PACW PacWest Bancorp

Highlights

PacWest Bancorp (Nasdaq:PACW) today announced net earnings for the first quarter of 2016 of $90.5 million, or $0.74 per diluted share, compared to net earnings for the fourth quarter of 2015 of $71.8 million, or $0.60 per diluted share. The $0.14 increase in diluted earnings per share was due mostly to higher accretion on acquired loans and leases ($0.06 per share), higher noninterest income from higher gain on securities and lower dividends and gains on equity investments ($0.02 per share), and lower acquisition, integration and reorganization costs ($0.09 per share), and a higher provision for credit losses ($0.03 per share) as compared to the fourth quarter of 2015.

Matt Wagner, President and CEO, commented, “We continued to deliver outstanding performance in the first quarter and demonstrate our earning power despite competitive and market challenges. Our strong first quarter results produced a return on assets of 1.72%, a return on tangible equity of 16.45% and a quarter over quarter 23% increase in diluted earnings per share. We are also pleased with the continued transformation of our deposit portfolio as core deposits were 71% of total deposits compared to 52% a year ago. With flat net loan growth for the first quarter due to the sale of Pacific Western Equipment Finance unit leases, we expect mid to upper single digit loan growth for the year.”

Patrick Rusnak, Executive Vice President and CFO stated, “Our first quarter core tax equivalent net interest margin (NIM) remained steady at 5.10% and the NIM excluding all purchase accounting items increased 5 basis points to 4.93%. The first quarter NIM was helped by the combination of the 25 basis point rate hike in December and higher-yielding assets were a higher percentage of average interest-earning assets.”

Mr. Rusnak continued, “We continue to control operating expenses as shown by our efficiency ratio, which declined to 38.5% in the first quarter. We are pleased with our solid start to 2016 and believe our talented teams will continue to deliver strong results.”

Mr. Wagner continued, “Now that we have completed the integration of the Square 1 Bank employees and business units, we are focused on two important corporate initiatives for 2016. We will be converting our core processing systems beginning in the second quarter. Also, later this year, we will submit our first DFAST capital stress test to our regulators.”

FINANCIAL HIGHLIGHTS

	At or For the Three Months Ended
	March 31,				December 31,
		2016				2015			Change
	(Dollars in thousands, except per share data)
Financial Highlights:
Net Earnings	$	90,456			$	71,841			$	18,615
Diluted Earnings Per Share	$	0.74			$	0.60			$	0.14
Return on Average Assets		1.72	%			1.37	%			0.35
Return on Average
Tangible Equity (1)		16.45	%			13.14	%			3.31
Net Interest Margin (tax equivalent)		5.53	%			5.22	%			0.31
Core Net Interest Margin (tax equivalent) (1)		5.10	%			5.10	%			-
Efficiency Ratio		38.5	%			39.3	%			(0.8	)
Total Assets	$	21,031,009			$	21,288,490			$	(257,481	)
Loans and Leases, Net of Deferred Fees	$	14,483,517			$	14,478,254			$	5,263
Total Deposits	$	15,441,375			$	15,666,182			$	(224,807	)
Noninterest-Bearing Deposits as Percentage of Total Deposits		40	%			39	%			1
Core Deposits as Percentage of Total Deposits		71	%			67	%			4
Tangible Common Equity Ratio (1)		11.87	%			11.38	%			0.49
Tangible Book Value Per Share (1)	$	18.33			$	17.86			$	0.47
(1) Non-GAAP measure.

INCOME STATEMENT HIGHLIGHTS

Net Interest Income

Net interest income increased by $15.4 million to $244.6 million for the first quarter of 2016 compared to $229.2 million for the fourth quarter of 2015 due to higher accretion on acquired loans and a higher average loan and lease balance offset by a lower average investment securities balance. Total accretion on acquired loans was $27.9 million in the first quarter of 2016 (77 basis points on the loan and lease yield) compared to $16.1 million in the fourth quarter of 2015 (46 basis points on the loan and lease yield). The increase in accretion was due primarily to higher accelerated accretion from payoffs on acquired loans, including $12.1 million from the payoff of a nonaccrual purchased credit impaired (“PCI”) loan. The loan and lease yield for the first quarter of 2016 was 6.57% compared to 6.21% for the fourth quarter of 2015. The increase in the loan and lease yield was due to the higher accretion on acquired loans offset by the yield on new originations being lower than the current portfolio yield. Excluding accelerated accretion, the core loan and lease yield was 6.03% in the first quarter compared to 6.05% in the fourth quarter.

The tax equivalent net interest margin (“NIM”) for the first quarter of 2016 was 5.53% compared to 5.22% for the fourth quarter of 2015. The increase in the NIM was due to higher accretion on acquired loans and a higher percentage of average higher-yielding assets in the mix. Accretion on acquired loans contributed 62 basis points to the NIM in the first quarter of 2016 and 36 basis points to the NIM in the fourth quarter of 2015. Excluding accelerated accretion, the core NIM was 5.10% for both the first and fourth quarters.    

The cost of total deposits decreased to 0.23% in the first quarter of 2016 from 0.24% in the fourth quarter of 2015 due to the increased average balance of noninterest-bearing deposits and a lower level of higher-cost time deposits.

