Fourth Quarter 2015
Highlights
- Square 1 Acquisition Closed October 6,
2015
- Net Earnings of $71.8 Million, or $0.60 Per Diluted
Share; Adjusted Net Earnings of $83.9 Million, or $0.70 Per Diluted
Share
- New Loan and Lease Production of $1.4 Billion for the
Quarter
- Core Deposits Increased $3.8 Billion for the Quarter
and Represented 67% of Total Deposits
- Core Tax Equivalent Net Interest Margin of
5.10%
Full Year 2015 Highlights
- Net Earnings of $299.6 Million, or $2.79 Per Diluted
Share; Adjusted Net Earnings of $287.4 Million, or $2.68 Per
Diluted Share
- New Loan and Lease Production of $4.2 Billion for the
Year; Organic Growth Rate of 9%
- Core Deposits Increased $4.4 Billion for the Year,
Including $3.8 Billion From the Square 1 Acquisition
- Core Tax Equivalent Net Interest Margin of 5.25%
LOS ANGELES, Jan. 21, 2016 (GLOBE NEWSWIRE) -- PacWest
Bancorp (Nasdaq:PACW) today announced net earnings for the
fourth quarter of 2015 of $71.8 million, or $0.60 per diluted
share, compared to net earnings for the third quarter of 2015 of
$69.6 million, or $0.68 per diluted share. Net earnings for
the full year 2015 were $299.6 million, or $2.79 per diluted share,
compared to net earnings of $168.9 million for the full year 2014,
or $1.92 per diluted share. The increase in annual net
earnings was due mostly to including the operations of
CapitalSource for all of 2015 compared to including its operations
in 2014 only from the April 7, 2014 merger date.
When certain income and expense items described below are
excluded, adjusted net earnings were $83.9 million, or $0.70 per
diluted share, for the fourth quarter of 2015 compared to $65.1
million, or $0.63 per diluted share, for the third quarter of
2015. Adjusted net earnings were $287.4 million, or $2.68 per
diluted share, for the full year 2015 compared to $219.7 million,
or $2.49 per diluted share, for the full year 2014.
Matt Wagner, President and CEO, commented, “Our strong fourth
quarter results capped a year of profitable growth and continued
solid operating performance. Our full year 2015 diluted EPS
increased 45%, driving our return on assets of 1.70% and return on
tangible equity of 15.76%. These exceptional operating results
allowed us to distribute more than $215 million of cash dividends
to our stockholders in 2015.”
Mr. Wagner continued, “Our entry into the venture capital
banking space as a result of the Square 1 acquisition combined with
the recent expansion of new commercial construction and
multi-family lending groups will help to diversify our loan
and lease portfolio along product and geographical lines and
contribute toward our targeted upper single-digit portfolio growth.
With our strong capital levels and overall sound asset quality
metrics we are well positioned for continued success. Our
achievements were recently recognized in Forbes magazine’s 2016
List of America’s Best Banks where PacWest was named the second
best performing of the 100 largest publicly-traded U.S. banks.”
Patrick Rusnak, Executive Vice President and CFO stated, “Our
fourth quarter tax equivalent net interest margin on a core basis
of 5.10% reflects proactive steps taken during the third and fourth
quarters in connection with the Square 1 acquisition. These
actions included a further reduction in time deposits and a
restructuring of the acquired investment securities
portfolio. Further, Square 1’s core deposits substantially
improved our core deposit base driving core deposits as a
percentage of total deposits up to 67%, nearly a 20%
increase. Our total organic loan and lease portfolio growth
for 2015, which excludes merger related and bulk acquisitions,
totaled over $800 million, or 7%, driven by growth in cash flow,
asset-based and construction lending.”
Mr. Rusnak continued, “Our total oil and gas related credit
exposure at year end was $137 million, or less than one percent of
total loans and leases, reflecting a reduction of 10% from
principal payments received during the fourth quarter. The reserves
related to this credit exposure total approximately 8%. We continue
to control operating expenses as shown by our efficiency ratio,
which declined to 39.3% in the fourth quarter. We are excited about
our prospects for 2016 and believe our talented teams will continue
to deliver strong results.”
FINANCIAL HIGHLIGHTS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At or For the Three Months Ended |
|
At or For the Year Ended |
|
|
December 31, |
|
September 30, |
|
|
|
December 31, |
|
|
|
|
|
2015 |
|
|
|
2015 |
|
|
Change |
|
|
2015 |
|
|
|
2014 |
|
|
Change |
|
|
(Dollars in thousands, except per share
data) |
|
Financial Highlights
(1): |
|
|
|
|
|
|
|
|
|
|
|
|
Net Earnings |
$ |
71,841 |
|
|
$ |
69,616 |
|
|
$ |
2,225 |
|
|
$ |
299,619 |
|
|
$ |
168,905 |
|
|
$ |
130,714 |
|
|
Diluted Earnings Per Share |
$ |
0.60 |
|
|
$ |
0.68 |
|
|
$ |
(0.08 |
) |
|
$ |
2.79 |
|
|
$ |
1.92 |
|
|
$ |
0.87 |
|
|
Return on Average Assets |
|
1.37 |
% |
|
|
1.65 |
% |
|
|
(0.28 |
) |
|
|
1.70 |
% |
|
|
1.27 |
% |
|
|
0.43 |
|
|
Return on Average |
|
|
|
|
|
|
|
|
|
|
|
|
Tangible Equity (2) |
|
13.14 |
% |
|
|
15.09 |
% |
|
|
(1.95 |
) |
|
|
15.76 |
% |
|
|
11.88 |
% |
|
|
3.88 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Net Earnings (2) |
$ |
83,927 |
|
|
$ |
65,063 |
|
|
$ |
18,864 |
|
|
$ |
287,422 |
|
|
$ |
219,701 |
|
|
$ |
67,721 |
|
|
Adjusted Diluted Earnings |
|
|
|
|
|
|
|
|
|
|
|
|
Per Share (2) |
$ |
0.70 |
|
|
$ |
0.63 |
|
|
$ |
0.07 |
|
|
$ |
2.68 |
|
|
$ |
2.49 |
|
|
$ |
0.19 |
|
|
Adjusted Return on Average |
|
|
|
|
|
|
|
|
|
|
|
|
Assets (2) |
|
1.60 |
% |
|
|
1.55 |
% |
|
|
0.05 |
|
|
|
1.64 |
% |
|
|
1.65 |
% |
|
|
(0.01 |
) |
|
Adjusted Return on Average |
|
|
|
|
|
|
|
|
|
|
|
|
Tangible Equity (2) |
|
15.35 |
% |
|
|
14.10 |
% |
|
|
1.25 |
|
|
|
15.12 |
% |
|
|
15.46 |
% |
|
|
(0.34 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Interest Margin |
|
|
|
|
|
|
|
|
|
|
|
|
(tax equivalent) |
|
5.22 |
% |
|
|
5.46 |
% |
|
|
(0.24 |
) |
|
|
5.60 |
% |
|
|
6.01 |
% |
|
|
(0.41 |
) |
|
Core Net Interest Margin |
|
|
|
|
|
|
|
|
|
|
|
|
(tax equivalent) (2) |
|
5.10 |
% |
|
|
5.19 |
% |
|
|
(0.09 |
) |
|
|
5.25 |
% |
|
|
5.66 |
% |
|
|
(0.41 |
) |
|
Efficiency Ratio |
|
39.3 |
% |
|
|
39.6 |
% |
|
|
(0.3 |
) |
|
|
38.5 |
% |
|
|
41.6 |
% |
|
|
(3.1 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Assets |
$ |
21,288,490 |
|
|
$ |
16,814,105 |
|
|
$ |
4,474,385 |
|
|
$ |
21,288,490 |
|
|
$ |
16,234,605 |
|
|
$ |
5,053,885 |
|
|
Loans and Leases, Net of |
|
|
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|
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|
|
|
|
|
|
|
|
|
|
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|
|
|
|
|
|
|
|
Deferred Fees |
$ |
14,478,254 |
|
|
$ |
12,452,205 |
|
|
$ |
2,026,049 |
|
|
$ |
14,478,254 |
|
|
$ |
11,882,432 |
|
|
$ |
2,595,822 |
|
|
Total Deposits |
$ |
15,666,182 |
|
|
$ |
12,115,763 |
|
|
$ |
3,550,419 |
|
|
$ |
15,666,182 |
|
|
$ |
11,755,128 |
|
|
$ |
3,911,054 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest-Bearing
Deposits |
|
|
|
|
|
|
|
|
|
|
|
as Percentage of Total |
|
|
|
|
|
|
|
|
|
|
|
|
Deposits |
|
39 |
% |
|
|
29 |
% |
|
|
10 |
|
|
|
39 |
% |
|
|
25 |
% |
|
|
14 |
|
|
Core Deposits as Percentage |
|
|
|
|
|
|
|
|
|
|
|
|
of Total Deposits |
|
67 |
% |
|
|
56 |
% |
|
|
11 |
|
|
|
67 |
% |
|
|
52 |
% |
|
|
15 |
|
|
Tangible Common Equity |
|
|
|
|
|
|
|
|
|
|
|
|
Ratio (2) |
|
11.38 |
% |
|
|
12.21 |
% |
|
|
(0.83 |
) |
|
|
11.38 |
% |
|
|
12.20 |
% |
|
|
(0.82 |
) |
|
Tangible Book Value Per |
|
|
|
|
|
|
|
|
|
|
|
|
Share (2) |
$ |
17.86 |
|
|
$ |
17.86 |
|
|
$ |
- |
|
|
$ |
17.86 |
|
|
$ |
17.17 |
|
|
$ |
0.69 |
|
|
________________________ |
|
|
|
|
|
|
|
|
|
|
|
|
(1) The
operations of Square 1 Financial, Inc. are included from its
October 6, 2015, acquisition date. |
|
(2)
Non-GAAP measure. |
|
ADJUSTED NET EARNINGS
In evaluating our earnings, certain items are
excluded to arrive at adjusted net earnings and adjusted diluted
earnings per share, as detailed below:
|
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|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Year Ended |
|
|
|
December 31, |
|
September 30, |
|
December 31, |
|
December 31, |
|
|
|
|
2015 |
|
|
|
2015 |
|
|
|
2014 |
|
|
|
2015 |
|
|
|
2014 |
|
|
|
|
(Dollars in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
earnings |
$ |
71,841 |
|
|
$ |
69,616 |
|
|
$ |
70,999 |
|
|
$ |
299,619 |
|
|
$ |
168,905 |
|
|
Less: |
Tax benefit on
discontinued operations |
|
- |
|
|
|
- |
|
|
|
(47 |
) |
|
|
- |
|
|
|
(1,114 |
) |
|
Add: |
Tax expense on
continuing operations |
|
49,380 |
|
|
|
39,777 |
|
|
|
43,261 |
|
|
|
180,517 |
|
|
|
117,005 |
|
|
Pre-tax earnings |
|
121,221 |
|
|
|
109,393 |
|
|
|
114,213 |
|
|
|
480,136 |
|
|
|
284,796 |
|
|
Add: |
Acquisition,
integration, and |
|
|
|
|
|
|
|
|
|
|
|
reorganization costs |
|
17,600 |
|
|
|
747 |
|
|
|
7,381 |
|
|
|
21,247 |
|
|
|
101,016 |
|
|
Less: |
FDIC loss sharing
expense, net |
|
(4,291 |
) |
|
|
(4,449 |
) |
|
|
(4,360 |
) |
|
|
(18,246 |
) |
|
|
(31,730 |
) |
|
|
Gain on
sale of loans and leases |
|
183 |
|
|
|
27 |
|
|
|
7 |
|
|
|
373 |
|
|
|
601 |
|
|
|
Gain on
securities |
|
- |
|
|
|
655 |
|
|
|
- |
|
|
|
3,744 |
|
|
|
4,841 |
|
|
|
Covered
OREO income (expense), net |
|
2,920 |
|
|
|
(20 |
) |
|
|
(176 |
) |
|
|
2,931 |
|
|
|
1,172 |
|
|
|
Gain on
sale of owned office building |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
1,570 |
|
|
Adjusted
pre-tax earnings before accelerated |
|
|
|
|
|
|
|
|
|
|
discount accretion |
|
140,009 |
|
|
|
113,927 |
|
|
|
126,123 |
|
|
|
512,581 |
|
|
|
409,358 |
|
|
Less: |
Accelerated discount
accretion from |
|
|
|
|
|
|
|
|
|
|
|
early
payoffs of acquired loans |
|
5,511 |
|
|
|
9,659 |
|
|
|
11,421 |
|
|
|
51,969 |
|
|
|
38,867 |
|
|
Adjusted pre-tax earnings |
|
134,498 |
|
|
|
104,268 |
|
|
|
114,702 |
|
|
|
460,612 |
|
|
|
370,491 |
|
|
|
Tax expense (1) |
|
(50,571 |
) |
|
|
(39,205 |
) |
|
|
(46,684 |
) |
|
|
(173,190 |
) |
|
|
(150,790 |
) |
|
Adjusted net earnings |
$ |
83,927 |
|
|
$ |
65,063 |
|
|
$ |
68,018 |
|
|
$ |
287,422 |
|
|
$ |
219,701 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
diluted earnings per share |
$ |
0.70 |
|
|
$ |
0.63 |
|
|
$ |
0.66 |
|
|
$ |
2.68 |
|
|
$ |
2.49 |
|
|
Adjusted
return on average assets |
|
1.60 |
% |
|
|
1.55 |
% |
|
|
1.70 |
% |
|
|
1.64 |
% |
|
|
1.65 |
% |
|
___________________________________ |
|
|
|
|
|
|
|
|
|
|
(1)
Full-year actual effective tax rates of 37.6% used
for 2015 periods and 40.7% used for 2014 periods. |
|
INCOME STATEMENT HIGHLIGHTS
Net Interest Income
Net interest income increased by $36.7 million to $229.2 million
for the fourth quarter of 2015 compared to $192.5 million for the
third quarter of 2015 due to higher average investment and loan
balances offset by lower discount accretion on acquired
loans. The loan and lease yield for the fourth quarter of
2015 was 6.21% compared to 6.34% for the third quarter of
2015. The decrease in the loan and lease yield was due to
lower discount accretion on acquired loans and the yield on new
originations being lower than the current portfolio yield. Total
discount accretion on acquired loans was $16.1 million in the
fourth quarter of 2015 (46 basis points on the loan and lease
yield) compared to $17.1 million in the third quarter of 2015 (57
basis points on the loan and lease yield). The decrease in discount
accretion was due primarily to lower accelerated accretion from
early payoffs.
