net |
$ 20,121 |
$ 6,825 |
$ (3,347) |
|
|
|
|
Book value per share |
$ 33.37 |
$ 18.21 |
$ 17.66 |
Tangible book value per share |
$ 16.43 |
$ 13.31 |
$ 12.73 |
|
|
|
|
Shares outstanding (includes unvested
restricted shares of 1,121,850 at June 30, 2014, 1,087,436 at March
31, 2014 and 1,216,524 at December 31, 2013) |
103,033,449 |
45,777,580 |
45,822,834 |
|
|
|
|
|
PACWEST BANCORP AND
SUBSIDIARIES |
CONDENSED CONSOLIDATED
STATEMENT OF EARNINGS |
|
|
Three Months
Ended |
Six Months
Ended |
|
June 30, |
March 31, |
June 30, |
June 30, |
June 30, |
|
2014 |
2014 |
2013 |
2014 |
2013 |
|
(Dollars in
thousands, except per share data) |
|
|
|
|
Interest income: |
|
|
|
|
|
Loans and leases |
$ 192,201 |
$ 77,463 |
$ 63,168 |
$ 269,664 |
$ 124,178 |
Investment securities |
11,986 |
10,823 |
8,414 |
22,809 |
16,630 |
Deposits in financial
institutions |
176 |
74 |
49 |
250 |
92 |
Total interest
income |
204,363 |
88,360 |
71,631 |
292,723 |
140,900 |
Interest expense: |
|
|
|
|
|
Deposits |
7,313 |
1,225 |
2,077 |
8,538 |
4,726 |
Borrowings |
199 |
79 |
199 |
278 |
343 |
Subordinated debentures |
4,318 |
1,041 |
882 |
5,359 |
1,665 |
Total interest
expense |
11,830 |
2,345 |
3,158 |
14,175 |
6,734 |
Net interest income |
192,533 |
86,015 |
68,473 |
278,548 |
134,166 |
Provision (negative provision) for credit
losses |
5,030 |
(644) |
(1,842) |
4,386 |
1,295 |
Net interest income after
provision for credit losses |
187,503 |
86,659 |
70,315 |
274,162 |
132,871 |
Noninterest income: |
|
|
|
|
|
Service charges on deposit
accounts |
2,719 |
3,002 |
2,767 |
5,721 |
5,630 |
Other commissions and fees |
5,743 |
1,932 |
2,154 |
7,675 |
4,087 |
Leased equipment income |
5,672 |
— |
— |
5,672 |
— |
(Loss) gain on sale of loans
and leases |
(485) |
106 |
279 |
(379) |
504 |
Gain on securities |
89 |
4,752 |
— |
4,841 |
409 |
FDIC loss sharing expense,
net |
(8,525) |
(11,430) |
(5,410) |
(19,955) |
(8,547) |
Other income |
3,266 |
6,329 |
413 |
9,595 |
960 |
Total noninterest
income |
8,479 |
4,691 |
203 |
13,170 |
3,043 |
Noninterest expense: |
|
|
|
|
|
Compensation |
45,081 |
28,627 |
26,057 |
73,708 |
51,407 |
Occupancy |
11,078 |
7,595 |
7,480 |
18,673 |
14,078 |
Data processing |
4,099 |
2,540 |
2,455 |
6,639 |
4,688 |
Other professional
services |
2,843 |
1,523 |
1,599 |
4,366 |
3,078 |
Insurance and assessments |
3,179 |
1,593 |
1,267 |
4,772 |
2,528 |
Intangible asset
amortization |
1,677 |
1,364 |
1,284 |
3,041 |
2,460 |
Other expense |
12,115 |
7,288 |
6,091 |
19,403 |
11,985 |
Total operating expense |
80,072 |
50,530 |
46,233 |
130,602 |
90,224 |
Leased equipment
depreciation |
3,095 |
— |
— |
3,095 |
— |
Foreclosed assets expense
(income), net |
497 |
(1,861) |
(14) |
(1,364) |
(514) |
Acquisition, integration and
reorganization costs |
86,242 |
2,200 |
17,997 |
88,442 |
18,689 |
Total noninterest
expense |
169,906 |
50,869 |
64,216 |
220,775 |
108,399 |
Earnings from continuing operations before
income taxes |
26,076 |
40,481 |
6,302 |
66,557 |
27,515 |
Income tax expense |
(14,846) |
(14,576) |
(1,906) |
(29,422) |
(9,625) |
Net earnings from
continuing operations |
11,230 |
25,905 |
4,396 |
37,135 |
17,890 |
Loss from discontinued operations before
income taxes |
(1,151) |
(1,413) |
(81) |
(2,564) |
(81) |
Income tax benefit |
476 |
588 |
34 |
1,064 |
34 |
Net loss from
discontinued operations |
(675) |
(825) |
(47) |
(1,500) |
(47) |
Net
earnings |
$ 10,555 |
$ 25,080 |
$ 4,349 |
$ 35,635 |
$ 17,843 |
|
|
|
|
|
|
Basic and diluted earnings per
share: |
|
|
|
|
|
Net earnings from continuing