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
		March 31, 2016							December 31, 2015
					Loan and							Loan and
		NIM			Lease Yield				NIM			Lease Yield
Reported			5.53	%		6.57	%			5.22	%		6.21	%
Less:	Accelerated accretion of acquisition discounts from early payoffs of acquired loans		(0.43	)%		(0.54	)%			(0.12	)%		(0.16	)%
Core			5.10	%		6.03	%			5.10	%		6.05	%

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
		March 31, 2016							December 31, 2015
					Impact on							Impact on
		Amount			NIM				Amount			NIM
		(Dollars in thousands)
Net interest income/NIM		$	249,610			5.53	%		$	233,959			5.22	%
Less:	Accelerated accretion of acquisition discounts from early payoffs of acquired loans		(19,465	)		(0.43	)%			(5,511	)		(0.12	)%
	Remaining accretion of Non-PCI loan acquisition discounts		(8,403	)		(0.19	)%			(10,553	)		(0.24	)%
	Total accretion of loan acquisition discounts		(27,868	)		(0.62	)%			(16,064	)		(0.36	)%
	Amortization of TruPS discount		1,395			0.03	%			1,397			0.03	%
	Accretion of time deposits premium		(270	)		(0.01	)%			(384	)		(0.01	)%
			(26,743	)		(0.60	)%			(15,051	)		(0.34	)%
Net interest income/NIM - excluding purchase accounting		$	222,867			4.93	%		$	218,908			4.88	%

Noninterest Income

Noninterest income increased by $6.5 million to $34.5 million for the first quarter of 2016 compared to $28.1 million for the fourth quarter of 2015 due mostly to higher gains on sales of securities of $8.1 million and lower FDIC loss sharing expense of $1.9 million, offset by lower dividends and gains on equity investments of $4.6 million. The gain on securities resulted from the sale of $335 million of securities in the first quarter due to ongoing portfolio management activities. The lower FDIC loss sharing expense is due to a fewer number and decreased balance of covered assets combined with fewer asset resolutions this quarter compared to the previous quarter. Dividends and gains from equity investments decreased as this item fluctuates from period to period based upon dividends received and number of sales of equity investments. Other income in the first quarter included a loan syndication fee ($0.9 million), a death benefit received on a BOLI policy ($0.6 million) and a loss on the sale of the Pacific Western Equipment Finance (“PWEF”) leasing unit ($0.7 million); there are no similar items in the other periods presented.

The following table presents details of noninterest income for the periods indicated:

	Three Months Ended
	March 31,				December 31,				Increase
Noninterest Income		2016				2015			(Decrease)
	(In thousands)
Service charges on deposit accounts	$	3,856			$	3,901			$	(45	)
Other commissions and fees		11,489				12,691				(1,202	)
Leased equipment income		8,244				7,791				453
Gain on sale of loans and leases		245				183				62
Gain on securities		8,110				-				8,110
FDIC loss sharing expense, net		(2,415	)			(4,291	)			1,876
Other income:
Dividends and realized gains on equity investments		246				4,886				(4,640	)
Foreign currency translation net gains (losses)		606				(661	)			1,267
Income recognized on early repayment of leases		922				802				120
Other		3,236				2,756				480
Total noninterest income	$	34,539			$	28,058			$	6,481

Noninterest Expense

Noninterest expense decreased by $11.6 million to $110.7 million for the first quarter of 2016 compared to $122.3 million for the fourth quarter of 2015. The decrease was due mostly to lower acquisition, integration and reorganization costs of $17.4 million offset by lower foreclosed assets income and higher compensation expense. Foreclosed assets income is lower by $2.6 million due to lower gains on foreclosed asset sales compared to the prior quarter. Compensation expense increased $2.1 million due to higher payroll taxes from the timing of the annual employment tax cycle and higher stock-based compensation due to awards granted in the first quarter offset partially by lower commission and incentive expense.   

The following table presents details of noninterest expense for the periods indicated:

	Three Months Ended
	March 31,				December 31,				Increase
Noninterest Expense		2016				2015			(Decrease)
	(In thousands)
Compensation	$	61,065			$	58,992			$	2,073
Occupancy		12,632				12,194				438
Data processing		5,904				5,585				319
Other professional services		3,572				3,811				(239	)
Insurance and assessments		4,965				5,450				(485	)
Intangible asset amortization		4,746				4,910				(164	)
Leased equipment depreciation		5,024				4,235				789
Foreclosed assets (income) expense, net		(561	)			(3,185	)			2,624
Acquisition, integration and reorganization costs		200				17,600				(17,400	)
Other expense:
Loan expense		2,155				2,745				(590	)
Other		10,986				9,927				1,059
Total noninterest expense	$	110,688			$	122,264			$	(11,576	)

Income Taxes

Our overall effective income tax rate was 39.0% in the first quarter of 2016 and 40.7% for the fourth quarter of 2015. The first quarter effective tax rate approximates the expected effective tax rate for calendar year 2016.

BALANCE SHEET HIGHLIGHTS

Loans and Leases

Average total loans and leases for the first quarter of 2016 increased by $440 million compared to the fourth quarter while period-end total loans and leases increased by $5.3 million in the first quarter to $14.5 billion at March 31, 2016. The loan and lease production of $842 million was largely offset by repayment activity and the sale of the PWEF leases.   

The following table presents a roll forward of the loan and lease portfolio for the periods indicated:

	Three Months Ended
	March 31,				December 31,
Loan and Lease Roll Forward (1)		2016				2015
	(In thousands)
Beginning balance	$	14,478,254			$	12,452,205
New production		842,064				1,403,611
Existing loans and leases:
Principal repayments, net (2)		(665,281	)			(910,445	)
Loan and lease sales (3)		(26,657	)			(19,610	)
Transfers to foreclosed assets		(129	)			-
Charge-offs		(5,536	)			(1,227	)
Sale of PWEF		(139,198	)			-
Loans acquired through Square 1 acquisition		-				1,553,720
Ending balance	$	14,483,517			$	14,478,254
Weighted average yields on new production		5.29	%			5.29	%
(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.
(3) Includes $15.1 million of PWEF leases sold to third parties during the three months ended March 31, 2016.