The tax equivalent net interest margin (“NIM”) for the fourth
quarter of 2015 was 5.22% compared to 5.46% for the third quarter
of 2015. The decrease in the NIM was due to lower discount
accretion on acquired loans and a higher percentage of average
lower-yielding assets in the mix. Discount accretion on acquired
loans contributed 36 basis points to the NIM in the fourth quarter
of 2015 and 48 basis points in the third quarter of 2015.
The cost of total deposits decreased to 0.24% in the fourth
quarter from 0.33% in the third quarter due to the increased
balance of noninterest-bearing deposits and a lower level of
higher-cost time deposits.
Net interest margin information is presented in the following
table for the periods indicated:
|
|
|
|
|
Three Months Ended |
|
December 31, |
|
September 30, |
|
|
2015 |
|
|
|
2015 |
|
|
(Dollars in
thousands)
|
Average
Assets: |
|
|
|
Loans and leases |
$ |
14,031,102 |
|
|
$ |
12,112,881 |
|
Investment securities |
|
3,492,124 |
|
|
|
1,806,628 |
|
Deposits in financial
institutions |
|
254,308 |
|
|
|
278,973 |
|
Interest-earning assets |
|
17,777,534 |
|
|
|
14,198,482 |
|
Other assets |
|
3,047,714 |
|
|
|
2,491,695 |
|
Total assets |
$ |
20,825,248 |
|
|
$ |
16,690,177 |
|
|
|
|
|
Average
Liabilities and Stockholders' Equity: |
|
|
|
Interest-bearing deposits |
$ |
9,633,393 |
|
|
$ |
8,993,681 |
|
Borrowings |
|
206,236 |
|
|
|
70,171 |
|
Subordinated debentures |
|
435,293 |
|
|
|
434,420 |
|
Interest-bearing liabilities |
|
10,274,922 |
|
|
|
9,498,272 |
|
Noninterest-bearing demand
deposits |
|
6,043,900 |
|
|
|
3,486,780 |
|
Other liabilities |
|
160,264 |
|
|
|
132,360 |
|
Total liabilities |
|
16,479,086 |
|
|
|
13,117,412 |
|
Stockholders' equity |
|
4,346,162 |
|
|
|
3,572,765 |
|
Liabilities and stockholders'
equity |
$ |
20,825,248 |
|
|
$ |
16,690,177 |
|
|
|
|
|
Time deposits |
$ |
4,439,940 |
|
|
$ |
5,042,768 |
|
Total deposits |
$ |
15,677,293 |
|
|
$ |
12,480,461 |
|
Funding sources |
$ |
16,318,822 |
|
|
$ |
12,985,052 |
|
|
|
|
|
Yields on
Average Assets: |
|
|
|
Loans and leases |
|
6.21 |
% |
|
|
6.34 |
% |
Investment securities (1) |
|
3.23 |
% |
|
|
3.67 |
% |
Interest-earning assets (1) |
|
5.54 |
% |
|
|
5.88 |
% |
|
|
|
|
Costs of
Average Liabilities: |
|
|
|
Total deposits |
|
0.24 |
% |
|
|
0.33 |
% |
Time deposits |
|
0.63 |
% |
|
|
0.66 |
% |
Interest-bearing deposits |
|
0.39 |
% |
|
|
0.46 |
% |
Borrowings |
|
0.31 |
% |
|
|
0.41 |
% |
Subordinated debentures |
|
4.33 |
% |
|
|
4.27 |
% |
Interest-bearing liabilities |
|
0.55 |
% |
|
|
0.63 |
% |
Funding sources |
|
0.35 |
% |
|
|
0.46 |
% |
|
|
|
|
Net interest
rate spread (1) |
|
4.99 |
% |
|
|
5.25 |
% |
Net interest
margin (1) |
|
5.22 |
% |
|
|
5.46 |
% |
|
|
|
|
(1) Tax equivalent |
|
|
|
The tax equivalent NIM and loan and lease yield are impacted by
volatility in accelerated accretion of acquisition discounts due to
the prepayment of acquired loans and leases. The effects of this
item are shown in the following table for the periods
indicated:
|
|
Three Months Ended |
|
Three Months Ended |
|
|
December 31, 2015 |
|
September 30, 2015 |
|
|
|
Loan and |
|
|
Loan and |
|
|
NIM |
Lease Yield |
|
NIM |
Lease Yield |
Reported |
|
5.22 |
% |
|
6.21 |
% |
|
|
5.46 |
% |
|
6.34 |
% |
Less: |
Accelerated accretion
of acquisition discounts |
|
|
|
|
|
|
|
|
from early payoffs of acquired
loans |
|
(0.12 |
)% |
|
(0.16 |
)% |
|
|
(0.27 |
)% |
|
(0.32 |
)% |
Core |
|
|
5.10 |
% |
|
6.05 |
% |
|
|
5.19 |
% |
|
6.02 |
% |
|
|
|
|
|
|
|
The impact on the tax equivalent net interest income and NIM
from all purchase accounting items is set forth in the table below
for the periods indicated:
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Three Months Ended |
|
|
December 31, 2015 |
|
September 30, 2015 |
|
|
|
Impact on |
|
|
Impact on |
|
|
Amount |
NIM |
|
Amount |
NIM |
|
|
(Dollars in thousands) |
|
|
|
|
|
|
|
Net
interest income/NIM |
$ |
233,959 |
|
|
5.22 |
% |
|
$ |
195,274 |
|
|
5.46 |
% |
Less: |
Accelerated accretion
of acquisition discounts |
|
|
|
|
|
|
from early payoffs of acquired
loans |
|
(5,511 |
) |
|
(0.12 |
)% |
|
|
(9,659 |
) |
|
(0.27 |
)% |
|
Remaining accretion of Non-PCI loan |
|
|
|
|
|
|
acquisition discounts |
|
(10,553 |
) |
|
(0.24 |
)% |
|
|
(7,485 |
) |
|
(0.21 |
)% |
|
Total accretion of loan acquisition
discounts |
|
(16,064 |
) |
|
(0.36 |
)% |
|
|
(17,144 |
) |
|
(0.48 |
)% |
|
Amortization of TruPS discount |
|
1,397 |
|
|
0.03 |
% |
|
|
1,399 |
|
|
0.04 |
% |
|
Accretion of time deposits premium |
|
(384 |
) |
|
(0.01 |
)% |
|
|
(576 |
) |
|
(0.02 |
)% |
|
|
|
(15,051 |
) |
|
(0.34 |
)% |
|
|
(16,321 |
) |
|
(0.46 |
)% |
Net
interest income/NIM - excluding purchase |
|
|
|
|
|
accounting |
$ |
218,908 |
|
|
4.88 |
% |
|
$ |
178,953 |
|
|
5.00 |
% |
Noninterest Income
Noninterest income increased by $12.3 million to $28.1 million
for the fourth quarter of 2015 compared to $15.8 million for the
third quarter of 2015 due mostly to higher other commissions and
fees of $6.3 million, higher leased equipment income of $2.3
million, higher other income of $2.7 million and higher service
charges on deposit accounts of $1.3 million. The increase in other
commissions and fees was comprised of $3.3 million from loan
prepayment fees, $1.7 million from foreign exchange fees and $0.7
million from credit card fee income. The last two items are new
revenue streams acquired in the Square 1 acquisition. Leased
equipment income increased due to higher average balances and other
income increased due to gains from early lease terminations,
dividends received on other investments, a miscellaneous recovery
and warrant gains. We acquired a portfolio of equity warrants in
the Square 1 acquisition, and we continue to receive warrants in
connection with extending loan commitments to certain of our
customers. Warrants potentially provide gains in the case of a
future customer liquidity event. The increase in deposit service
charges was due to the acquired Square 1 deposits.
The following table presents details of noninterest income for
the periods indicated:
|
|
|
|
|
|
|
Three Months Ended |
|
December 31, |
|
September 30, |
|
Increase |
Noninterest
Income |
|
2015 |
|
|
|
2015 |
|
|
(Decrease) |
|
(In
thousands)
|
|
|
|
|
|
|
Service
charges on deposit accounts |
$ |
3,901 |
|
|
$ |
2,601 |
|
|
$ |
1,300 |
|
Other
commissions and fees |
|
12,691 |
|
|
|
6,376 |
|
|
|
6,315 |
|
Leased
equipment income |
|
7,791 |
|
|
|
5,475 |
|
|
|
2,316 |
|
Gain on
sale of loans and leases |
|
183 |
|
|
|
27 |
|
|
|
156 |
|
Gain on
securities |
|
- |
|
|
|
655 |
|
|
|
(655 |
) |
FDIC
loss sharing expense, net |
|
(4,291 |
) |
|
|
(4,449 |
) |
|
|
158 |
|
Other
income: |
|
|
|
|
|
Dividends and realized gains on
equity investments |
|
4,886 |
|
|
|
4,357 |
|
|
|
529 |
|
Foreign currency translation net
losses |
|
(661 |
) |
|
|
(373 |
) |
|
|
(288 |
) |
Income recognized on early
repayment of leases |
|
802 |
|
|
|
12 |
|
|
|
790 |
|
Other |
|
2,756 |
|
|
|
1,077 |
|
|
|
1,679 |
|
Total noninterest income |
$ |
28,058 |
|
|
$ |
15,758 |
|
|
$ |
12,300 |
|
Noninterest Expense
Noninterest expense increased by $32.1 million to $122.3 million
for the fourth quarter of 2015 compared to $90.1 million for the
third quarter of 2015. The increase was due mostly to higher
acquisition, integration and reorganization costs of $16.9 million
related to the Square 1 acquisition and integration. All operating
expense categories were higher quarter over quarter due mostly to
the Square 1 acquisition. Foreclosed assets expense is lower by
$7.7 million due to gains of $3.0 million on foreclosed asset sales
in the fourth quarter, while the third quarter included a
write-down of $4.6 million on an existing foreclosed property.
The following table presents details of noninterest expense for
the periods indicated:
|
Three Months Ended |
|
December 31, |
|
September 30, |
|
Increase |
Noninterest
Expense |
|
2015 |
|
|
|
2015 |
|
|
(Decrease) |
|
(In
thousands)
|
|
|
|
|
|
|
Compensation |
$ |
58,992 |
|
|
$ |
48,152 |
|
|
$ |
10,840 |
|
Occupancy |
|
12,194 |
|
|
|
10,762 |
|
|
|
1,432 |
|
Data
processing |
|
5,585 |
|
|
|
4,322 |
|
|
|
1,263 |
|
Other
professional services |
|
3,811 |
|
|
|
3,396 |
|
|
|
415 |
|
Insurance and assessments |
|
5,450 |
|
|
|
3,805 |
|
|
|
1,645 |
|
Intangible asset amortization |
|
4,910 |
|
|
|
1,497 |
|
|
|
3,413 |
|
Leased
equipment depreciation |
|
4,235 |
|
|
|
3,162 |
|
|
|
1,073 |
|
Foreclosed assets (income) expense, net |
|
(3,185 |
) |
|
|
4,521 |
|
|
|
(7,706 |
) |
Acquisition, integration and reorganization costs |
|
17,600 |
|
|
|
747 |
|
|
|
16,853 |
|
Other
expense: |
|
|
|
|
|
Loan expense |
|
2,745 |
|
|
|
1,494 |
|
|
|
1,251 |
|
Other |
|
9,927 |
|
|
|
8,281 |
|
|
|
1,646 |
|
Total noninterest expense |
$ |
122,264 |
|
|
$ |
90,139 |
|
|
$ |
32,125 |
|
Income Taxes
Our overall effective income tax rate was 40.7% for the fourth
quarter of 2015 and 36.4% for the third quarter of 2015. The
effective tax rate for the full year 2015 was 37.6%.
BALANCE SHEET HIGHLIGHTS
Loans and Leases
Total loans and leases increased $2.0 billion in the fourth
quarter to $14.5 billion at December 31, 2015. The net
increase was driven by the acquisition of Square 1 loans of $1.6
billion and fourth quarter originations and purchases of $1.4
billion, offset partially by principal repayments of $910.4
million. For the year ended December 31, 2015, total
loans and leases increased $2.6 billion, or approximately 22%.
Fourth quarter new production included $96 million of purchased
multi-family loans and the third quarter included $132 million of
purchased multi-family and student loans.