operations |
$ 0.11 |
$ 0.57 |
$ 0.11 |
$ 0.51 |
$ 0.47 |
Net earnings |
$ 0.10 |
$ 0.55 |
$ 0.11 |
$ 0.49 |
$ 0.47 |
PACWEST BANCORP AND
SUBSIDIARIES |
AVERAGE BALANCE SHEET
AND YIELD ANALYSIS |
|
|
Three Months
Ended |
|
June 30,
2014 |
March 31,
2014 |
June 30,
2013 |
|
|
Interest |
Average |
|
Interest |
Average |
|
Interest |
Average |
|
Average |
Income / |
Yield / |
Average |
Income / |
Yield / |
Average |
Income / |
Yield / |
|
Balance |
Expense |
Cost |
Balance |
Expense |
Cost |
Balance |
Expense |
Cost |
|
(Dollars in
thousands) |
|
|
|
|
|
|
|
|
Assets: |
|
|
|
|
|
|
|
|
|
PCI loans |
$ 375,194 |
$ 14,104 |
15.08% |
$ 339,329 |
$ 18,270 |
21.84% |
$ 472,090 |
$ 10,435 |
8.87% |
Non-PCI loans and leases |
10,125,327 |
178,098 |
7.06% |
3,891,990 |
59,193 |
6.17% |
3,293,625 |
52,733 |
6.42% |
Total loans and leases |
10,500,521 |
192,201 |
7.34% |
4,231,319 |
77,463 |
7.42% |
3,765,715 |
63,168 |
6.73% |
Investment securities (1) |
1,606,848 |
11,986 |
2.99% |
1,512,694 |
10,823 |
2.90% |
1,424,804 |
8,414 |
2.37% |
Deposits in financial institutions |
276,095 |
176 |
0.26% |
118,682 |
74 |
0.25% |
75,739 |
49 |
0.26% |
Total interest-earning
assets |
12,383,464 |
204,363 |
6.62% |
5,862,695 |
88,360 |
6.11% |
5,266,258 |
71,631 |
5.46% |
Noninterest-earning assets |
2,653,637 |
|
|
650,681 |
|
|
511,633 |
|
|
Total assets |
$ 15,037,101 |
|
|
$ 6,513,376 |
|
|
$ 5,777,891 |
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
Stockholders' Equity: |
|
|
|
|
|
|
|
|
|
Interest-bearing checking |
$ 601,958 |
77 |
0.05% |
$ 627,493 |
78 |
0.05% |
$ 557,438 |
75 |
0.05% |
Money market |
1,691,115 |
874 |
0.21% |
1,451,964 |
618 |
0.17% |
1,307,386 |
587 |
0.18% |
Savings |
722,808 |
548 |
0.30% |
223,074 |
14 |
0.03% |
184,055 |
22 |
0.05% |
Time |
5,613,601 |
5,814 |
0.42% |
666,463 |
515 |
0.31% |
756,008 |
1,393 |
0.74% |
Total interest-bearing
deposits |
8,629,482 |
7,313 |
0.34% |
2,968,994 |
1,225 |
0.17% |
2,804,887 |
2,077 |
0.30% |
Borrowings |
39,931 |
199 |
2.00% |
18,176 |
79 |
1.76% |
20,554 |
199 |
3.88% |
Subordinated debentures |
409,934 |
4,318 |
4.22% |
132,696 |
1,041 |
3.18% |
116,998 |
882 |
3.02% |
Total interest-bearing
liabilities |
9,079,347 |
$ 11,830 |
0.52% |
3,119,866 |
$ 2,345 |
0.30% |
2,942,439 |
$ 3,158 |
0.43% |
Noninterest-bearing demand deposits |
2,546,540 |
|
|
2,374,325 |
|
|
2,072,923 |
|
|
Other liabilities |
178,196 |
|
|
198,937 |
|
|
96,104 |
|
|
Total liabilities |
11,804,083 |
|
|
5,693,128 |
|
|
5,111,466 |
|
|
Stockholders' equity |
3,233,018 |
|
|
820,248 |
|
|
666,425 |
|
|
Total liabilities and
shareholders' equity |
$ 15,037,101 |
|
|
$ 6,513,376 |
|
|
$ 5,777,891 |
|
|
Net interest income |
|
$ 192,533 |
|
|
$ 86,015 |
|
|
$ 68,473 |
|
Net interest spread |
|
|
6.10% |
|
|
5.81% |
|
|
5.03% |
Net interest margin |
|
|
6.24% |
|
|
5.95% |
|
|
5.22% |
|
(1) The tax-equivalent yield on
investment securities was 3.39%, 3.35%, and 2.74% for the three
months ended June 30, 2014, March 31, 2014, and June 30, 2013,
respectively. |
PACWEST BANCORP AND
SUBSIDIARIES |
FIVE QUARTER BALANCE
SHEET |
|
|
June 30, |
March 31, |
December 31, |
September 30, |
June 30, |
|
2014 |
2014 |
2013 |
2013 |
2013 |
|
(Dollars in thousands, except
per share data) |
ASSETS |
|
|
|
|
|
Cash and due from banks |
$ 243,583 |
$ 113,508 |
$ 96,424 |
$ 132,467 |
$ 106,237 |
Interest-earning deposits in
financial institutions |
119,782 |
228,579 |
50,998 |
11,552 |
112,590 |
Total cash and cash
equivalents |
363,365 |
342,087 |
147,422 |
144,019 |