The following table presents the composition of our loan and lease portfolio as of the dates indicated:

	March 31,				December 31,				March 31,
Loan and Lease Portfolio		2016				2015				2015
	(In thousands)
Real estate mortgage:
Commercial	$	4,640,419			$	4,642,088			$	4,851,038
Residential		1,149,998				1,211,209				959,364
Total real estate mortgage		5,790,417				5,853,297				5,810,402
Real estate construction and land:
Commercial		308,192				349,436				212,738
Residential		269,965				184,382				122,338
Total real estate construction and land		578,157				533,818				335,076
Total real estate loans		6,368,574				6,387,115				6,145,478
Commercial:
Cash flow		3,173,424				3,073,965				3,004,304
Asset-based		2,589,598				2,547,665				2,114,411
Venture capital		1,507,788				1,458,013				-
Equipment finance		733,228				890,349				914,015
Total commercial		8,004,038				7,969,992				6,032,730
Consumer		110,905				121,147				93,958
Total loans and leases, net of deferred fees	$	14,483,517			$	14,478,254			$	12,272,166
Total unfunded loan commitments	$	3,812,554			$	3,580,655			$	2,122,748

Loan growth in the first quarter came primarily from the cash flow, construction and venture capital portfolios. These same portfolios also accounted for most of the growth in our unfunded commitments during the quarter.

Credit Exposure Affected by Low Oil Prices

At March 31, 2016, PacWest had 19 outstanding loan and lease relationships totaling $127.7 million to borrowers involved in the oil and gas services industry, down from $137.3 million at December 31, 2015. The collateral for this credit exposure includes primarily equipment, such as drilling equipment and transportation vehicles. The reserves related to this credit exposure total approximately 15%. At March 31, 2016, three relationships totaling $45.5 million were on nonaccrual status and were classified, down from $47.1 million at December 31, 2015. The largest of these relationships had an aggregate outstanding balance of $39.9 million at March 31, 2016.    

Deposits and Client Investment Funds

The following table presents the composition of our deposit portfolio as of the dates indicated:

	March 31,				December 31,				March 31,
Deposit Category		2016				2015				2015
	(Dollars in thousands)
Noninterest-bearing demand deposits	$	6,139,963			$	6,171,455			$	3,029,463
Interest checking deposits		921,189				874,349				739,073
Money market deposits		3,144,843				2,782,974				1,682,123
Savings deposits		764,323				742,795				746,741
Total core deposits		10,970,318				10,571,573				6,197,400
Brokered non-maturity deposits		985,784				942,253				155,976
Total non-maturity deposits		11,956,102				11,513,826				6,353,376
Time deposits under $100,000		1,357,598				1,656,227				2,562,078
Time deposits of $100,000 and over		2,127,675				2,496,129				3,018,721
Total time deposits		3,485,273				4,152,356				5,580,799
Total deposits	$	15,441,375			$	15,666,182			$	11,934,175
Noninterest-bearing demand deposits as percentage of total deposits		40	%			39	%			26	%
Core deposits as percentage of total deposits		71	%			67	%			52	%

At March 31, 2016, core deposits totaled $11.0 billion, or 71% of total deposits, including $6.1 billion of noninterest-bearing demand deposits, or 40% of total deposits. 

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 March 31, 2016 were $1.6 billion, of which $1.3 billion was managed by S1AM. Approximately $184 million of client investment funds were shifted into on-balance sheet deposit products during the first quarter of 2016.

PROVISION AND ALLOWANCE FOR CREDIT LOSSES

A provision for credit losses of $20.1 million was recorded in the first quarter of 2016 compared to $13.8 million in the fourth quarter of 2015. The first quarter provision related almost entirely to Non-PCI loans and leases and increased due in part to additions to our oil and gas portfolio reserves. The allowance for Non-PCI credit losses to Non-PCI loans and leases coverage ratio increased to 0.96% at March 31, 2016 from 0.85% at December 31, 2015. 

The following tables show roll forwards of the allowance for credit losses for the periods indicated:

	Three Months Ended March 31, 2016
	Non-PCI
Allowance for Credit	Loans and				Unfunded				Total				PCI
Losses Rollforward	Leases				Commitments				Non-PCI				Loans				Total
	(In thousands)
Beginning balance	$	105,534			$	16,734			$	122,268			$	9,577			$	131,845
Charge-offs		(5,373	)			-				(5,373	)			(163	)			(5,536	)
Recoveries		1,481				-				1,481				-				1,481
Net charge-offs		(3,892	)			-				(3,892	)			(163	)			(4,055	)
Provision		19,165				835				20,000				140				20,140
Ending balance	$	120,807			$	17,569			$	138,376			$	9,554			$	147,930
	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

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:

	March 31, 2016												December 31, 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	$	14,365,915		$	138,376					0.96	%		$	14,339,070		$	122,268					0.85	%
Acquired loans		(5,468,875	)		(34,231	)	(1	)						(6,030,921	)		(19,127	)	(1	)
Adjusted balance	$	8,897,040		$	104,145					1.17	%		$	8,308,149		$	103,141					1.24	%
Ending balance	$	14,365,915		$	138,376					0.96	%		$	14,339,070		$	122,268					0.85	%
Unamortized net discount		78,761			78,761		(2	)						92,192			92,192		(2	)
Adjusted balance	$	14,444,676		$	217,137					1.50	%		$	14,431,262		$	214,460					1.49	%
(1) Allowance attributed to $5.5 billion and $6.0 billion of acquired Non-PCI loans at March 31, 2016 and December 31, 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 $5.5 billion and $6.0 billion of acquired Non-PCI loans at March 31, 2016 and December 31, 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 $78.8 million at March 31, 2016, is expected to be substantially accreted to income by the end of 2018.

