Highlights
- Net Earnings of $116.3 Million, or $0.94 Per Diluted
Share
- Tax Equivalent Net Interest Margin of 4.99% for Q3 and
5.09% YTD 2018
- New Loan and Lease Production of $1.3 Billion; $345
Million of Net Loan Growth
- Net Charge-offs 48% Lower for YTD 2018 Compared to Same
Period in 2017
- Core Deposits Steady at 87% of Total
Deposits
- Announced Agreement to Acquire El Dorado Savings Bank,
F.S.B.
LOS ANGELES, Oct. 16, 2018 (GLOBE NEWSWIRE) -- PacWest
Bancorp (Nasdaq: PACW) today announced net earnings for
the third quarter of 2018 of $116.3 million, or $0.94 per diluted
share, compared to net earnings for the second quarter of 2018 of
$115.7 million, or $0.92 per diluted share. The increase in
net earnings from the prior quarter was due primarily to a lower
provision for credit losses, offset partially by lower net interest
income and lower noninterest income.
The provision for credit losses decreased by $6.0 million in the
third quarter of 2018 compared to the second quarter of 2018 due
mainly to a lower level of loans rated special mention. Net
interest income decreased by $2.0 million in the third quarter of
2018 due mostly to higher deposit costs and a lower yield on
average loans and leases, offset partially by a higher balance of
average loans and leases. Noninterest income decreased by
$2.7 million in the third quarter of 2018 due primarily to a $6.4
million decrease in other income, offset partially by a $2.6
million increase in warrant income and a $0.9 million increase in
dividends and gains on equity investments.
Matt Wagner, President and CEO, commented, “We achieved strong
net loan growth across all our business lines along with solid
earnings and operating metrics. Our third quarter results produced
a return on assets of 1.89% and a return on tangible equity of
21.61%.”
Mr. Wagner continued, “Our third quarter tax equivalent NIM
decreased by 19 basis points to 4.99% due to higher rates on
deposits from competitive pressures and lower loan yields resulting
from lower discount accretion.”
Mr. Wagner continued, “We recently announced our pending
acquisition of El Dorado Savings Bank which will expand our
Community Banking franchise into Northern California and Northern
Nevada and enhance our core funding with approximately $2.0 billion
of stable low cost deposits.”
FINANCIAL HIGHLIGHTS
|
At or For
the |
|
|
|
At or For
the |
|
|
|
Three Months Ended |
|
|
|
Nine Months Ended |
|
|
|
September 30, |
|
June 30, |
|
Increase |
|
September 30, |
|
Increase |
Financial
Highlights |
|
2018 |
|
|
|
2018 |
|
|
(Decrease) |
|
|
2018 |
|
|
|
2017 |
|
|
(Decrease) |
|
|
|
(Dollars in thousands, except per share
data) |
Net
earnings |
$ |
116,287 |
|
|
$ |
115,735 |
|
|
$ |
552 |
|
|
$ |
350,298 |
|
|
$ |
273,781 |
|
|
$ |
76,517 |
|
Diluted
earnings per share |
$ |
0.94 |
|
|
$ |
0.92 |
|
|
$ |
0.02 |
|
|
$ |
2.79 |
|
|
$ |
2.26 |
|
|
$ |
0.53 |
|
Return
on average assets |
|
1.89 |
% |
|
|
1.93 |
% |
|
|
(0.04 |
) |
|
|
1.94 |
% |
|
|
1.67 |
% |
|
|
0.27 |
|
Return
on average |
|
|
|
|
|
|
|
|
|
|
|
tangible
equity (1) |
|
21.61 |
% |
|
|
20.98 |
% |
|
|
0.63 |
|
|
|
21.22 |
% |
|
|
15.63 |
% |
|
|
5.59 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
interest margin ("NIM") |
|
|
|
|
|
|
|
|
|
|
|
(tax
equivalent) |
|
4.99 |
% |
|
|
5.18 |
% |
|
|
(0.19 |
) |
|
|
5.09 |
% |
|
|
5.15 |
% |
|
|
(0.06 |
) |
Yield on average loans
and |
|
|
|
|
|
|
|
|
|
|
|
leases
(tax equivalent) |
|
6.20 |
% |
|
|
6.30 |
% |
|
|
(0.10 |
) |
|
|
6.20 |
% |
|
|
6.01 |
% |
|
|
0.19 |
|
Cost of average total
deposits |
|
0.46 |
% |
|
|
0.37 |
% |
|
|
0.09 |
|
|
|
0.38 |
% |
|
|
0.26 |
% |
|
|
0.12 |
|
Efficiency ratio |
|
40.9 |
% |
|
|
39.8 |
% |
|
|
1.1 |
|
|
|
40.8 |
% |
|
|
40.7 |
% |
|
|
0.1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
assets |
$ |
24,782,126 |
|
|
$ |
24,529,557 |
|
|
$ |
252,569 |
|
|
$ |
24,782,126 |
|
|
$ |
22,242,932 |
|
|
$ |
2,539,194 |
|
Loans
and leases held |
|
|
|
|
|
|
|
|
|
|
|
for
investment, |
|
|
|
|
|
|
|
|
|
|
|
net of
deferred fees |
$ |
17,230,146 |
|
|
$ |
16,885,192 |
|
|
$ |
344,954 |
|
|
$ |
17,230,146 |
|
|
$ |
15,690,517 |
|
|
$ |
1,539,629 |
|
Noninterest-bearing deposits |
$ |
7,834,480 |
|
|
$ |
8,126,153 |
|
|
$ |
(291,673 |
) |
|
$ |
7,834,480 |
|
|
$ |
6,911,874 |
|
|
$ |
922,606 |
|
Core
deposits |
$ |
15,512,742 |
|
|
$ |
15,586,238 |
|
|
$ |
(73,496 |
) |
|
$ |
15,512,742 |
|
|
$ |
13,531,300 |
|
|
$ |
1,981,442 |
|
Total
deposits |
$ |
17,879,543 |
|
|
$ |
17,929,192 |
|
|
$ |
(49,649 |
) |
|
$ |
17,879,543 |
|
|
$ |
16,773,245 |
|
|
$ |
1,106,298 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest-bearing |
|
|
|
|
|
|
|
|
|
|
|
deposits
as percentage |
|
|
|
|
|
|
|
|
|
|
|
of total
deposits |
|
44 |
% |
|
|
45 |
% |
|
|
(1 |
) |
|
|
44 |
% |
|
|
41 |
% |
|
|
3 |
|
Core
deposits as |
|
|
|
|
|
|
|
|
|
|
|
percentage of total |
|
|
|
|
|
|
|
|
|
|
|
deposits |
|
87 |
% |
|
|
87 |
% |
|
|
- |
|
|
|
87 |
% |
|
|
81 |
% |
|
|
6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
to assets ratio |
|
19.13 |
% |
|
|
19.48 |
% |
|
|
(0.35 |
) |
|
|
19.13 |
% |
|
|
20.73 |
% |
|
|
(1.60 |
) |
Tangible
common equity |
|
|
|
|
|
|
|
|
|
|
|
ratio
(1) |
|
9.61 |
% |
|
|
9.86 |
% |
|
|
(0.25 |
) |
|
|
9.61 |
% |
|
|
12.02 |
% |
|
|
(2.41 |
) |
Book
value per share |
$ |
38.46 |
|
|
$ |
38.36 |
|
|
$ |
0.10 |
|
|