218,827 |
|
|
|
|
|
|
Securities available-for-sale,
at estimated fair value |
1,552,115 |
1,477,473 |
1,494,745 |
1,512,147 |
1,473,578 |
Federal Home Loan Bank stock,
at cost |
49,983 |
25,000 |
27,939 |
34,095 |
39,129 |
Total investment
securities |
1,602,098 |
1,502,473 |
1,522,684 |
1,546,242 |
1,512,707 |
|
|
|
|
|
|
Gross loans and leases |
11,200,524 |
4,161,085 |
4,313,335 |
4,384,312 |
4,420,619 |
Unearned income |
(10,419) |
(18) |
(983) |
(919) |
(933) |
Allowance for loan and lease
losses |
(82,149) |
(81,180) |
(82,034) |
(83,786) |
(90,643) |
Total loans and leases,
net |
11,107,956 |
4,079,887 |
4,230,318 |
4,299,607 |
4,329,043 |
|
|
|
|
|
|
Equipment leased to others
under operating leases |
127,289 |
— |
— |
— |
— |
Premises and equipment,
net |
40,440 |
29,908 |
32,435 |
32,683 |
33,642 |
Foreclosed assets, net |
53,821 |
50,895 |
55,891 |
55,972 |
64,546 |
FDIC loss sharing asset |
28,834 |
34,628 |
45,524 |
55,653 |
66,993 |
Deferred tax asset, net |
342,105 |
72,683 |
77,924 |
70,933 |
69,176 |
Goodwill |
1,725,153 |
208,743 |
208,743 |
215,862 |
209,190 |
Core deposit and customer
relationship intangibles, net |
20,431 |
15,884 |
17,248 |
18,678 |
20,190 |
Other assets |
273,374 |
180,665 |
195,174 |
177,206 |
184,788 |
Total
assets |
$ 15,684,866 |
$ 6,517,853 |
$ 6,533,363 |
$ 6,616,855 |
$ 6,709,102 |
|
|
|
|
|
|
LIABILITIES |
|
|
|
|
|
Noninterest-bearing demand
deposits |
$ 2,701,434 |
$ 2,391,609 |
$ 2,318,446 |
$ 2,328,688 |
$ 2,291,246 |
Interest-bearing deposits |
8,966,363 |
2,977,799 |
2,962,541 |
3,104,456 |
3,231,754 |
Total
deposits |
11,667,797 |
5,369,408 |
5,280,987 |
5,433,144 |
5,523,000 |
Borrowings |
4,596 |
5,748 |
113,726 |
8,243 |
9,696 |
Subordinated debentures |
434,878 |
132,790 |
132,645 |
132,500 |
132,358 |
Accrued interest payable and
other liabilities |
139,663 |
176,205 |
196,912 |
226,679 |
242,349 |
Total
liabilities |
12,246,934 |
5,684,151 |
5,724,270 |
5,800,566 |
5,907,403 |
|
|
|
|
|
|
STOCKHOLDERS' EQUITY
(1) |
3,437,932 |
833,702 |
809,093 |
816,289 |
801,699 |
Total liabilities and
stockholders' equity |
$ 15,684,866 |
$ 6,517,853 |
$ 6,533,363 |
$ 6,616,855 |
$ 6,709,102 |
|
|
|
|
|
|
(1) Includes net unrealized gain (loss) on
securities available-for-sale, net |
$ 20,121 |
$ 6,825 |
$ (3,347) |
$ 327 |
$ 996 |
|
|
|
|
|
|
Book value per share |
$ 33.37 |
$ 18.21 |
$ 17.66 |
$ 17.71 |
$ 17.40 |
Tangible book value per share |
$ 16.43 |
$ 13.31 |
$ 12.73 |
$ 12.62 |
$ 12.42 |
|
|
|
|
|
|
Shares outstanding (includes unvested
restricted shares) |
103,033,449 |
45,777,580 |
45,822,834 |
46,090,742 |
46,080,731 |
|
PACWEST BANCORP AND
SUBSIDIARIES |
FIVE QUARTER STATEMENT OF
EARNINGS |
|
|
Three Months
Ended |
|
June 30, |
March 31, |
December 31, |
September 30, |
June 30, |
|
2014 |
2014 |
2013 |
2013 |
2013 |
|
(Dollars in thousands, except
per share data) |
Interest income: |
|
|
|
|
|
Loans and leases |
$ 192,201 |
$ 77,463 |
$ 73,352 |
$ 75,196 |
$ 63,168 |
Investment securities |
11,986 |
10,823 |
10,422 |
9,871 |
8,414 |
Deposits in financial
institutions |
176 |
74 |
82 |
91 |
49 |
Total interest
income |
204,363 |
88,360 |
83,856 |
85,158 |
71,631 |
Interest expense: |
|
|
|
|
|
Deposits |
7,313 |
1,225 |
1,450 |
1,692 |
2,077 |
Borrowings |
199 |
79 |
86 |
108 |
199 |
Subordinated debentures |
4,318 |
1,041 |
1,062 |
1,069 |
882 |
Total interest expense |
11,830 |
2,345 |
2,598 |
2,869 |
3,158 |
Net interest income |
192,533 |
86,015 |
81,258 |
82,289 |
68,473 |
Provision (negative provision) for credit