Non-PCI loans and leases at March 31, 2016 included $8.9 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 1.02% of the outstanding balance.

CREDIT QUALITY

The following table presents Non-PCI loan and lease credit quality metrics as of the dates indicated:

	March 31,				December 31,
Non-PCI Credit Quality Metrics		2016				2015
	(Dollars in thousands)
Nonaccrual loans and leases (1)	$	130,418			$	129,019
Classified loans and leases		384,698				391,754
Performing restructured loans		66,829				40,182
Allowance for credit losses		138,376				122,268
Net charge-offs (recoveries) (for the quarter)		3,892				(1,718	)
Provision for credit losses (for the quarter)		20,000				15,114
Allowance for credit losses to loans and leases		0.96	%			0.85	%
Allowance for credit losses to nonaccrual loans and leases (1)		106.1	%			94.8	%
Nonaccrual loans and leases to loans and leases		0.91	%			0.90	%
Nonperforming assets to loans and leases and foreclosed assets		1.05	%			1.06	%
Classified loans and leases to loans and leases		2.68	%			2.73	%
(1) The March 31, 2016 and December 31, 2015 amounts include $16.2 million and $85.2 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:

	Non-PCI Nonaccrual Loans and Leases														Non-PCI Accruing and
	March 31, 2016							December 31, 2015							30-89 Days Past Due
				% of							% of				March 31,				December 31,
				Loan							Loan					2016				2015
	Amount			Category				Amount			Category				Amount				Amount
	(Dollars in thousands)
Real estate mortgage:
Commercial	$	30,357			0.7	%		$	52,363			1.2	%		$	4,968			$	1,498
Residential		5,807			0.5	%			4,914			0.4	%			730				3,174
Total real estate mortgage		36,164			0.6	%			57,277			1.0	%			5,698				4,672
Real estate construction and land:
Commercial		-			-				-			-				-				-
Residential		370			0.1	%			372			0.2	%			-				-
Total real estate construction and land		370			0.1	%			372			0.1	%			-				-
Commercial:
Cash flow		39,665			1.3	%			15,800			0.5	%			639				1,118
Asset-based		2,046			0.1	%			2,505			0.1	%			-				1
Venture capital		-			-				124			-				9,554				250
Equipment finance (1)		51,247			7.0	%			51,410			5.8	%			1,870				360
Total commercial		92,958			1.2	%			69,839			0.9	%			2,063				1,729
Consumer		926			0.8	%			1,531			1.3	%			30				628
Total Non-PCI loans and leases	$	130,418			0.9	%		$	129,019			0.9	%		$	17,791			$	7,029
(1) Includes nonaccrual leases and loans to companies involved in the oil and gas industries of $45.5 million and $47.1 million at March 31, 2016 and December 31, 2015, respectively.

The following table presents nonperforming assets as of the dates indicated:

	March 31,				December 31,
Nonperforming Assets		2016				2015
	(Dollars in thousands)
Nonaccrual Non-PCI loans and leases	$	130,418			$	129,019
Nonaccrual PCI Loans (1)		3,241				4,596
Total nonaccrual loans and leases		133,659				133,615
Non-PCI accruing loan contractually past due 90 days or more		2,538				700
Foreclosed assets, net		18,310				22,120
Total nonperforming assets	$	154,507			$	156,435
Nonaccrual loans and leases to loans and leases		0.92	%			0.92	%
Nonperforming assets to loans and leases and foreclosed assets		1.06	%			1.08	%
(1) Represents legacy CapitalSource borrowing relationships placed on nonaccrual status as of the acquisition date.

ABOUT PACWEST BANCORP

PacWest Bancorp (“PacWest”) is a bank holding company with $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 loan and lease portfolio growth, profitability, 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:

• 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;
• 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”).

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
	March 31,				December 31,				March 31,
		2016				2015				2015
	(Dollars in thousands, except per share data)
ASSETS:
Cash and due from banks	$	161,977			$	161,020			$	140,873
Interest-earning deposits in financial institutions		357,541				235,466				250,981
Total cash and cash equivalents		519,518				396,486				391,854
Securities available-for-sale, at estimated fair value		3,240,586				3,559,437				1,595,409
Federal Home Loan Bank stock, at cost		17,250				19,710				28,905
Total investment securities		3,257,836				3,579,147				1,624,314
Non-PCI loans and leases		14,365,915				14,339,070				12,047,946
PCI loans		176,607				189,095				254,346
Total gross loans and leases		14,542,522				14,528,165				12,302,292
Deferred fees and costs		(59,005	)			(49,911	)			(30,126	)
Total loans and leases, net of deferred fees		14,483,517				14,478,254				12,272,166
Allowance for loan and lease losses		(130,361	)			(115,111	)			(92,378	)
Total loans and leases, net		14,353,156				14,363,143				12,179,788
Equipment leased to others under operating leases		205,163				197,452				119,959
Premises and equipment, net		39,713				39,197				36,022
Foreclosed assets, net		18,310				22,120				35,940
Deferred tax asset, net		91,126				126,389				236,065
Goodwill		2,175,791				2,176,291				1,728,380
Core deposit and customer relationship intangibles, net		48,137				53,220				15,703
Other assets		322,259				335,045				275,915
Total assets	$	21,031,009			$	21,288,490			$	16,643,940
LIABILITIES:
Noninterest-bearing deposits	$	6,139,963			$	6,171,455			$	3,029,463
Interest-bearing deposits		9,301,412				9,494,727				8,904,712
Total deposits		15,441,375				15,666,182				11,934,175
Borrowings		551,401				621,914				618,156
Subordinated debentures		438,723				436,000				431,448
Accrued interest payable and other liabilities		142,918				166,703				126,800
Total liabilities		16,574,417				16,890,799				13,110,579
STOCKHOLDERS' EQUITY (1)		4,456,592				4,397,691				3,533,361
Total liabilities and stockholders’ equity	$	21,031,009			$	21,288,490			$	16,643,940
(1) Includes net unrealized gain on securities available-for-sale, net	$	48,479			$	27,828			$	28,744
Book value per share	$	36.60			$	36.22			$	34.29
Tangible book value per share	$	18.33			$	17.86			$	17.36
Shares outstanding		121,771,252				121,413,727				103,044,257