$ |
38.46 |
|
|
$ |
37.96 |
|
|
$ |
0.50 |
|
Tangible
book value per |
|
|
|
|
|
|
|
|
|
|
|
share
(1) |
$ |
17.28 |
|
|
$ |
17.35 |
|
|
$ |
(0.07 |
) |
|
$ |
17.28 |
|
|
$ |
19.84 |
|
|
$ |
(2.56 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
(1) Non-GAAP
measure. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INCOME STATEMENT HIGHLIGHTS
Net Interest Income
Net interest income decreased by $2.0 million to $260.3 million
for the third quarter of 2018 compared to $262.3 million for the
second quarter of 2018 due to interest expense growth exceeding
interest income growth. Interest expense increased due to
higher deposit costs and one additional day in the third
quarter. Interest income increased due primarily to a higher
balance of average loans and leases and one additional day in the
third quarter, offset partially by a lower yield on average loans
and leases. The tax equivalent yield on average loans and
leases was 6.20% for the third quarter of 2018 compared to 6.30%
for the second quarter of 2018. The decrease in the yield on
average loans and leases was due principally to lower discount
accretion on acquired loans (14 basis points in the third quarter
versus 21 basis points in the second quarter).
The tax equivalent NIM was 4.99% for the third quarter of 2018
compared to 5.18% for the second quarter of 2018. The decrease in
the NIM was due mainly to higher deposit costs and a lower yield on
average loans and leases resulting from lower discount accretion on
acquired loans.
The cost of average total deposits increased to 0.46% for the
third quarter of 2018 from 0.37% for the second quarter of 2018 due
to higher rates paid on deposits in conjunction with increased
market interest rates.
Provision for Credit Losses
A provision for credit losses of $11.5 million was recorded in
the third quarter of 2018 compared to $17.5 million in the second
quarter of 2018. The lower provision for the third quarter of 2018
was due to a lower level of loans graded special mention at
September 30, 2018 compared to June 30, 2018. Loans graded special
mention have a higher general reserve amount than loans graded
pass.
The following table presents details of the provision for credit
losses for the periods indicated:
|
Three Months Ended |
|
|
|
Nine Months Ended |
|
September 30, |
|
June 30, |
|
Increase |
|
September 30, |
Provision for Credit Losses |
2018 |
|
2018 |
|
(Decrease) |
|
2018 |
|
|
|
(In thousands) |
Addition
to allowance for loan |
|
|
|
|
|
|
|
and lease
losses |
$ |
11,500 |
|
$ |
15,000 |
|
$ |
(3,500 |
) |
|
$ |
26,274 |
Addition
to reserve for unfunded |
|
|
|
|
|
|
loan
commitments |
|
- |
|
|
2,500 |
|
|
(2,500 |
) |
|
|
6,726 |
Total
provision for credit losses |
$ |
11,500 |
|
$ |
17,500 |
|
$ |
(6,000 |
) |
|
$ |
33,000 |
|
|
|
|
|
|
|
|
Noninterest Income
Noninterest income decreased by $2.7 million to $36.9 million
for the third quarter of 2018 compared to $39.6 million for the
second quarter of 2018 due mainly to decreases in other income and
leased equipment income, partially offset by increases in warrant
income, dividends and gains on equity investments, and other
commissions and fees. Other income and leased equipment
income decreased in the third quarter due to lower gains on early
lease terminations. Warrant income increased due to higher realized
gains on exercised warrants primarily from a $3.1 million gain on a
warrant in a company that completed an IPO. Dividends and gains on
equity investments increased due to higher realized gains on
investments sold. The increase in other commissions and fees was
attributable to higher loan-related fees.
The following table presents details of noninterest income for
the periods indicated:
|
Three Months Ended |
|
|
|
September 30, |
|
June 30, |
|
Increase |
Noninterest Income |
2018 |
|
2018 |
|
(Decrease) |
|
|
|
(In
thousands)
|
Service
charges on deposit accounts |
$ |
3,979 |
|
$ |
4,265 |
|
$ |
(286 |
) |
Other
commissions and fees |
|
12,397 |
|
|
11,767 |
|
|
630 |
|
Leased
equipment income |
|
9,120 |
|
|
9,790 |
|
|
(670 |
) |
Gain on
sale of loans and leases |
|
- |
|
|
106 |
|
|
(106 |
) |
Gain on
sale of securities |
|
826 |
|
|
253 |
|
|
573 |
|
Other
income: |
|
|
|
|
|
Dividends
and gains on equity investments |
|
2,895
|
|
|
1,992
|
|
|
903
|
|
Warrant
income |
|
3,818
|
|
|
1,225
|
|
|
2,593
|
|
Other |
|
3,877
|
|
|
10,240
|
|
|
(6,363 |
) |
Total
noninterest income |
$ |
36,912 |
|
$ |
39,638 |
|
$ |
(2,726 |
) |
|
Noninterest Expense
Noninterest expense increased by $1.7 million to $128.1 million
for the third quarter of 2018 compared to $126.4 million for the
second quarter of 2018 attributable primarily to a $2.4 million
increase in compensation expense, a $0.8 million increase in other
professional expense, and a $0.8 million increase in acquisition
costs, partially offset by decreases in most other expense
categories. Compensation expense increased due to higher stock
compensation expense for our performance-based restricted stock
units as we now expect to achieve a higher level of certain
performance metrics, and higher commissions expense related to the
increased warrant income. Other professional services increased due
to higher legal and consulting expense. The increase in acquisition
costs relates to the recently announced pending acquisition of El
Dorado Savings Bank.