losses |
5,030 |
(644) |
(1,338) |
(4,167) |
(1,842) |
Net interest income after
provision for credit losses |
187,503 |
86,659 |
82,596 |
86,456 |
70,315 |
Noninterest income: |
|
|
|
|
|
Service charges on deposit
accounts |
2,719 |
3,002 |
3,197 |
2,938 |
2,767 |
Other commissions and fees |
5,743 |
1,932 |
2,125 |
2,204 |
2,154 |
Leased equipment income |
5,672 |
— |
— |
— |
— |
(Loss) gain on sale of loans
and leases |
(485) |
106 |
683 |
604 |
279 |
Gain (loss) on securities |
89 |
4,752 |
(272) |
5,222 |
— |
FDIC loss sharing expense,
net |
(8,525) |
(11,430) |
(10,593) |
(7,032) |
(5,410) |
Other income |
3,266 |
6,329 |
934 |
1,191 |
413 |
Total noninterest
income (expense) |
8,479 |
4,691 |
(3,926) |
5,127 |
203 |
Noninterest expense: |
|
|
|
|
|
Compensation |
45,081 |
28,627 |
27,697 |
27,963 |
26,057 |
Occupancy |
11,078 |
7,595 |
7,553 |
7,828 |
7,480 |
Data processing |
4,099 |
2,540 |
2,216 |
2,590 |
2,455 |
Other professional
services |
2,843 |
1,523 |
1,770 |
1,906 |
1,599 |
Insurance and assessments |
3,179 |
1,593 |
1,572 |
1,496 |
1,267 |
Intangible asset
amortization |
1,677 |
1,364 |
1,430 |
1,512 |
1,284 |
Other expense |
12,115 |
7,288 |
7,746 |
7,875 |
6,091 |
Total operating expense |
80,072 |
50,530 |
49,984 |
51,170 |
46,233 |
Leased equipment
depreciation |
3,095 |
— |
— |
— |
— |
Foreclosed assets expense
(income), net |
497 |
(1,861) |
(569) |
(420) |
(14) |
Acquisition, integration and
reorganization costs |
86,242 |
2,200 |
16,673 |
5,450 |
17,997 |
Total noninterest
expense |
169,906 |
50,869 |
66,088 |
56,200 |
64,216 |
Earnings from continuing operations before
income taxes |
26,076 |
40,481 |
12,582 |
35,383 |
6,302 |
Income tax expense |
(14,846) |
(14,576) |
(9,135) |
(11,243) |
(1,906) |
Net earnings from
continuing operations |
11,230 |
25,905 |
3,447 |
24,140 |
4,396 |
(Loss) earnings from discontinued operations
before income taxes |
(1,151) |
(1,413) |
(578) |
39 |
(81) |
Income tax benefit (expense) |
476 |
588 |
240 |
(16) |
34 |
Net (loss) earnings
from discontinued operations |
(675) |
(825) |
(338) |
23 |
(47) |
Net
earnings |
$ 10,555 |
$ 25,080 |
$ 3,109 |
$ 24,163 |
$ 4,349 |
|
|
|
|
|
|
Basic and diluted earnings per
share: |
|
|
|
|
|
Net earnings from continuing
operations |
$ 0.11 |
$ 0.57 |
$ 0.07 |
$ 0.53 |
$ 0.11 |
Net earnings |
$ 0.10 |
$ 0.55 |
$ 0.06 |
$ 0.53 |
$ 0.11 |
PACWEST BANCORP AND
SUBSIDIARIES |
FIVE QUARTER SELECTED
FINANCIAL DATA |
|
|
At or For the
Three Months Ended |
|
June 30, |
March 31, |
December 31, |
September 30, |
June 30, |
|
2014 |
2014 |
2013 |
2013 |
2013 |
|
(Dollars in thousands) |
|
|
|
|
|
|
Performance Ratios -
GAAP: |
|
|
|
|
|
Annualized return on average
assets |
0.28% |
1.56% |
0.19% |
1.44% |
0.30% |
Annualized return on average
equity |
1.31% |
12.40% |
1.51% |
12.02% |
2.62% |
Yield on loans and leases |
7.34% |
7.42% |
6.77% |
6.90% |
6.73% |
Yield on interest-earning
assets |
6.62% |
6.11% |
5.58% |
5.65% |
5.46% |
Cost of total deposits |
0.26% |
0.09% |
0.11% |
0.12% |
0.17% |
Cost of time deposits |
0.42% |
0.31% |
0.40% |
0.45% |
0.74% |
Cost of interest-bearing
liabilities |
0.52% |
0.30% |
0.32% |
0.34% |
0.43% |
Cost of funding sources |
0.41% |
0.17% |
0.18% |
0.20% |
0.25% |
Net interest rate spread |
6.10% |
5.81% |
5.26% |
5.31% |
5.03% |
Net interest margin |
6.24% |
5.95% |
5.41% |
5.46% |
5.22% |
Annualized operating expense as
a percentage of average assets |
2.14% |
3.15% |
2.99% |
3.05% |
3.21% |
Annualized noninterest expense
as a percentage of average assets |