The following table presents a roll forward of the loan and
lease portfolio for the periods indicated:
|
Three Months Ended |
|
Year Ended |
|
December 31, |
|
September 30, |
|
December 31, |
Loan and Lease Roll Forward
(1) |
|
2015 |
|
|
|
2015 |
|
|
|
2015 |
|
|
(In thousands) |
|
|
|
|
|
|
Beginning balance |
$ |
12,452,205 |
|
|
$ |
12,034,189 |
|
|
$ |
11,882,432 |
|
New production |
|
1,403,611 |
|
|
|
1,070,986 |
|
|
|
4,171,172 |
|
Existing loans and
leases: |
|
|
|
|
|
Principal repayments, net (2) |
|
(910,445 |
) |
|
|
(630,292 |
) |
|
|
(3,067,733 |
) |
Loan and lease sales |
|
(19,610 |
) |
|
|
(6,864 |
) |
|
|
(30,095 |
) |
Transfers to foreclosed assets |
|
- |
|
|
|
(10,383 |
) |
|
|
(13,471 |
) |
Charge-offs |
|
(1,227 |
) |
|
|
(5,431 |
) |
|
|
(17,771 |
) |
Loans acquired through
Square 1 acquisition |
|
1,553,720 |
|
|
|
- |
|
|
|
1,553,720 |
|
Ending balance |
$ |
14,478,254 |
|
|
$ |
12,452,205 |
|
|
$ |
14,478,254 |
|
|
|
|
|
|
|
Weighted average yields
on new production |
|
5.29 |
% |
|
|
5.16 |
% |
|
|
5.47 |
% |
___________________________________ |
|
|
|
|
|
(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 the composition of our loan and
lease portfolio as of the dates indicated:
|
December 31, |
|
September 30, |
|
December 31, |
Loan and Lease
Portfolio |
|
2015 |
|
|
|
2015 |
|
|
|
2014 |
|
|
(In thousands) |
Real estate
mortgage: |
|
|
|
|
|
Commercial |
$ |
4,642,088 |
|
|
$ |
4,512,489 |
|
|
$ |
4,583,350 |
|
Residential |
|
1,211,209 |
|
|
|
1,177,302 |
|
|
|
1,010,022 |
|
Total real estate mortgage |
|
5,853,297 |
|
|
|
5,689,791 |
|
|
|
5,593,372 |
|
Real estate
construction and land: |
|
|
|
|
|
Commercial |
|
349,436 |
|
|
|
229,904 |
|
|
|
220,927 |
|
Residential |
|
184,382 |
|
|
|
145,262 |
|
|
|
96,749 |
|
Total real estate construction and
land |
|
533,818 |
|
|
|
375,166 |
|
|
|
317,676 |
|
Total real estate loans |
|
6,387,115 |
|
|
|
6,064,957 |
|
|
|
5,911,048 |
|
Commercial: |
|
|
|
|
|
Cash flow |
|
3,073,965 |
|
|
|
2,980,650 |
|
|
|
2,665,654 |
|
Asset-based |
|
2,547,665 |
|
|
|
2,381,706 |
|
|
|
2,234,474 |
|
Equipment finance |
|
890,349 |
|
|
|
894,777 |
|
|
|
969,489 |
|
Venture capital |
|
1,458,013 |
|
|
|
- |
|
|
|
- |
|
Total commercial |
|
7,969,992 |
|
|
|
6,257,133 |
|
|
|
5,869,617 |
|
Consumer |
|
121,147 |
|
|
|
130,115 |
|
|
|
101,767 |
|
Total loans and leases, net
of deferred fees |
$ |
14,478,254 |
|
|
$ |
12,452,205 |
|
|
$ |
11,882,432 |
|
|
|
|
|
|
|
Total unfunded loan
commitments |
$ |
3,580,655 |
|
|
$ |
2,022,046 |
|
|
$ |
1,921,067 |
|
Production from our recently expanded construction lending team
is ramping up resulting in the growth in construction loans in the
fourth quarter from the combination of new loans originated and
disbursements on previously booked loans. Venture capital loans and
unfunded loan commitments showed large increases in the fourth
quarter due to the acquired balances from Square 1.
Credit Exposure Affected by Low Oil
Prices
At December 31, 2015, PacWest had 24 outstanding loan and lease
relationships totaling $137.3 million to borrowers involved in the
oil and gas services industry, down from $152.3 million at
September 30, 2015. The collateral for these loans and leases
primarily includes equipment, such as drilling equipment and
transportation vehicles. At December 31, 2015, three
relationships totaling $47.1 million were on nonaccrual status and
were classified, down from $47.9 million at September 30,
2015. The largest of these relationships had an
aggregate outstanding balance of $40.1 million at December 31,
2015. These nonaccrual loans had specific valuation
allowances of $6.3 million at December 31, 2015 reflecting a $4.9
million increase during the fourth quarter of 2015. The total
reserves related to our oil and gas services industry exposure was
approximately 8% at year end.
Deposits and Client Investment
Funds
The following table presents the composition of our deposit
portfolio as of the dates indicated:
|
December 31, |
|
September 30, |
|
December 31, |
Deposit Category |
|
2015 |
|
|
|
2015 |
|
|
|
2014 |
|
|
(Dollars in thousands) |
|
|
|
|
|
|
Noninterest-bearing
demand deposits |
$ |
6,171,455 |
|
|
$ |
3,508,682 |
|
|
$ |
2,931,352 |
|
Interest checking
deposits |
|
874,349 |
|
|
|
693,632 |
|
|
|
732,196 |
|
Money market
deposits |
|
2,782,974 |
|
|
|
1,860,983 |
|
|
|
1,709,068 |
|
Savings deposits |
|
742,795 |
|
|
|
751,955 |
|
|
|
762,961 |
|
Total core deposits |
|
10,571,573 |
|
|
|
6,815,252 |
|
|
|
6,135,577 |
|
Brokered non-maturity
deposits |
|
942,253 |
|
|
|
713,215 |
|
|
|
120,613 |
|
Total non-maturity deposits |
|
11,513,826 |
|
|
|
7,528,467 |
|
|
|
6,256,190 |
|
Time deposits under
$100,000 |
|
1,656,227 |
|
|
|
1,951,938 |
|
|
|
2,467,338 |
|
Time deposits of
$100,000 and over |
|
2,496,129 |
|
|
|
2,635,358 |
|
|
|
3,031,600 |
|
Total time deposits |
|
4,152,356 |
|
|
|
4,587,296 |
|
|
|
5,498,938 |
|
Total deposits |
$ |
15,666,182 |
|
|
$ |
12,115,763 |
|
|
$ |
11,755,128 |
|
|
|
|
|
|
|
Noninterest-bearing demand deposits as percentage of total
deposits |
|
39 |
% |
|
|
29 |
% |
|
|
25 |
% |
Core
deposits as percentage of total deposits |
|
67 |
% |
|
|
56 |
% |
|
|
52 |
% |
At December 31, 2015, core deposits totaled $10.6 billion, or
67% of total deposits, including $6.2 billion of
noninterest-bearing demand deposits, or 39% of total
deposits. Core deposits obtained in the Square 1 acquisition
totaled $3.8 billion.
The following table summarizes the maturities of our time
deposits as of the date indicated:
|
December 31, 2015 |
|
|
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 |
$ |
|
589,234 |
|
|
$ |
|
784,141 |
|
|
$ |
1,373,375 |
|
|
0.60 |
% |
|
0.58 |
% |
|
Due in over three
months through six months |
|
|
453,763 |
|
|
|
|
821,581 |
|
|
|
1,275,344 |
|
|
0.73 |
% |
|
0.72 |
% |
|
Due in over six months
through twelve months |
|
|
500,658 |
|
|
|
|
763,141 |
|
|
|
1,263,799 |
|
|
0.64 |
% |
|
0.62 |
% |
|
Due in over 12 months
through 24 months |
|
|
82,459 |
|
|
|
|
100,050 |
|
|
|
182,509 |
|
|
0.63 |
% |
|
0.51 |
% |
|
Due in over 24
months |
|
|
30,113 |
|
|
|
|
27,216 |
|
|
|
57,329 |
|
|
1.03 |
% |
|
0.84 |
% |
|
Total |
$ |
|
1,656,227 |
|
|
$ |
|
2,496,129 |
|
|
$ |
4,152,356 |
|
|
0.66 |
% |
|
0.64 |
% |
|
|
|
|
|
|
|
|
At September 30,
2015 |
$ |
|
1,951,938 |
|
|
$ |
|
2,635,358 |
|
|
$ |
4,587,296 |
|
|
0.67 |
% |
|
0.65 |
% |
|
In addition to deposit products, we also offer alternative
non-depository cash investment options for select clients,
including investments managed by Square 1 Asset Management, Inc.
(“S1AM”) our registered investment advisor subsidiary, and
third-party sweep products. Total client investment funds at
December 31, 2015 were $2.0 billion, of which $1.6 billion was
managed by S1AM. In conjunction with the integration of
Square 1 Bank, approximately $300 million of assets managed by S1AM
were transferred into on-balance sheet deposit products during the
fourth quarter of 2015.
PROVISION AND ALLOWANCE FOR CREDIT LOSSES
A provision for credit losses of $13.8 million was recorded in
the fourth quarter of 2015 compared to $8.7 million in the third
quarter of 2015. The fourth quarter provision was comprised of a
$15.1 million provision for Non-PCI loans and leases and a negative
provision of $1.3 million for PCI loans. The allowance for Non-PCI
credit losses to Non-PCI loans and leases coverage ratio increased
to 0.85% at December 31, 2015 from 0.82% at September 30,
2015. The increase in the reserve for unfunded commitments
was due to higher levels of expected unfunded commitments
utilization and a higher level of unfunded commitments, excluding
any gained in the Square 1 acquisition. The negative
provision for PCI loans resulted from increases in actual and
expected cash flows, mostly due to payoffs.
The following tables show roll forwards of the allowance for
credit losses for the periods indicated:
|
Three Months Ended December 31,
2015 |
|
Non-PCI |
|
|
|
|
|
|
|
|
Allowance for
Credit |
Loans and |
|
Unfunded |
|
Total |
|
PCI |
|
|
Losses
Rollforward |
Leases |
|
Commitments |
|
Non-PCI |
|
Loans |
|
Total |
|
(In thousands) |
|
|
|
|
|
|
|
|
|
|
Beginning balance |
$ |
92,316 |
|
|
$ |
8,374 |
|
|
$ |
100,690 |
|
|
$ |
10,955 |
|
|
$ |
111,645 |
|
Fair value of acquired reserve for
unfunded commitments |
|
- |
|
|
|
4,746 |
|
|
|
4,746 |
|
|
|
- |
|
|
|
4,746 |
|
Charge-offs |
|
(1,153 |
) |
|
|
- |
|
|
|
(1,153 |
) |
|
|
(74 |
) |
|
|
(1,227 |
) |
Recoveries |
|
2,871 |
|
|
|
- |
|
|
|
2,871 |
|
|
|
38 |
|
|
|
2,909 |
|
Net recoveries |
|
1,718 |
|
|
|
- |
|
|
|
1,718 |
|
|
|
(36 |
) |
|
|
1,682 |
|
Provision (negative provision) |
|
11,500 |
|
|
|
3,614 |
|
|
|
15,114 |
|
|
|
(1,342 |
) |
|
|
13,772 |
|
Ending balance |
$ |
105,534 |
|
|
$ |
16,734 |
|
|
$ |
122,268 |
|
|
$ |
9,577 |
|
|
$ |
131,845 |
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30,
2015 |
Allowance for
Credit |
Non-PCI |
|
|
|
|
|
|
|
|
Losses
Rollforward |
Loans and |
|
Unfunded |
|
Total |
|
PCI |
|
|
|
Leases |
|
Commitments |
|
Non-PCI |
|
Loans |
|
Total |
|
(In thousands) |
|
|
|
|
Beginning balance |
$ |
85,047 |
|
|
$ |
7,874 |
|
|
$ |
92,921 |
|
|
$ |
14,328 |
|
|
$ |
107,249 |
|
Charge-offs |
|
(4,312 |
) |
|
|
- |
|
|
|
(4,312 |
) |
|
|
(1,119 |
) |
|
|
(5,431 |
) |
Recoveries |
|
1,081 |
|
|
|
- |
|
|
|
1,081 |
|
|
|
- |
|
|
|
1,081 |
|
Net (charge-offs) recoveries |
|
(3,231 |
) |
|
|
- |
|
|
|
(3,231 |
) |
|
|
(1,119 |
) |
|
|
(4,350 |
) |
Provision (negative provision) |
|
10,500 |
|
|
|
500 |
|
|
|
11,000 |
|
|
|
(2,254 |
) |
|
|
8,746 |
|
Ending balance |
$ |
92,316 |
|
|
$ |
8,374 |
|
|
$ |
100,690 |
|
|
$ |
10,955 |
|
|
$ |
111,645 |
|
All acquired loans are recorded initially at their estimated
fair value including an estimate of credit losses. The table below
presents two alternative views of credit risk coverage ratios for
Non-PCI loans reflecting adjustments for acquired loans and
associated purchase accounting discounts:
|
December 31, 2015 |
|
September 30, 2015 |
|
|
Non-PCI |
|
|
|
Non-PCI |
|
|
|
|
Loans and |
Allowance/ |
Coverage |
|
Loans and |
Allowance/ |
Coverage |
|
Credit Risk Coverage
Ratios |
Leases |
Discount |
Ratio |
|
Leases |
Discount |
Ratio |
|
|
(Dollars in thousands) |
|
|
|
|
|
|
|
|
|
|
Ending balance |
$ |
14,339,070 |
|
$ |
122,268 |
|
|
0.85 |
% |
|
$ |
12,300,057 |
|
$ |
100,690 |
|
|
0.82 |
% |
|
Acquired loans |
|
(6,030,921 |
) |
|
(19,127 |
) |
(1 |
) |
|
|
|
(5,180,808 |
) |
|
(12,173 |
) |
(1 |
) |
|
|
Adjusted balance |
$ |
8,308,149 |
|
$ |
103,141 |
|
|
1.24 |
% |
|
$ |
7,119,249 |
|
$ |
88,517 |
|
|
1.24 |
% |
|
|
|
|
|
|
|
|
|
|
Ending balance |
$ |
14,339,070 |
|
$ |
122,268 |
|
|
0.85 |
% |
|
$ |
12,300,057 |
|
$ |
100,690 |
|
|
0.82 |
% |
|
Unamortized net
discount |
|
92,192 |
|
|
92,192 |
|
(2 |
) |
|
|
|
88,690 |
|
|
88,690 |
|
(2 |
) |
|
|
Adjusted balance |
$ |
14,431,262 |
|
$ |
214,460 |
|
|
1.49 |
% |
|
$ |
12,388,747 |
|
$ |
189,380 |
|
|
1.53 |
% |
|
___________________________ |
|
|
|
|
|
|
|
|
(1) Allowance attributed to $6.0 billion and $5.2 billion of
acquired Non-PCI loans at December 31, 2015 and September 30, 2015,
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 $6.0 billion and $5.2
billion of acquired Non-PCI loans at December 31, 2015 and
September 30, 2015, and is assigned specifically to those loans
only. Such discount represents the acquisition date fair
value adjustment based on market, liquidity, interest rate risk and
credit risk and is being accreted to interest income over the
remaining life of the respective loans using the interest
method. Use of the interest method results in steadily
declining amounts being taken into income in each reporting
period. The remaining discount of $92.2 million at December
31, 2015, is expected to be substantially accreted to income by the
end of 2018. |
|
Non-PCI loans and leases at December 31, 2015 included $8.3
billion of originated loans and leases that were not obtained
through acquisitions. The related allowance for loan and lease
losses totaled $90.5 million, or 1.09% of the outstanding
balance.