The following table presents details of noninterest expense for
the periods indicated:
|
Three Months Ended |
|
|
|
September 30, |
|
June 30, |
|
Increase |
Noninterest Expense |
2018 |
|
|
2018 |
|
|
(Decrease) |
|
(In
thousands)
|
Compensation |
$ |
72,333 |
|
|
$ |
69,913 |
|
|
$ |
2,420 |
|
Occupancy |
|
13,069 |
|
|
|
13,575 |
|
|
|
(506 |
) |
Data
processing |
|
6,740 |
|
|
|
6,896 |
|
|
|
(156 |
) |
Other
professional services |
|
6,058 |
|
|
|
5,257 |
|
|
|
801 |
|
Insurance and assessments |
|
5,446 |
|
|
|
5,330 |
|
|
|
116 |
|
Intangible asset amortization |
|
5,587 |
|
|
|
5,587 |
|
|
|
- |
|
Leased
equipment depreciation |
|
5,001 |
|
|
|
5,237 |
|
|
|
(236 |
) |
Foreclosed assets income, net |
|
(257 |
) |
|
|
(61 |
) |
|
|
(196 |
) |
Acquisition, integration and reorganization costs |
|
800 |
|
|
|
- |
|
|
|
800 |
|
Loan
expense |
|
2,249 |
|
|
|
3,058 |
|
|
|
(809 |
) |
Other |
|
11,127 |
|
|
|
11,657 |
|
|
|
(530 |
) |
Total
noninterest expense |
$ |
128,153 |
|
|
$ |
126,449 |
|
|
$ |
1,704 |
|
|
Income Taxes
The overall effective income tax rate was 26.2% for the third
quarter of 2018 and 26.8% for the second quarter of 2018. The
effective tax rate for the nine months ended September 30, 2018 was
26.9% while the full year 2018 is estimated to be approximately
28%.
BALANCE SHEET HIGHLIGHTS
Loans and Leases
Loans and leases held for investment, net of deferred fees,
increased by $345.0 million in the third quarter of 2018 to $17.2
billion at September 30, 2018. The net increase was driven
mainly by production of $1.3 billion and disbursements of $966.7
million, offset partially by payoffs of $1.1 billion and paydowns
of $795.2 million.
The following table presents a roll forward of loans and leases
held for investment, net of deferred fees, for the periods
indicated:
|
Three Months Ended |
|
Nine Months Ended |
Loans and
Leases |
September
30, |
|
June 30, |
|
September
30, |
Held for
Investment Roll Forward (1) |
|
2018 |
|
|
|
2018 |
|
|
|
2018 |
|
|
|
|
(Dollars in thousands) |
Balance, beginning of
period |
$ |
16,885,192 |
|
|
$ |
16,455,285 |
|
|
$ |
16,972,743 |
|
Additions: |
|
|
|
|
|
Production |
|
1,315,572 |
|
|
|
1,256,559 |
|
|
|
3,317,049 |
|
Disbursements |
|
966,668 |
|
|
|
1,203,940 |
|
|
|
2,917,984 |
|
Total production and disbursements |
|
2,282,240 |
|
|
|
2,460,499 |
|
|
|
6,235,033 |
|
Reductions: |
|
|
|
|
|
Payoffs |
|
(1,133,233 |
) |
|
|
(1,154,400 |
) |
|
|
(3,218,606 |
) |
Paydowns |
|
(795,243 |
) |
|
|
(829,119 |
) |
|
|
(2,560,364 |
) |
Total payoffs and paydowns |
|
(1,928,476 |
) |
|
|
(1,983,519 |
) |
|
|
(5,778,970 |
) |
Sales |
|
(3,326 |
) |
|
|
(27,779 |
) |
|
|
(161,729 |
) |
Transfers
to foreclosed assets |
|
(2,176 |
) |
|
|
(1,059 |
) |
|
|
(3,235 |
) |
Charge-offs |
|
(3,308 |
) |
|
|
(18,235 |
) |
|
|
(33,696 |
) |
Total reductions |
|
(1,937,286 |
) |
|
|
(2,030,592 |
) |
|
|
(5,977,630 |
) |
Balance, end of
period |
$ |
17,230,146 |
|
|
$ |
16,885,192 |
|
|
$ |
17,230,146 |
|
|
|
|
|
|
|
Weighted average rate
on production (2) |
|
5.17 |
% |
|
|
5.04 |
% |
|
|
5.16 |
% |
|
|
|
|
|
|
(1)
Includes direct financing leases but excludes equipment leased to
others under operating leases. |
|
|
|
|
(2) The
weighted average rate on production presents contractual rates on a
tax equivalent basis and excludes amortized fees.
