UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest
event reported) April 16, 2015
PacWest Bancorp
(Exact name of registrant as specified in its charter)
|
Delaware |
|
00-30747 |
|
33-0885320 |
|
(State of |
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(Commission File Number) |
|
(IRS Employer |
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Incorporation) |
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Identification No.) |
10250 Constellation Blvd., Suite 1640, Los Angeles, California 90067
(Address of principal executive offices and zip code)
(310) 286-1144
(Registrant’s telephone number, including area code)
N/A
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
x Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230-425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 2.02 Results of Operations and Financial Condition.*
On April 16, 2015, PacWest Bancorp announced its results of operations and financial condition for the quarter ended March 31, 2015. A copy of the press release is furnished as Exhibit 99.1 and incorporated herein by reference.
Item 8.01 Other Events.
The information set forth under the captions “Square 1 Financial, Inc. Merger Announcement,” “Forward Looking Statements,” and “Additional Information About the Proposed Transaction and Where to Find It” in the press release furnished as Exhibit 99.1 is incorporated by reference in this Item 8.01.
Item 9.01 Financial Statements and Exhibits.*
(d) Exhibits.
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Exhibit |
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Number |
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Description |
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99.1 |
|
Press release dated April 16, 2015 |
*The information furnished under Item 2.02 and Item 9.01 of this Current Report on Form 8-K, including the exhibit, shall not be deemed “filed” for purposes of Section 18 of the Securities and Exchange Act of 1934, as amended, or otherwise subject to the liabilities under that Section, nor shall it be deemed incorporated by reference in any registration statement or other filings of PacWest Bancorp under the Securities Act of 1933, as amended, except as shall be set forth by specific reference in such filing.
2
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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PacWest Bancorp |
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|
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|
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By: |
/s/ Lynn M. Hopkins |
|
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Name: |
Lynn M. Hopkins |
|
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Title: |
Executive Vice President |
Date: April 16, 2015
3
EXHIBIT INDEX
|
Exhibit No. |
|
Description |
|
|
|
|
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99.1 |
|
Press release dated April 16, 2015 |
4
Exhibit 99.1
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Filed by PacWest Bancorp pursuant to Rule 425 under the Securities Act of 1933 and deemed filed pursuant to Rule 14a-12 under the Securities Exchange Act of 1934 |
|
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Subject Company: Square 1 Financial, Inc. |
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Commission File No.: 001-36372 |
PRESS RELEASE
PacWest Bancorp
(NASDAQ: PACW)
|
Contact: |
Matthew P. Wagner |
Victor R. Santoro |
|
|
President and CEO |
Executive Vice President and CFO |
|
|
10250 Constellation Boulevard, Suite 1640 |
10250 Constellation Boulevard, Suite 1640 |
|
|
Los Angeles, CA 90067 |
Los Angeles, CA 90067 |
|
Phone: |
310-728-1020 |
310-728-1021 |
|
FOR IMMEDIATE RELEASE |
April 16, 2015 |
PACWEST BANCORP ANNOUNCES RESULTS
FOR THE FIRST QUARTER OF 2015
Highlights
· Net Earnings of $73.1 Million, or $0.71 Per Diluted Share; Adjusted Net Earnings of $62.9 Million, or $0.61 Per Diluted Share
· Core Net Interest Margin at 5.38%
· $389.7 Million, or 13.1% Annualized, Loan and Lease Growth Driven by $1.0 Billion of Production
· Demand Deposits Increased $98.1 Million in the Quarter and are 26% of Total Deposits
· Core Deposits Increased $61.8 Million in the Quarter and are 52% of Total Deposits
Los Angeles, California . . . PacWest Bancorp (Nasdaq: PACW) today announced net earnings for the first quarter of 2015 of $73.1 million, or $0.71 per diluted share, compared to net earnings for the fourth quarter of 2014 of $71.0 million, or $0.69 per diluted share. When certain income and expense items described below are excluded, adjusted net earnings are $62.9 million, or $0.61 per diluted share, for the first quarter of 2015 and $68.0 million, or $0.66 per diluted share, for the fourth quarter of 2014. The decline in adjusted earnings is largely the result of the first quarter provision for credit losses.
Matt Wagner, President and CEO, commented, “Reported net earnings remained strong this quarter at $73.1 million. Loan and lease originations of $1.0 billion reached a new high since the CapitalSource merger, resulting in an annualized growth rate for the quarter of 13.1%. The combination of loan and lease growth with some deterioration in a few energy-related credits resulted in a credit loss provision of $16.4 million. When the credit loss provision is excluded, however, our adjusted net earnings increased $3.6 million quarter-over-quarter to $72.8 million.”
Mr. Wagner continued, “In addition to focusing on loan growth and credit, our teams concentrated on deposit growth. Core deposits were up $61.8 million in the quarter, and deposits from CapitalSource Division borrowers grew $25.1 million, reaching $303.1 million at the end of March. Although we continue to make progress in achieving our goal of remixing our deposit base, the anticipated merger with Square 1 is expected to accelerate that process. We are on track to close the Square 1 merger in the fourth quarter. Regulatory applications have been filed, SEC filings are in process and integration planning is underway. We look forward to closing the merger and expanding our business with Square 1’s loan and deposit products.”
1
Vic Santoro, Executive Vice President and CFO, stated, “Our reported and core NIMs of 5.89% and 5.38% remain very strong. The $1.0 billion in new loans and leases went on the books this quarter at a yield of 5.76%, nine basis points better than last quarter’s 5.67%. Our all-in deposit cost of 0.36% compares very favorably to our $10-$50 billion peer banks whose NIMs are substantially lower than ours. And our adjusted efficiency ratio of 40.4% reflects lower expenses. The Company’s earning power, along with its solid tangible capital at 12.01%, positions us well for continued profitable growth.”
FINANCIAL HIGHLIGHTS
|
|
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At or For the Three Months Ended |
|
|
|
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March 31, |
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December 31, |
|
|
|
|
|
|
2015 |
|
2014 |
|
Change |
|
|
|
|
(Dollars in thousands, except per share data) |
|
|
Financial Highlights: |
|
|
|
|
|
|
|
|
Total Assets |
|
$ |
16,643,940 |
|
$ |
16,234,800 |
|
$ |
409,140 |
|
|
Loans and Leases, Net of |
|
|
|
|
|
|
|
|
Deferred Fees |
|
$ |
12,272,166 |
|
$ |
11,882,432 |
|
$ |
389,734 |
|
|
Total Deposits |
|
$ |
11,934,175 |
|
$ |
11,755,128 |
|
$ |
179,047 |
|
|
|
|
|
|
|
|
|
|
|
Net Earnings |
|
$ |
73,079 |
|
$ |
70,999 |
|
$ |
2,080 |
|
|
Diluted Earnings Per Share |
|
$ |
0.71 |
|
$ |
0.69 |
|
$ |
0.02 |
|
|
Annualized Return on Average Assets |
|
1.82 |
% |
1.77 |
% |
0.05 |
|
|
|
|
|
|
|
|
|
|
|
Adjusted Net Earnings (1) (2) |
|
$ |
62,943 |
|
$ |
68,018 |
|
$ |
(5,075 |
) |
|
Adjusted Diluted Earnings Per Share (1) |
|
$ |
0.61 |
|
$ |
0.66 |
|
$ |
(0.05 |
) |
|
Annualized Adjusted Return on Average Assets (1) |
|
1.57 |
% |
1.70 |
% |
(0.13 |
) |
|
Annualized Return on Average Tangible Equity (1) |
|
16.50 |
% |
16.00 |
% |
0.50 |
|
|
Annualized Adjusted Return on Average Tangible Equity (1) |
|
14.21 |
% |
15.33 |
% |
(1.12 |
) |
|
|
|
|
|
|
|
|
|
|
Noninterest-Bearing Deposits as Percentage of Total Deposits |
|
26 |
% |
25 |
% |
1 |
|
|
Core Deposits as Percentage of Total Deposits |
|
52 |
% |
52 |
% |
— |
|
|
Tangible Common Equity Ratio (1) |
|
12.01 |
% |
12.20 |
% |
(0.19 |
) |
|
Tangible Book Value Per Share (1) |
|
$ |
17.36 |
|
$ |
17.17 |
|
$ |
0.19 |
|
|
Net Interest Margin |
|
5.89 |
% |
5.86 |
% |
0.03 |
|
|
Core Net Interest Margin (1) |
|
5.38 |
% |
5.52 |
% |
(0.14 |
) |
|
Efficiency Ratio |
|
38.4 |
% |
44.0 |
% |
(5.6 |
) |
|
Adjusted Efficiency Ratio (1) |
|
40.4 |
% |
41.7 |
% |
(1.3 |
) |
(1) Non-GAAP measure.
(2) When the provision for credit losses is excluded, adjusted net earnings are $72.8 million and $69.2 million for the quarters ended March 31, 2015 and December 31, 2014, respectively.
2
ADJUSTED NET 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 |
|
|
|
March 31, |
|
December 31, |
|
March 31, |
|
|
|
|
2015 |
|
2014 |
|
2014 |
|
|
|
|
(Dollars in thousands) |
|
|
|
|
|
|
|
|
|
|
|
Reported net earnings |
|
$ |
73,079 |
|
$ |
70,999 |
|
$ |
25,080 |
|
|
Less: Tax benefit on discontinued operations |
|
— |
|
(47 |
) |
(588 |
) |
|
Add: Tax expense on continuing operations |
|
46,073 |
|
43,261 |
|
15,281 |
|
|
Reported pre-tax earnings |
|
119,152 |
|
114,213 |
|
39,773 |
|
|
Add: Acquisition, integration, and reorganization costs |
|
2,000 |
|
7,381 |
|
2,200 |
|
|
Less: FDIC loss sharing expense, net |
|
(4,399 |
) |
(4,360 |
) |
(11,430 |
) |
|
Gain on sale of loans and leases |
|
— |
|
7 |
|
106 |
|
|
Gain on securities |
|
3,275 |
|
— |
|
4,752 |
|
|
Covered OREO (expense) income, net |
|
19 |
|
(176 |
) |
1,615 |
|
|
Gain on sale of owned office building |
|
— |
|
— |
|
1,570 |
|
|
Adjusted pre-tax earnings before accelerated discount accretion |
|
122,257 |
|
126,123 |
|
45,360 |
|
|
Less: Accelerated discount accretion from early payoffs of acquired loans |
|
17,352 |
|
11,421 |
|
7,655 |
|
|
Adjusted pre-tax earnings |
|
104,905 |
|
114,702 |
|
37,705 |
|
|
Tax expense (1) |
|
(41,962 |
) |
(46,684 |
) |
(15,346 |
) |
|
Adjusted net earnings (2) |
|
$ |
62,943 |
|
$ |
68,018 |
|
$ |
22,359 |
|
|
|
|
|
|
|
|
|
|
|
Annualized adjusted return on average assets |
|
1.57 |
% |
1.70 |
% |
1.39 |
% |
|
|
|
|
|
|
|
|
|
|
Adjusted diluted earnings per share |
|
$ |
0.61 |
|
$ |
0.66 |
|
$ |
0.47 |
|
(1) Full-year expected effective rate of 40.0% used for 2015 period and actual effective rate of 40.7% used for 2014 periods.
(2) When the provision for credit losses is excluded, adjusted net earnings are $72.8 million and $69.2 million for the quarters ended March 31, 2015 and December 31, 2014, respectively.
INCOME STATEMENT HIGHLIGHTS
Net Interest Income
Net interest income increased $4.1 million to $199.1 million for the first quarter of 2015 compared to $195.0 million for the fourth quarter of 2014 due to higher average loan and lease balances and higher accelerated discount accretion resulting from early payoffs of acquired loans offset by two less days in the quarter. Net interest margin (“NIM”) for the first quarter of 2015 was 5.89% compared to 5.86% for the fourth quarter of 2014, and loan yield was 6.80% compared to 6.76% for the fourth quarter of 2014. The increase in the NIM and loan yield are both due to higher accelerated discount accretion from early payoffs of acquired loans. Accelerated accretion resulting from early payoffs of acquired loans was $17.4 million in the first quarter of 2015 (58 basis points on the loan and lease yield) compared to $11.4 million in the fourth quarter (39 basis points on the loan and lease yield), an increase of $6.0 million.