CREDIT QUALITY
The following table presents Non-PCI loan and lease credit
quality metrics as of the dates indicated:
|
December 31, |
|
September 30, |
Non-PCI Credit Quality
Metrics |
|
2015 |
|
|
|
2015 |
|
|
(Dollars in thousands) |
|
|
|
|
Allowance for credit
losses |
$ |
122,268 |
|
|
$ |
100,690 |
|
Nonaccrual loans and
leases (1) |
|
129,019 |
|
|
|
107,190 |
|
Classified loans and
leases |
|
391,754 |
|
|
|
328,038 |
|
Performing restructured
loans |
|
40,182 |
|
|
|
39,956 |
|
Net charge-offs
(recoveries) (for the quarter) |
|
(1,718 |
) |
|
|
3,231 |
|
Provision for credit
losses (for the quarter) |
|
15,114 |
|
|
|
11,000 |
|
Allowance for credit
losses to loans and leases |
|
0.85 |
% |
|
|
0.82 |
% |
Allowance for credit losses to nonaccrual loans and leases
(1) |
|
94.8 |
% |
|
|
93.9 |
% |
Nonaccrual loans and
leases to loans and leases |
|
0.90 |
% |
|
|
0.87 |
% |
Nonperforming assets to loans and leases and foreclosed
assets |
|
1.06 |
% |
|
|
1.14 |
% |
Classified loans and
leases to loans and leases |
|
2.73 |
% |
|
|
2.67 |
% |
_________________________________________ |
|
|
(1) The December 31, 2015 and September 30, 2015 amounts
include $85.2 million and $54.9 million of acquired loans and
leases with no allowance due to the effects of fair value
accounting. |
The following table presents 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 |
|
|
December 31, 2015 |
|
September 30, 2015 |
|
30-89 Days Past Due |
|
|
|
% of |
|
|
% of |
|
December 31, |
|
September 30, |
|
|
|
Loan |
|
|
Loan |
|
|
2015 |
|
|
|
2015 |
|
|
|
Amount |
Category |
|
Amount |
Category |
|
Amount |
|
Amount |
|
|
(Dollars in thousands) |
|
Real estate
mortgage: |
|
|
|
|
|
|
|
|
|
|
Commercial |
$ |
52,363 |
|
|
1.2 |
% |
|
$ |
25,899 |
|
|
0.6 |
% |
|
$ |
1,498 |
|
|
$ |
1,191 |
|
|
Residential |
|
4,914 |
|
|
0.4 |
% |
|
|
5,922 |
|
|
0.5 |
% |
|
|
3,174 |
|
|
|
1,911 |
|
|
Total real estate mortgage |
|
57,277 |
|
|
1.0 |
% |
|
|
31,821 |
|
|
0.6 |
% |
|
|
4,672 |
|
|
|
3,102 |
|
|
Real estate
construction and land: |
|
|
|
|
|
|
|
|
|
|
Commercial |
|
- |
|
|
- |
|
|
|
- |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
Residential |
|
372 |
|
|
0.2 |
% |
|
|
374 |
|
|
0.3 |
% |
|
|
- |
|
|
|
- |
|
|
Total real estate construction and
land |
|
372 |
|
|
0.1 |
% |
|
|
374 |
|
|
0.1 |
% |
|
|
- |
|
|
|
- |
|
|
Commercial: |
|
|
|
|
|
|
|
|
|
|
Cash flow |
|
15,800 |
|
|
0.5 |
% |
|
|
15,602 |
|
|
0.5 |
% |
|
|
1,118 |
|
|
|
11 |
|
|
Asset-based |
|
2,505 |
|
|
0.1 |
% |
|
|
2,861 |
|
|
0.1 |
% |
|
|
1 |
|
|
|
82 |
|
|
Equipment finance (1) |
|
51,410 |
|
|
5.8 |
% |
|
|
53,153 |
|
|
5.9 |
% |
|
|
360 |
|
|
|
- |
|
|
Venture capital |
|
124 |
|
|
- |
|
|
|
- |
|
|
- |
|
|
|
250 |
|
|
|
- |
|
|
Total commercial |
|
69,839 |
|
|
0.9 |
% |
|
|
71,616 |
|
|
1.1 |
% |
|
|
1,729 |
|
|
|
93 |
|
|
Consumer |
|
1,531 |
|
|
1.3 |
% |
|
|
3,379 |
|
|
2.6 |
% |
|
|
628 |
|
|
|
88 |
|
|
Total Non-PCI loans and
leases |
$ |
129,019 |
|
|
0.9 |
% |
|
$ |
107,190 |
|
|
0.9 |
% |
|
$ |
7,029 |
|
|
$ |
3,283 |
|
|
_________________________ |
|
|
|
|
|
|
|
|
|
|
(1) Includes nonaccrual leases and loans to companies involved
in the oil and gas industries of $47.1 million and $47.9 million at
December 31, 2015 and September 30, 2015, respectively. |
|
The following table presents nonperforming assets as of the
dates indicated:
|
December 31, |
|
September 30, |
Nonperforming
Assets |
|
2015 |
|
|
|
2015 |
|
|
(Dollars in thousands) |
|
|
|
|
Nonaccrual Non-PCI loans and leases |
$ |
129,019 |
|
|
$ |
107,190 |
|
Nonaccrual PCI Loans (1) |
|
4,596 |
|
|
|
4,823 |
|
Total nonaccrual loans and
leases |
|
133,615 |
|
|
|
112,013 |
|
Non-PCI
accruing loan contractually past due 90 days or more |
|
700 |
|
|
|
- |
|
Foreclosed assets, net |
|
22,120 |
|
|
|
33,216 |
|
Total nonperforming assets |
$ |
156,435 |
|
|
$ |
145,229 |
|
|
|
|
|
Nonaccrual loans and leases to loans and leases |
|
0.92 |
% |
|
|
0.90 |
% |
Nonperforming assets to loans and leases and foreclosed assets |
|
1.08 |
% |
|
|
1.16 |
% |
_________________________________________ |
|
|
|
(1) Represents legacy CapitalSource borrowing
relationships placed on nonaccrual status as of the acquisition
date. |
SQUARE 1 FINANCIAL, INC. ACQUISITION
On October 6, 2015, the acquisition of Square 1 Financial, Inc.
(“Square 1”) was consummated in a transaction valued at
approximately $815 million. PacWest Bancorp is the surviving
company and Pacific Western Bank is the surviving subsidiary bank,
with the banking operations of Square 1 conducted under the trade
name of Square 1 Bank, a division of Pacific Western Bank.
Under the terms of the merger agreement, Square 1 stockholders
received 0.5997 shares of PacWest common stock for each share of
Square 1 common stock and holders of stock options and restricted
stock units received cash consideration as described in the merger
agreement. The total value of the per share merger consideration
was $26.37, based on the closing price of PacWest common stock of
$43.97 on October 6, 2015.
The following table shows the various purchase accounting
adjustments at the acquisition date by category along with
accretion/amortization periods:
|
|
Purchase |
|
|
|
|
Accounting |
|
Estimated Accretion/ |
Description |
|
Adjustment |
|
Amortization
Method |
|
|
(In thousands) |
|
|
|
|
Debit (Credit) |
|
|
|
|
|
|
|
|
|
Loan portfolio
discount |
|
$ |
(37,892 |
) |
|
30 months using a level
yield method |
Reserve for unfunded
commitments |
|
$ |
(4,746 |
) |
|
30 months based on
commitment activity |
Core deposit
intangible |
|
$ |
42,300 |
|
|
84 months using an
accelerated method |
Customer relationship
intangible |
|
$ |
3,126 |
|
|
84 months using an
accelerated method |
Other intangible assets
with definite lives |
|
$ |
1,500 |
|
|
Straight line over 18
months |
Other intangible assets
with indefinite lives |
|
$ |
2,100 |
|
|
Not amortized |
ABOUT PACWEST BANCORP
PacWest Bancorp (“PacWest”) is a bank holding company with over
$21 billion in assets with one wholly-owned banking subsidiary,
Pacific Western Bank (“Pacific Western”). The Bank has 80
full-service branches located throughout the state of California
and one branch in Durham, North Carolina. Pacific Western provides
commercial banking services, including real estate, construction,
and commercial loans, and comprehensive deposit and treasury
management services to small and medium-sized businesses.
Pacific Western offers additional products and services under the
brands of its business groups, CapitalSource and Square 1 Bank.
CapitalSource provides cash flow, asset-based, equipment and real
estate loans and treasury management services to established middle
market businesses on a national basis. Square 1 Bank offers a
comprehensive suite of financial services focused on
entrepreneurial businesses and their venture capital and private
equity investors, with offices located in key innovation hubs
across the United States. 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 expectations regarding our acquisition of Square 1, intentions
to expand Pacific Western’s lending business, credit loss exposure,
profitability, and loan and lease portfolio growth. 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;
- credit quality deterioration or pronounced and sustained
reduction in market values or other economic factors which
adversely affect our borrowers’ ability to repay loans and
leases;
- higher than anticipated delinquencies, charge-offs, and loan
losses;
- compression of spreads on newly originated loans and
leases;
- the impact of asset/liability repricing risk and liquidity risk
on net interest margin and the value of investments;
- higher than anticipated increases in operating expenses;
- increased costs to manage and sell foreclosed assets;
- reduced demand for our services due to strategic or regulatory
reasons;
- our inability to grow deposits or access wholesale funding
sources;
- legislative or regulatory requirements or changes could
negatively impact our business including an increase to capital
requirements;
- loan repayments higher than expected;
- our ability to complete future acquisitions and to successfully
integrate such acquired entities, including Square 1, or achieve
expected benefits, synergies and/or operating efficiencies within
expected time frames or at all;
- business disruption following the Square 1 acquisition;
- changes in our stock price;
- the reaction to the Square 1 acquisition of the Company’s
customers, employees and counterparties;
- inability to attract qualified professionals;
- the success and timing of other business strategies; 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 |
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, |
|
September 30, |
|
December 31, |
|
|
|
|
|
2015 |
|
|
|
2015 |
|
|
|
2014 |
|
|
|
|
|
(Dollars in thousands, except per share
data) |
|
|
|
ASSETS: |
|
|
|
|
|
|
|
|
Cash and due from
banks |
$ |
161,020 |
|
|
$ |
154,652 |
|
|
$ |
164,757 |
|
|
|
|
Interest-earning
deposits in financial institutions |
|
235,466 |
|
|
|
81,642 |
|
|
|
148,469 |
|
|
|
|
Total cash and cash
equivalents |
|
396,486 |
|
|
|
236,294 |
|
|
|
313,226 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Securities
available-for-sale, at estimated fair value |
|
3,559,437 |
|
|
|
1,809,364 |
|
|
|
1,567,177 |
|
|
|
|
Federal Home Loan Bank
stock, at cost |
|
19,710 |
|
|
|
17,250 |
|
|
|
40,609 |
|
|
|
|
Total investment
securities |
|
3,579,147 |
|
|
|
1,826,614 |
|
|
|
1,607,786 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-PCI loans and
leases |
|
14,339,070 |
|
|
|
12,300,057 |
|
|
|
11,613,832 |
|
|
|
|
PCI loans |
|
189,095 |
|
|
|
193,340 |
|
|
|
290,852 |
|
|
|
|
Total gross loans and leases |
|
14,528,165 |
|
|
|
12,493,397 |
|
|
|
11,904,684 |
|
|
|
|
Deferred fees and
costs |
|
(49,911 |
) |
|
|
(41,192 |
) |
|
|
(22,252 |
) |
|
|
|
Total loans and leases, net of
deferred fees |
|
14,478,254 |
|
|
|
12,452,205 |
|
|
|