Amortized fees added approximately 31 basis points to
loan yields in 2018. |
|
|
The following table presents the composition of loans and leases
held for investment, net of deferred fees, as of the dates
indicated:
|
September 30, |
|
June 30, |
|
March 31, |
|
September 30, |
Loan and
Lease Portfolio |
2018 |
|
2018 |
|
2018 |
|
2017 |
|
|
|
(In thousands) |
Real estate
mortgage: |
|
Commercial |
$ |
4,932,823 |
|
$ |
5,010,680 |
|
$ |
5,033,006 |
|
$ |
4,338,933 |
Residential |
|
2,745,837 |
|
|
2,555,695 |
|
|
2,521,237 |
|
|
1,850,324 |
Total
real estate mortgage |
|
7,678,660 |
|
|
7,566,375 |
|
|
7,554,243 |
|
|
6,189,257 |
Real estate
construction and land: |
|
|
|
|
|
|
|
Commercial |
|
854,346 |
|
|
831,462 |
|
|
789,892 |
|
|
680,950 |
Residential |
|
1,146,611 |
|
|
1,042,564 |
|
|
887,110 |
|
|
568,273 |
Total
real estate construction and land |
|
2,000,957 |
|
|
1,874,026 |
|
|
1,677,002 |
|
|
1,249,223 |
Total
real estate |
|
9,679,617 |
|
|
9,440,401 |
|
|
9,231,245 |
|
|
7,438,480 |
Commercial: |
|
|
|
|
|
|
|
Asset-based |
|
3,222,311 |
|
|
3,184,300 |
|
|
2,957,890 |
|
|
2,792,823 |
Venture
capital |
|
2,031,895 |
|
|
2,008,205 |
|
|
1,920,643 |
|
|
1,959,489 |
Other
commercial |
|
1,897,852 |
|
|
1,873,607 |
|
|
1,947,590 |
|
|
3,113,574 |
Total
commercial |
|
7,152,058 |
|
|
7,066,112 |
|
|
6,826,123 |
|
|
7,865,886 |
Consumer |
|
398,471 |
|
|
378,679 |
|
|
397,917 |
|
|
386,151 |
Total
loans and leases held for |
|
|
|
|
|
|
|
investment, net of deferred fees |
$ |
17,230,146 |
|
$ |
16,885,192 |
|
$ |
16,455,285 |
|
$ |
15,690,517 |
|
|
|
|
|
|
|
|
Total unfunded loan
commitments |
$ |
7,055,833 |
|
$ |
6,429,587 |
|
$ |
6,352,803 |
|
$ |
5,037,084 |
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for Credit Losses
The following tables show roll forwards of the allowance for
credit losses for the periods indicated:
|
Three Months Ended September 30,
2018 |
|
Allowance for |
|
Reserve
for |
|
Total |
Allowance for
Credit |
Loan and |
|
Unfunded Loan |
|
Allowance for |
Losses
Rollforward |
Lease Losses |
|
Commitments |
|
Credit Losses |
|
(In thousands) |
Beginning balance |
$ |
132,139 |
|
|
$ |
35,361 |
|
$ |
167,500 |
|
Charge-offs |
|
(3,308 |
) |
|
|
- |
|
|
(3,308 |
) |
Recoveries |
|
1,589 |
|
|
|
- |
|
|
1,589 |
|
Net
charge-offs |
|
(1,719 |
) |
|
|
- |
|
|
(1,719 |
) |
Provision |
|
11,500 |
|
|
|
- |
|
|
11,500 |
|
Ending balance |
$ |
141,920 |
|
|
$ |
35,361 |
|
$ |
177,281 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, 2018 |
|
Allowance for |
|
Reserve
for |
|
Total |
Allowance for
Credit |
Loan and |
|
Unfunded Loan |
|
Allowance for |
Losses
Rollforward |
Lease Losses |
|
Commitments |
|
Credit Losses |
|
(In thousands) |
Beginning balance |
$ |
134,275 |
|
|
$ |
32,861 |
|
$ |
167,136 |
|
Charge-offs |
|
(18,235 |
) |
|
|
- |
|
|
(18,235 |
) |
Recoveries |
|
1,099 |
|
|
|
- |
|
|
1,099 |
|
Net
charge-offs |
|
(17,136 |
) |
|
|
- |
|
|
(17,136 |
) |
Provision |
|
15,000 |
|
|
|
2,500 |
|
|
17,500 |
|
Ending balance |
$ |
132,139 |
|
|
$ |
35,361 |
|
$ |
167,500 |
|
|
|
|
|
|
|
The allowance for credit losses as a percentage of loans and
leases held for investment increased to 1.03% at September 30, 2018
from 0.99% at June 30, 2018 due primarily to an increase in the
level of specific reserves on impaired loans.
Gross charge-offs for the third quarter of 2018 were $3.3
million and included $1.1 million for venture capital loans, $0.7
million for real estate mortgage loans, and $0.7 million for
asset-based loans. Gross charge-offs for the second quarter
of 2018 were $18.2 million and included $6.1 million for venture
capital loans, $4.7 million for real estate mortgage loans, $4.4
million for other commercial loans, and $2.9 million for
asset-based loans. Recoveries for the third quarter of 2018
were $1.6 million and included $1.0 million for venture capital
loans. Recoveries in the second quarter of 2018 were $1.1 million
and included $0.8 million for other commercial loans.
The annualized ratio of net charge-offs to average loans was
0.04% for the third quarter of 2018 compared to 0.41% for the
second quarter of 2018. The annualized ratio of net charge-offs to
average loans was 0.19% for the nine months ended September 30,
2018 compared to 0.35% for the same period in 2017.