3
The total cost of deposits increased to 0.36% from 0.34% in the prior quarter due primarily to a $1.2 million decrease in the amount of premium accretion on the time deposits acquired in the CapitalSource merger. The repricing of maturing time deposits at current rates and new time deposit production resulted in the decline in the weighted average contractual interest rate on time deposits to 0.72% at March 31, 2015 from 0.75% at December 31, 2014.
Net interest margin information is presented in the following table for the periods indicated:
|
|
|
Three Months Ended |
|
|
|
|
March 31, |
|
December 31, |
|
|
|
|
2015 |
|
2014 |
|
|
|
|
(In thousands) |
|
|
Net Interest Margin |
|
|
|
|
|
|
Average Assets: |
|
|
|
|
|
|
Loans and leases |
|
$ |
12,055,682 |
|
$ |
11,586,573 |
|
|
Investment securities |
|
1,613,422 |
|
1,591,839 |
|
|
Deposits in financial institutions |
|
32,761 |
|
26,971 |
|
|
Average interest-earning assets |
|
13,701,865 |
|
13,205,383 |
|
|
Other assets |
|
2,594,775 |
|
2,687,378 |
|
|
Average total assets |
|
$ |
16,296,640 |
|
$ |
15,892,761 |
|
|
|
|
|
|
|
|
|
Average Liabilities: |
|
|
|
|
|
|
Interest-bearing deposits |
|
$ |
8,801,306 |
|
$ |
8,679,599 |
|
|
Borrowings |
|
424,061 |
|
214,053 |
|
|
Subordinated debentures |
|
432,603 |
|
433,859 |
|
|
Average interest-bearing liabilities |
|
9,657,970 |
|
9,327,511 |
|
|
Noninterest-bearing demand deposits |
|
2,949,719 |
|
2,900,388 |
|
|
Other liabilities |
|
155,608 |
|
164,571 |
|
|
Average total liabilities |
|
12,763,297 |
|
12,392,470 |
|
|
Average stockholders’ equity |
|
3,533,343 |
|
3,500,291 |
|
|
Average liabilities and stockholders’ equity |
|
$ |
16,296,640 |
|
$ |
15,892,761 |
|
|
|
|
|
|
|
|
|
Average time deposits |
|
$ |
5,481,886 |
|
$ |
5,427,687 |
|
|
Average total deposits |
|
$ |
11,751,025 |
|
$ |
11,579,987 |
|
|
Average funding sources |
|
$ |
12,607,689 |
|
$ |
12,227,899 |
|
|
|
|
|
|
|
|
|
Yield on: |
|
|
|
|
|
|
Average loans and leases |
|
6.80 |
% |
6.76 |
% |
|
Average investment securities |
|
3.07 |
% |
3.04 |
% |
|
Average interest-earning assets |
|
6.34 |
% |
6.30 |
% |
|
|
|
|
|
|
|
|
Cost of: |
|
|
|
|
|
|
Average total deposits |
|
0.36 |
% |
0.34 |
% |
|
Average time deposits |
|
0.65 |
% |
0.60 |
% |
|
Average interest-bearing deposits |
|
0.48 |
% |
0.46 |
% |
|
Average borrowings |
|
0.22 |
% |
0.27 |
% |
|
Average subordinated debentures |
|
4.24 |
% |
4.20 |
% |
|
Average interest-bearing liabilities |
|
0.64 |
% |
0.63 |
% |
|
Average funding sources |
|
0.49 |
% |
0.48 |
% |
|
|
|
|
|
|
|
|
Net interest rate spread |
|
5.70 |
% |
5.67 |
% |
|
Net interest margin |
|
5.89 |
% |
5.86 |
% |
4
The NIM and loan and lease yield are impacted by volatility in accelerated accretion of acquisition discounts from early payoffs of acquired loans. The effects of this item are shown in the following table for the periods indicated:
|
|
|
Three Months Ended |
|
Three Months Ended |
|
|
|
|
March 31, 2015 |
|
December 31, 2014 |
|
|
|
|
|
|
Loan and |
|
|
|
Loan and |
|
|
|
|
NIM |
|
Lease Yield |
|
NIM |
|
Lease Yield |
|
|
Reported |
|
5.89 |
% |
6.80 |
% |
5.86 |
% |
6.76 |
% |
|
Less: |
Accelerated accretion of acquisition discounts from early payoffs of acquired loans |
|
(0.51 |
)% |
(0.58 |
)% |
(0.34 |
)% |
(0.39 |
)% |
|
Core (non-GAAP measure) |
|
5.38 |
% |
6.22 |
% |
5.52 |
% |
6.37 |
% |
|
|
|
|
|
|
|
|
|
|
|
The impact on the NIM from all purchase accounting items is detailed in the table below for the periods indicated:
|
|
|
Three Months Ended |
|
Three Months Ended |
|
|
|
|
March 31, 2015 |
|
December 31, 2014 |
|
|
|
|
|
|
Impact on |
|
|
|
Impact on |
|
|
|
|
Amount |
|
NIM |
|
Amount |
|
NIM |
|
|
|
|
(Dollars in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income/NIM as reported |
|
$ |
199,075 |
|
5.89 |
% |
$ |
194,983 |
|
5.86 |
% |
|
Less: |
Accelerated accretion of acquisition discounts from early payoffs of acquired loans |
|
(17,352 |
) |
(0.51 |
)% |
(11,421 |
) |
(0.34 |
)% |
|
|
Remaining accretion of Non-PCI loan acquisition discounts |
|
(11,245 |
) |
(0.33 |
)% |
(13,073 |
) |
(0.39 |
)% |
|
|
Amortization of TruPS discount |
|
1,401 |
|
0.04 |
% |
1,401 |
|
0.04 |
% |
|
|
Accretion of time deposits premium |
|
(1,285 |
) |
(0.04 |
)% |
(2,469 |
) |
(0.07 |
)% |
|
|
|
(28,481 |
) |
(0.84 |
)% |
(25,562 |
) |
(0.76 |
)% |
|
Net interest income/NIM excluding purchase accounting |
|
$ |
170,594 |
|
5.05 |
% |
$ |
169,421 |
|
5.10 |
% |
Noninterest Income
Noninterest income increased by $8.2 million to $20.9 million for the first quarter of 2015 compared to $12.7 million for the fourth quarter of 2014 due mostly to higher commissions and fees, gain on securities, higher dividends and gains on equity investments, and higher foreign currency translation net gains. The increase in commissions and fees is largely the result of a servicing asset write-off made in the fourth quarter of 2014. The gain on sale of securities was $3.3 million for the first quarter of 2015; there were no securities sold in the prior quarter. Dividends and gains on equity investments increased $1.6 million and foreign currency translation net gains increased $1.7 million from the prior quarter. These items tend to fluctuate from period to period based upon dividends received, sales of equity investments and the movement of the U.S. Dollar against various foreign currencies, especially the Euro.
5
The following table presents details of noninterest income for the periods indicated:
|
|
|
Three Months Ended |
|
|
|
|
March 31, |
|
December 31, |
|
Increase |
|
|
|
|
2015 |
|
2014 |
|
(Decrease) |
|
|
|
|
(In thousands) |
|
|
|
|
|
|
|
|
|
|
|
Noninterest Income |
|
|
|
|
|
|
|
|
Service charges on deposit accounts |
|
$ |
2,574 |
|
$ |
2,787 |
|
$ |
(213 |
) |
|
Other commissions and fees |
|
5,396 |
|
4,556 |
|
840 |
|
|
Leased equipment income |
|
5,382 |
|
5,382 |
|
— |
|
|
Gain on sale of loans and leases |
|
— |
|
7 |
|
(7 |
) |
|
Gain on securities |
|
3,275 |
|
— |
|
3,275 |
|
|
FDIC loss sharing expense, net |
|
(4,399 |
) |
(4,360 |
) |
(39 |
) |
|
Other income: |
|
|
|
|
|
|
|
|
Dividends and realized gains on equity investments |
|
3,477 |
|
1,924 |
|
1,553 |
|
|
Foreign currency translation net gains |
|
2,597 |
|
854 |
|
1,743 |
|
|
Income recognized on early repayment of leases |
|
736 |
|
294 |
|
442 |
|
|
Other |
|
1,833 |
|
1,259 |
|
574 |
|
|
Total noninterest income |
|
$ |
20,871 |
|
$ |
12,703 |
|
$ |
8,168 |
|
The following table presents the details of FDIC loss sharing expense for the periods indicated:
|
|
|
Three Months Ended |
|
|
|
|
March 31, |
|
December 31, |
|
Increase |
|
|
|
|
2015 |
|
2014 |
|
(Decrease) |
|
|
|
|
(In thousands) |
|
|
|
|
|
|
|
|
|
|
|
FDIC Loss Sharing Expense, Net |
|
|
|
|
|
|
|
|
Loss on FDIC loss sharing asset |
|
$ |
(278 |
) |
$ |
(525 |
) |
$ |
247 |
|
|
FDIC loss sharing asset amortization, net |
|
(4,015 |
) |
(3,795 |
) |
(220 |
) |
|
Net reimbursement from FDIC for |
|
|
|
|
|
|
|
|
covered OREOs |
|
(3 |
) |
63 |
|
(66 |
) |
|
Other |
|
(103 |
) |
(103 |
) |
— |
|
|
FDIC loss sharing expense, net |
|
$ |
(4,399 |
) |
$ |
(4,360 |
) |
$ |
(39 |
) |
Noninterest Expense
Noninterest expense decreased by $6.9 million to $84.4 million for the first quarter of 2015 compared to $91.3 million for the fourth quarter of 2014. The decrease was due mostly to lower acquisition, integration and reorganization expense of $5.4 million, lower foreclosed assets expense of $1.6 million and lower loan-related expense of $2.0 million, offset by higher compensation expense of $1.8 million. The decrease in foreclosed assets expense was mostly due to lower write-downs on existing properties. Loan-related expense decreased due to lower expenses related to origination and work-out activities and a $1.7 million recovery of legal costs. The increase in compensation expense was from higher payroll taxes due to the tax cycle.
6
The following table presents details of noninterest expense for the periods indicated:
|
|
|
Three Months Ended |
|
|
|
|
March 31, |
|
December 31, |
|
Increase |
|
|
|
|
2015 |
|
2014 |
|
(Decrease) |
|
|
|
|
|
|
(In thousands) |
|
|
|
|
Noninterest Expense |
|
|
|
|
|
|
|
|
Compensation |
|
$ |
47,737 |
|
$ |
45,930 |
|
$ |
1,807 |
|
|
Occupancy |
|
10,600 |
|
10,745 |
|
(145 |
) |
|
Data processing |
|
4,308 |
|
4,050 |
|
258 |
|
|
Other professional services |
|
3,221 |
|
3,181 |
|
40 |
|
|
Insurance and assessments |
|
3,025 |
|
3,115 |
|
(90 |
) |
|
Intangible asset amortization |
|
1,501 |
|
1,619 |
|
(118 |
) |
|
Leased equipment depreciation |
|
3,103 |
|
3,103 |
|
— |
|
|
Foreclosed assets expense, net |
|
336 |
|
1,938 |
|
(1,602 |
) |
|
Acquisition, integration and reorganization costs |
|
2,000 |
|
7,381 |
|
(5,381 |
) |
|
Other expense: |
|
|
|
|
|
|
|
|
Loan expense |
|
339 |
|
2,365 |
|
(2,026 |
) |
|
Other |
|
8,190 |
|
7,878 |
|
312 |
|
|
Total noninterest expense |
|
$ |
84,360 |
|
$ |
91,305 |
|
$ |
(6,945 |
) |
Income Taxes
Our overall effective income tax rate was 38.7% for the first quarter of 2015 and 37.9% for the fourth quarter of 2014.
7
BALANCE SHEET HIGHLIGHTS
Loans and Leases
Total loans and leases increased $389.7 million in the first quarter to $12.3 billion at March 31, 2015. The loan and lease growth in the first quarter represents an annualized growth rate of 13.1%.