 

PACWEST BANCORP AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF EARNINGS
	Three Months Ended
	March 31,				December 31,				March 31,
		2016				2015				2015
	(Dollars in thousands, except per share data)
Interest income:
Loans and leases	$	236,375			$	219,677			$	202,097
Investment securities		22,547				23,648				12,195
Deposits in financial institutions		308				172				22
Total interest income		259,230				243,497				214,314
Interest expense:
Deposits		9,073				9,391				10,479
Borrowings		581				159				235
Subordinated debentures		4,982				4,748				4,525
Total interest expense		14,636				14,298				15,239
Net interest income		244,594				229,199				199,075
Provision for credit losses		20,140				13,772				16,434
Net interest income after provision for credit losses		224,454				215,427				182,641
Noninterest income:
Service charges on deposit accounts		3,856				3,901				2,574
Other commissions and fees		11,489				12,691				5,396
Leased equipment income		8,244				7,791				5,382
Gain on sale of loans and leases		245				183				-
Gain on securities		8,110				-				3,275
FDIC loss sharing expense, net		(2,415	)			(4,291	)			(4,399	)
Other income		5,010				7,783				8,643
Total noninterest income		34,539				28,058				20,871
Noninterest expense:
Compensation		61,065				58,992				47,737
Occupancy		12,632				12,194				10,600
Data processing		5,904				5,585				4,308
Other professional services		3,572				3,811				3,221
Insurance and assessments		4,965				5,450				3,025
Intangible asset amortization		4,746				4,910				1,501
Leased equipment depreciation		5,024				4,235				3,103
Foreclosed assets (income) expense, net		(561	)			(3,185	)			336
Acquisition, integration and reorganization costs		200				17,600				2,000
Other expense		13,141				12,672				8,529
Total noninterest expense		110,688				122,264				84,360
Earnings before income taxes		148,305				121,221				119,152
Income tax expense		(57,849	)			(49,380	)			(46,073	)
Net earnings	$	90,456			$	71,841			$	73,079
Basic and diluted earnings per share	$	0.74			$	0.60			$	0.71

PACWEST BANCORP AND SUBSIDIARIES
NET EARNINGS PER SHARE CALCULATIONS
	Three Months Ended
	March 31,				December 31,				March 31,
		2016				2015				2015
	(Dollars in thousands, except per share data)
Basic Earnings Per Share:
Net earnings	$	90,456			$	71,841			$	73,079
Less: earnings allocated to unvested restricted stock (1)		(1,067	)			(690	)			(819	)
Net earnings allocated to common shares	$	89,389			$	71,151			$	72,260
Weighted-average basic shares and unvested restricted stock outstanding		121,598				120,385				103,035
Less: weighted-average unvested restricted stock outstanding		(1,392	)			(1,133	)			(1,122	)
Weighted-average basic shares outstanding		120,206				119,252				101,913
Basic earnings per share	$	0.74			$	0.60			$	0.71
Diluted Earnings Per Share:
Net earnings allocated to common shares	$	89,389			$	71,151			$	72,260
Weighted-average basic shares outstanding		120,206				119,252				101,913
Diluted earnings per share	$	0.74			$	0.60			$	0.71
(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.