Deposits and Client Investment
Funds
The following table presents the composition of our deposit
portfolio as of the dates indicated:
|
September 30, |
|
June 30, |
|
March 31, |
|
September 30, |
Deposit
Category |
2018 |
|
|
2018 |
|
|
2018 |
|
|
2017 |
|
|
|
|
(Dollars in thousands) |
Noninterest-bearing
demand deposits |
$ |
7,834,480 |
|
|
$ |
8,126,153 |
|
|
$ |
8,232,140 |
|
|
$ |
6,911,874 |
|
Interest checking
deposits |
|
2,277,537 |
|
|
|
2,184,785 |
|
|
|
2,076,152 |
|
|
|
1,957,485 |
|
Money market
deposits |
|
4,782,724 |
|
|
|
4,631,658 |
|
|
|
4,676,734 |
|
|
|
3,967,224 |
|
Savings deposits |
|
618,001 |
|
|
|
643,642 |
|
|
|
676,503 |
|
|
|
694,717 |
|
Total
core deposits |
|
15,512,742 |
|
|
|
15,586,238 |
|
|
|
15,661,529 |
|
|
|
13,531,300 |
|
Non-core non-maturity
deposits |
|
483,528 |
|
|
|
607,388 |
|
|
|
585,399 |
|
|
|
1,118,694 |
|
Total
non-maturity deposits |
|
15,996,270 |
|
|
|
16,193,626 |
|
|
|
16,246,928 |
|
|
|
14,649,994 |
|
Time deposits $250,000
and under |
|
1,509,214 |
|
|
|
1,394,117 |
|
|
|
1,482,118 |
|
|
|
1,770,439 |
|
Time deposits over
$250,000 |
|
374,059 |
|
|
|
341,449 |
|
|
|
349,742 |
|
|
|
352,812 |
|
Total
time deposits |
|
1,883,273 |
|
|
|
1,735,566 |
|
|
|
1,831,860 |
|
|
|
2,123,251 |
|
Total
deposits |
$ |
17,879,543 |
|
|
$ |
17,929,192 |
|
|
$ |
18,078,788 |
|
|
$ |
16,773,245 |
|
|
Noninterest-bearing
demand deposits |
|
as
percentage of total deposits |
|
44 |
% |
|
|
45 |
% |
|
|
46 |
% |
|
|
41 |
% |
Core deposits as
percentage of total deposits |
|
87 |
% |
|
|
87 |
% |
|
|
87 |
% |
|
|
81 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At September 30, 2018, core deposits totaled $15.5 billion, or
87% of total deposits, including $7.8 billion of
noninterest-bearing demand deposits, or 44% of total
deposits.
In addition to deposit products, we also offer alternative
non-depository cash investment options for select clients; these
alternatives include investments managed by Square 1 Asset
Management, Inc. (“S1AM”), our registered investment advisor
subsidiary, and third-party sweep products. Total off-balance
sheet client investment funds at September 30, 2018 were $2.0
billion, of which $1.5 billion was managed by S1AM.
CREDIT QUALITY
The following table presents loan and lease credit quality
metrics as of the dates indicated:
|
September 30, |
|
June 30, |
|
Increase |
Credit
Quality Metrics |
2018 |
|
2018 |
|
(Decrease) |
|
|
|
(Dollars in thousands) |
Nonaccrual loans and
leases held for investment (1) |
$ |
112,972 |
|
|
$ |
113,745 |
|
|
$ |
(773 |
) |
Accruing loans
contractually past due |
|
|
|
|
|
90 days
or more |
|
- |
|
|
|
- |
|
|
|
- |
|
Foreclosed assets,
net |
|
4,407 |
|
|
|
2,231 |
|
|
|
2,176 |
|
Total
nonperforming assets |
$ |
117,379 |
|
|
$ |
115,976 |
|
|
$ |
1,403 |
|
|
|
|
|
|
|
Nonaccrual loans and
leases held for investment (1) |
$ |
112,972 |
|
|
$ |
113,745 |
|
|
$ |
(773 |
) |
Performing troubled
debt restructured loans |
|
|
|
|
|
held for
investment |
|
22,106 |
|
|
|
58,148 |
|
|
|
(36,042 |
) |
Total
impaired loans and leases |
$ |
135,078 |
|
|
$ |
171,893 |
|
|
$ |
(36,815 |
) |
|
|
|
|
|
|
Nonaccrual loans and leases held for investment |
|
|
|
|
|
to loans
and leases held for investment |
|
0.66 |
% |
|
|
0.67 |
% |
|
|
Nonperforming assets to loans and leases |
|
|
|
|
|
held for
investment and foreclosed assets |
|
0.68 |
% |
|
|
0.69 |
% |
|
|
|
|
|
|
|
|
Pass |
$ |
16,609,629 |
|
|
$ |
16,142,052 |
|
|
$ |
467,577 |
|
Special mention |
|
360,058 |
|
|
|
506,848 |
|
|
|
(146,790 |
) |
Classified |
|
260,459 |
|
|
|
236,292 |
|
|
|
24,167 |
|
Total
loans and leases held for investment, |
|
|
|
|
|
net of
deferred fees |
$ |
17,230,146 |
|
|
$ |
16,885,192 |
|
|
$ |
344,954 |
|
|
|
|
|
|
|
Classified loans and leases held for investment |
|
|
|
|
|
to loans
and leases held for investment |
|
1.51 |
% |
|
|
1.40 |
% |
|
|
|
|
|
|
|
|
Allowance for credit
losses |
$ |
177,281 |
|
|
$ |
167,500 |
|
|
$ |
9,781 |
|
Provision for credit losses (for the quarter) |
$ |
11,500 |
|
|
$ |
17,500 |
|
|
$ |
(6,000 |
) |
Net
charge-offs (for the quarter) |
$ |
1,719 |
|
|
$ |
17,136 |
|
|
$ |
(15,417 |
) |
Net
charge-offs to average loans and leases |
|
|
|
|
|
(for the
quarter) |
|
0.04 |
% |
|
|
0.41 |
% |
|
|
Allowance for credit losses to loans and leases |
|
|
|
|
|
held for
investment |
|
1.03 |
% |
|
|
0.99 |
% |
|
|
Allowance for credit losses to nonaccrual loans |
|
|
|
|
|
and
leases held for investment |
|
156.9 |
% |
|
|
147.3 |
% |
|
|
|
|
|
|
|
|
(1)
Nonaccrual loans include guaranteed amounts of $13.5 million at
September 30, 2018 and $13.5 million at June 30, 2018. |
|
|
|
|
|
|
Nonaccrual loans and leases decreased by $0.8 million in the
third quarter due to net changes in the population of nonaccrual
loans which included collections applied to loans and leases, the
full repayment of a $10.5 million nonaccrual residential real
estate construction loan, and an $11.9 million venture capital loan
that was placed on nonaccrual status during the quarter. The
decrease in nonaccrual loans and leases by loan category was
attributable primarily to a $10.5 million decrease in nonaccrual
residential real estate construction and land loans and a $3.4
million decrease in nonaccrual commercial real estate mortgage
loans, offset partially by a $7.6 million increase in nonaccrual
venture capital loans and a $4.9 million increase in nonaccrual
asset-based loans.
Special mention loans and leases decreased by $146.8 million in
the third quarter due to net changes in the population of these
loans which included a $47.8 million special mention commercial
real estate loan being upgraded to pass status and the full
repayment of a $33.4 million special mention healthcare real estate
loan.