The following table presents a roll forward of the loan and lease portfolio for the periods indicated:
|
|
|
Three Months Ended |
|
|
|
|
March 31, |
|
December 31, |
|
|
|
|
2015 |
|
2014 |
|
|
|
|
(In thousands) |
|
|
Loan and Lease Roll Forward (1) |
|
|
|
|
|
|
Beginning balance |
|
$ |
11,882,432 |
|
$ |
11,574,885 |
|
|
Loans and leases originated and purchased |
|
1,037,906 |
|
950,385 |
|
|
Existing loans and leases: |
|
|
|
|
|
|
Principal repayments, net (2) |
|
(637,288 |
) |
(620,799 |
) |
|
Loan and lease sales |
|
— |
|
(6,388 |
) |
|
Transfers to foreclosed assets |
|
(394 |
) |
(9,139 |
) |
|
Charge-offs |
|
(10,490 |
) |
(6,512 |
) |
|
Ending balance |
|
$ |
12,272,166 |
|
$ |
11,882,432 |
|
(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), loan participation sales and other changes within the loan portfolio.
The following table presents a roll forward of the loan and lease portfolio by business segment for the period indicated:
|
|
|
Three Months Ended March 31, 2015 |
|
|
|
|
Community |
|
National |
|
|
|
|
|
|
Banking |
|
Lending |
|
Total |
|
|
|
|
(In thousands) |
|
|
Loan and Lease Roll Forward by Segment |
|
|
|
|
|
|
|
|
Beginning balance |
|
$ |
3,401,129 |
|
$ |
8,481,303 |
|
$ |
11,882,432 |
|
|
Loans and leases originated and purchased |
|
143,200 |
|
894,706 |
|
1,037,906 |
|
|
Existing loans and leases: |
|
|
|
|
|
|
|
|
Principal repayments, net |
|
(192,104 |
) |
(445,184 |
) |
(637,288 |
) |
|
Loan and lease sales |
|
— |
|
— |
|
— |
|
|
Transfers to foreclosed assets |
|
(186 |
) |
(208 |
) |
(394 |
) |
|
Charge-offs |
|
(2,111 |
) |
(8,379 |
) |
(10,490 |
) |
|
Ending balance |
|
$ |
3,349,928 |
|
$ |
8,922,238 |
|
$ |
12,272,166 |
|
|
|
|
|
|
|
|
|
|
|
Weighted average yields on originations for the quarters ended: |
|
|
|
|
|
|
|
|
March 31, 2015 |
|
5.28 |
% |
5.84 |
% |
5.76 |
% |
|
December 31, 2014 |
|
5.09 |
% |
5.76 |
% |
5.67 |
% |
|
September 30, 2014 |
|
4.73 |
% |
5.56 |
% |
5.34 |
% |
|
June 30, 2014 |
|
4.98 |
% |
5.86 |
% |
5.71 |
% |
8
The following table presents the composition of our loan and lease portfolio as of the dates indicated:
|
|
|
March 31, |
|
December 31, |
|
|
|
|
2015 |
|
2014 |
|
|
|
|
(In thousands) |
|
|
Loan and Lease Portfolio |
|
|
|
|
|
|
Real estate mortgage: |
|
|
|
|
|
|
Hospitality |
|
$ |
622,310 |
|
$ |
570,634 |
|
|
SBA |
|
392,704 |
|
380,890 |
|
|
Commercial real estate |
|
2,742,593 |
|
2,428,794 |
|
|
Healthcare real estate |
|
1,097,910 |
|
1,030,851 |
|
|
Multi-family |
|
749,661 |
|
774,710 |
|
|
Other |
|
209,703 |
|
411,123 |
|
|
Total real estate mortgage |
|
5,814,881 |
|
5,597,002 |
|
|
Real estate construction: |
|
|
|
|
|
|
Residential |
|
122,338 |
|
96,749 |
|
|
Commercial |
|
208,259 |
|
217,297 |
|
|
Total real estate construction |
|
330,597 |
|
314,046 |
|
|
Commercial: |
|
|
|
|
|
|
Collateralized |
|
394,576 |
|
439,567 |
|
|
Unsecured |
|
143,585 |
|
131,939 |
|
|
Asset-based |
|
1,719,835 |
|
1,794,907 |
|
|
Cash flow |
|
2,818,293 |
|
2,486,411 |
|
|
Equipment finance |
|
914,015 |
|
969,489 |
|
|
SBA |
|
42,426 |
|
47,304 |
|
|
Total commercial |
|
6,032,730 |
|
5,869,617 |
|
|
Consumer |
|
93,958 |
|
101,767 |
|
|
Total loans and leases, net of deferred fees |
|
$ |
12,272,166 |
|
$ |
11,882,432 |
|
Energy-Related Credit Exposure
The continued low price of oil further weakened the exploration business during the first quarter. Ultimately, those involved in exploration cut back on their business with support service providers. Since almost all of our energy-related credits are in support services, several of our outstanding credits weakened during the quarter. Updated cash flow analyses and appraisals resulted in a $6.5 million credit loss provision on several energy-related credits.
At March 31, 2015, we had 45 outstanding loan and lease relationships totaling $264.4 million to borrowers broadly involved in the energy industry. The obligors under these loans and leases either conduct mining, oil and gas extraction or provide industrial support services to such types of businesses. The collateral for these loans and leases primarily includes equipment, such as drilling and mining equipment and transportation vehicles, used directly and indirectly in these activities. At March 31, 2015, six relationships totaling $69.3 million were on nonaccrual status and were classified.
9
Deposits
The following table presents the composition of our deposit portfolio as of the dates indicated:
|
|
|
March 31, 2015 |
|
December 31, 2014 |
|
|
|
|
|
|
% of |
|
|
|
% of |
|
|
|
|
Amount |
|
Total |
|
Amount |
|
Total |
|
|
|
|
(Dollars in thousands) |
|
|
Deposit Category |
|
|
|
|
|
|
|
|
|
|
Noninterest-bearing demand deposits |
|
$ |
3,029,463 |
|
26 |
% |
$ |
2,931,352 |
|
25 |
% |
|
Interest checking deposits |
|
739,073 |
|
6 |
% |
732,196 |
|
6 |
% |
|
Money market deposits |
|
1,682,123 |
|
14 |
% |
1,709,068 |
|
15 |
% |
|
Savings deposits |
|
746,741 |
|
6 |
% |
762,961 |
|
6 |
% |
|
Total core deposits |
|
6,197,400 |
|
52 |
% |
6,135,577 |
|
52 |
% |
|
Brokered non-maturity deposits |
|
155,976 |
|
1 |
% |
120,613 |
|
1 |
% |
|
Total non-maturity deposits |
|
6,353,376 |
|
53 |
% |
6,256,190 |
|
53 |
% |
|
Time deposits under $100,000 |
|
2,562,078 |
|
22 |
% |
2,467,338 |
|
21 |
% |
|
Time deposits of $100,000 and over |
|
3,018,721 |
|
25 |
% |
3,031,600 |
|
26 |
% |
|
Total time deposits |
|
5,580,799 |
|
47 |
% |
5,498,938 |
|
47 |
% |
|
Total deposits |
|
$ |
11,934,175 |
|
100 |
% |
$ |
11,755,128 |
|
100 |
% |
At March 31, 2015, core deposits totaled $6.2 billion, or 52% of total deposits, including $3.0 billion of noninterest-bearing demand deposits, or 26% of total deposits. Deposits obtained from CapitalSource Division borrowers totaled $303.1 million at March 31, 2015, of which $289.9 million were core deposits.
The following table summarizes the maturities of our time deposits as of the date indicated:
|
|
|
March 31, 2015 |
|
|
|
|
Time Deposits |
|
Time Deposits |
|
Total |
|
|
|
Estimated |
|
|
|
|
Under |
|
$100,000 |
|
Time |
|
Contractual |
|
Effective |
|
|
|
|
$100,000 |
|
or More |
|
Deposits |
|
Rate |
|
Rate |
|
|
|
|
(Dollars in thousands) |
|
|
Time Deposit Maturities |
|
|
|
|
|
|
|
|
|
|
|
|
Due in three months or less |
|
$ |
666,961 |
|
$ |
741,091 |
|
$ |
1,408,052 |
|
0.65 |
% |
0.60 |
% |
|
Due in over three months through six months |
|
845,811 |
|
1,242,887 |
|
2,088,698 |
|
0.71 |
% |
0.68 |
% |
|
Due in over six months through twelve months |
|
825,838 |
|
701,955 |
|
1,527,793 |
|
0.71 |
% |
0.67 |
% |
|
Due in over 12 months through 24 months |
|
175,369 |
|
288,107 |
|
463,476 |
|
0.95 |
% |
0.85 |
% |
|
Due in over 24 months |
|
48,099 |
|
44,681 |
|
92,780 |
|
0.99 |
% |
0.72 |
% |
|
Total |
|
$ |
2,562,078 |
|
$ |
3,018,721 |
|
$ |
5,580,799 |
|
0.72 |
% |
0.68 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At December 31, 2014 |
|
$ |
2,467,338 |
|
$ |
3,031,600 |
|
$ |
5,498,938 |
|
0.75 |
% |
0.69 |
% |
The remaining purchase accounting premium on acquired CapitalSource time deposits was $2.4 million at March 31, 2015, of which $1.6 million will be recognized as a reduction of interest expense in the remainder of 2015.
10
PROVISION AND ALLOWANCE FOR CREDIT LOSSES
We made a provision for credit losses of $16.4 million in the first quarter of 2015 and $2.1 million in the fourth 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 first quarter provision is comprised of a $17.1 million provision for Non-PCI loans and leases and a negative provision of $0.7 million for PCI loans. The $17.1 million provision related to Non-PCI loans and leases included $8.8 million for specific reserves and $8.3 million for the combination of portfolio growth, payoffs, and risk rating changes. Of the $8.8 million of net provision for specific reserves, $6.5 million related to newly impaired energy-related leases. The negative provision for PCI loans results from increases in expected cash flows on such loans, which have a net carrying value of $254.3 million at March 31, 2015.
The following tables show roll forwards of the allowance for credit losses for the first quarter of 2015 and fourth quarter of 2014:
|
|
|
Three Months Ended March 31, 2015 |
|
|
|
|
Non-PCI |
|
|
|
|
|
|
|
|
|
|
|
|
Loans and |
|
Unfunded |
|
Total |
|
PCI |
|
|
|
|
|
|
Leases |
|
Commitments |
|
Non-PCI |
|
Loans |
|
Total |
|
|
|
|
(In thousands) |
|
|
Allowance for Credit Losses Rollforward |
|
|
|
|
|
|
|
|
|
|
|
|
Beginning balance |
|
$ |
70,456 |
|
$ |
6,311 |
|
$ |
76,767 |
|
$ |
13,999 |
|
$ |
90,766 |
|
|
Charge-offs |
|
(9,911 |
) |
— |
|
(9,911 |
) |
(579 |
) |
(10,490 |
) |
|
Recoveries |
|
2,531 |
|
— |
|
2,531 |
|
11 |
|
2,542 |
|
|
Net (charge-offs) recoveries |
|
(7,380 |
) |
— |
|
(7,380 |
) |
(568 |
) |
(7,948 |
) |
|
Provision (negative provision) |
|
16,604 |
|
563 |
|
17,167 |
|
(733 |
) |
16,434 |
|
|
Ending balance |
|
$ |
79,680 |
|
$ |
6,874 |
|
$ |
86,554 |
|
$ |
12,698 |
|
$ |
99,252 |
|
|
|
|
Three Months Ended December 31, 2014 |
|
|
|
|
Non-PCI |
|
|
|
|
|
|
|
|
|
|
|
|
Loans and |
|
Unfunded |
|
Total |
|
PCI |
|
|
|
|
|
|
Leases |
|
Commitments |
|
Non-PCI |
|
Loans |
|
Total |
|
|
|
|
(In thousands) |
|
|
Allowance for Credit Losses Rollforward |
|
|
|
|
|
|
|
|
|
|
|
|
Beginning balance |
|
$ |
63,084 |
|
$ |
5,913 |
|
$ |
68,997 |
|
$ |
18,815 |
|
$ |
87,812 |
|
|
Charge-offs |
|
(1,647 |
) |
— |
|
(1,647 |
) |
(4,865 |
) |
(6,512 |
) |
|
Recoveries |
|
6,688 |
|
— |
|
6,688 |
|
715 |
|
7,403 |
|
|
Net charge-offs |
|
5,041 |
|
— |
|
5,041 |
|
(4,150 |
) |
891 |
|
|
Provision (negative provision) |
|
2,331 |
|
398 |
|
2,729 |
|
(666 |
) |
2,063 |
|
|
Ending balance |
|
$ |
70,456 |
|
$ |
6,311 |
|
$ |
76,767 |
|
$ |
13,999 |
|
$ |
90,766 |
|
Non-PCI loans and leases include $5.9 billion of originated loans and leases that were not obtained through acquisitions. The allowance related to these loans and leases totals $70.7 million, or 1.20% of the outstanding balance.