11,882,432 |
|
|
|
|
Allowance for loan and
lease losses |
|
(115,111 |
) |
|
|
(103,271 |
) |
|
|
(84,455 |
) |
|
|
|
Total loans and leases,
net |
|
14,363,143 |
|
|
|
12,348,934 |
|
|
|
11,797,977 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Equipment leased to
others under operating leases |
|
197,452 |
|
|
|
161,508 |
|
|
|
122,506 |
|
|
|
|
Premises and equipment,
net |
|
39,197 |
|
|
|
36,475 |
|
|
|
36,551 |
|
|
|
|
Foreclosed assets,
net |
|
22,120 |
|
|
|
33,216 |
|
|
|
43,721 |
|
|
|
|
Deferred tax asset,
net |
|
126,389 |
|
|
|
169,760 |
|
|
|
284,411 |
|
|
|
|
Goodwill |
|
2,176,291 |
|
|
|
1,728,380 |
|
|
|
1,720,479 |
|
|
|
|
Core
deposit and customer relationship intangibles, net |
|
53,220 |
|
|
|
12,704 |
|
|
|
17,204 |
|
|
|
|
Other assets |
|
335,045 |
|
|
|
260,220 |
|
|
|
290,744 |
|
|
|
|
Total assets |
$ |
21,288,490 |
|
|
$ |
16,814,105 |
|
|
$ |
16,234,605 |
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES: |
|
|
|
|
|
|
|
|
Noninterest-bearing
deposits |
$ |
6,171,455 |
|
|
$ |
3,508,682 |
|
|
$ |
2,931,352 |
|
|
|
|
Interest-bearing
deposits |
|
9,494,727 |
|
|
|
8,607,081 |
|
|
|
8,823,776 |
|
|
|
|
Total
deposits |
|
15,666,182 |
|
|
|
12,115,763 |
|
|
|
11,755,128 |
|
|
|
|
Borrowings |
|
621,914 |
|
|
|
552,497 |
|
|
|
383,402 |
|
|
|
|
Subordinated
debentures |
|
436,000 |
|
|
|
435,417 |
|
|
|
433,583 |
|
|
|
|
Accrued interest
payable and other liabilities |
|
166,703 |
|
|
|
128,724 |
|
|
|
156,262 |
|
|
|
|
Total
liabilities |
|
16,890,799 |
|
|
|
13,232,401 |
|
|
|
12,728,375 |
|
|
|
|
STOCKHOLDERS'
EQUITY (1) |
|
4,397,691 |
|
|
|
3,581,704 |
|
|
|
3,506,230 |
|
|
|
|
Total liabilities and
stockholders’ equity |
$ |
21,288,490 |
|
|
$ |
16,814,105 |
|
|
$ |
16,234,605 |
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
Includes net unrealized gain on securities available-for-sale,
net |
$ |
27,828 |
|
|
$ |
24,459 |
|
|
$ |
26,380 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Book value per
share |
$ |
36.22 |
|
|
$ |
34.76 |
|
|
$ |
34.03 |
|
|
|
|
Tangible book value per
share |
$ |
17.86 |
|
|
$ |
17.86 |
|
|
$ |
17.17 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares
outstanding (includes unvested restricted shares of 1,211,951 at
December 31, 2015, 988,825 at September 30, 2015, and 1,108,505 at
December 31, 2014) |
|
121,413,727 |
|
|
|
103,053,694 |
|
|
|
103,022,017 |
|
|
|
|
PACWEST BANCORP AND SUBSIDIARIES |
CONDENSED CONSOLIDATED STATEMENT OF
EARNINGS |
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Year Ended |
|
December 31, |
|
September 30, |
|
December 31, |
|
December 31, |
|
|
2015 |
|
|
|
2015 |
|
|
|
2014 |
|
|
|
2015 |
|
|
|
2014 |
|
|
(Dollars in thousands, except per share
data) |
Interest
income: |
|
|
|
|
|
|
|
|
|
Loans and leases |
$ |
219,677 |
|
|
$ |
193,539 |
|
|
$ |
197,472 |
|
|
$ |
819,094 |
|
|
$ |
657,097 |
|
Investment
securities |
|
23,648 |
|
|
|
13,955 |
|
|
|
12,205 |
|
|
|
64,368 |
|
|
|
47,345 |
|
Deposits in financial
institutions |
|
172 |
|
|
|
178 |
|
|
|
19 |
|
|
|
476 |
|
|
|
333 |
|
Total interest
income |
|
243,497 |
|
|
|
207,672 |
|
|
|
209,696 |
|
|
|
883,938 |
|
|
|
704,775 |
|
|
|
|
|
|
|
|
|
|
|
Interest
expense: |
|
|
|
|
|
|
|
|
|
Deposits |
|
9,391 |
|
|
|
10,400 |
|
|
|
9,972 |
|
|
|
41,503 |
|
|
|
27,332 |
|
Borrowings |
|
159 |
|
|
|
72 |
|
|
|
144 |
|
|
|
554 |
|
|
|
496 |
|
Subordinated
debentures |
|
4,748 |
|
|
|
4,680 |
|
|
|
4,597 |
|
|
|
18,535 |
|
|
|
14,570 |
|
Total interest
expense |
|
14,298 |
|
|
|
15,152 |
|
|
|
14,713 |
|
|
|
60,592 |
|
|
|
42,398 |
|
|
|
|
|
|
|
|
|
|
|
Net interest
income |
|
229,199 |
|
|
|
192,520 |
|
|
|
194,983 |
|
|
|
823,346 |
|
|
|
662,377 |
|
Provision for credit
losses |
|
13,772 |
|
|
|
8,746 |
|
|
|
2,063 |
|
|
|
45,481 |
|
|
|
11,499 |
|
Net interest income after
provision for credit losses |
|
215,427 |
|
|
|
183,774 |
|
|
|
192,920 |
|
|
|
777,865 |
|
|
|
650,878 |
|
|
|
|
|
|
|
|
|
|
|
Noninterest
income: |
|
|
|
|
|
|
|
|
|
Service charges on
deposit accounts |
|
3,901 |
|
|
|
2,601 |
|
|
|
2,787 |
|
|
|
11,688 |
|
|
|
11,233 |
|
Other commissions and
fees |
|
12,691 |
|
|
|
6,376 |
|
|
|
4,556 |
|
|
|
31,586 |
|
|
|
18,602 |
|
Leased equipment
income |
|
7,791 |
|
|
|
5,475 |
|
|
|
5,382 |
|
|
|
24,023 |
|
|
|
16,669 |
|
Gain on sale of loans
and leases |
|
183 |
|
|
|
27 |
|
|
|
7 |
|
|
|
373 |
|
|
|
601 |
|
Gain on securities |
|
- |
|
|
|
655 |
|
|
|
- |
|
|
|
3,744 |
|
|
|
4,841 |
|
FDIC loss sharing
expense, net |
|
(4,291 |
) |
|
|
(4,449 |
) |
|
|
(4,360 |
) |
|
|
(18,246 |
) |
|
|
(31,730 |
) |
Other income |
|
7,783 |
|
|
|
5,073 |
|
|
|
4,331 |
|
|
|
31,142 |
|
|
|
21,971 |
|
Total noninterest
income |
|
28,058 |
|
|
|
15,758 |
|
|
|
12,703 |
|
|
|
84,310 |
|
|
|
42,187 |
|
|
|
|
|
|
|
|
|
|
|
Noninterest
expense: |
|
|
|
|
|
|
|
|
|
Compensation |
|
58,992 |
|
|
|
48,152 |
|
|
|
45,930 |
|
|
|
203,914 |
|
|
|
165,499 |
|
Occupancy |
|
12,194 |
|
|
|
10,762 |
|
|
|
10,745 |
|
|
|
44,144 |
|
|
|
40,606 |
|
Data processing |
|
5,585 |
|
|
|
4,322 |
|
|
|
4,050 |
|
|
|
18,617 |
|
|
|
14,618 |
|
Other professional
services |
|
3,811 |
|
|
|
3,396 |
|
|
|
3,181 |
|
|
|
13,760 |
|
|
|
11,234 |
|
Insurance and
assessments |
|
5,450 |
|
|
|
3,805 |
|
|
|
3,115 |
|
|
|
16,996 |
|
|
|
10,907 |
|
Intangible asset
amortization |
|
4,910 |
|
|
|
1,497 |
|
|
|
1,619 |
|
|
|
9,410 |
|
|
|
6,268 |
|
Leased equipment
depreciation |
|
4,235 |
|
|
|
3,162 |
|
|
|
3,103 |
|
|
|
13,603 |
|
|
|
9,159 |
|
Foreclosed assets
(income) expense, net |
|
(3,185 |
) |
|
|
4,521 |
|
|
|
1,938 |
|
|
|
(668 |
) |
|
|
5,401 |
|
Acquisition,
integration and reorganization costs |
|
17,600 |
|
|
|
747 |
|
|
|
7,381 |
|
|
|
21,247 |
|
|
|
101,016 |
|
Other expense |
|
12,672 |
|
|
|
9,775 |
|
|
|
10,243 |
|
|
|
41,016 |
|
|
|
40,884 |
|
Total noninterest
expense |
|
122,264 |
|
|
|
90,139 |
|
|
|
91,305 |
|
|
|
382,039 |
|
|
|
405,592 |
|
|
|
|
|
|
|
|
|
|
|
Earnings
from continuing operations before taxes |
|
121,221 |
|
|
|
109,393 |
|
|
|
114,318 |
|
|
|
480,136 |
|
|
|
287,473 |
|
Income tax
expense |
|
(49,380 |
) |
|
|
(39,777 |
) |
|
|
(43,261 |
) |
|
|
(180,517 |
) |
|
|
(117,005 |
) |
Net earnings from
continuing operations |
|
71,841 |
|
|
|
69,616 |
|
|
|
71,057 |
|
|
|
299,619 |
|
|
|
170,468 |
|
|
|
|
|
|
|
|
|
|
|
Loss from discontinued
operations before taxes |
|
- |
|
|
|
- |
|
|
|
(105 |
) |
|
|
- |
|
|
|
(2,677 |
) |
Income tax
benefit |
|
- |
|
|
|
- |
|
|
|
47 |
|
|
|
- |
|
|
|
1,114 |
|
Net loss from discontinued
operations |
|
- |
|
|
|
- |
|
|
|
(58 |
) |
|
|
- |
|
|
|
(1,563 |
) |
|
|
|
|
|
|
|
|
|
|
Net
earnings |
$ |
71,841 |
|
|
$ |
69,616 |
|
|
$ |
70,999 |
|
|
$ |
299,619 |
|
|
$ |
168,905 |
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted
earnings per share: |
|
|
|
|
|
|
|
|
|
Net earnings from continuing
operations |
$ |
0.60 |
|
|
$ |
0.68 |
|
|
$ |
0.69 |
|
|
$ |
2.79 |
|
|
$ |
1.94 |
|
Net earnings |
$ |
0.60 |
|
|
$ |
0.68 |
|
|
$ |
0.69 |
|
|
$ |
2.79 |
|
|
$ |
1.92 |
|
PACWEST BANCORP AND SUBSIDIARIES |
|
AVERAGE BALANCE SHEET AND YIELD ANALYSIS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
December 31, 2015 |
|
September 30, 2015 |
|
December 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 |
$ |
169,772 |
|
$ |
6,345 |
|
|
14.83 |
% |
|
$ |
193,094 |
|
$ |
7,505 |
|
|
15.42 |
% |
|
$ |
311,061 |
|
$ |
11,247 |
|
|
14.34 |
% |
|
Non-PCI loans and
leases |
|
13,861,330 |
|
|
213,332 |
|
|
6.11 |
% |
|
|
11,919,787 |
|
|
186,034 |
|
|
6.19 |
% |
|
|
11,275,512 |
|
|
186,225 |
|
|
6.55 |
% |
|
Total loans and leases |
|
14,031,102 |
|
|
219,677 |
|
|
6.21 |
% |
|
|
12,112,881 |
|
|
193,539 |
|
|
6.34 |
% |
|
|
11,586,573 |
|
|
197,472 |
|
|
6.76 |
% |
|
Investment securities
(1) |
|
3,492,124 |
|
|
28,408 |
|
|
3.23 |
% |
|
|
1,806,628 |
|
|
16,709 |
|
|
3.67 |
% |
|
|
1,591,839 |
|
|
13,840 |
|
|
3.45 |
% |
|
Deposits
in financial institutions |
|
254,308 |
|
|
172 |
|
|
0.27 |
% |
|
|
278,973 |
|
|
178 |
|
|
0.25 |
% |
|
|
26,971 |
|
|
19 |
|
|
0.28 |
% |
|
Total interest-earning assets |
|
17,777,534 |
|
|
248,257 |
|
|
5.54 |
% |
|
|
14,198,482 |
|
|
210,426 |
|
|
5.88 |
% |
|
|
13,205,383 |
|
|
211,331 |
|
|
6.35 |
% |
|
Other assets |
|
3,047,714 |
|
|
|
|
|
2,491,695 |
|
|
|
|
|
2,687,378 |
|
|
|
|
Total assets |
$ |
20,825,248 |
|
|
|
|
$ |
16,690,177 |
|
|
|
|
$ |
15,892,761 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities
and Stockholders'
Equity: |
|
|
|
|
|
|
|
|
|
|
|
|
Interest checking |
$ |
889,035 |
|
|
345 |
|
|
0.15 |
% |
|
$ |
787,271 |
|
|
300 |
|
|
0.15 |
% |
|
$ |
702,498 |
|
|
194 |
|
|
0.11 |
% |
|
Money market |
|
3,557,364 |
|
|
1,543 |
|
|
0.17 |
% |
|
|
2,417,280 |
|
|
1,218 |
|
|
0.20 |
% |
|
|
1,788,341 |
|
|
932 |
|
|
0.21 |
% |
|
Savings |
|
747,054 |
|
|
445 |
|
|
0.24 |
% |
|
|
746,362 |
|
|
449 |
|
|
0.24 |
% |
|
|
761,073 |
|
|
572 |
|
|
0.30 |
% |
|
Time |
|
4,439,940 |
|
|
7,058 |
|
|
0.63 |
% |
|
|
5,042,768 |
|
|
8,433 |
|
|
0.66 |
% |
|
|
5,427,687 |
|
|
8,274 |
|
|
0.60 |
% |
|
Total interest-bearing
deposits |
|
9,633,393 |
|
|
9,391 |
|
|
0.39 |
% |
|
|
8,993,681 |
|
|
10,400 |
|
|
0.46 |
% |
|
|
8,679,599 |
|
|
9,972 |
|
|
0.46 |
% |
|
Borrowings |
|
206,236 |
|
|
159 |
|
|
0.31 |
% |
|
|
70,171 |
|
|
72 |
|
|
0.41 |
% |
|
|
214,053 |
|
|
144 |
|
|
0.27 |
% |
|
Subordinated
debentures |
|
435,293 |
|
|
4,748 |
|
|
4.33 |
% |
|
|
434,420 |
|
|
4,680 |
|
|
4.27 |
% |
|
|
433,859 |
|
|
4,597 |
|
|
4.20 |
% |
|
Total interest-bearing
liabilities |
|
10,274,922 |
|
|
14,298 |
|
|
0.55 |
% |
|
|
9,498,272 |
|
|
15,152 |
|
|
0.63 |
% |
|
|
9,327,511 |
|
|
14,713 |
|
|
0.63 |
% |
|
Noninterest-bearing demand deposits |
|
6,043,900 |
|
|
|
|
|
3,486,780 |
|
|
|
|
|
2,900,388 |
|
|
|
|
Other liabilities |
|
160,264 |
|
|
|
|
|
132,360 |
|
|
|
|
|
164,571 |
|
|
|
|
Total liabilities |
|
16,479,086 |
|
|
|
|
|
13,117,412 |
|
|
|
|
|
12,392,470 |
|
|
|
|
Stockholders'
equity |
|
4,346,162 |
|
|
|
|
|
3,572,765 |
|
|
|
|
|
3,500,291 |
|
|
|
|
Total liabilities and stockholders'