4.53% |
3.17% |
3.95% |
3.35% |
4.46% |
Efficiency ratio |
84.5% |
56.1% |
85.5% |
64.3% |
93.5% |
|
|
|
|
|
|
Average Balances: |
|
|
|
|
|
Average loans and leases |
$ 10,500,521 |
$ 4,231,319 |
$ 4,301,377 |
$ 4,320,770 |
$ 3,765,715 |
Average interest-earning
assets |
12,383,464 |
5,862,695 |
5,962,428 |
5,979,811 |
5,266,258 |
Average total assets |
15,037,101 |
6,513,376 |
6,632,730 |
6,660,854 |
5,777,891 |
Average noninterest-bearing
deposits |
2,546,540 |
2,374,325 |
2,397,642 |
2,329,197 |
2,072,923 |
Average interest-bearing
deposits |
8,629,482 |
2,968,994 |
3,054,880 |
3,169,924 |
2,804,887 |
Average total deposits |
11,176,022 |
5,343,319 |
5,452,522 |
5,499,121 |
4,877,810 |
Average borrowings and
subordinated debentures |
449,865 |
150,872 |
142,421 |
141,425 |
137,552 |
Average interest-bearing
liabilities |
9,079,347 |
3,119,866 |
3,197,301 |
3,311,349 |
2,942,439 |
Average funding sources |
11,625,887 |
5,494,191 |
5,594,943 |
5,640,546 |
5,015,362 |
Average stockholders'
equity |
3,233,018 |
820,248 |
818,935 |
797,725 |
666,425 |
|
|
|
|
|
|
Non-PCI Credit Quality: |
|
|
|
|
|
Allowance for credit losses to
loans and leases |
0.67% |
1.75% |
1.73% |
1.72% |
1.78% |
Allowance for credit losses to
nonaccrual loans and leases |
75% |
115% |
145% |
133% |
135% |
Nonaccrual loans and leases to
loans and leases |
0.90% |
1.51% |
1.19% |
1.29% |
1.32% |
Nonperforming assets to loans
and leases and foreclosed assets |
1.39% |
2.81% |
2.58% |
2.67% |
2.91% |
Nonperforming assets to total
assets |
0.96% |
1.67% |
1.57% |
1.61% |
1.73% |
Trailing twelve month net
charge-offs to average loans and leases |
0.05% |
0.13% |
0.12% |
0.21% |
0.19% |
PACWEST BANCORP AND
SUBSIDIARIES |
FIVE QUARTER SELECTED
FINANCIAL DATA |
|
|
Three Months
Ended |
|
June 30, |
March 31, |
December 31, |
September 30, |
June 30, |
|
2014 |
2014 |
2013 |
2013 |
2013 |
|
|
|
|
|
|
|
|
|
|
|
|
Performance Ratios -
Non-GAAP: |
|
|
|
|
|
Annualized adjusted return on
average assets |
1.70% |
1.41% |
1.43% |
1.14% |
1.31% |
Annualized adjusted return on
average equity |
7.92% |
11.16% |
11.60% |
9.54% |
11.38% |
Annualized return on average
tangible equity |
2.65% |
17.10% |
2.11% |
16.85% |
3.25% |
Annualized adjusted return on
average tangible equity |
16.05% |
15.39% |
16.23% |
13.39% |
14.13% |
Core net interest margin |
5.74% |
5.42% |
5.31% |
5.29% |
5.21% |
Adjusted efficiency ratio |
43.1% |
57.1% |
58.1% |
59.0% |
62.9% |
|
|
|
|
|
|
PacWest Bancorp Consolidated Capital
Ratios: |
|
|
|
|
|
Tier 1 leverage capital
ratio |
12.40% |
11.73% |
11.17% |
11.16% |
12.75% |
Tier 1 risk-based capital
ratio |
13.15% |
16.16% |
15.06% |
15.13% |
15.04% |
Total risk-based capital
ratio |
16.25% |
17.42% |
16.32% |
16.39% |
16.30% |
Tangible common equity ratio
(non-GAAP measure) |
12.14% |
9.68% |
9.24% |
9.12% |
8.83% |
|
|
|
|
|
|
Pacific Western Bank Capital
Ratios: |
|
|
|
|
|
Tier 1 leverage capital
ratio |
11.71% |
10.88% |
10.83% |
10.53% |
12.05% |
Tier 1 risk-based capital
ratio |
12.58% |
15.00% |
14.61% |
14.27% |
14.16% |
Total risk-based capital
ratio |
13.32% |
16.25% |
15.87% |
15.53% |
15.42% |
Tangible common equity ratio
(non-GAAP measure) |
11.40% |
10.92% |
10.88% |
10.54% |
10.22% |
PACWEST BANCORP AND
SUBSIDIARIES |
NET EARNINGS PER SHARE
CALCULATIONS |
|
|
Three Months
Ended |
Six Months
Ended |
|
June 30, |
March 31, |
June 30, |
June 30, |
June 30, |
|
2014 |
2014 |
2013 |
2014 |
2013 |
|
(Dollars in thousands, except
per share data) |
Basic Earnings Per
Share: |
|
|
|
|
|