11
All acquired loans are recorded initially at their estimated fair value with such initial fair value including an estimate of credit losses. Two additional credit coverage ratios shown in the table below are presented to give an indication of overall credit risk coverage:
|
|
|
March 31, 2015 |
|
December 31, 2014 |
|
|
|
|
Non-PCI |
|
|
|
|
|
Non-PCI |
|
|
|
|
|
|
|
|
Loans and |
|
Allowance/ |
|
Coverage |
|
Loans and |
|
Allowance/ |
|
Coverage |
|
|
|
|
Leases |
|
Discount |
|
Ratio |
|
Leases |
|
Discount |
|
Ratio |
|
|
|
|
(Dollars in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Credit Risk Coverage Ratios
(Excludes PCI Loans) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ending balance |
|
$ |
12,047,946 |
|
$ |
86,554 |
|
0.72 |
% |
$ |
11,613,832 |
|
$ |
76,767 |
|
0.66 |
% |
|
Acquired loans |
|
(6,152,731 |
) |
(8,962 |
)(1) |
|
|
(6,562,267 |
) |
(4,184 |
)(1) |
|
|
|
Adjusted balance |
|
$ |
5,895,215 |
|
$ |
77,592 |
|
1.32 |
% |
$ |
5,051,565 |
|
$ |
72,583 |
|
1.44 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ending balance |
|
$ |
12,047,946 |
|
$ |
86,554 |
|
0.72 |
% |
$ |
11,613,832 |
|
$ |
76,767 |
|
0.66 |
% |
|
Unamortized net discount |
|
130,845 |
|
130,845 |
(2) |
|
|
156,428 |
|
156,428 |
(2) |
|
|
|
Adjusted balance |
|
$ |
12,178,791 |
|
$ |
217,399 |
|
1.79 |
% |
$ |
11,770,260 |
|
$ |
233,195 |
|
1.98 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Allowance attributed to $6.2 billion and $6.6 billion of acquired Non-PCI loans at March 31, 2015 and December 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 $6.2 billion and $6.6 billion of acquired Non-PCI loans at March 31, 2015 and December 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.
The decrease in coverage ratios results from the combination of newly originated loans being provided for at a rate lower than the current coverage ratio and normal and accelerated accretion of unamortized discount.
12
CREDIT QUALITY
The following table presents our Non-PCI loan and lease credit quality metrics as of the dates indicated:
|
|
|
March 31, |
|
December 31, |
|
|
|
|
2015 |
|
2014 |
|
|
|
|
(Dollars in thousands) |
|
|
|
|
|
|
|
|
|
Non-PCI Credit Quality Metrics |
|
|
|
|
|
|
Allowance for credit losses |
|
$ |
86,554 |
|
$ |
76,767 |
|
|
Nonaccrual loans and leases (1) |
|
139,334 |
|
83,621 |
|
|
Classified loans and leases (2) |
|
333,182 |
|
242,611 |
|
|
Performing restructured loans |
|
35,975 |
|
35,244 |
|
|
Net charge-offs (recoveries) (for the quarter) |
|
7,380 |
|
(5,041 |
) |
|
Provision for credit losses (for the quarter) |
|
17,167 |
|
2,729 |
|
|
Allowance for credit losses to loans and leases |
|
0.72 |
% |
0.66 |
% |
|
Allowance for credit losses to nonaccrual loans and leases |
|
62.1 |
% |
91.8 |
% |
|
Nonperforming assets to loans and leases and foreclosed assets |
|
1.45 |
% |
1.09 |
% |
|
Classified loans and leases to loans and leases |
|
2.77 |
% |
2.09 |
% |
|
|
|
|
|
|
|
|
(1) At March 31, 2015 and December 31, 2014 includes $62.7 million and $22.9 million 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.
Energy-related loans and leases classified and placed on nonaccrual during the quarter totaled $69.9 million. First quarter net charge-offs of $7.4 million include $5.0 million on energy-related credits.
13
The following table presents our Non-PCI 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 |
|
|
|
|
March 31, 2015 |
|
December 31, 2014 |
|
30-89 Days Past Due |
|
|
|
|
|
|
% of |
|
|
|
% of |
|
March 31, |
|
December 31, |
|
|
|
|
|
|
Loan |
|
|
|
Loan |
|
2015 |
|
2014 |
|
|
|
|
Balance |
|
Category |
|
Balance |
|
Category |
|
Balance |
|
Balance |
|
|
|
|
(Dollars in thousands) |
|
|
Real estate mortgage: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hospitality |
|
$ |
8,088 |
|
1 |
% |
$ |
6,366 |
|
1 |
% |
$ |
— |
|
$ |
— |
|
|
SBA |
|
10,919 |
|
3 |
% |
11,141 |
|
3 |
% |
3,310 |
|
3,339 |
|
|
Other |
|
18,328 |
|
— |
|
20,105 |
|
— |
|
3,009 |
|
4,769 |
|
|
Total real estate mortgage |
|
37,335 |
|
1 |
% |
37,612 |
|
1 |
% |
6,319 |
|
8,108 |
|
|
Real estate construction: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Residential |
|
379 |
|
— |
|
381 |
|
— |
|
— |
|
— |
|
|
Commercial |
|
453 |
|
— |
|
1,178 |
|
1 |
% |
— |
|
— |
|
|
Total real estate construction |
|
832 |
|
— |
|
1,559 |
|
1 |
% |
— |
|
— |
|
|
Commercial: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Collateralized |
|
3,601 |
|
1 |
% |
5,450 |
|
1 |
% |
1,397 |
|
93 |
|
|
Unsecured |
|
594 |
|
— |
|
639 |
|
— |
|
— |
|
69 |
|
|
Asset-based |
|
4,159 |
|
— |
|
4,574 |
|
— |
|
— |
|
— |
|
|
Cash flow |
|
15,172 |
|
1 |
% |
15,964 |
|
1 |
% |
— |
|
— |
|
|
Equipment finance |
|
71,039 |
|
8 |
% |
11,131 |
|
1 |
% |
7,751 |
|
2,339 |
|
|
SBA |
|
3,128 |
|
7 |
% |
3,207 |
|
7 |
% |
614 |
|
26 |
|
|
Total commercial |
|
97,693 |
|
2 |
% |
40,965 |
|
1 |
% |
9,762 |
|
2,527 |
|
|
Consumer |
|
3,474 |
|
4 |
% |
3,485 |
|
3 |
% |
9 |
|
50 |
|
|
Total Non-PCI loans and leases (1) |
|
$ |
139,334 |
|
1 |
% |
$ |
83,621 |
|
1 |
% |
$ |
16,090 |
|
$ |
10,685 |
|
(1) Includes leases and loans to companies involved in the energy industry of $69.3 million and $6.8 million at March 31, 2015 and December 31, 2014, respectively. There were $0.7 million and no energy-related leases accruing and 30-89 days past due at March 31, 2015 and December 31, 2014, respectively.
The following table presents our nonperforming assets as of the dates indicated:
|
|
|
March 31, |
|
December 31, |
|
|
|
|
2015 |
|
2014 |
|
|
|
|
(Dollars in thousands) |
|
|
|
|
|
|
|
|
|
Nonperforming Assets |
|
|
|
|
|
|
Nonaccrual Non-PCI loans and leases |
|
$ |
139,334 |
|
$ |
83,621 |
|
|
Nonaccrual PCI Loans (1) |
|
23,331 |
|
25,264 |
|
|
Total nonaccrual loans and leases |
|
162,665 |
|
108,885 |
|
|
Foreclosed assets, net |
|
35,940 |
|
43,721 |
|
|
Total nonperforming assets |
|
$ |
198,605 |
|
$ |
152,606 |
|
|
|
|
|
|
|
|
|
Nonperforming assets to loans and leases and foreclosed assets |
|
1.61 |
% |
1.28 |
% |
(1) Represents legacy CapitalSource borrowing relationships placed on nonaccrual status as of the acquisition date.
14
SQUARE 1 FINANCIAL, INC. MERGER ANNOUNCEMENT
On March 2, 2015, PacWest announced the signing of a definitive agreement and plan of merger (the “Agreement”) whereby PacWest and Square 1 Financial, Inc. (“Square 1”) will merge in a transaction valued at approximately $849 million. The combined company will be called PacWest Bancorp and the combined subsidiary bank will be called Pacific Western Bank. The Square 1 lending operations will continue to do business under the name Square 1 as a division of Pacific Western Bank.
Under the terms of the Agreement, Square 1 stockholders will receive 0.5997 shares of PacWest common stock for each share of Square 1 common stock and holders of stock options, restricted stock units, and warrants will receive cash based on the approximate value of the merger consideration. The total value of the per share merger consideration was $27.49, based on the closing price of PacWest common stock on February 27, 2015, the last trading day before the transaction was announced, of $45.84.
As of December 31, 2014, on a pro forma consolidated basis, the combined company would have had approximately $19.8 billion in assets with 80 branches throughout California and one in North Carolina. The combined institution would be the 6th largest publicly-owned bank headquartered in California.
The transaction, currently expected to close in the fourth quarter of 2015, is subject to customary conditions, including the approval of bank regulatory authorities and the Square 1 stockholders.
ABOUT PACWEST BANCORP
PacWest Bancorp is a bank holding company with over $16 billion in assets with one wholly-owned banking subsidiary, Pacific Western Bank (“Pacific Western”). Through 80 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. Pacific Western and its CapitalSource Division 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.
15
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 expectations regarding our pending merger between the Company and Square 1, profitability, deposit growth, and effective tax rates. 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:
· the Company’s ability to complete future acquisitions, including the Square 1 merger, and to successfully integrate such acquired entities or achieve expected benefits, synergies and/or operating efficiencies within expected time frames or at all;
· the Company’s ability to obtain regulatory approvals and meet other closing conditions to the Square 1 merger on the expected terms and schedule;
· delay in closing the Square 1 merger;
· business disruption following the proposed Square 1 merger;
· changes in the Company’s stock price before completion of the Square 1 merger, including as a result of the financial performance of the Company or Square 1 prior to closing;
· the reaction to the Square 1 merger of the companies’ customers, employees and counterparties;
· 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 and lease 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;
· 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;
· 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;
· changes in tax laws or regulations affecting our business;
· our inability to generate sufficient earnings;
· tax planning or disallowance of tax benefits by tax authorities;
· changes in tax filing jurisdictions or entity classifications; and
· other risk factors described in documents filed by PacWest with the U.S. Securities and Exchange Commission (“SEC”).
16
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.
ADDITIONAL INFORMATION ABOUT THE PROPOSED TRANSACTION AND WHERE TO FIND IT
Investors and security holders are urged to carefully review and consider each of PacWest Bancorp’s and Square 1’s public filings with the SEC, including but not limited to their Annual Reports on Form 10-K, their proxy statements, their Current Reports on Form 8-K and their Quarterly Reports on Form 10-Q. The documents filed by PacWest with the SEC may be obtained free of charge at PacWest’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 requesting them in writing to PacWest Bancorp, c/o Pacific Western Bank, 130 S. State College Blvd., Brea, CA 92821, Attention: Investor Relations, telephone (714) 671-6800, or via e-mail to investor-relations@pacwestbancorp.com.
The documents filed by Square 1 with the SEC may be obtained free of charge at Square 1’s website at www.square1bank.com or at the SEC’s website at www.sec.gov. These documents may also be obtained free of charge from Square 1 by requesting them in writing to Square 1 Financial, c/o Square 1 Bank, 406 Blackwell Street, Suite 240, Durham, NC 27701; Attention: Investor Relations, or by telephone at Phone: (866) 355-0468.