equity |
$ |
20,825,248 |
|
|
|
|
$ |
16,690,177 |
|
|
|
|
$ |
15,892,761 |
|
|
|
|
Net interest income
(2) |
|
$ |
233,959 |
|
|
|
|
$ |
195,274 |
|
|
|
|
$ |
196,618 |
|
|
|
Net interest spread
(2) |
|
|
|
4.99 |
% |
|
|
|
|
5.25 |
% |
|
|
|
|
5.72 |
% |
|
Net interest margin
(2) |
|
|
|
5.22 |
% |
|
|
|
|
5.46 |
% |
|
|
|
|
5.91 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total deposits (3) |
$ |
15,677,293 |
|
$ |
9,391 |
|
|
0.24 |
% |
|
$ |
12,480,461 |
|
$ |
10,400 |
|
|
0.33 |
% |
|
$ |
11,579,987 |
|
$ |
9,972 |
|
|
0.34 |
% |
|
Funding sources
(4) |
$ |
16,318,822 |
|
$ |
14,298 |
|
|
0.35 |
% |
|
$ |
12,985,052 |
|
$ |
15,152 |
|
|
0.46 |
% |
|
$ |
12,227,899 |
|
$ |
14,713 |
|
|
0.48 |
% |
|
___________________ |
|
|
|
|
|
|
|
|
|
|
|
|
(1) Includes tax equivalent adjustments of $4.8 million, $2.8
million, and $1.6 million for the three months ended December 31,
2015, September 30, 2015, and December 31, 2014 related to tax
exempt income on municipal securities. The federal statutory
tax rate utilized was 35% for the periods. |
|
(2) Tax equivalent. |
|
(3) 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. |
|
(4) 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. |
|
PACWEST BANCORP AND SUBSIDIARIES |
|
FIVE QUARTER BALANCE SHEET |
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, |
|
September 30, |
|
June 30, |
|
March 31, |
|
December 31, |
|
|
|
2015 |
|
|
|
2015 |
|
|
|
2015 |
|
|
|
2015 |
|
|
|
2014 |
|
|
|
(Dollars in thousands, except per share
data) |
|
ASSETS: |
|
|
|
|
|
|
|
|
|
|
Cash and due from
banks |
$ |
161,020 |
|
|
$ |
154,652 |
|
|
$ |
207,598 |
|
|
$ |
140,873 |
|
|
$ |
164,757 |
|
|
Interest-earning deposits in financial institutions |
|
235,466 |
|
|
|
81,642 |
|
|
|
433,033 |
|
|
|
250,981 |
|
|
|
148,469 |
|
|
Total cash and cash
equivalents |
|
396,486 |
|
|
|
236,294 |
|
|
|
640,631 |
|
|
|
391,854 |
|
|
|
313,226 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Securities
available-for-sale |
|
3,559,437 |
|
|
|
1,809,364 |
|
|
|
1,698,158 |
|
|
|
1,595,409 |
|
|
|
1,567,177 |
|
|
Federal Home Loan Bank
stock, at cost |
|
19,710 |
|
|
|
17,250 |
|
|
|
17,250 |
|
|
|
28,905 |
|
|
|
40,609 |
|
|
Total investment
securities |
|
3,579,147 |
|
|
|
1,826,614 |
|
|
|
1,715,408 |
|
|
|
1,624,314 |
|
|
|
1,607,786 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-PCI loans and
leases |
|
14,339,070 |
|
|
|
12,300,057 |
|
|
|
11,846,314 |
|
|
|
12,047,946 |
|
|
|
11,613,832 |
|
|
PCI loans |
|
189,095 |
|
|
|
193,340 |
|
|
|
222,691 |
|
|
|
254,346 |
|
|
|
290,852 |
|
|
Total gross loans and leases |
|
14,528,165 |
|
|
|
12,493,397 |
|
|
|
12,069,005 |
|
|
|
12,302,292 |
|
|
|
11,904,684 |
|
|
Deferred fees and
costs |
|
(49,911 |
) |
|
|
(41,192 |
) |
|
|
(34,816 |
) |
|
|
(30,126 |
) |
|
|
(22,252 |
) |
|
Total loans and leases, net of
deferred fees |
|
14,478,254 |
|
|
|
12,452,205 |
|
|
|
12,034,189 |
|
|
|
12,272,166 |
|
|
|
11,882,432 |
|
|
Allowance for loan and
lease losses |
|
(115,111 |
) |
|
|
(103,271 |
) |
|
|
(99,375 |
) |
|
|
(92,378 |
) |
|
|
(84,455 |
) |
|
Total loans and leases,
net |
|
14,363,143 |
|
|
|
12,348,934 |
|
|
|
11,934,814 |
|
|
|
12,179,788 |
|
|
|
11,797,977 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Equipment leased to others under operating leases |
|
197,452 |
|
|
|
161,508 |
|
|
|
117,182 |
|
|
|
119,959 |
|
|
|
122,506 |
|
|
Premises and equipment,
net |
|
39,197 |
|
|
|
36,475 |
|
|
|
35,984 |
|
|
|
36,022 |
|
|
|
36,551 |
|
|
Foreclosed assets,
net |
|
22,120 |
|
|
|
33,216 |
|
|
|
31,668 |
|
|
|
35,940 |
|
|
|
43,721 |
|
|
Deferred tax asset,
net |
|
126,389 |
|
|
|
169,760 |
|
|
|
211,556 |
|
|
|
236,065 |
|
|
|
284,411 |
|
|
Goodwill |
|
2,176,291 |
|
|
|
1,728,380 |
|
|
|
1,728,380 |
|
|
|
1,728,380 |
|
|
|
1,720,479 |
|
|
Core
deposit and customer relationship intangibles, net |
|
53,220 |
|
|
|
12,704 |
|
|
|
14,201 |
|
|
|
15,703 |
|
|
|
17,204 |
|
|
Other assets |
|
335,045 |
|
|
|
260,220 |
|
|
|
267,196 |
|
|
|
275,915 |
|
|
|
290,744 |
|
|
Total assets |
$ |
21,288,490 |
|
|
$ |
16,814,105 |
|
|
$ |
16,697,020 |
|
|
$ |
16,643,940 |
|
|
$ |
16,234,605 |
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES: |
|
|
|
|
|
|
|
|
|
|
Noninterest-bearing
deposits |
$ |
6,171,455 |
|
|
$ |
3,508,682 |
|
|
$ |
3,396,688 |
|
|
$ |
3,029,463 |
|
|
$ |
2,931,352 |
|
|
Interest-bearing
deposits |
|
9,494,727 |
|
|
|
8,607,081 |
|
|
|
9,185,128 |
|
|
|
8,904,712 |
|
|
|
8,823,776 |
|
|
Total
deposits |
|
15,666,182 |
|
|
|
12,115,763 |
|
|
|
12,581,816 |
|
|
|
11,934,175 |
|
|
|
11,755,128 |
|
|
Borrowings |
|
621,914 |
|
|
|
552,497 |
|
|
|
2,751 |
|
|
|
618,156 |
|
|
|
383,402 |
|
|
Subordinated
debentures |
|
436,000 |
|
|
|
435,417 |
|
|
|
433,944 |
|
|
|
431,448 |
|
|
|
433,583 |
|
|
Accrued
interest payable and other liabilities |
|
166,703 |
|
|
|
128,724 |
|
|
|
127,019 |
|
|
|
126,800 |
|
|
|
156,262 |
|
|
Total
liabilities |
|
16,890,799 |
|
|
|
13,232,401 |
|
|
|
13,145,530 |
|
|
|
13,110,579 |
|
|
|
12,728,375 |
|
|
STOCKHOLDERS'
EQUITY (1) |
|
4,397,691 |
|
|
|
3,581,704 |
|
|
|
3,551,490 |
|
|
|
3,533,361 |
|
|
|
3,506,230 |
|
|
Total liabilities and
stockholders’ equity |
$ |
21,288,490 |
|
|
$ |
16,814,105 |
|
|
$ |
16,697,020 |
|
|
$ |
16,643,940 |
|
|
$ |
16,234,605 |
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
Includes net unrealized gain on securities available-for-sale,
net |
$ |
27,828 |
|
|
$ |
24,459 |
|
|
$ |
16,255 |
|
|
$ |
28,744 |
|
|
$ |
26,380 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Book value per
share |
$ |
36.22 |
|
|
$ |
34.76 |
|
|
$ |
34.46 |
|
|
$ |
34.29 |
|
|
$ |
34.03 |
|
|
Tangible book value per
share |
$ |
17.86 |
|
|
$ |
17.86 |
|
|
$ |
17.55 |
|
|
$ |
17.36 |
|
|
$ |
17.17 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares
outstanding (includes unvested restricted shares) |
|
121,413,727 |
|
|
|
103,053,694 |
|
|
|
103,051,989 |
|
|
|
103,044,257 |
|
|
|
103,022,017 |
|
|
PACWEST BANCORP AND SUBSIDIARIES |
FIVE QUARTER STATEMENT OF EARNINGS |
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
December 31, |
|
September 30, |
|
June 30, |
|
March 31, |
|
December 31, |
|
|
2015 |
|
|
|
2015 |
|
|
|
2015 |
|
|
|
2015 |
|
|
|
2014 |
|
|
(Dollars in thousands, except per share
data) |
Interest
income: |
|
|
|
|
|
|
|
|
|
Loans and leases |
$ |
219,677 |
|
|
$ |
193,539 |
|
|
$ |
203,781 |
|
|
$ |
202,097 |
|
|
$ |
197,472 |
|
Investment
securities |
|
23,648 |
|
|
|
13,955 |
|
|
|
14,570 |
|
|
|
12,195 |
|
|
|
12,205 |
|
Deposits in financial
institutions |
|
172 |
|
|
|
178 |
|
|
|
104 |
|
|
|
22 |
|
|
|
19 |
|
Total interest
income |
|
243,497 |
|
|
|
207,672 |
|
|
|
218,455 |
|
|
|
214,314 |
|
|
|
209,696 |
|
|
|
|
|
|
|
|
|
|
|
Interest
expense: |
|
|
|
|
|
|
|
|
|
Deposits |
|
9,391 |
|
|
|
10,400 |
|
|
|
11,233 |
|
|
|
10,479 |
|
|
|
9,972 |
|
Borrowings |
|
159 |
|
|
|
72 |
|
|
|
88 |
|
|
|
235 |
|
|
|
144 |
|
Subordinated
debentures |
|
4,748 |
|
|
|
4,680 |
|
|
|
4,582 |
|
|
|
4,525 |
|
|
|
4,597 |
|
Total interest
expense |
|
14,298 |
|
|
|
15,152 |
|
|
|
15,903 |
|
|
|
15,239 |
|
|
|
14,713 |
|
|
|
|
|
|
|
|
|
|
|
Net interest
income |
|
229,199 |
|
|
|
192,520 |
|
|
|
202,552 |
|
|
|
199,075 |
|
|
|
194,983 |
|
Provision for credit
losses |
|
13,772 |
|
|
|
8,746 |
|
|
|
6,529 |
|
|
|
16,434 |
|
|
|
2,063 |
|
Net interest income after
provision for credit losses |
|
215,427 |
|
|
|
183,774 |
|
|
|
196,023 |
|
|
|
182,641 |
|
|
|
192,920 |
|
|
|
|
|
|
|
|
|
|
|
Noninterest
income: |
|
|
|
|
|
|
|
|
|
Service charges on
deposit accounts |
|
3,901 |
|
|
|
2,601 |
|
|
|
2,612 |
|
|
|
2,574 |
|
|
|
2,787 |
|
Other commissions and
fees |
|
12,691 |
|
|
|
6,376 |
|
|
|
7,123 |
|
|
|
5,396 |
|
|
|
4,556 |
|
Leased equipment
income |
|
7,791 |
|
|
|
5,475 |
|
|
|
5,375 |
|
|
|
5,382 |
|
|
|
5,382 |
|
Gain on sale of loans
and leases |
|
183 |
|
|
|
27 |
|
|
|
163 |
|
|
|
- |
|
|
|
7 |
|
Gain (loss) on
securities |
|
- |
|
|
|
655 |
|
|
|
(186 |
) |
|
|
3,275 |
|
|
|
- |
|
FDIC loss sharing
expense, net |
|
(4,291 |
) |
|
|
(4,449 |
) |
|
|
(5,107 |
) |
|
|
(4,399 |
) |
|
|
(4,360 |
) |
Other income |
|
7,783 |
|
|
|
5,073 |
|
|
|
9,643 |
|
|
|
8,643 |
|
|
|
4,331 |
|
Total noninterest
income |
|
28,058 |
|
|
|
15,758 |
|
|
|
19,623 |
|
|
|
20,871 |
|
|
|
12,703 |
|
|
|
|
|
|
|
|
|
|
|
Noninterest
expense: |
|
|
|
|
|
|
|
|
|
Compensation |
|
58,992 |
|
|
|
48,152 |
|
|
|
49,033 |
|
|
|
47,737 |
|
|
|
45,930 |
|
Occupancy |
|
12,194 |
|
|
|
10,762 |
|
|
|
10,588 |
|
|
|
10,600 |
|
|
|
10,745 |
|
Data processing |
|
5,585 |
|
|
|
4,322 |
|
|
|
4,402 |
|
|
|
4,308 |
|
|
|
4,050 |
|
Other professional
services |
|
3,811 |
|
|
|
3,396 |
|
|
|
3,332 |
|
|
|
3,221 |
|
|
|
3,181 |
|
Insurance and
assessments |
|
5,450 |
|
|
|
3,805 |
|
|
|
4,716 |
|
|
|
3,025 |
|
|
|
3,115 |
|
Intangible asset
amortization |
|
4,910 |
|
|
|
1,497 |
|
|
|
1,502 |
|
|
|
1,501 |
|
|
|
1,619 |
|
Leased equipment
depreciation |
|
4,235 |
|
|
|
3,162 |
|
|
|
3,103 |
|
|
|
3,103 |
|
|
|
3,103 |
|
Foreclosed assets
(income) expense, net |
|
(3,185 |
) |
|
|
4,521 |
|
|
|
(2,340 |
) |
|
|
336 |
|
|
|
1,938 |
|
Acquisition,
integration and reorganization costs |
|
17,600 |
|
|
|
747 |
|
|
|
900 |
|
|
|
2,000 |
|
|
|
7,381 |
|
Other expense |
|
12,672 |
|
|
|
9,775 |
|
|
|
10,040 |
|
|
|
8,529 |
|
|
|
10,243 |
|
Total noninterest
expense |
|
122,264 |
|
|
|
90,139 |
|
|
|
85,276 |
|
|
|
84,360 |
|
|
|
91,305 |
|
|
|
|
|
|
|
|
|
|
|
Earnings
from continuing operations before taxes |
|
121,221 |
|
|
|
109,393 |
|
|
|
130,370 |
|
|
|
119,152 |
|
|
|
114,318 |
|
Income tax
expense |
|
(49,380 |
) |
|
|
(39,777 |
) |
|
|
(45,287 |
) |
|
|
(46,073 |
) |
|
|
(43,261 |
) |
Net earnings from
continuing operations |
|
71,841 |
|
|
|
69,616 |
|
|
|
85,083 |
|
|
|
73,079 |
|
|
|
71,057 |
|
|
|
|
|
|
|
|
|
|
|
Loss from discontinued
operations before taxes |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(105 |
) |
Income tax benefit |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