Classified loans and leases increased by $24.2 million in the
third quarter due to net changes in the population of these loans
which included a $34.4 million security cash flow loan being
downgraded to classified status, offset partially by the full
repayment of a $10.5 million classified nonaccrual residential real
estate construction loan.
The following table presents 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 |
|
September 30, 2018 |
|
June 30, 2018 |
|
30-89 Days Past
Due |
|
|
% of |
|
|
% of |
|
September 30, |
|
June 30, |
|
|
Loan |
|
|
Loan |
|
2018 |
|
2018 |
|
Amount |
Category |
|
Amount |
Category |
|
Amount |
|
Amount |
|
|
|
(Dollars in thousands) |
Real estate
mortgage: |
|
|
|
|
|
|
|
|
|
Commercial |
$ |
29,723 |
0.6 |
% |
|
$ |
33,105 |
0.7 |
% |
|
$ |
824 |
|
$ |
2,620 |
Residential |
|
3,259 |
0.1 |
% |
|
|
3,527 |
0.1 |
% |
|
|
5,436 |
|
|
2,983 |
Total
real estate mortgage |
|
32,982 |
0.4 |
% |
|
|
36,632 |
0.5 |
% |
|
|
6,260 |
|
|
5,603 |
Real estate
construction and land: |
|
|
|
|
|
|
|
|
|
Commercial |
|
- |
0.0 |
% |
|
|
- |
0.0 |
% |
|
|
- |
|
|
- |
Residential |
|
- |
0.0 |
% |
|
|
10,450 |
1.0 |
% |
|
|
8,498 |
|
|
5,969 |
Total
real estate |
|
|
|
|
|
|
|
|
|
construction and land |
|
- |
0.0 |
% |
|
|
10,450 |
0.6 |
% |
|
|
8,498 |
|
|
5,969 |
Commercial: |
|
|
|
|
|
|
|
|
|
Asset-based |
|
34,619 |
1.1 |
% |
|
|
29,677 |
0.9 |
% |
|
|
- |
|
|
- |
Venture
capital |
|
35,520 |
1.7 |
% |
|
|
27,940 |
1.4 |
% |
|
|
1,028 |
|
|
- |
Other
commercial |
|
9,579 |
0.5 |
% |
|
|
8,782 |
0.5 |
% |
|
|
222 |
|
|
230 |
Total
commercial |
|
79,718 |
1.1 |
% |
|
|
66,399 |
0.9 |
% |
|
|
1,250 |
|
|
230 |
Consumer |
|
272 |
0.1 |
% |
|
|
264 |
0.1 |
% |
|
|
605 |
|
|
75 |
Total
held for investment |
$ |
112,972 |
0.7 |
% |
|
$ |
113,745 |
0.7 |
% |
|
$ |
16,613 |
|
$ |
11,877 |
|
|
|
|
|
|
|
|
|
|
EL DORADO SAVINGS BANK MERGER
ANNOUNCEMENT
On September 12, 2018, PacWest announced the signing of a
definitive agreement and plan of merger (the “Agreement”) whereby
PacWest will acquire El Dorado Savings Bank, F.S.B. (“El Dorado”)
in a transaction valued at approximately $466.7 million.
El Dorado, headquartered in Placerville, California, is a
federally chartered savings bank founded in 1958, with
approximately $2.2 billion in assets and 35 branches located
primarily in eight Northern California counties and two Northern
Nevada counties. In connection with the transaction, El
Dorado will be merged into Pacific Western Bank, the principal
operating subsidiary of PacWest Bancorp.
The transaction, which was approved by the PacWest and El Dorado
boards of directors, is expected to close in the first quarter of
2019 and is subject to customary closing conditions, including
obtaining approval by bank regulatory authorities and El Dorado’s
stockholders.
As of June 30, 2018, on a pro forma consolidated basis, the
combined company would have approximately $26.7 billion in assets
and 110 branches. No El Dorado branches are expected to be
consolidated as a result of the Agreement.
Under terms of the Agreement, El Dorado stockholders will
receive 58.2209 shares of PacWest common stock and $427.92 in cash
for each share of El Dorado, subject to adjustment in certain
circumstances as set forth in the Agreement. Based on
PacWest’s September 11, 2018 closing price of $50.04, the total
value of the merger consideration is $3,341.29 per El Dorado share.
The consideration mix would result in a total of approximately
$59.8 million in cash and $406.9 million in PacWest
shares.
STOCK REPURCHASE PROGRAM
During the third quarter of 2018, we repurchased 1,276,498
shares at an average price of $50.59 and a total cost of $64.6
million. At September 30, 2018, the remaining amount that
could be used to repurchase shares under the $350 million Stock
Repurchase Program was $110.1 million.
ABOUT PACWEST BANCORP
PacWest Bancorp (“PacWest”) is a bank holding company with over
$24 billion in assets with one wholly-owned banking subsidiary,
Pacific Western Bank (the “Bank”). The Bank has 74 full-service
branches located throughout the state of California and one branch
in Durham, North Carolina. Our Community Banking group provides
lending and comprehensive deposit and treasury management services
to small and medium-sized businesses conducted primarily through
our California-based branch offices. We offer additional products
and services through our National Lending and Venture Banking
business groups. National Lending provides asset-based, equipment,
real estate and security cash flow loans and treasury management
services to established middle-market businesses on a national
basis. Venture Banking offers a comprehensive suite of financial
services focused on entrepreneurial businesses and their venture
capital and private equity investors, with offices located in key
innovative 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 communication contains certain forward-looking information
about PacWest, El Dorado, and the combined company after the close
of the transaction that is intended to be covered by the safe
harbor for “forward-looking statements” provided by the Private
Securities Litigation Reform Act of 1995. Such statements include
future financial and operating results, expectations, intentions
and other statements that are not historical facts such as our
future effective tax rate; the ability to complete the proposed El
Dorado transaction, including obtaining required regulatory
approvals and approval by the stockholders of El Dorado, or any
future transaction, successfully integrate such acquired entities,
or achieve expected beneficial synergies and/or operating
efficiencies, in each case within expected time-frames or at all;
and the possibility that personnel changes/retention will not
proceed as planned. Such statements are based on information
available at the time of this communication and are based on
current beliefs and expectations of the Company’s management and
are subject to significant risks, uncertainties and contingencies,
many of which are beyond our control. Actual results may differ
materially from those set forth in the forward-looking statements
due to a variety of factors, including the risk factors described
in documents filed by the Company with the Securities and Exchange
Commission.