PacWest intends to file a registration statement with the SEC which will include a proxy statement of Square 1 and a prospectus of PacWest, and each party will file other documents regarding the proposed transaction with the SEC. Before making any voting or investment decision, investors and security holders of Square 1 are urged to carefully read the entire registration statement and proxy statement/prospectus, when they become available, as well as any amendments or supplements to these documents, because they will contain important information about the proposed transaction. A definitive proxy statement/prospectus will be sent to the stockholders of Square 1 seeking any required stockholder approvals. Investors and security holders will be able to obtain the registration statement and the proxy statement/prospectus free of charge from the SEC’s website or from PacWest or Square 1 by writing to the addresses provided for each company set forth in the paragraphs above.
PacWest, Square 1, their directors, executive officers and certain other persons may be deemed to be participants in the solicitation of proxies from Square 1 stockholders in favor of the approval of the transaction. Information about the directors and executive officers of PacWest and their ownership of PacWest common stock is set forth in the proxy statement for PacWest’s 2015 annual meeting of stockholders, as previously filed with the SEC. Information about the directors and executive officers of Square 1 and their ownership of Square 1 common stock is set forth in the proxy statement for Square 1’s 2014 annual meeting of stockholders, as previously filed with the SEC. Stockholders may obtain additional information regarding the interests of such participants by reading the registration statement and the proxy statement/prospectus when they become available.
17
PACWEST BANCORP AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
|
|
|
March 31, |
|
December 31, |
|
|
|
|
2015 |
|
2014 |
|
|
|
|
(Dollars in thousands, except per share data) |
|
|
ASSETS: |
|
|
|
|
|
|
Cash and due from banks |
|
$ |
140,873 |
|
$ |
164,757 |
|
|
Interest-earning deposits in financial institutions |
|
250,981 |
|
148,469 |
|
|
Total cash and cash equivalents |
|
391,854 |
|
313,226 |
|
|
|
|
|
|
|
|
|
Securities available-for-sale, at estimated fair value |
|
1,595,409 |
|
1,567,177 |
|
|
Federal Home Loan Bank stock, at cost |
|
28,905 |
|
40,609 |
|
|
Total investment securities |
|
1,624,314 |
|
1,607,786 |
|
|
|
|
|
|
|
|
|
Non-PCI loans and leases |
|
12,047,946 |
|
11,613,832 |
|
|
PCI loans |
|
254,346 |
|
290,852 |
|
|
Total gross loans and leases |
|
12,302,292 |
|
11,904,684 |
|
|
Deferred fees and costs |
|
(30,126 |
) |
(22,252 |
) |
|
Total loans and leases, net of deferred fees |
|
12,272,166 |
|
11,882,432 |
|
|
Allowance for loan and lease losses |
|
(92,378 |
) |
(84,455 |
) |
|
Total loans and leases, net |
|
12,179,788 |
|
11,797,977 |
|
|
|
|
|
|
|
|
|
Equipment leased to others under operating leases |
|
119,959 |
|
122,506 |
|
|
Premises and equipment, net |
|
36,022 |
|
36,551 |
|
|
Foreclosed assets, net |
|
35,940 |
|
43,721 |
|
|
Deferred tax asset, net |
|
236,065 |
|
284,411 |
|
|
Goodwill |
|
1,728,380 |
|
1,720,479 |
|
|
Core deposit and customer relationship intangibles, net |
|
15,703 |
|
17,204 |
|
|
Other assets |
|
275,915 |
|
290,939 |
|
|
Total assets |
|
$ |
16,643,940 |
|
$ |
16,234,800 |
|
|
|
|
|
|
|
|
|
LIABILITIES: |
|
|
|
|
|
|
Noninterest-bearing deposits |
|
$ |
3,029,463 |
|
$ |
2,931,352 |
|
|
Interest-bearing deposits |
|
8,904,712 |
|
8,823,776 |
|
|
Total deposits |
|
11,934,175 |
|
11,755,128 |
|
|
Borrowings |
|
618,156 |
|
383,402 |
|
|
Subordinated debentures |
|
431,448 |
|
433,583 |
|
|
Accrued interest payable and other liabilities |
|
126,800 |
|
156,262 |
|
|
Total liabilities |
|
13,110,579 |
|
12,728,375 |
|
|
STOCKHOLDERS’ EQUITY (1) |
|
3,533,361 |
|
3,506,425 |
|
|
Total liabilities and stockholders’ equity |
|
$ |
16,643,940 |
|
$ |
16,234,800 |
|
|
(1) Includes net unrealized gain on securities available-for-sale, net |
|
$ |
28,744 |
|
$ |
26,380 |
|
|
|
|
|
|
|
|
|
Book value per share |
|
$ |
34.29 |
|
$ |
34.04 |
|
|
Tangible book value per share |
|
$ |
17.36 |
|
$ |
17.17 |
|
|
|
|
|
|
|
|
|
Shares outstanding (includes unvested restricted shares of 1,129,445 at March 31, 2015 and 1,108,505 at December 31, 2014) |
|
103,044,257 |
|
103,022,017 |
|
18
PACWEST BANCORP AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF EARNINGS
|
|
|
Three Months Ended |
|
|
|
|
March 31, |
|
December 31, |
|
March 31, |
|
|
|
|
2015 |
|
2014 |
|
2014 |
|
|
|
|
(Dollars in thousands, except per share data) |
|
|
Interest income: |
|
|
|
|
|
|
|
|
Loans and leases |
|
$ |
202,097 |
|
$ |
197,472 |
|
$ |
77,463 |
|
|
Investment securities |
|
12,195 |
|
12,205 |
|
10,823 |
|
|
Deposits in financial institutions |
|
22 |
|
19 |
|
74 |
|
|
Total interest income |
|
214,314 |
|
209,696 |
|
88,360 |
|
|
|
|
|
|
|
|
|
|
|
Interest expense: |
|
|
|
|
|
|
|
|
Deposits |
|
10,479 |
|
9,972 |
|
1,225 |
|
|
Borrowings |
|
235 |
|
144 |
|
79 |
|
|
Subordinated debentures |
|
4,525 |
|
4,597 |
|
1,041 |
|
|
Total interest expense |
|
15,239 |
|
14,713 |
|
2,345 |
|
|
|
|
|
|
|
|
|
|
|
Net interest income |
|
199,075 |
|
194,983 |
|
86,015 |
|
|
Provision (negative provision) for credit losses |
|
16,434 |
|
2,063 |
|
(644 |
) |
|
Net interest income after provision for credit losses |
|
182,641 |
|
192,920 |
|
86,659 |
|
|
|
|
|
|
|
|
|
|
|
Noninterest income: |
|
|
|
|
|
|
|
|
Service charges on deposit accounts |
|
2,574 |
|
2,787 |
|
3,002 |
|
|
Other commissions and fees |
|
5,396 |
|
4,556 |
|
1,932 |
|
|
Leased equipment income |
|
5,382 |
|
5,382 |
|
— |
|
|
Gain on sale of loans and leases |
|
— |
|
7 |
|
106 |
|
|
Gain on securities |
|
3,275 |
|
— |
|
4,752 |
|
|
FDIC loss sharing expense, net |
|
(4,399 |
) |
(4,360 |
) |
(11,430 |
) |
|
Other income |
|
8,643 |
|
4,331 |
|
6,329 |
|
|
Total noninterest income |
|
20,871 |
|
12,703 |
|
4,691 |
|
|
|
|
|
|
|
|
|
|
|
Noninterest expense: |
|
|
|
|
|
|
|
|
Compensation |
|
47,737 |
|
45,930 |
|
28,627 |
|
|
Occupancy |
|
10,600 |
|
10,745 |
|
7,595 |
|
|
Data processing |
|
4,308 |
|
4,050 |
|
2,540 |
|
|
Other professional services |
|
3,221 |
|
3,181 |
|
1,523 |
|
|
Insurance and assessments |
|
3,025 |
|
3,115 |
|
1,593 |
|
|
Intangible asset amortization |
|
1,501 |
|
1,619 |
|
1,364 |
|
|
Leased equipment depreciation |
|
3,103 |
|
3,103 |
|
— |
|
|
Foreclosed assets expense (income), net |
|
336 |
|
1,938 |
|
(1,861 |
) |
|
Acquisition, integration and reorganization costs |
|
2,000 |
|
7,381 |
|
2,200 |
|
|
Other expense |
|
8,529 |
|
10,243 |
|
6,583 |
|
|
Total noninterest expense |
|
84,360 |
|
91,305 |
|
50,164 |
|
|
|
|
|
|
|
|
|
|
|
Earnings from continuing operations before taxes |
|
119,152 |
|
114,318 |
|
41,186 |
|
|
Income tax expense |
|
(46,073 |
) |
(43,261 |
) |
(15,281 |
) |
|
Net earnings from continuing operations |
|
73,079 |
|
71,057 |
|
25,905 |
|
|
|
|
|
|
|
|
|
|
|
Loss from discontinued operations before taxes |
|
— |
|
(105 |
) |
(1,413 |
) |
|
Income tax benefit |
|
— |
|
47 |
|
588 |
|
|
Net loss from discontinued operations |
|
— |
|
(58 |
) |
(825 |
) |
|
|
|
|
|
|
|
|
|
|
Net earnings |
|
$ |
73,079 |
|
$ |
70,999 |
|
$ |
25,080 |
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted earnings per share |
|
$ |
0.71 |
|
$ |
0.69 |
|
$ |
0.55 |
|
19
PACWEST BANCORP AND SUBSIDIARIES
AVERAGE BALANCE SHEET AND YIELD ANALYSIS
|
|
|
Three Months Ended |
|
|
|
|
March 31, 2015 |
|
December 31, 2014 |
|
March 31, 2014 |
|
|
|
|
|
|
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 |
|
$ |
260,648 |
|
$ |
10,165 |
|
15.82 |
% |
$ |
311,061 |
|
$ |
11,247 |
|
14.34 |
% |
$ |
339,329 |
|
$ |
18,264 |
|
21.83 |
% |
|
Non-PCI loans and leases |
|
11,795,034 |
|
191,932 |
|
6.60 |
% |
11,275,512 |
|
186,225 |
|
6.55 |
% |
3,891,990 |
|
59,199 |
|
6.17 |
% |
|
Total loans and leases |
|
12,055,682 |
|
202,097 |
|
6.80 |
% |
11,586,573 |
|
197,472 |
|
6.76 |
% |
4,231,319 |
|
77,463 |
|
7.42 |
% |
|
Investment securities (1) |
|
1,613,422 |
|
12,195 |
|
3.07 |
% |
1,591,839 |
|
12,205 |
|
3.04 |
% |
1,512,694 |
|
10,823 |
|
2.90 |
% |
|
Deposits in financial institutions |
|
32,761 |
|
22 |
|
0.27 |
% |
26,971 |
|
19 |
|
0.28 |
% |
118,682 |
|
74 |
|
0.25 |
% |
|
Total interest-earning assets |
|
13,701,865 |
|
214,314 |
|
6.34 |
% |
13,205,383 |
|
209,696 |
|
6.30 |
% |
5,862,695 |
|
88,360 |
|
6.11 |
% |
|
Other assets |
|
2,594,775 |
|
|
|
|
|
2,687,378 |
|
|
|
|
|
650,681 |
|
|
|
|
|
|
Total assets |
|
$ |
16,296,640 |
|
|
|
|
|
$ |
15,892,761 |
|
|
|
|
|
$ |
6,513,376 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Stockholders’ Equity: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest checking |
|
$ |
726,748 |
|
194 |
|
0.11 |
% |
$ |
702,498 |
|
194 |
|
0.11 |
% |
$ |
627,493 |
|
78 |
|
0.05 |
% |
|
Money market |
|
1,836,094 |
|
945 |
|
0.21 |
% |
1,788,341 |
|
932 |
|
0.21 |
% |
1,451,964 |
|
618 |
|
0.17 |
% |
|
Savings |
|
756,578 |
|
571 |
|
0.31 |
% |
761,073 |
|
572 |
|
0.30 |
% |
223,074 |
|
14 |
|
0.03 |
% |
|
Time |
|
5,481,886 |
|
8,769 |
|
0.65 |
% |
5,427,687 |
|
8,274 |
|
0.60 |
% |
666,463 |
|
515 |
|
0.31 |
% |
|
Total interest-bearing deposits |
|
8,801,306 |
|
10,479 |
|
0.48 |
% |
8,679,599 |
|
9,972 |
|
0.46 |
% |
2,968,994 |
|
1,225 |
|
0.17 |
% |
|
Borrowings |
|
424,061 |
|
235 |
|
0.22 |
% |
214,053 |
|
144 |
|
0.27 |
% |
18,176 |
|
79 |
|
1.76 |
% |
|
Subordinated debentures |
|
432,603 |
|
4,525 |
|
4.24 |
% |
433,859 |
|
4,597 |
|
4.20 |
% |
132,696 |
|
1,041 |
|
3.18 |
% |
|
Total interest-bearing liabilities |
|
9,657,970 |
|
15,239 |
|
0.64 |
% |
9,327,511 |
|
14,713 |
|
0.63 |
% |
3,119,866 |
|
2,345 |
|
0.30 |
% |
|
Noninterest-bearing demand deposits |
|
2,949,719 |
|
|
|
|
|
2,900,388 |
|
|
|
|
|
2,374,325 |
|
|
|
|
|
|
Other liabilities |
|
155,608 |
|
|
|
|
|
164,571 |
|
|
|
|
|
198,937 |
|
|
|
|
|
|
Total liabilities |
|
12,763,297 |
|
|
|
|
|
12,392,470 |
|
|
|
|
|
5,693,128 |
|
|
|
|
|
|
Stockholders’ equity |
|
3,533,343 |
|
|
|
|
|
3,500,291 |
|
|
|
|
|
820,248 |
|
|
|
|
|
|
Total liabilities and stockholders’ equity |
|
$ |
16,296,640 |
|
|
|
|
|
$ |
15,892,761 |
|
|
|
|
|
$ |
6,513,376 |
|
|
|
|
|
|
Net interest income |
|
|
|
$ |
199,075 |
|
|
|
|
|
$ |
194,983 |
|
|
|
|
|
$ |
86,015 |
|
|
|
|
Net interest spread |
|
|
|
|
|
5.70 |
% |
|
|
|
|
5.67 |
% |
|
|
|
|
5.81 |
% |
|
Net interest margin |
|
|
|
|
|
5.89 |
% |
|
|
|
|
5.86 |
% |
|
|
|
|
5.95 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total deposits (2) |
|
$ |
11,751,025 |
|
$ |
10,479 |
|
0.36 |
% |
$ |
11,579,987 |
|
$ |
9,972 |
|
0.34 |
% |
$ |
5,343,319 |
|
$ |
1,225 |
|
0.09 |
% |
|
Funding sources (3) |
|
$ |
12,607,689 |
|
$ |
15,239 |
|
0.49 |
% |
$ |
12,227,899 |
|
$ |
14,713 |
|
0.48 |
% |
$ |
5,494,191 |
|
$ |
2,345 |
|
0.17 |
% |
(1) The tax equivalent yield on investment securities was 3.52%, 3.45%, and 3.35% for the three months ended March 31, 2015, December 31, 2014, and March 31, 2014.