47 |
|
Net loss from discontinued
operations |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(58 |
) |
|
|
|
|
|
|
|
|
|
|
Net
earnings |
$ |
71,841 |
|
|
$ |
69,616 |
|
|
$ |
85,083 |
|
|
$ |
73,079 |
|
|
$ |
70,999 |
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted
earnings per share: |
|
|
|
|
|
|
|
|
|
Net earnings from continuing
operations |
$ |
0.60 |
|
|
$ |
0.68 |
|
|
$ |
0.83 |
|
|
$ |
0.71 |
|
|
$ |
0.69 |
|
Net earnings |
$ |
0.60 |
|
|
$ |
0.68 |
|
|
$ |
0.83 |
|
|
$ |
0.71 |
|
|
$ |
0.69 |
|
PACWEST BANCORP AND SUBSIDIARIES |
|
FIVE QUARTER SELECTED FINANCIAL DATA |
|
|
|
|
|
|
|
|
|
|
|
|
|
At or For the Three Months Ended |
|
|
December 31, |
|
September 30, |
|
June 30, |
|
March 31, |
|
December 31, |
|
|
|
2015 |
|
|
|
2015 |
|
|
|
2015 |
|
|
|
2015 |
|
|
|
2014 |
|
|
|
(Dollars in
thousands)
|
|
Performance
Ratios - GAAP: |
|
|
|
|
|
|
|
|
|
|
Return on average assets (1) |
|
1.37 |
% |
|
|
1.65 |
% |
|
|
2.07 |
% |
|
|
1.82 |
% |
|
|
1.77 |
% |
|
Return on average equity (1) |
|
6.56 |
% |
|
|
7.73 |
% |
|
|
9.62 |
% |
|
|
8.39 |
% |
|
|
8.05 |
% |
|
Yield on average loans and
leases |
|
6.21 |
% |
|
|
6.34 |
% |
|
|
6.75 |
% |
|
|
6.80 |
% |
|
|
6.76 |
% |
|
Yield on average interest-earning
assets (2) |
|
5.54 |
% |
|
|
5.88 |
% |
|
|
6.35 |
% |
|
|
6.40 |
% |
|
|
6.35 |
% |
|
Cost of average total deposits |
|
0.24 |
% |
|
|
0.33 |
% |
|
|
0.37 |
% |
|
|
0.36 |
% |
|
|
0.34 |
% |
|
Cost of average time deposits |
|
0.63 |
% |
|
|
0.66 |
% |
|
|
0.68 |
% |
|
|
0.65 |
% |
|
|
0.60 |
% |
|
Cost of average interest-bearing
liabilities |
|
0.55 |
% |
|
|
0.63 |
% |
|
|
0.66 |
% |
|
|
0.64 |
% |
|
|
0.63 |
% |
|
Cost of average funding
sources |
|
0.35 |
% |
|
|
0.46 |
% |
|
|
0.50 |
% |
|
|
0.49 |
% |
|
|
0.48 |
% |
|
Net interest rate spread (2) |
|
4.99 |
% |
|
|
5.25 |
% |
|
|
5.69 |
% |
|
|
5.76 |
% |
|
|
5.72 |
% |
|
Net interest margin (2) |
|
5.22 |
% |
|
|
5.46 |
% |
|
|
5.89 |
% |
|
|
5.95 |
% |
|
|
5.91 |
% |
|
Noninterest expense as a percentage
of average assets (1) |
|
2.33 |
% |
|
|
2.14 |
% |
|
|
2.08 |
% |
|
|
2.10 |
% |
|
|
2.28 |
% |
|
Efficiency ratio |
|
39.3 |
% |
|
|
39.6 |
% |
|
|
38.0 |
% |
|
|
36.9 |
% |
|
|
38.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Performance
Ratios - Non-GAAP: |
|
|
|
|
|
|
|
|
|
|
Adjusted return on average assets
(1) |
|
1.60 |
% |
|
|
1.55 |
% |
|
|
1.78 |
% |
|
|
1.63 |
% |
|
|
1.70 |
% |
|
Adjusted return on average equity
(1) |
|
7.66 |
% |
|
|
7.22 |
% |
|
|
8.25 |
% |
|
|
7.51 |
% |
|
|
7.71 |
% |
|
Return on average tangible equity
(1) |
|
13.14 |
% |
|
|
15.09 |
% |
|
|
18.90 |
% |
|
|
16.50 |
% |
|
|
16.00 |
% |
|
Adjusted return on average tangible
equity (1) |
|
15.35 |
% |
|
|
14.10 |
% |
|
|
16.21 |
% |
|
|
14.78 |
% |
|
|
15.33 |
% |
|
Core net interest margin (2) |
|
5.10 |
% |
|
|
5.19 |
% |
|
|
5.33 |
% |
|
|
5.44 |
% |
|
|
5.57 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Average
Balances: |
|
|
|
|
|
|
|
|
|
|
Loans and leases |
$ |
14,031,102 |
|
|
$ |
12,112,881 |
|
|
$ |
12,108,016 |
|
|
$ |
12,055,682 |
|
|
$ |
11,586,573 |
|
|
Interest-earning assets |
|
17,777,534 |
|
|
|
14,198,482 |
|
|
|
13,942,289 |
|
|
|
13,701,865 |
|
|
|
13,205,383 |
|
|
Total assets |
|
20,825,248 |
|
|
|
16,690,177 |
|
|
|
16,463,311 |
|
|
|
16,296,640 |
|
|
|
15,892,761 |
|
|
Noninterest-bearing deposits |
|
6,043,900 |
|
|
|
3,486,780 |
|
|
|
3,157,129 |
|
|
|
2,949,719 |
|
|
|
2,900,388 |
|
|
Interest-bearing deposits |
|
9,633,393 |
|
|
|
8,993,681 |
|
|
|
9,107,937 |
|
|
|
8,801,306 |
|
|
|
8,679,599 |
|
|
Total deposits |
|
15,677,293 |
|
|
|
12,480,461 |
|
|
|
12,265,066 |
|
|
|
11,751,025 |
|
|
|
11,579,987 |
|
|
Borrowings and subordinated
debentures |
|
641,529 |
|
|
|
504,591 |
|
|
|
513,820 |
|
|
|
856,664 |
|
|
|
647,912 |
|
|
Interest-bearing liabilities |
|
10,274,922 |
|
|
|
9,498,272 |
|
|
|
9,621,757 |
|
|
|
9,657,970 |
|
|
|
9,327,511 |
|
|
Funding sources |
|
16,318,822 |
|
|
|
12,985,052 |
|
|
|
12,778,886 |
|
|
|
12,607,689 |
|
|
|
12,227,899 |
|
|
Stockholders' equity |
|
4,346,162 |
|
|
|
3,572,765 |
|
|
|
3,548,748 |
|
|
|
3,533,343 |
|
|
|
3,500,291 |
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
Annualized. |
|
|
|
|
|
|
|
|
|
|
(2) Tax
equivalent. |
|
|
|
|
|
|
|
|
|
|
PACWEST BANCORP AND SUBSIDIARIES |
FIVE QUARTER SELECTED FINANCIAL DATA |
|
|
|
|
|
|
|
|
|
|
|
At or For the Three Months Ended |
|
December 31, |
|
September 30, |
|
June 30, |
|
March 31, |
|
December 31, |
|
|
2015 |
|
|
|
2015 |
|
|
|
2015 |
|
|
|
2015 |
|
|
|
2014 |
|
|
(Dollars in
thousands)
|
Non-PCI Credit Quality: |
|
|
|
|
|
|
|
|
|
Allowance for credit losses to
loans and leases |
|
0.85 |
% |
|
|
0.82 |
% |
|
|
0.78 |
% |
|
|
0.72 |
% |
|
|
0.66 |
% |
Allowance for credit losses to
nonaccrual loans and leases |
|
95 |
% |
|
|
94 |
% |
|
|
71 |
% |
|
|
62 |
% |
|
|
92 |
% |
Nonaccrual loans and leases to
loans and leases |
|
0.90 |
% |
|
|
0.87 |
% |
|
|
1.11 |
% |
|
|
1.16 |
% |
|
|
0.72 |
% |
Nonperforming assets to loans and
leases and foreclosed assets |
|
1.06 |
% |
|
|
1.14 |
% |
|
|
1.37 |
% |
|
|
1.45 |
% |
|
|
1.09 |
% |
Nonperforming assets to total
assets |
|
0.71 |
% |
|
|
0.84 |
% |
|
|
0.98 |
% |
|
|
1.05 |
% |
|
|
0.78 |
% |
Trailing twelve month net
charge-offs to average loans and leases |
|
0.06 |
% |
|
|
0.04 |
% |
|
|
0.06 |
% |
|
|
0.07 |
% |
|
|
0.02 |
% |
|
|
|
|
|
|
|
|
|
|
PacWest Bancorp Consolidated Capital: |
|
|
|
|
|
|
|
|
|
Tier 1 leverage ratio (1) |
|
11.67 |
% |
|
|
12.04 |
% |
|
|
11.96 |
% |
|
|
11.74 |
% |
|
|
12.34 |
% |
Common equity tier 1 capital ratio
(1) |
|
12.56 |
% |
|
|
12.74 |
% |
|
|
12.87 |
% |
|
|
12.27 |
% |
|
|
N/A |
|
Tier 1 capital ratio (1) |
|
12.58 |
% |
|
|
12.74 |
% |
|
|
12.87 |
% |
|
|
12.27 |
% |
|
|
13.16 |
% |
Total capital ratio (1) |
|
15.60 |
% |
|
|
16.32 |
% |
|
|
16.53 |
% |
|
|
15.80 |
% |
|
|
16.07 |
% |
Tangible common equity ratio
(non-GAAP measure) |
|
11.38 |
% |
|
|
12.21 |
% |
|
|
12.10 |
% |
|
|
12.01 |
% |
|
|
12.20 |
% |
Risk-weighted assets (1) |
$ |
17,198,540 |
|
|
$ |
14,038,839 |
|
|
$ |
13,569,369 |
|
|
$ |
13,776,106 |
|
|
$ |
13,096,354 |
|
|
|
|
|
|
|
|
|
|
|
Pacific Western Bank Capital: |
|
|
|
|
|
|
|
|
|
Tier 1 leverage ratio (1) |
|
11.40 |
% |
|
|
11.56 |
% |
|
|
11.65 |
% |
|
|
11.53 |
% |
|
|
11.70 |
% |
Common equity tier 1 capital ratio
(1) |
|
12.03 |
% |
|
|
12.25 |
% |
|
|
12.55 |
% |
|
|
12.07 |
% |
|
|
N/A |
|
Tier 1 capital ratio (1) |
|
12.03 |
% |
|
|
12.25 |
% |
|
|
12.55 |
% |
|
|
12.07 |
% |
|
|
12.46 |
% |
Total capital ratio (1) |
|
12.78 |
% |
|
|
13.05 |
% |
|
|
13.35 |
% |
|
|
12.80 |
% |
|
|
13.16 |
% |
Tangible common equity ratio
(non-GAAP measure) |
|
10.80 |
% |
|
|
11.53 |
% |
|
|
11.46 |
% |
|
|
11.32 |
% |
|
|
11.51 |
% |
___________________________ |
|
|
|
|
|
|
|
|
|
(1) Capital information for December 31, 2015 is
preliminary. |
PACWEST BANCORP AND SUBSIDIARIES |
NET EARNINGS PER SHARE CALCULATIONS |
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Year Ended |
|
December 31, |
|
September 30, |
|
December 31, |
|
December 31, |
|
|
2015 |
|
|
|
2015 |
|
|
|
2014 |
|
|
|
2015 |
|
|
|
2014 |
|
|
(Dollars in thousands, except per share
data) |
Basic Earnings
Per Share: |
|
|
|
|
|
|
|
|
|
Net earnings from continuing
operations |
$ |
71,841 |
|
|
$ |
69,616 |
|
|
$ |
71,057 |
|
|
$ |
299,619 |
|
|
$ |
170,468 |
|
Less: earnings allocated to
unvested restricted stock (1) |
|
(690 |
) |
|
|
(649 |
) |
|
|
(810 |
) |
|
|
(2,892 |
) |
|
|
(1,959 |
) |
Net earnings from continuing
operations allocated to common shares |
|
71,151 |
|
|
|
68,967 |
|
|
|
70,247 |
|
|
|
296,727 |
|
|
|
168,509 |
|
Net earnings from discontinued
operations allocated to common shares |
|
- |
|
|
|
- |
|
|
|
(57 |
) |
|
|
- |
|
|
|
(1,545 |
) |
Net earnings allocated to common
shares |
$ |
71,151 |
|
|
$ |
68,967 |
|
|
$ |
70,190 |
|
|
$ |
296,727 |
|
|
$ |
166,964 |
|
|
|
|
|
|
|
|
|
|
|
Weighted-average basic shares and
unvested restricted stock outstanding |
|
120,385 |
|
|
|
103,048 |
|
|
|
103,045 |
|
|
|
107,401 |
|
|
|
87,871 |
|
Less: weighted-average unvested
restricted stock outstanding |
|
(1,133 |
) |
|
|
(985 |
) |
|
|
(1,132 |
) |
|
|
(1,074 |
) |
|
|
(1,018 |
) |
Weighted-average basic shares
outstanding |
|
119,252 |
|
|
|
102,063 |
|
|
|
101,913 |
|
|
|
106,327 |
|
|
|
86,853 |
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per share: |
|
|
|
|
|
|
|
|
|
Net earnings from continuing
operations |
$ |
0.60 |
|
|
$ |
0.68 |
|
|
$ |
0.69 |
|
|
$ |
2.79 |
|
|
$ |
1.94 |
|
Net earnings from discontinued
operations |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(0.02 |
) |
Net earnings |
$ |
0.60 |
|
|
$ |
0.68 |
|
|
$ |
0.69 |
|
|
$ |
2.79 |
|
|
$ |
1.92 |
|
|
|
|
|
|
|
|
|
|
|
Diluted
Earnings Per Share: |
|
|
|
|
|
|
|
|
|
Net earnings from continuing
operations allocated to common shares |
$ |
71,151 |
|
|
$ |
68,967 |
|
|
$ |
70,247 |
|
|
$ |
296,727 |
|
|
$ |
168,509 |
|
Net earnings from discontinued
operations allocated to common shares |
|
- |
|
|
|
- |
|
|
|
(57 |
) |
|
|
- |
|
|
|
(1,545 |
) |
Net earnings allocated to common
shares |
$ |
71,151 |
|
|
$ |
68,967 |
|
|
$ |
70,190 |
|
|
$ |
296,727 |
|
|
$ |
166,964 |
|
|
|
|
|
|
|
|
|
|
|
Weighted-average basic shares
outstanding |
|
119,252 |
|
|
|
102,063 |
|
|
|
101,913 |
|
|
|
106,327 |
|
|
|
86,853 |
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per share: |
|
|
|
|
|
|
|
|
|
Net earnings from continuing
operations |
$ |
0.60 |
|
|
$ |
0.68 |
|
|
$ |
0.69 |
|
|
$ |
2.79 |
|
|
$ |
1.94 |
|
Net earnings from discontinued
operations |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(0.02 |
) |
Net earnings |
$ |
0.60 |
|
|
$ |
0.68 |
|
|
$ |
0.69 |
|
|
$ |
2.79 |
|
|
$ |
1.92 |
|
_______________________________________ |
|
|
|
|
|
|
|
|
|
(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. |
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, 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.