PACWEST BANCORP AND SUBSIDIARIES
AVERAGE BALANCE SHEET AND YIELD ANALYSIS
	Three Months Ended
	March 31, 2016										December 31, 2015										March 31, 2015
				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	$	167,626		$	20,072			48.16	%		$	169,772		$	6,345			14.83	%		$	260,648		$	10,165			15.82	%
Non-PCI loans and leases		14,303,539			216,303			6.08	%			13,861,330			213,332			6.11	%			11,795,034			191,932			6.60	%
Total loans and leases		14,471,165			236,375			6.57	%			14,031,102			219,677			6.21	%			12,055,682			202,097			6.80	%
Investment securities (1)		3,460,293			27,563			3.20	%			3,492,124			28,408			3.23	%			1,613,422			13,980			3.51	%
Deposits in financial institutions		230,293			308			0.54	%			254,308			172			0.27	%			32,761			22			0.27	%
Total interest-earning assets		18,161,751			264,246			5.85	%			17,777,534			248,257			5.54	%			13,701,865			216,099			6.40	%
Other assets		3,036,843										3,047,714										2,594,775
Total assets	$	21,198,594									$	20,825,248									$	16,296,640
Liabilities and Stockholders' Equity:
Interest checking	$	926,256			383			0.17	%		$	889,035			345			0.15	%		$	726,748			194			0.11	%
Money market		3,848,753			2,415			0.25	%			3,557,364			1,543			0.17	%			1,836,094			945			0.21	%
Savings		753,371			444			0.24	%			747,054			445			0.24	%			756,578			571			0.31	%
Time		3,860,272			5,831			0.61	%			4,439,940			7,058			0.63	%			5,481,886			8,769			0.65	%
Total interest-bearing deposits		9,388,652			9,073			0.39	%			9,633,393			9,391			0.39	%			8,801,306			10,479			0.48	%
Borrowings		494,725			581			0.47	%			206,236			159			0.31	%			424,061			235			0.22	%
Subordinated debentures		436,535			4,982			4.59	%			435,293			4,748			4.33	%			432,603			4,525			4.24	%
Total interest-bearing liabilities		10,319,912			14,636			0.57	%			10,274,922			14,298			0.55	%			9,657,970			15,239			0.64	%
Noninterest-bearing demand deposits		6,273,249										6,043,900										2,949,719
Other liabilities		166,831										160,264										155,608
Total liabilities		16,759,992										16,479,086										12,763,297
Stockholders' equity		4,438,602										4,346,162										3,533,343
Total liabilities and stockholders' equity	$	21,198,594									$	20,825,248									$	16,296,640
Net interest income (2)				$	249,610									$	233,959									$	200,860
Net interest spread (2)								5.28	%									4.99	%									5.76	%
Net interest margin (2)								5.53	%									5.22	%									5.95	%
Total deposits (3)	$	15,661,901		$	9,073			0.23	%		$	15,677,293		$	9,391			0.24	%		$	11,751,025		$	10,479			0.36	%
Funding sources (4)	$	16,593,161		$	14,636			0.35	%		$	16,318,822		$	14,298			0.35	%		$	12,607,689		$	15,239			0.49	%
(1) Includes tax equivalent adjustments of $5.0 million, $4.8 million, and $1.8 million for the three months ended March 31, 2016, December 31, 2015, and March 31, 2015 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
	March 31,				December 31,				September 30,				June 30,				March 31,
		2016				2015				2015				2015				2015
	(Dollars in thousands, except per share data)
ASSETS:
Cash and due from banks	$	161,977			$	161,020			$	154,652			$	207,598			$	140,873
Interest-earning deposits in financial institutions		357,541				235,466				81,642				433,033				250,981
Total cash and cash equivalents		519,518				396,486				236,294				640,631				391,854
Securities available-for-sale		3,240,586				3,559,437				1,809,364				1,698,158				1,595,409
Federal Home Loan Bank stock		17,250				19,710				17,250				17,250				28,905
Total investment securities		3,257,836				3,579,147				1,826,614				1,715,408				1,624,314
Non-PCI loans and leases		14,365,915				14,339,070				12,300,057				11,846,314				12,047,946
PCI loans		176,607				189,095				193,340				222,691				254,346
Total gross loans and leases		14,542,522				14,528,165				12,493,397				12,069,005				12,302,292
Deferred fees and costs		(59,005	)			(49,911	)			(41,192	)			(34,816	)			(30,126	)
Total loans and leases, net of deferred fees		14,483,517				14,478,254				12,452,205				12,034,189				12,272,166
Allowance for loan and lease losses		(130,361	)			(115,111	)			(103,271	)			(99,375	)			(92,378	)
Total loans and leases, net		14,353,156				14,363,143				12,348,934				11,934,814				12,179,788
Equipment leased to others under operating leases		205,163				197,452				161,508				117,182				119,959
Premises and equipment, net		39,713				39,197				36,475				35,984				36,022
Foreclosed assets, net		18,310				22,120				33,216				31,668				35,940
Deferred tax asset, net		91,126				126,389				169,760				211,556				236,065
Goodwill		2,175,791				2,176,291				1,728,380				1,728,380				1,728,380
Core deposit and customer relationship intangibles, net		48,137				53,220				12,704				14,201				15,703
Other assets		322,259				335,045				260,220				267,196				275,915
Total assets	$	21,031,009			$	21,288,490			$	16,814,105			$	16,697,020			$	16,643,940
LIABILITIES:
Noninterest-bearing deposits	$	6,139,963			$	6,171,455			$	3,508,682			$	3,396,688			$	3,029,463
Interest-bearing deposits		9,301,412				9,494,727				8,607,081				9,185,128				8,904,712
Total deposits		15,441,375				15,666,182				12,115,763				12,581,816				11,934,175
Borrowings		551,401				621,914				552,497				2,751				618,156
Subordinated debentures		438,723				436,000				435,417				433,944				431,448
Accrued interest payable and other liabilities		142,918				166,703				128,724				127,019				126,800
Total liabilities		16,574,417				16,890,799				13,232,401				13,145,530				13,110,579
STOCKHOLDERS' EQUITY (1)		4,456,592				4,397,691				3,581,704				3,551,490				3,533,361
Total liabilities and stockholders’ equity	$	21,031,009			$	21,288,490			$	16,814,105			$	16,697,020			$	16,643,940
(1) Includes net unrealized gain on securities available-for-sale	$	48,479			$	27,828			$	24,459			$	16,255			$	28,744
Book value per share	$	36.60			$	36.22			$	34.76			$	34.46			$	34.29
Tangible book value per share	$	18.33			$	17.86			$	17.86			$	17.55			$	17.36
Shares outstanding		121,771,252				121,413,727				103,053,694				103,051,989				103,044,257