(2) Total deposits is the sum of interest-bearing deposits and noninterest-bearing demand deposits. The cost of total deposits is calculated as annualized interest expense on deposits divided by average total deposits.
(3) Funding sources is the sum of interest-bearing liabilities and noninterest-bearing demand deposits. The cost of funding sources is calculated as annualized total interest expense divided by average funding sources.
20
PACWEST BANCORP AND SUBSIDIARIES
FIVE QUARTER BALANCE SHEET
|
|
|
March 31, |
|
December 31, |
|
September 30, |
|
June 30, |
|
March 31, |
|
|
|
|
2015 |
|
2014 |
|
2014 |
|
2014 |
|
2014 |
|
|
|
|
(Dollars in thousands, except per share data) |
|
|
ASSETS: |
|
|
|
|
|
|
|
|
|
|
|
|
Cash and due from banks |
|
$ |
140,873 |
|
$ |
164,757 |
|
$ |
145,463 |
|
$ |
243,583 |
|
$ |
113,508 |
|
|
Interest-earning deposits in financial institutions |
|
250,981 |
|
148,469 |
|
115,399 |
|
119,782 |
|
228,579 |
|
|
Total cash and cash equivalents |
|
391,854 |
|
313,226 |
|
260,862 |
|
363,365 |
|
342,087 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Securities available-for-sale |
|
1,595,409 |
|
1,567,177 |
|
1,539,681 |
|
1,552,115 |
|
1,477,473 |
|
|
Federal Home Loan Bank stock, at cost |
|
28,905 |
|
40,609 |
|
45,602 |
|
49,983 |
|
25,000 |
|
|
Total investment securities |
|
1,624,314 |
|
1,607,786 |
|
1,585,283 |
|
1,602,098 |
|
1,502,473 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-PCI loans and leases |
|
12,047,946 |
|
11,613,832 |
|
11,239,964 |
|
10,802,053 |
|
3,828,569 |
|
|
PCI loans |
|
254,346 |
|
290,852 |
|
351,431 |
|
398,471 |
|
332,516 |
|
|
Total gross loans and leases |
|
12,302,292 |
|
11,904,684 |
|
11,591,395 |
|
11,200,524 |
|
4,161,085 |
|
|
Deferred fees and costs |
|
(30,126 |
) |
(22,252 |
) |
(16,510 |
) |
(10,419 |
) |
(18 |
) |
|
Total loans and leases, net of deferred fees |
|
12,272,166 |
|
11,882,432 |
|
11,574,885 |
|
11,190,105 |
|
4,161,067 |
|
|
Allowance for loan and lease losses |
|
(92,378 |
) |
(84,455 |
) |
(81,899 |
) |
(82,149 |
) |
(81,180 |
) |
|
Total loans and leases, net |
|
12,179,788 |
|
11,797,977 |
|
11,492,986 |
|
11,107,956 |
|
4,079,887 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equipment leased to others under operating leases |
|
119,959 |
|
122,506 |
|
125,119 |
|
127,289 |
|
— |
|
|
Premises and equipment, net |
|
36,022 |
|
36,551 |
|
38,368 |
|
40,440 |
|
29,908 |
|
|
Foreclosed assets, net |
|
35,940 |
|
43,721 |
|
40,524 |
|
53,821 |
|
50,895 |
|
|
Deferred tax asset, net |
|
236,065 |
|
284,411 |
|
331,176 |
|
342,105 |
|
72,683 |
|
|
Goodwill |
|
1,728,380 |
|
1,720,479 |
|
1,722,129 |
|
1,725,153 |
|
208,743 |
|
|
Core deposit and customer relationship intangibles, net |
|
15,703 |
|
17,204 |
|
18,822 |
|
20,431 |
|
15,884 |
|
|
Other assets |
|
275,915 |
|
290,939 |
|
323,076 |
|
302,208 |
|
215,293 |
|
|
Total assets |
|
$ |
16,643,940 |
|
$ |
16,234,800 |
|
$ |
15,938,345 |
|
$ |
15,684,866 |
|
$ |
6,517,853 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES: |
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest-bearing deposits |
|
$ |
3,029,463 |
|
$ |
2,931,352 |
|
$ |
2,842,488 |
|
$ |
2,701,434 |
|
$ |
2,391,609 |
|
|
Interest-bearing deposits |
|
8,904,712 |
|
8,823,776 |
|
8,680,949 |
|
8,966,363 |
|
2,977,799 |
|
|
Total deposits |
|
11,934,175 |
|
11,755,128 |
|
11,523,437 |
|
11,667,797 |
|
5,369,408 |
|
|
Borrowings |
|
618,156 |
|
383,402 |
|
363,672 |
|
4,596 |
|
5,748 |
|
|
Subordinated debentures |
|
431,448 |
|
433,583 |
|
433,545 |
|
434,878 |
|
132,790 |
|
|
Accrued interest payable and other liabilities |
|
126,800 |
|
156,262 |
|
139,445 |
|
139,663 |
|
176,205 |
|
|
Total liabilities |
|
13,110,579 |
|
12,728,375 |
|
12,460,099 |
|
12,246,934 |
|
5,684,151 |
|
|
STOCKHOLDERS’ EQUITY (1) |
|
3,533,361 |
|
3,506,425 |
|
3,478,246 |
|
3,437,932 |
|
833,702 |
|
|
Total liabilities and stockholders’ equity |
|
$ |
16,643,940 |
|
$ |
16,234,800 |
|
$ |
15,938,345 |
|
$ |
15,684,866 |
|
$ |
6,517,853 |
|
|
(1) Includes net unrealized gain on securities available-for-sale, net |
|
$ |
28,744 |
|
$ |
26,380 |
|
$ |
20,821 |
|
$ |
20,121 |
|
$ |
6,825 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Book value per share |
|
$ |
34.29 |
|
$ |
34.04 |
|
$ |
33.76 |
|
$ |
33.37 |
|
$ |
18.21 |
|
|
Tangible book value per share |
|
$ |
17.36 |
|
$ |
17.17 |
|
$ |
16.86 |
|
$ |
16.43 |
|
$ |
13.31 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares outstanding (includes unvested restricted shares) |
|
103,044,257 |
|
103,022,017 |
|
103,027,830 |
|
103,033,449 |
|
45,777,580 |
|
21
PACWEST BANCORP AND SUBSIDIARIES
FIVE QUARTER STATEMENT OF EARNINGS
|
|
|
Three Months Ended |
|
|
|
|
March 31, |
|
December 31, |
|
September 30, |
|
June 30, |
|
March 31, |
|
|
|
|
2015 |
|
2014 |
|
2014 |
|
2014 |
|
2014 |
|
|
|
|
(Dollars in thousands, except per share data) |
|
|
Interest income: |
|
|
|
|
|
|
|
|
|
|
|
|
Loans and leases |
|
$ |
202,097 |
|
$ |
197,472 |
|
$ |
189,961 |
|
$ |
192,201 |
|
$ |
77,463 |
|
|
Investment securities |
|
12,195 |
|
12,205 |
|
12,331 |
|
11,986 |
|
10,823 |
|
|
Deposits in financial institutions |
|
22 |
|
19 |
|
64 |
|
176 |
|
74 |
|
|
Total interest income |
|
214,314 |
|
209,696 |
|
202,356 |
|
204,363 |
|
88,360 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense: |
|
|
|
|
|
|
|
|
|
|
|
|
Deposits |
|
10,479 |
|
9,972 |
|
8,822 |
|
7,313 |
|
1,225 |
|
|
Borrowings |
|
235 |
|
144 |
|
74 |
|
199 |
|
79 |
|
|
Subordinated debentures |
|
4,525 |
|
4,597 |
|
4,614 |
|
4,318 |
|
1,041 |
|
|
Total interest expense |
|
15,239 |
|
14,713 |
|
13,510 |
|
11,830 |
|
2,345 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income |
|
199,075 |
|
194,983 |
|
188,846 |
|
192,533 |
|
86,015 |
|
|
Provision (negative provision) for credit losses |
|
16,434 |
|
2,063 |
|
5,050 |
|
5,030 |
|
(644 |
) |
|
Net interest income after provision for credit losses |
|
182,641 |
|
192,920 |
|
183,796 |
|
187,503 |
|
86,659 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest income: |
|
|
|
|
|
|
|
|
|
|
|
|
Service charges on deposit accounts |
|
2,574 |
|
2,787 |
|
2,725 |
|
2,719 |
|
3,002 |
|
|
Other commissions and fees |
|
5,396 |
|
4,556 |
|
6,371 |
|
5,743 |
|
1,932 |
|
|
Leased equipment income |
|
5,382 |
|
5,382 |
|
5,615 |
|
5,672 |
|
— |
|
|
Gain (loss) on sale of loans and leases |
|
— |
|
7 |
|
973 |
|
(485 |
) |
106 |
|
|
Gain on securities |
|
3,275 |
|
— |
|
— |
|
89 |
|
4,752 |
|
|
FDIC loss sharing expense, net |
|
(4,399 |
) |
(4,360 |
) |
(7,415 |
) |
(8,525 |
) |
(11,430 |
) |
|
Other income |
|
8,643 |
|
4,331 |
|
8,045 |
|
3,266 |
|
6,329 |
|
|
Total noninterest income |
|
20,871 |
|
12,703 |
|
16,314 |
|
8,479 |
|
4,691 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest expense: |
|
|
|
|
|
|
|
|
|
|
|
|
Compensation |
|
47,737 |
|
45,930 |
|
45,861 |
|
45,081 |
|
28,627 |
|
|
Occupancy |
|
10,600 |
|
10,745 |
|
11,188 |
|
11,078 |
|
7,595 |
|
|
Data processing |
|
4,308 |
|
4,050 |
|
3,929 |
|
4,099 |
|
2,540 |
|
|
Other professional services |
|
3,221 |
|
3,181 |
|
3,687 |
|
2,843 |
|
1,523 |
|
|
Insurance and assessments |
|
3,025 |
|
3,115 |
|
3,020 |
|
3,179 |
|
1,593 |
|
|
Intangible asset amortization |
|
1,501 |
|
1,619 |
|
1,608 |
|
1,677 |
|
1,364 |
|
|
Leased equipment depreciation |
|
3,103 |
|
3,103 |
|
2,961 |
|
3,095 |
|
— |
|
|
Foreclosed assets expense (income), net |
|
336 |
|
1,938 |
|
4,827 |
|
497 |
|
(1,861 |
) |
|
Acquisition, integration and reorganization costs |
|
2,000 |
|
7,381 |
|
5,193 |
|
86,242 |
|
2,200 |
|
|
Other expense |
|
8,529 |
|
10,243 |
|
12,649 |
|
11,409 |
|
6,583 |
|
|
Total noninterest expense |
|
84,360 |
|
91,305 |
|
94,923 |
|
169,200 |
|
50,164 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings from continuing operations before taxes |
|
119,152 |
|
114,318 |
|
105,187 |
|
26,782 |
|
41,186 |
|
|
Income tax expense |
|
(46,073 |
) |
(43,261 |
) |
(42,911 |
) |
(15,552 |
) |
(15,281 |
) |
|
Net earnings from continuing operations |
|
73,079 |
|
71,057 |
|
62,276 |
|
11,230 |
|
25,905 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from discontinued operations before taxes |
|
— |
|
(105 |
) |
(8 |
) |
(1,151 |
) |
(1,413 |
) |
|
Income tax benefit |
|
— |
|
47 |
|
3 |
|
476 |
|
588 |
|
|