Net earnings from continuing
operations |
$ 11,230 |
$ 25,905 |
$ 4,396 |
$ 37,135 |
$ 17,890 |
Less: earnings allocated to
unvested restricted stock (1) |
(290) |
(500) |
(212) |
(424) |
(351) |
Net earnings from continuing
operations allocated to common shares |
10,940 |
25,405 |
4,184 |
36,711 |
17,539 |
Net earnings (loss) from
discontinued operations allocated to common shares |
(675) |
(804) |
(47) |
(1,500) |
(47) |
Net earnings allocated to
common shares |
$ 10,265 |
$ 24,601 |
$ 4,137 |
$ 35,211 |
$ 17,492 |
|
|
|
|
|
|
Weighted-average basic shares
and unvested restricted stock outstanding |
98,817 |
45,799 |
40,338 |
72,454 |
38,873 |
Less: weighted-average unvested
restricted stock outstanding |
(678) |
(1,148) |
(1,597) |
(911) |
(1,595) |
Weighted-average basic shares
outstanding |
98,139 |
44,651 |
38,741 |
71,543 |
37,278 |
|
|
|
|
|
|
Basic earnings per
share: |
|
|
|
|
|
Net earnings from continuing
operations |
$ 0.11 |
$ 0.57 |
$ 0.11 |
$ 0.51 |
$ 0.47 |
Net earnings from discontinued
operations |
(0.01) |
(0.02) |
— |
(0.02) |
— |
Net earnings |
$ 0.10 |
$ 0.55 |
$ 0.11 |
$ 0.49 |
$ 0.47 |
|
|
|
|
|
|
Diluted Earnings Per
Share: |
|
|
|
|
|
Net earnings from continuing
operations allocated to common shares |
$ 10,940 |
$ 25,405 |
$ 4,184 |
$ 36,711 |
$ 17,539 |
Net earnings (loss) from
discontinued operations allocated to common shares |
(675) |
(804) |
(47) |
(1,500) |
(47) |
Net earnings allocated to
common shares |
$ 10,265 |
$ 24,601 |
$ 4,137 |
$ 35,211 |
$ 17,492 |
|
|
|
|
|
|
Weighted-average basic shares
outstanding |
98,139 |
44,651 |
38,741 |
71,543 |
37,278 |
|
|
|
|
|
|
Diluted earnings per
share: |
|
|
|
|
|
Net earnings from continuing
operations |
$ 0.11 |
$ 0.57 |
$ 0.11 |
$ 0.51 |
$ 0.47 |
Net earnings from discontinued
operations |
(0.01) |
(0.02) |
— |
(0.02) |
— |
Net earnings |
$ 0.10 |
$ 0.55 |
$ 0.11 |
$ 0.49 |
$ 0.47 |
|
(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. |
GAAP TO NON-GAAP RECONCILIATION
This press release contains certain non-GAAP financial
disclosures for adjusted net earnings, adjusted return on average
assets, adjusted return on average equity, return on average
tangible equity, adjusted return on average tangible equity,
tangible common equity amounts and ratios, tangible book value per
share, adjusted efficiency ratio, core net interest margin, and
operating expense as a percentage of average assets. 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:
- Adjusted net earnings - as analysts and investors view this
measure as an indicator of the Company's ability to both generate
earnings and absorb credit losses, we disclose this amount in
addition to net earnings.
- Adjusted return on average assets, adjusted return on average
equity, return on average tangible equity, adjusted return on
average tangible equity, tangible common equity amounts and ratios,
and tangible book value per share - given that the use of these
measures is prevalent among banking regulators, investors and
analysts, we disclose them in addition to return on average assets,
return on average equity, equity-to-assets ratio, and book value
per share, respectively.
- Adjusted efficiency ratio - we disclose this measure in
addition to efficiency ratio as it shows the trend in recurring
overhead-related noninterest expense relative to recurring net
revenues.
Please refer to the tables on the following pages for a
presentation of performance ratios in accordance with GAAP and a
reconciliation of the non-GAAP financial measures to the GAAP
financial measures.