PACWEST BANCORP AND SUBSIDIARIES
FIVE QUARTER STATEMENT OF EARNINGS
	Three Months Ended
	March 31,				December 31,				September 30,				June 30,				March 31,
		2016				2015				2015				2015				2015
	(Dollars in thousands, except per share data)
Interest income:
Loans and leases	$	236,375			$	219,677			$	193,539			$	203,781			$	202,097
Investment securities		22,547				23,648				13,955				14,570				12,195
Deposits in financial institutions		308				172				178				104				22
Total interest income		259,230				243,497				207,672				218,455				214,314
Interest expense:
Deposits		9,073				9,391				10,400				11,233				10,479
Borrowings		581				159				72				88				235
Subordinated debentures		4,982				4,748				4,680				4,582				4,525
Total interest expense		14,636				14,298				15,152				15,903				15,239
Net interest income		244,594				229,199				192,520				202,552				199,075
Provision for credit losses		20,140				13,772				8,746				6,529				16,434
Net interest income after provision for credit losses		224,454				215,427				183,774				196,023				182,641
Noninterest income:
Service charges on deposit accounts		3,856				3,901				2,601				2,612				2,574
Other commissions and fees		11,489				12,691				6,376				7,123				5,396
Leased equipment income		8,244				7,791				5,475				5,375				5,382
Gain on sale of loans and leases		245				183				27				163				-
Gain (loss) on securities		8,110				-				655				(186	)			3,275
FDIC loss sharing expense, net		(2,415	)			(4,291	)			(4,449	)			(5,107	)			(4,399	)
Other income		5,010				7,783				5,073				9,643				8,643
Total noninterest income		34,539				28,058				15,758				19,623				20,871
Noninterest expense:
Compensation		61,065				58,992				48,152				49,033				47,737
Occupancy		12,632				12,194				10,762				10,588				10,600
Data processing		5,904				5,585				4,322				4,402				4,308
Other professional services		3,572				3,811				3,396				3,332				3,221
Insurance and assessments		4,965				5,450				3,805				4,716				3,025
Intangible asset amortization		4,746				4,910				1,497				1,502				1,501
Leased equipment depreciation		5,024				4,235				3,162				3,103				3,103
Foreclosed assets (income) expense, net		(561	)			(3,185	)			4,521				(2,340	)			336
Acquisition, integration and reorganization costs		200				17,600				747				900				2,000
Other expense		13,141				12,672				9,775				10,040				8,529
Total noninterest expense		110,688				122,264				90,139				85,276				84,360
Earnings before income taxes		148,305				121,221				109,393				130,370				119,152
Income tax expense		(57,849	)			(49,380	)			(39,777	)			(45,287	)			(46,073	)
Net earnings	$	90,456			$	71,841			$	69,616			$	85,083			$	73,079
Basic and diluted earnings per share	$	0.74			$	0.60			$	0.68			$	0.83			$	0.71

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,
		2016				2015				2015				2015				2015
	(Dollars in thousands)
Performance Ratios - GAAP:
Return on average assets (1)		1.72	%			1.37	%			1.65	%			2.07	%			1.82	%
Return on average equity (1)		8.20	%			6.56	%			7.73	%			9.62	%			8.39	%
Yield on average loans and leases		6.57	%			6.21	%			6.34	%			6.75	%			6.80	%
Yield on average interest-earning assets (2)		5.85	%			5.54	%			5.88	%			6.35	%			6.40	%
Cost of average total deposits		0.23	%			0.24	%			0.33	%			0.37	%			0.36	%
Cost of average time deposits		0.61	%			0.63	%			0.66	%			0.68	%			0.65	%
Cost of average interest-bearing liabilities		0.57	%			0.55	%			0.63	%			0.66	%			0.64	%
Cost of average funding sources		0.35	%			0.35	%			0.46	%			0.50	%			0.49	%
Net interest rate spread (2)		5.28	%			4.99	%			5.25	%			5.69	%			5.76	%
Net interest margin (2)		5.53	%			5.22	%			5.46	%			5.89	%			5.95	%
Noninterest expense as a percentage of average assets (1)		2.10	%			2.33	%			2.14	%			2.08	%			2.10	%
Efficiency ratio		38.5	%			39.3	%			39.6	%			38.0	%			36.9	%
Performance Ratios - Non-GAAP:
Return on average tangible equity (1)		16.45	%			13.14	%			15.09	%			18.90	%			16.50	%
Core net interest margin (2)		5.10	%			5.10	%			5.19	%			5.33	%			5.44	%
Average Balances:
Loans and leases	$	14,471,165			$	14,031,102			$	12,112,881			$	12,108,016			$	12,055,682
Interest-earning assets		18,161,751				17,777,534				14,198,482				13,942,289				13,701,865
Total assets		21,198,594				20,825,248				16,690,177				16,463,311				16,296,640
Noninterest-bearing deposits		6,273,249				6,043,900				3,486,780				3,157,129				2,949,719
Interest-bearing deposits		9,388,652				9,633,393				8,993,681				9,107,937				8,801,306
Total deposits		15,661,901				15,677,293				12,480,461				12,265,066				11,751,025
Borrowings and subordinated debentures		931,260				641,529				504,591				513,820				856,664
Interest-bearing liabilities		10,319,912				10,274,922				9,498,272				9,621,757				9,657,970
Funding sources		16,593,161				16,318,822				12,985,052				12,778,886				12,607,689
Stockholders' equity		4,438,602				4,346,162				3,572,765				3,548,748				3,533,343
(1) Annualized.
(2) Tax equivalent.