Net loss from discontinued operations |
|
— |
|
(58 |
) |
(5 |
) |
(675 |
) |
(825 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings |
|
$ |
73,079 |
|
$ |
70,999 |
|
$ |
62,271 |
|
$ |
10,555 |
|
$ |
25,080 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted earnings per share |
|
$ |
0.71 |
|
$ |
0.69 |
|
$ |
0.60 |
|
$ |
0.10 |
|
$ |
0.55 |
|
22
PACWEST BANCORP AND SUBSIDIARIES
FIVE QUARTER SELECTED FINANCIAL DATA
|
|
|
At or For the Three Months Ended |
|
|
|
|
March 31, |
|
December 31, |
|
September 30, |
|
June 30, |
|
March 31, |
|
|
|
|
2015 |
|
2014 |
|
2014 |
|
2014 |
|
2014 |
|
|
|
|
(Dollars in thousands) |
|
|
Performance Ratios - GAAP: |
|
|
|
|
|
|
|
|
|
|
|
|
Annualized return on average assets |
|
1.82 |
% |
1.77 |
% |
1.57 |
% |
0.28 |
% |
1.56 |
% |
|
Annualized return on average equity |
|
8.39 |
% |
8.05 |
% |
7.13 |
% |
1.31 |
% |
12.40 |
% |
|
Yield on loans and leases |
|
6.80 |
% |
6.76 |
% |
6.68 |
% |
7.34 |
% |
7.42 |
% |
|
Yield on interest-earning assets |
|
6.34 |
% |
6.30 |
% |
6.19 |
% |
6.62 |
% |
6.11 |
% |
|
Cost of total deposits |
|
0.36 |
% |
0.34 |
% |
0.30 |
% |
0.26 |
% |
0.09 |
% |
|
Cost of time deposits |
|
0.65 |
% |
0.60 |
% |
0.51 |
% |
0.42 |
% |
0.31 |
% |
|
Cost of interest-bearing liabilities |
|
0.64 |
% |
0.63 |
% |
0.58 |
% |
0.52 |
% |
0.30 |
% |
|
Cost of funding sources |
|
0.49 |
% |
0.48 |
% |
0.44 |
% |
0.41 |
% |
0.17 |
% |
|
Net interest rate spread |
|
5.70 |
% |
5.67 |
% |
5.61 |
% |
6.10 |
% |
5.81 |
% |
|
Net interest margin |
|
5.89 |
% |
5.86 |
% |
5.78 |
% |
6.24 |
% |
5.95 |
% |
|
Annualized noninterest expense as a percentage of average assets |
|
2.10 |
% |
2.28 |
% |
2.40 |
% |
4.51 |
% |
3.12 |
% |
|
Efficiency ratio |
|
38.4 |
% |
44.0 |
% |
46.3 |
% |
84.2 |
% |
55.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Performance Ratios - Non-GAAP: |
|
|
|
|
|
|
|
|
|
|
|
|
Annualized adjusted return on average assets |
|
1.57 |
% |
1.70 |
% |
1.71 |
% |
1.69 |
% |
1.39 |
% |
|
Annualized adjusted return on average equity |
|
7.22 |
% |
7.71 |
% |
7.75 |
% |
7.84 |
% |
11.05 |
% |
|
Annualized return on average tangible equity |
|
16.50 |
% |
16.00 |
% |
14.36 |
% |
2.65 |
% |
17.10 |
% |
|
Annualized adjusted return on average tangible equity |
|
14.21 |
% |
15.33 |
% |
15.60 |
% |
15.89 |
% |
15.24 |
% |
|
Core net interest margin |
|
5.38 |
% |
5.52 |
% |
5.64 |
% |
5.74 |
% |
5.42 |
% |
|
Adjusted efficiency ratio |
|
40.4 |
% |
41.7 |
% |
43.1 |
% |
42.7 |
% |
56.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average Balances: |
|
|
|
|
|
|
|
|
|
|
|
|
Average loans and leases |
|
$ |
12,055,682 |
|
$ |
11,586,573 |
|
$ |
11,285,689 |
|
$ |
10,500,521 |
|
$ |
4,231,319 |
|
|
Average interest-earning assets |
|
13,701,865 |
|
13,205,383 |
|
12,969,776 |
|
12,383,464 |
|
5,862,695 |
|
|
Average total assets |
|
16,296,640 |
|
15,892,761 |
|
15,716,539 |
|
15,037,101 |
|
6,513,376 |
|
|
Average noninterest-bearing deposits |
|
2,949,719 |
|
2,900,388 |
|
2,778,260 |
|
2,546,540 |
|
2,374,325 |
|
|
Average interest-bearing deposits |
|
8,801,306 |
|
8,679,599 |
|
8,778,642 |
|
8,629,482 |
|
2,968,994 |
|
|
Average total deposits |
|
11,751,025 |
|
11,579,987 |
|
11,556,902 |
|
11,176,022 |
|
5,343,319 |
|
|
Average borrowings and subordinated debentures |
|
856,664 |
|
647,912 |
|
531,336 |
|
449,865 |
|
150,872 |
|
|
Average interest-bearing liabilities |
|
9,657,970 |
|
9,327,511 |
|
9,309,978 |
|
9,079,347 |
|
3,119,866 |
|
|
Average funding sources |
|
12,607,689 |
|
12,227,899 |
|
12,088,238 |
|
11,625,887 |
|
5,494,191 |
|
|
Average stockholders’ equity |
|
3,533,343 |
|
3,500,291 |
|
3,465,119 |
|
3,233,018 |
|
820,248 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
23
PACWEST BANCORP AND SUBSIDIARIES
FIVE QUARTER SELECTED FINANCIAL DATA
|
|
|
At or For the Three Months Ended |
|
|
|
|
March 31, |
|
December 31, |
|
September 30, |
|
June 30, |
|
March 31, |
|
|
|
|
2015 |
|
2014 |
|
2014 |
|
2014 |
|
2014 |
|
|
|
|
(Dollars in thousands) |
|
|
Non-PCI Credit Quality: |
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for credit losses to loans and leases |
|
0.72 |
% |
0.66 |
% |
0.61 |
% |
0.67 |
% |
1.75 |
% |
|
Allowance for credit losses to nonaccrual loans and leases |
|
62 |
% |
92 |
% |
78 |
% |
75 |
% |
115 |
% |
|
Nonaccrual loans and leases to loans and leases |
|
1.16 |
% |
0.72 |
% |
0.79 |
% |
0.90 |
% |
1.52 |
% |
|
Nonperforming assets to loans and leases and foreclosed assets |
|
1.45 |
% |
1.09 |
% |
1.15 |
% |
1.39 |
% |
2.81 |
% |
|
Nonperforming assets to total assets |
|
1.05 |
% |
0.78 |
% |
0.81 |
% |
0.96 |
% |
1.67 |
% |
|
Trailing twelve month net charge-offs to average loans and leases |
|
0.07 |
% |
0.02 |
% |
0.09 |
% |
0.05 |
% |
0.13 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PacWest Bancorp Consolidated Capital Ratios: |
|
|
|
|
|
|
|
|
|
|
|
|
Tier 1 leverage capital ratio |
|
11.74 |
% |
12.34 |
% |
12.17 |
% |
12.40 |
% |
11.73 |
% |
|
Common equity tier 1 capital ratio |
|
12.35 |
% |
N/A |
|
N/A |
|
N/A |
|
N/A |
|
|
Tier 1 risk-based capital ratio |
|
12.35 |
% |
13.16 |
% |
13.24 |
% |
13.15 |
% |
16.16 |
% |
|
Total risk-based capital ratio |
|
15.90 |
% |
16.07 |
% |
16.24 |
% |
16.25 |
% |
17.42 |
% |
|
Tangible common equity ratio (non-GAAP measure) |
|
12.01 |
% |
12.20 |
% |
12.24 |
% |
12.14 |
% |
9.68 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pacific Western Bank Capital Ratios: |
|
|
|
|
|
|
|
|
|
|
|
|
Tier 1 leverage capital ratio |
|
11.53 |
% |
11.70 |
% |
11.74 |
% |
11.71 |
% |
10.88 |
% |
|
Common equity tier 1 capital ratio |
|
12.15 |
% |
N/A |
|
N/A |
|
N/A |
|
N/A |
|
|
Tier 1 risk-based capital ratio |
|
12.15 |
% |
12.46 |
% |
12.74 |
% |
12.58 |
% |
15.00 |
% |
|
Total risk-based capital ratio |
|
12.88 |
% |
13.16 |
% |
13.44 |
% |
13.32 |
% |
16.25 |
% |
|
Tangible common equity ratio (non-GAAP measure) |
|
11.32 |
% |
11.51 |
% |
11.60 |
% |
11.40 |
% |
10.92 |
% |
24
PACWEST BANCORP AND SUBSIDIARIES
NET EARNINGS PER SHARE CALCULATIONS
|
|
|
Three Months Ended |
|
|
|
|
March 31, |
|
December 31, |
|
March 31, |
|
|
|
|
2015 |
|
2014 |
|
2014 |
|
|
|
|
(Dollars in thousands, except per share data) |
|
|
Basic Earnings Per Share: |
|
|
|
|
|
|
|
|
Net earnings from continuing operations |
|
$ |
73,079 |
|
$ |
71,057 |
|
$ |
25,905 |
|
|
Less: earnings allocated to unvested restricted stock (1) |
|
(819 |
) |
(810 |
) |
(500 |
) |
|
Net earnings from continuing operations allocated to common shares |
|
72,260 |
|
70,247 |
|
25,405 |
|
|
Net earnings from discontinued operations allocated to common shares |
|
— |
|
(57 |
) |
(804 |
) |
|
Net earnings allocated to common shares |
|
$ |
72,260 |
|
$ |
70,190 |
|
$ |
24,601 |
|
|
|
|
|
|
|
|
|
|
|
Weighted-average basic shares and unvested restricted stock outstanding |
|
103,035 |
|
103,045 |
|
45,799 |
|
|
Less: weighted-average unvested restricted stock outstanding |
|
(1,122 |
) |
(1,132 |
) |
(1,148 |
) |
|
Weighted-average basic shares outstanding |
|
101,913 |
|
101,913 |
|
44,651 |
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per share: |
|
|
|
|
|
|
|
|
Net earnings from continuing operations |
|
$ |
0.71 |
|
$ |
0.69 |
|
$ |
0.57 |
|
|
Net earnings from discontinued operations |
|
— |
|
— |
|
(0.02 |
) |
|
Net earnings |
|
$ |
0.71 |
|
$ |
0.69 |
|
$ |
0.55 |
|
|
|
|
|
|
|
|
|
|
|
Diluted Earnings Per Share: |
|
|
|
|
|
|
|
|
Net earnings from continuing operations allocated to common shares |
|
$ |
72,260 |
|
$ |
70,247 |
|
$ |
25,405 |
|
|
Net earnings from discontinued operations allocated to common shares |
|
— |
|
(57 |
) |
(804 |
) |
|
Net earnings allocated to common shares |
|
$ |
72,260 |
|
$ |
70,190 |
|
$ |
24,601 |
|
|
|
|
|
|
|
|
|
|
|
Weighted-average basic shares outstanding |
|
101,913 |
|
101,913 |
|
44,651 |
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per share: |
|
|
|
|
|
|
|
|
Net earnings from continuing operations |
|
$ |
0.71 |
|
$ |
0.69 |
|
$ |
0.57 |
|
|
Net earnings from discontinued operations |
|
— |
|
— |
|
(0.02 |
) |
|
Net earnings |
|
$ |
0.71 |
|
$ |
0.69 |
|
$ |
0.55 |
|
(1) Represents cash dividends paid to holders of unvested stock, net of estimated forfeitures, plus undistributed earnings amounts available to holders of unvested restricted stock, if any.