We are under no obligation (and expressly disclaim any such
obligation) to update or alter our forward-looking statements,
whether as a result of new information, future events or otherwise,
except as required by law.
ADDITIONAL INFORMATION ABOUT THE PROPOSED TRANSACTION
AND WHERE TO FIND IT
Stockholders of El Dorado are urged to carefully review and
consider each of PacWest’s public filings with the SEC, including
but not limited to its Annual Reports on Form 10-K, its proxy
statements, its Current Reports on Form 8-K and its Quarterly
Reports on Form 10-Q. The documents filed by PacWest with the SEC
may be obtained free of charge at PacWest’s website at
www.pacwestbancorp.com or at the SEC’s website at www.sec.gov.
These documents may also be obtained free of charge from PacWest by
requesting them in writing to PacWest Bancorp, 9701 Wilshire
Boulevard, Suite 700, Beverly Hills, CA 90212; Attention: Investor
Relations, by submitting an email request to
investor-relations@pacwestbancorp.com or by telephone at (310)
887-8521.
PacWest intends to file a registration statement with the SEC
which will include a proxy statement of El Dorado and a prospectus
of PacWest, and will file other documents regarding the proposed
transaction with the SEC. Before making any voting or investment
decision, stockholders of El Dorado are urged to carefully read the
entire registration statement and proxy statement/prospectus, when
they become available, as well as any amendments or supplements to
these documents, because they will contain important information
about the proposed transaction. A definitive proxy
statement/prospectus will be sent to the stockholders of El Dorado
seeking any required stockholder approvals. Stockholders of El
Dorado will be able to obtain the registration statement and the
proxy statement/prospectus free of charge from the SEC’s website or
from PacWest by writing to the address provided in the paragraph
above.
|
PACWEST BANCORP AND
SUBSIDIARIES |
CONDENSED CONSOLIDATED BALANCE SHEET |
|
|
|
|
|
|
|
September 30, |
|
June 30, |
|
December 31, |
|
2018
|
|
2018
|
|
2017
|
|
(Dollars in thousands, except per share
data) |
ASSETS: |
|
|
|
|
|
Cash and due from
banks |
$ |
196,502 |
|
|
$ |
245,998 |
|
|
$ |
233,215 |
|
Interest-earning
deposits in financial institutions |
|
185,284 |
|
|
|
205,567 |
|
|
|
165,222 |
|
Total cash and cash
equivalents |
|
381,786 |
|
|
|
451,565 |
|
|
|
398,437 |
|
|
|
|
|
|
|
Securities
available-for-sale, at estimated fair value |
|
3,820,333 |
|
|
|
3,857,788 |
|
|
|
3,774,431 |
|
Federal Home Loan Bank
stock, at cost |
|
31,077 |
|
|
|
26,271 |
|
|
|
20,790 |
|
Total investment securities |
|
3,851,410 |
|
|
|
3,884,059 |
|
|
|
3,795,221 |
|
|
|
|
|
|
|
Loans held for
sale |
|
- |
|
|
|
- |
|
|
|
481,100 |
|
|
|
|
|
|
|
Gross loans and leases
held for investment |
|
17,295,589 |
|
|
|
16,947,502 |
|
|
|
17,032,221 |
|
Deferred fees, net |
|
(65,443 |
) |
|
|
(62,310 |
) |
|
|
(59,478 |
) |
Total
loans and leases held for investment, |
|
|
|
|
|
net of
deferred fees |
|
17,230,146 |
|
|
|
16,885,192 |
|
|
|
16,972,743 |
|
Allowance for loan and
lease losses |
|
(141,920 |
) |
|
|
(132,139 |
) |
|
|
(139,456 |
) |
Total loans and leases held for investment,
net |
|
17,088,226 |
|
|
|
16,753,053 |
|
|
|
16,833,287 |
|
|
|
|
|
|
|
Equipment leased to
others under operating leases |
|
275,707 |
|
|
|
266,576 |
|
|
|
284,631 |
|
Premises and equipment,
net |
|
34,012 |
|
|
|
34,513 |
|
|
|
31,852 |
|
Foreclosed assets, net |
|
4,407 |
|
|
|
2,231 |
|
|
|
1,329 |
|
Deferred tax asset,
net |
|
41,280 |
|
|
|
25,551 |
|
|
|
- |
|
Goodwill |
|
2,548,670 |
|
|
|
2,548,670 |
|
|
|
2,548,670 |
|
Core deposit and
customer relationship intangibles, net |
|
62,106 |
|
|
|
67,693 |
|
|
|
79,626 |
|
Other assets |
|
494,522 |
|
|
|
495,646 |
|
|
|
540,723 |
|
Total assets |
$ |
24,782,126 |
|
|
$ |
24,529,557 |
|
|
$ |
24,994,876 |
|
|
|
|
|
|
|
LIABILITIES: |
|
|
|
|
|
Noninterest-bearing
deposits |
$ |
7,834,480 |
|
|
$ |
8,126,153 |
|
|
$ |
8,508,044 |
|
Interest-bearing