PACWEST BANCORP AND
SUBSIDIARIES |
GAAP TO NON-GAAP
RECONCILIATION |
(Unaudited) |
|
|
|
|
|
|
|
Three Months
Ended |
Six Months
Ended |
|
June 30, |
March 31, |
June 30, |
June 30, |
June 30, |
Adjusted Net Earnings and
Related Ratios |
2014 |
2014 |
2013 |
2014 |
2013 |
|
(Dollars in thousands) |
|
|
|
|
|
|
Reported net earnings |
$ 10,555 |
$ 25,080 |
$ 4,349 |
$ 35,635 |
$ 17,843 |
Subtract: Tax benefit on discontinued
operations |
(476) |
(588) |
(34) |
(1,064) |
(34) |
Add: Tax expense on continuing
operations |
14,846 |
14,576 |
1,906 |
29,422 |
9,625 |
Reported pre-tax earnings |
24,925 |
39,068 |
6,221 |
63,993 |
27,434 |
Add: Acquisition, integration and
reorganization costs |
86,242 |
2,200 |
17,997 |
88,442 |
18,689 |
Subtract: FDIC loss sharing expense, net |
(8,525) |
(11,430) |
(5,410) |
(19,955) |
(8,547) |
(Loss) gain on sale of loans and
leases |
(485) |
106 |
279 |
(379) |
504 |
Gain on securities |
89 |
4,752 |
— |
4,841 |
409 |
Covered OREO income, net |
185 |
1,615 |
94 |
1,800 |
907 |
Gain on sale of owned office
building |
— |
1,570 |
— |
1,570 |
— |
Adjusted pre-tax earnings before accelerated
discount accretion |
119,903 |
44,655 |
29,255 |
164,558 |
52,850 |
Subtract: Accelerated discount accretion
resulting from payoffs of acquired loans |
15,290 |
7,655 |
177 |
22,945 |
854 |
Adjusted pre-tax earnings |
104,613 |
37,000 |
29,078 |
141,613 |
51,996 |
Tax expense (1) |
(40,799) |
(14,430) |
(10,177) |
(55,229) |
(18,199) |
Adjusted net earnings |
$ 63,814 |
$ 22,570 |
$ 18,901 |
$ 86,384 |
$ 33,797 |
|
|
|
|
|
|
Average assets |
$ 15,037,101 |
$ 6,513,376 |
$ 5,777,891 |
$ 10,798,982 |
$ 5,578,131 |
|
|
|
|
|
|
Average stockholders' equity |
$ 3,233,018 |
$ 820,248 |
$ 666,425 |
$ 2,032,830 |
$ 628,029 |
Less: Average intangible assets |
1,638,267 |
225,294 |
129,863 |
935,684 |
111,924 |
Average tangible common equity |
$ 1,594,751 |
$ 594,954 |
$ 536,562 |
$ 1,097,146 |
$ 516,105 |
|
|
|
|
|
|
Annualized return on average assets (2) |
0.28% |
1.56% |
0.30% |
0.67% |
0.65% |
Annualized adjusted return on average assets
(3) |
1.70% |
1.41% |
1.31% |
1.61% |
1.22% |
Annualized return on average equity (4) |
1.31% |
12.40% |
2.62% |
3.54% |
5.73% |
Annualized adjusted return on average equity
(5) |
7.92% |
11.16% |
11.38% |
8.57% |
10.85% |
Annualized return on average tangible equity
(6) |
2.65% |
17.10% |
3.25% |
6.55% |
6.97% |
Annualized adjusted return on average
tangible equity (7) |
16.05% |
15.39% |
14.13% |
15.88% |
13.21% |
|
(1) Full-year expected effective
rate of 39% used in 2014 periods and actual effective rate of 35%
used in 2013 periods. |
(2) Annualized net earnings
divided by average assets. |
(3) Annualized adjusted net
earnings divided by average assets. |
(4) Annualized net earnings
divided by average stockholders' equity. |
(5) Annualized adjusted net
earnings divided by average stockholders' equity. |
(6) Annualized net earnings
divided by average tangible common equity. |
(7) Annualized adjusted net
earnings divided by average tangible common equity. |
|
|
PACWEST BANCORP AND
SUBSIDIARIES |
GAAP TO NON-GAAP
RECONCILIATION |
(Unaudited) |
|
|
|
|
|
|
|
Three Months
Ended |
Six Months
Ended |
|
June 30, |
March 31, |
June 30, |
June 30, |
June 30, |
Adjusted Efficiency
Ratio |
2014 |
2014 |
2013 |
2014 |
2013 |
|
(Dollars in thousands) |
|
|
|
|
|
|
Noninterest expense |
$ 169,906 |
$ 50,869 |
$ 64,216 |
$ 220,775 |
$ 108,399 |
Less: Acquisition, integration and