25
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: To calculate adjusted net earnings, we exclude from net earnings primarily income statement items for which the related assets or liabilities have been completely resolved and are no longer on the balance sheet. As analysts and investors view this measure as an indicator of the Company’s ability to generate recurring earnings, 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.
26
PACWEST BANCORP AND SUBSIDIARIES
GAAP TO NON-GAAP RECONCILIATION
(Unaudited)
|
|
|
Three Months Ended |
|
|
|
|
March 31, |
|
December 31, |
|
March 31, |
|
|
|
|
2015 |
|
2014 |
|
2014 |
|
|
|
|
(Dollars in thousands) |
|
|
Adjusted Net Earnings and Related Ratios |
|
|
|
|
|
|
|
|
Reported net earnings |
|
$ |
73,079 |
|
$ |
70,999 |
|
$ |
25,080 |
|
|
Less: Tax benefit on discontinued operations |
|
— |
|
(47 |
) |
(588 |
) |
|
Add: Tax expense on continuing operations |
|
46,073 |
|
43,261 |
|
15,281 |
|
|
Reported pre-tax earnings |
|
119,152 |
|
114,213 |
|
39,773 |
|
|
Add: Acquisition, integration and reorganization costs |
|
2,000 |
|
7,381 |
|
2,200 |
|
|
Less: FDIC loss sharing expense, net |
|
(4,399 |
) |
(4,360 |
) |
(11,430 |
) |
|
Gain on sale of loans and leases |
|
— |
|
7 |
|
106 |
|
|
Gain on securities |
|
3,275 |
|
— |
|
4,752 |
|
|
Covered OREO (expense) income, net |
|
19 |
|
(176 |
) |
1,615 |
|
|
Gain on sale of owned office building |
|
— |
|
— |
|
1,570 |
|
|
Adjusted pre-tax earnings before accelerated discount accretion |
|
122,257 |
|
126,123 |
|
45,360 |
|
|
Less: Accelerated discount accretion from early payoffs of acquired loans |
|
17,352 |
|
11,421 |
|
7,655 |
|
|
Adjusted pre-tax earnings |
|
104,905 |
|
114,702 |
|
37,705 |
|
|
Tax expense (1) |
|
(41,962 |
) |
(46,684 |
) |
(15,346 |
) |
|
Adjusted net earnings (2) |
|
$ |
62,943 |
|
$ |
68,018 |
|
$ |
22,359 |
|
|
|
|
|
|
|
|
|
|
|
Average assets |
|
$ |
16,296,640 |
|
$ |
15,892,761 |
|
$ |
6,513,376 |
|
|
|
|
|
|
|
|
|
|
|
Average stockholders’ equity |
|
$ |
3,533,343 |
|
$ |
3,500,291 |
|
$ |
820,248 |
|
|
Less: Average intangible assets |
|
1,737,441 |
|
1,739,977 |
|
225,294 |
|
|
Average tangible common equity |
|
$ |
1,795,902 |
|
$ |
1,760,314 |
|
$ |
594,954 |
|
|
|
|
|
|
|
|
|
|
|
Annualized return on average assets (3) |
|
1.82 |
% |
1.77 |
% |
1.56 |
% |
|
Annualized adjusted return on average assets (4) |
|
1.57 |
% |
1.70 |
% |
1.39 |
% |
|
Annualized return on average equity (5) |
|
8.39 |
% |
8.05 |
% |
12.40 |
% |
|
Annualized adjusted return on average equity (6) |
|
7.22 |
% |
7.71 |
% |
11.05 |
% |
|
Annualized return on average tangible equity (7) |
|
16.50 |
% |
16.00 |
% |
17.10 |
% |
|
Annualized adjusted return on average tangible equity (8) |
|
14.21 |
% |
15.33 |
% |
15.24 |
% |
(1) Full-year expected effective rate of 40.0% used for 2015 period and actual effective rate of 40.7% used for 2014 periods.
(2) When the provision for credit losses is excluded, adjusted net earnings are $72.8 million and $69.2 million for the quarters ended March 31, 2015 and December 31, 2014, respectively.
(3) Annualized net earnings divided by average assets.
(4) Annualized adjusted net earnings divided by average assets.
(5) Annualized net earnings divided by average stockholders’ equity.
(6) Annualized adjusted net earnings divided by average stockholders’ equity.
(7) Annualized net earnings divided by average tangible common equity.
(8) Annualized adjusted net earnings divided by average tangible common equity.
27
PACWEST BANCORP AND SUBSIDIARIES
GAAP TO NON-GAAP RECONCILIATION
(Unaudited)
|
|
|
Three Months Ended |
|
|
|
|
March 31, |
|
December 31, |
|
March 31, |
|
|
|
|
2015 |
|
2014 |
|
2014 |
|
|
|
|
(Dollars in thousands) |
|
|
Adjusted Efficiency Ratio |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest expense |
|
$ |
84,360 |
|
$ |
91,305 |
|
$ |
50,164 |
|
|
Less: Acquisition, integration, and reorganization costs |
|
2,000 |
|
7,381 |
|
2,200 |
|
|
Covered OREO expense (income), net |
|
(19 |
) |
176 |
|
(1,615 |
) |
|
Adjusted noninterest expense |
|
$ |
82,379 |
|
$ |
83,748 |
|
$ |
49,579 |
|
|
|
|
|
|
|
|
|
|
|
Net interest income |
|
$ |
199,075 |
|
$ |
194,983 |
|
$ |
86,015 |
|
|
Noninterest income |
|
20,871 |
|
12,703 |
|
4,691 |
|
|
Net revenues |
|
219,946 |
|
207,686 |
|
90,706 |
|
|
Less: FDIC loss sharing expense, net |
|
(4,399 |
) |
(4,360 |
) |
(11,430 |
) |
|
Gain on sale of loans and leases |
|
— |
|
7 |
|
106 |
|
|
Gain on securities |
|
3,275 |
|
— |
|
4,752 |
|
|
Gain on sale of owned office building |
|
— |
|
— |
|
1,570 |
|
|
Accelerated discount accretion from early payoffs of acquired loans |
|
17,352 |
|
11,421 |
|
7,655 |
|
|
Adjusted net revenues |
|
$ |
203,718 |
|
$ |
200,618 |
|
$ |
88,053 |
|
|
|
|
|
|
|
|
|
|
|
Base efficiency ratio (1) |
|
38.4 |
% |
44.0 |
% |
55.3 |
% |
|
Adjusted efficiency ratio (2) |
|
40.4 |
% |
41.7 |
% |
56.3 |
% |
(1) Noninterest expense divided by net revenues.
(2) Adjusted noninterest expense divided by adjusted net revenues.
28
PACWEST BANCORP AND SUBSIDIARIES
GAAP TO NON-GAAP RECONCILIATION
(Unaudited)
|
|
|
March 31, |
|
December 31, |
|
September 30, |
|
June 30, |
|
March 31, |
|
|
|
|
2015 |
|
2014 |
|
2014 |
|
2014 |
|
2014 |
|
|
|
|
(Dollars in thousands) |
|
|
Tangible Common Equity Ratio |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PacWest Bancorp Consolidated: |
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders’ equity |
|
$ |
3,533,361 |
|
$ |
3,506,425 |
|
$ |
3,478,246 |
|
$ |
3,437,932 |
|
$ |
833,702 |
|
|
Less: Intangible assets |
|
1,744,083 |
|
1,737,683 |
|
1,740,951 |
|
1,745,584 |
|
224,627 |
|
|
Tangible common equity |
|
$ |
1,789,278 |
|
$ |
1,768,742 |
|
$ |
1,737,295 |
|
$ |
1,692,348 |
|
$ |
609,075 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets |
|
$ |
16,643,940 |
|
$ |
16,234,800 |
|
$ |
15,938,345 |
|
$ |
15,684,866 |
|
$ |
6,517,853 |
|
|
Less: Intangible assets |
|
1,744,083 |
|
1,737,683 |
|
1,740,951 |
|
1,745,584 |
|
224,627 |
|
|
Tangible assets |
|
$ |
14,899,857 |
|
$ |
14,497,117 |
|
$ |
14,197,394 |
|
$ |
13,939,282 |
|
$ |
6,293,226 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity to assets ratio |
|
21.23 |
% |
21.60 |
% |
21.82 |
% |
21.92 |
% |
12.79 |
% |
|
Tangible common equity ratio (1) |
|
12.01 |
% |
12.20 |
% |
12.24 |
% |
12.14 |
% |
9.68 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Book value per share |
|
$ |
34.29 |
|
$ |
34.04 |
|
$ |
33.76 |
|
$ |
33.37 |
|
$ |
18.21 |
|
|
Tangible book value per share (2) |
|
$ |
17.36 |
|
$ |
17.17 |
|
$ |
16.86 |
|
$ |
16.43 |
|
$ |
13.31 |
|
|
Shares outstanding |
|
103,044,257 |
|
103,022,017 |
|
103,027,830 |
|
103,033,449 |
|
45,777,580 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pacific Western Bank: |
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders’ equity |
|
$ |
3,410,276 |
|
$ |
3,379,074 |
|
$ |
3,357,138 |
|
$ |
3,298,908 |
|
$ |
910,644 |
|
|
Less: Intangible assets |
|
1,744,083 |
|
1,737,683 |
|
1,740,951 |
|
1,745,584 |
|
224,627 |
|
|
Tangible common equity |
|
$ |
1,666,193 |
|
$ |
1,641,391 |
|
$ |
1,616,187 |
|
$ |
1,553,324 |
|
$ |
686,017 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets |
|
$ |
16,458,591 |
|
$ |
15,995,914 |
|
$ |
15,675,486 |
|
$ |
15,376,440 |
|
$ |
6,507,288 |
|
|
Less: Intangible assets |
|
1,744,083 |
|
1,737,683 |
|
1,740,951 |
|
1,745,584 |
|
224,627 |
|
|
Tangible assets |
|
$ |
14,714,508 |
|
$ |
14,258,231 |
|
$ |
13,934,535 |
|
$ |
13,630,856 |
|
$ |
6,282,661 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity to assets ratio |
|
20.72 |
% |
21.12 |
% |
21.42 |
% |
21.45 |
% |
13.99 |
% |
|
Tangible common equity ratio |
|
11.32 |
% |
11.51 |
% |
11.60 |
% |
11.40 |
% |
10.92 |
% |
(1) Tangible common equity divided by tangible assets.
(2) Tangible common equity divided by shares outstanding.
29
PacWest Bancorp (NASDAQ:PACW)
Historical Stock Chart
Von Jun 2024 bis Jul 2024
PacWest Bancorp (NASDAQ:PACW)
Historical Stock Chart
Von Jul 2023 bis Jul 2024