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 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Year Ended |
|
Adjusted Net
Earnings and |
December 31, |
|
September 30, |
|
December 31, |
|
December 31, |
|
Related Ratios |
|
2015 |
|
|
|
2015 |
|
|
|
2014 |
|
|
|
2015 |
|
|
|
2014 |
|
|
|
(Dollars in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings |
$ |
71,841 |
|
|
$ |
69,616 |
|
|
$ |
70,999 |
|
|
$ |
299,619 |
|
|
$ |
168,905 |
|
|
Less: Tax benefit on
discontinued operations |
|
- |
|
|
|
- |
|
|
|
(47 |
) |
|
|
- |
|
|
|
(1,114 |
) |
|
Add: Tax expense on
continuing operations |
|
49,380 |
|
|
|
39,777 |
|
|
|
43,261 |
|
|
|
180,517 |
|
|
|
117,005 |
|
|
Pre-tax
earnings |
|
121,221 |
|
|
|
109,393 |
|
|
|
114,213 |
|
|
|
480,136 |
|
|
|
284,796 |
|
|
Add: Acquisition,
integration and reorganization costs |
|
17,600 |
|
|
|
747 |
|
|
|
7,381 |
|
|
|
21,247 |
|
|
|
101,016 |
|
|
Less:
FDIC loss sharing expense, net |
|
(4,291 |
) |
|
|
(4,449 |
) |
|
|
(4,360 |
) |
|
|
(18,246 |
) |
|
|
(31,730 |
) |
|
Gain on sale of loans and
leases |
|
183 |
|
|
|
27 |
|
|
|
7 |
|
|
|
373 |
|
|
|
601 |
|
|
Gain on securities |
|
- |
|
|
|
655 |
|
|
|
- |
|
|
|
3,744 |
|
|
|
4,841 |
|
|
Covered OREO income (expense),
net |
|
2,920 |
|
|
|
(20 |
) |
|
|
(176 |
) |
|
|
2,931 |
|
|
|
1,172 |
|
|
Gain on sale of owned office
building |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
1,570 |
|
|
Adjusted pre-tax
earnings before accelerated discount accretion |
|
140,009 |
|
|
|
113,927 |
|
|
|
126,123 |
|
|
|
512,581 |
|
|
|
409,358 |
|
|
Less: Accelerated
discount accretion from early payoffs of acquired loans |
|
5,511 |
|
|
|
9,659 |
|
|
|
11,421 |
|
|
|
51,969 |
|
|
|
38,867 |
|
|
Adjusted
pre-tax earnings |
|
134,498 |
|
|
|
104,268 |
|
|
|
114,702 |
|
|
|
460,612 |
|
|
|
370,491 |
|
|
Tax expense (1) |
|
(50,571 |
) |
|
|
(39,205 |
) |
|
|
(46,684 |
) |
|
|
(173,190 |
) |
|
|
(150,790 |
) |
|
Adjusted net
earnings |
$ |
83,927 |
|
|
$ |
65,063 |
|
|
$ |
68,018 |
|
|
$ |
287,422 |
|
|
$ |
219,701 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Average assets |
$ |
20,825,248 |
|
|
$ |
16,690,177 |
|
|
$ |
15,892,761 |
|
|
$ |
17,578,844 |
|
|
$ |
13,322,388 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Average stockholders'
equity |
$ |
4,346,162 |
|
|
$ |
3,572,765 |
|
|
$ |
3,500,291 |
|
|
$ |
3,751,995 |
|
|
$ |
2,763,726 |
|
|
Less: Average
intangible assets |
|
2,177,631 |
|
|
|
1,741,902 |
|
|
|
1,739,977 |
|
|
|
1,850,988 |
|
|
|
1,342,286 |
|
|
Average tangible common
equity |
$ |
2,168,531 |
|
|
$ |
1,830,863 |
|
|
$ |
1,760,314 |
|
|
$ |
1,901,007 |
|
|
$ |
1,421,440 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on average
assets (2) |
|
1.37 |
% |
|
|
1.65 |
% |
|
|
1.77 |
% |
|
|
1.70 |
% |
|
|
1.27 |
% |
|
Return on average
equity (3) |
|
6.56 |
% |
|
|
7.73 |
% |
|
|
8.05 |
% |
|
|
7.99 |
% |
|
|
6.11 |
% |
|
Return on average
tangible equity (4) |
|
13.14 |
% |
|
|
15.09 |
% |
|
|
16.00 |
% |
|
|
15.76 |
% |
|
|
11.88 |
% |
|
Adjusted return on
average assets (5) |
|
1.60 |
% |
|
|
1.55 |
% |
|
|
1.70 |
% |
|
|
1.64 |
% |
|
|
1.65 |
% |
|
Adjusted return on
average equity (6) |
|
7.66 |
% |
|
|
7.22 |
% |
|
|
7.71 |
% |
|
|
7.66 |
% |
|
|
7.95 |
% |
|
Adjusted return on
average tangible equity (7) |
|
15.35 |
% |
|
|
14.10 |
% |
|
|
15.33 |
% |
|
|
15.12 |
% |
|
|
15.46 |
% |
|
_________________________________ |
|
|
|
|
|
|
|
|
|
|
(1) Full-year actual effective rates of 37.6% used for 2015
periods and 40.7% used for 2014 periods. |
|
(2) Annualized net earnings divided by average assets. |
|
(3) Annualized net earnings divided by average stockholders'
equity. |
|
(4) Annualized net earnings divided by average tangible common
equity. |
|
(5) Annualized adjusted net earnings divided by average
assets. |
|
(6) Annualized adjusted net earnings divided by average
stockholders' equity. |
|
(7) Annualized adjusted net earnings divided by average
tangible common equity. |
|
PACWEST BANCORP AND SUBSIDIARIES |
GAAP TO NON-GAAP RECONCILIATION |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, |
|
September 30, |
|
June 30, |
|
March 31, |
|
December 31, |
Tangible Common Equity
Ratio |
|
2015 |
|
|
|
2015 |
|
|
|
2015 |
|
|
|
2015 |
|
|
|
2014 |
|
|
(Dollars in
thousands)
|
PacWest Bancorp
Consolidated: |
|
|
|
|
|
|
|
|
|
Stockholders'
equity |
$ |
4,397,691 |
|
|
$ |
3,581,704 |
|
|
$ |
3,551,490 |
|
|
$ |
3,533,361 |
|
|
$ |
3,506,230 |
|
Less: Intangible
assets |
|
2,229,511 |
|
|
|
1,741,084 |
|
|
|
1,742,581 |
|
|
|
1,744,083 |
|
|
|
1,737,683 |
|
Tangible common equity |
$ |
2,168,180 |
|
|
$ |
1,840,620 |
|
|
$ |
1,808,909 |
|
|
$ |
1,789,278 |
|
|
$ |
1,768,547 |
|
|
|
|
|
|
|
|
|
|
|
Total assets |
$ |
21,288,490 |
|
|
$ |
16,814,105 |
|
|
$ |
16,697,020 |
|
|
$ |
16,643,940 |
|
|
$ |
16,234,605 |
|
Less: Intangible
assets |
|
2,229,511 |
|
|
|
1,741,084 |
|
|
|
1,742,581 |
|
|
|
1,744,083 |
|
|
|
1,737,683 |
|
Tangible assets |
$ |
19,058,979 |
|
|
$ |
15,073,021 |
|
|
$ |
14,954,439 |
|
|
$ |
14,899,857 |
|
|
$ |
14,496,922 |
|
|
|
|
|
|
|
|
|
|
|
Equity to assets
ratio |
|
20.66 |
% |
|
|
21.30 |
% |
|
|
21.27 |
% |
|
|
21.23 |
% |
|
|
21.60 |
% |
Tangible common equity
ratio (1) |
|
11.38 |
% |
|
|
12.21 |
% |
|
|
12.10 |
% |
|
|
12.01 |
% |
|
|
12.20 |
% |
|
|
|
|
|
|
|
|
|
|
Book value per
share |
$ |
36.22 |
|
|
$ |
34.76 |
|
|
$ |
34.46 |
|
|
$ |
34.29 |
|
|
$ |
34.03 |
|
Tangible book value per
share (2) |
$ |
17.86 |
|
|
$ |
17.86 |
|
|
$ |
17.55 |
|
|
$ |
17.36 |
|
|
$ |
17.17 |
|
Shares outstanding |
|
121,413,727 |
|
|
|
103,053,694 |
|
|
|
103,051,989 |
|
|
|
103,044,257 |
|
|
|
103,022,017 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pacific Western
Bank: |
|
|
|
|
|
|
|
|
|
Stockholders'
equity |
$ |
4,276,279 |
|
|
$ |
3,466,817 |
|
|
$ |
3,440,715 |
|
|
$ |
3,410,276 |
|
|
$ |
3,378,879 |
|
Less: Intangible
assets |
|
2,229,511 |
|
|
|
1,741,084 |
|
|
|
1,742,581 |
|
|
|
1,744,083 |
|
|
|
1,737,683 |
|
Tangible common equity |
$ |
2,046,768 |
|
|
$ |
1,725,733 |
|
|
$ |
1,698,134 |
|
|
$ |
1,666,193 |
|
|
$ |
1,641,196 |
|
|
|
|
|
|
|
|
|
|
|
Total assets |
$ |
21,180,689 |
|
|
$ |
16,707,072 |
|
|
$ |
16,555,610 |
|
|
$ |
16,458,591 |
|
|
$ |
15,995,719 |
|
Less: Intangible
assets |
|
2,229,511 |
|
|
|
1,741,084 |
|
|
|
1,742,581 |
|
|
|
1,744,083 |
|
|
|
1,737,683 |
|
Tangible assets |
$ |
18,951,178 |
|
|
$ |
14,965,988 |
|
|
$ |
14,813,029 |
|
|
$ |
14,714,508 |
|
|
$ |
14,258,036 |
|
|
|
|
|
|
|
|
|
|
|
Equity to assets
ratio |
|
20.19 |
% |
|
|
20.75 |
% |
|
|
20.78 |
% |
|
|
20.72 |
% |
|
|
21.12 |
% |
Tangible common equity
ratio |
|
10.80 |
% |
|
|
11.53 |
% |
|
|
11.46 |
% |
|
|
11.32 |
% |
|
|
11.51 |
% |
________________________________ |
|
|
|
|
|
|
|
|
|
(1) Tangible common equity divided by tangible assets. |
(2) Tangible common equity divided by shares outstanding. |
Contact: Matthew P. Wagner
President and CEO
Phone: 310-887-8520
Patrick J. Rusnak
Executive Vice President and CFO
714-989-4705
PacWest Bancorp (NASDAQ:PACW)
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Von Jun 2024 bis Jul 2024
PacWest Bancorp (NASDAQ:PACW)
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