reorganization costs |
86,242 |
2,200 |
17,997 |
88,442 |
18,689 |
Covered OREO income, net |
(185) |
(1,615) |
(94) |
(1,800) |
(907) |
Adjusted noninterest expense |
$ 83,849 |
$ 50,284 |
$ 46,313 |
$ 134,133 |
$ 90,617 |
|
|
|
|
|
|
Net interest income |
$ 192,533 |
$ 86,015 |
$ 68,473 |
$ 278,548 |
$ 134,166 |
Noninterest income |
8,479 |
4,691 |
203 |
13,170 |
3,043 |
Net revenues |
201,012 |
90,706 |
68,676 |
291,718 |
137,209 |
Less: FDIC loss sharing expense, net |
(8,525) |
(11,430) |
(5,410) |
(19,955) |
(8,547) |
(Loss) gain on sale of loans and
leases |
(485) |
106 |
279 |
(379) |
504 |
Gain on securities |
89 |
4,752 |
— |
4,841 |
409 |
Gain on sale of owned office
building |
— |
1,570 |
— |
1,570 |
— |
Accelerated discount accretion resulting
from payoffs of acquired loans |
15,290 |
7,655 |
177 |
22,945 |
854 |
Adjusted net revenues |
$ 194,643 |
$ 88,053 |
$ 73,630 |
$ 282,696 |
$ 143,989 |
|
|
|
|
|
|
Base efficiency ratio (1) |
84.5% |
56.1% |
93.5% |
75.7% |
79.0% |
Adjusted efficiency ratio (2) |
43.1% |
57.1% |
62.9% |
47.4% |
62.9% |
|
(1) Noninterest expense
divided by net revenues. |
(2) Adjusted noninterest
expense divided by adjusted net revenues. |
|
|
PACWEST BANCORP AND
SUBSIDIARIES |
GAAP TO NON-GAAP
RECONCILIATION |
(Unaudited) |
|
|
|
|
|
|
|
June 30, |
March 31, |
December 31, |
September 30, |
June 30, |
Tangible Common Equity
Ratio |
2014 |
2014 |
2013 |
2013 |
2013 |
|
(Dollars in thousands) |
|
|
|
|
|
|
PacWest Bancorp
Consolidated: |
|
|
|
|
|
Stockholder's equity |
$ 3,437,932 |
$ 833,702 |
$ 809,093 |
$ 816,289 |
$ 801,699 |
Less: Intangible assets |
1,745,584 |
224,627 |
225,991 |
234,540 |
229,380 |
Tangible common equity |
$ 1,692,348 |
$ 609,075 |
$ 583,102 |
$ 581,749 |
$ 572,319 |
|
|
|
|
|
|
Total assets |
$ 15,684,866 |
$ 6,517,853 |
$ 6,533,363 |
$ 6,616,855 |
$ 6,709,102 |
Less: Intangible assets |
1,745,584 |
224,627 |
225,991 |
234,540 |
229,380 |
Tangible assets |
$ 13,939,282 |
$ 6,293,226 |
$ 6,307,372 |
$ 6,382,315 |
$ 6,479,722 |
|
|
|
|
|
|
Equity to assets ratio |
21.92% |
12.79% |
12.38% |
12.34% |
11.95% |
Tangible common equity ratio (1) |
12.14% |
9.68% |
9.24% |
9.12% |
8.83% |
|
|
|
|
|
|
Book value per share |
$ 33.37 |
$ 18.21 |
$ 17.66 |
$ 17.71 |
$ 17.40 |
Tangible book value per share (2) |
$ 16.43 |
$ 13.31 |
$ 12.73 |
$ 12.62 |
$ 12.42 |
Shares outstanding |
103,033,449 |
45,777,580 |
45,822,834 |
46,090,742 |
46,080,731 |
|
|
|
|
|
|
|
|
|
|
|
|
Pacific Western Bank: |
|
|
|
|
|
Stockholder's equity |
$ 3,298,908 |
$ 910,644 |
$ 911,200 |
$ 906,029 |
$ 890,477 |
Less: Intangible assets |
1,745,584 |
224,627 |
225,991 |
234,540 |
229,380 |
Tangible common equity |
$ 1,553,324 |
$ 686,017 |
$ 685,209 |
$ 671,489 |
$ 661,097 |
|
|
|
|
|
|
Total assets |
$ 15,376,440 |
$ 6,507,288 |
$ 6,523,742 |
$ 6,607,926 |
$ 6,699,832 |
Less: Intangible assets |
1,745,584 |
224,627 |
225,991 |
234,540 |
229,380 |
Tangible assets |
$ 13,630,856 |
$ 6,282,661 |
$ 6,297,751 |
$ 6,373,386 |
$ 6,470,452 |
|
|
|
|
|
|
Equity to assets ratio |
21.45% |
13.99% |
13.97% |
13.71% |
13.29% |
Tangible common equity ratio (1) |
11.40% |
10.92% |
10.88% |
10.54% |
10.22% |
|
(1) Tangible common equity
divided by tangible assets. |
(2) Tangible common equity
divided by shares outstanding. |
CONTACT: Matt Wagner, Chief Executive Officer, (310) 728-1020
Vic Santoro, Executive Vice President and CFO, (310) 728-1021
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