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,
		2016				2015				2015				2015				2015
	(Dollars in thousands)
Non-PCI Credit Quality:
Allowance for credit losses to loans and leases		0.96	%			0.85	%			0.82	%			0.78	%			0.72	%
Allowance for credit losses to nonaccrual loans and leases		106	%			95	%			94	%			71	%			62	%
Nonaccrual loans and leases to loans and leases		0.91	%			0.90	%			0.87	%			1.11	%			1.16	%
Nonperforming assets to loans and leases and foreclosed assets		1.05	%			1.06	%			1.14	%			1.37	%			1.45	%
Nonperforming assets to total assets		0.72	%			0.71	%			0.84	%			0.98	%			1.05	%
Trailing twelve month net charge-offs to average loans and leases		0.10	%			0.06	%			0.04	%			0.06	%			0.07	%
PacWest Bancorp Consolidated Capital:
Tier 1 leverage ratio (1)		11.58	%			11.67	%			12.04	%			11.96	%			11.74	%
Common equity tier 1 capital ratio (1)		12.70	%			12.58	%			12.74	%			12.87	%			12.27	%
Tier 1 capital ratio (1)		12.70	%			12.60	%			12.74	%			12.87	%			12.27	%
Total capital ratio (1)		16.04	%			15.65	%			16.32	%			16.53	%			15.80	%
Tangible common equity ratio (non-GAAP measure)		11.87	%			11.38	%			12.21	%			12.10	%			12.01	%
Risk-weighted assets (1)	$	17,226,658			$	17,170,292			$	14,038,839			$	13,569,369			$	13,776,106
Pacific Western Bank Capital:
Tier 1 leverage ratio (1)		11.10	%			11.40	%			11.56	%			11.65	%			11.53	%
Common equity tier 1 capital ratio (1)		12.19	%			12.03	%			12.25	%			12.55	%			12.07	%
Tier 1 capital ratio (1)		12.19	%			12.03	%			12.25	%			12.55	%			12.07	%
Total capital ratio (1)		13.06	%			12.80	%			13.05	%			13.35	%			12.80	%
Tangible common equity ratio (non-GAAP measure)		11.27	%			10.80	%			11.53	%			11.46	%			11.32	%
(1) Capital information for March 31, 2016 is preliminary.

GAAP TO NON-GAAP RECONCILIATION

This press release contains certain non-GAAP financial disclosures for return on average tangible equity, tangible common equity amounts and ratios, tangible book value per share, and core net interest margin. 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. We provide non-GAAP measures for 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 following tables 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
		March 31,				December 31,				March 31,
Return on Average Tangible Equity			2016				2015				2015
		(Dollars in thousands)
Net earnings		$	90,456			$	71,841			$	73,079
Average stockholders' equity		$	4,438,602			$	4,346,162			$	3,533,343
Less:	Average intangible assets		2,227,520				2,177,631				1,737,441
Average tangible common equity		$	2,211,082			$	2,168,531			$	1,795,902
Return on average equity (1)			8.20	%			6.56	%			8.39	%
Return on average tangible equity (2)			16.45	%			13.14	%			16.50	%
(1) Annualized net earnings divided by average stockholders' equity.
(2) Annualized net earnings divided by average tangible common equity.

 

PACWEST BANCORP AND SUBSIDIARIES
GAAP TO NON-GAAP RECONCILIATION
	March 31,				December 31,				September 30,				June 30,				March 31,
Tangible Common Equity Ratio		2016				2015				2015				2015				2015
	(Dollars in thousands)
PacWest Bancorp Consolidated:
Stockholders' equity	$	4,456,592			$	4,397,691			$	3,581,704			$	3,551,490			$	3,533,361
Less: Intangible assets		2,223,928				2,229,511				1,741,084				1,742,581				1,744,083
Tangible common equity	$	2,232,664			$	2,168,180			$	1,840,620			$	1,808,909			$	1,789,278
Total assets	$	21,031,009			$	21,288,490			$	16,814,105			$	16,697,020			$	16,643,940
Less: Intangible assets		2,223,928				2,229,511				1,741,084				1,742,581				1,744,083
Tangible assets	$	18,807,081			$	19,058,979			$	15,073,021			$	14,954,439			$	14,899,857
Equity to assets ratio		21.19	%			20.66	%			21.30	%			21.27	%			21.23	%
Tangible common equity ratio (1)		11.87	%			11.38	%			12.21	%			12.10	%			12.01	%
Book value per share	$	36.60			$	36.22			$	34.76			$	34.46			$	34.29
Tangible book value per share (2)	$	18.33			$	17.86			$	17.86			$	17.55			$	17.36
Shares outstanding		121,771,252				121,413,727				103,053,694				103,051,989				103,044,257
Pacific Western Bank:
Stockholders' equity	$	4,331,841			$	4,276,279			$	3,466,817			$	3,440,715			$	3,410,276
Less: Intangible assets		2,223,928				2,229,511				1,741,084				1,742,581				1,744,083
Tangible common equity	$	2,107,913			$	2,046,768			$	1,725,733			$	1,698,134			$	1,666,193
Total assets	$	20,928,105			$	21,180,689			$	16,707,072			$	16,555,610			$	16,458,591
Less: Intangible assets		2,223,928				2,229,511				1,741,084				1,742,581				1,744,083
Tangible assets	$	18,704,177			$	18,951,178			$	14,965,988			$	14,813,029			$	14,714,508
Equity to assets ratio		20.70	%			20.19	%			20.75	%			20.78	%			20.72	%
Tangible common equity ratio		11.27	%			10.80	%			11.53	%			11.46	%			11.32	%
(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