deposits |
|
10,045,063 |
|
|
|
9,803,039 |
|
|
|
10,357,492 |
|
Total deposits |
|
17,879,543 |
|
|
|
17,929,192 |
|
|
|
18,865,536 |
|
Borrowings |
|
1,513,166 |
|
|
|
1,187,226 |
|
|
|
467,342 |
|
Subordinated
debentures |
|
452,944 |
|
|
|
451,878 |
|
|
|
462,437 |
|
Accrued interest
payable and other liabilities |
|
194,788 |
|
|
|
183,302 |
|
|
|
221,963 |
|
Total liabilities |
|
20,040,441 |
|
|
|
19,751,598 |
|
|
|
20,017,278 |
|
STOCKHOLDERS'
EQUITY (1) |
|
4,741,685 |
|
|
|
4,777,959 |
|
|
|
4,977,598 |
|
Total liabilities and stockholders’ equity |
$ |
24,782,126 |
|
|
$ |
24,529,557 |
|
|
$ |
24,994,876 |
|
|
|
|
|
|
|
Book value per share |
$ |
38.46 |
|
|
$ |
38.36 |
|
|
$ |
38.65 |
|
Tangible book value per share (2) |
$ |
17.28 |
|
|
$ |
17.35 |
|
|
$ |
18.24 |
|
Shares outstanding |
|
123,283,450 |
|
|
|
124,567,950 |
|
|
|
128,782,878 |
|
|
|
|
|
|
|
(1) Includes net
unrealized (loss) gain on securities |
|
|
|
|
|
available-for-sale, net |
$ |
(43,854 |
) |
|
$ |
(22,340 |
) |
|
$ |
31,171 |
|
(2)
Non-GAAP measure. |
|
|
|
|
|
|
|
|
|
|
|
|
PACWEST BANCORP AND
SUBSIDIARIES |
CONDENSED CONSOLIDATED STATEMENT OF EARNINGS |
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Nine Months Ended |
|
September 30, |
|
June 30, |
|
September 30, |
|
September 30, |
|
2018 |
|
2018 |
|
2017 |
|
2018 |
|
2017 |
|
(Dollars in thousands, except per share
data) |
|
|
|
|
Interest
income: |
|
|
|
|
|
|
|
|
|
Loans and leases |
$ |
264,062 |
|
|
$ |
260,300 |
|
|
$ |
235,666 |
|
|
$ |
775,447 |
|
|
$ |
694,462 |
|
Investment
securities |
|
28,061 |
|
|
|
27,730 |
|
|
|
24,762 |
|
|
|
81,929 |
|
|
|
72,490 |
|
Deposits in financial
institutions |
|
519 |
|
|
|
484 |
|
|
|
538 |
|
|
|
1,555 |
|
|
|
967 |
|
Total interest income |
|
292,642 |
|
|
|
288,514 |
|
|
|
260,966 |
|
|
|
858,931 |
|
|
|
767,919 |
|
|
|
|
|
|
|
|
|
|
|
Interest
expense: |
|
|
|
|
|
|
|
|
|
Deposits |
|
21,121 |
|
|
|
16,367 |
|
|
|
13,071 |
|
|
|
51,306 |
|
|
|
31,653 |
|
Borrowings |
|
3,814 |
|
|
|
2,649 |
|
|
|
188 |
|
|
|
7,383 |
|
|
|
2,272 |
|
Subordinated
debentures |
|
7,390 |
|
|
|
7,166 |
|
|
|
6,017 |
|
|
|
21,093 |
|
|
|
17,379 |
|
Total interest expense |
|
32,325 |
|
|
|
26,182 |
|
|
|
19,276 |
|
|
|
79,782 |
|
|
|
51,304 |
|
|
|
|
|
|
|
|
|
|
|
Net interest income |
|
260,317 |
|
|
|
262,332 |
|
|
|
241,690 |
|
|
|
779,149 |
|
|
|
716,615 |
|
Provision for credit
losses |
|
11,500 |
|
|
|
17,500 |
|
|
|
15,119 |
|
|
|
33,000 |
|
|
|
51,346 |
|
Net interest income after
provision |
|
|
|
|
|
|
|
|
|
for credit losses |
|
248,817 |
|
|
|
244,832 |
|
|
|
226,571 |
|
|
|
746,149 |
|
|
|
665,269 |
|
|
|
|
|
|
|
|
|
|
|
Noninterest
income: |
|
|
|
|
|
|
|
|
|
Service charges on
deposit accounts |
|
3,979 |
|
|
|
4,265 |
|
|
|
3,465 |
|
|
|
12,418 |
|
|
|
10,733 |
|
Other commissions and
fees |
|
12,397 |
|
|
|
11,767 |
|
|
|
9,944 |
|
|
|
34,429 |
|
|
|
30,917 |
|
Leased equipment
income |
|
9,120 |
|
|
|
9,790 |
|
|
|
8,332 |
|
|
|
28,497 |
|
|
|
29,442 |
|
Gain on sale of loans
and leases |
|
- |
|
|
|
106 |
|
|
|
2,848 |
|
|
|
4,675 |
|
|
|
4,209 |
|
Gain on sale of
securities |
|
826 |
|
|
|
253 |
|
|
|
1,236 |
|
|
|
7,390 |
|
|
|
2,788 |
|
Other income |
|
10,590 |
|
|
|
13,457 |
|
|
|
5,557 |
|
|
|
27,700 |
|
|
|
23,689 |
|
Total noninterest income |
|
36,912 |
|
|
|
39,638 |
|
|
|
36,939 |
|
|
|
115,109 |
|
|
|
101,778 |
|
|
|
|
|
|
|
|
|
|
|
Noninterest
expense: |
|
|
|
|
|
|
|
|
|
Compensation |
|
72,333 |
|
|
|
69,913 |
|
|
|
64,413 |
|
|
|
213,269 |
|
|
|
194,581 |
|
Occupancy |
|
13,069 |
|
|
|
13,575 |
|
|
|
12,729 |
|
|
|
39,867 |
|
|
|
36,148 |
|
Data processing |
|
6,740 |
|
|
|
6,896 |
|
|
|
6,459 |
|
|
|
20,295 |
|
|
|
19,811 |
|
Other professional
services |
|
6,058 |
|
|
|
5,257 |
|
|
|
4,213 |
|
|
|
15,754 |
|
|
|
11,567 |
|
Insurance and
assessments |
|
5,446 |
|
|
|
5,330 |
|
|
|
4,702 |
|
|
|
16,503 |
|
|
|
14,349 |
|
Intangible asset
amortization |
|
5,587 |
|
|
|
5,587 |
|
|
|
3,049 |
|
|
|
17,520 |
|
|
|
9,178 |
|
Leased equipment
depreciation |
|
5,001 |
|
|
|
5,237 |
|
|
|
4,862 |
|
|
|
15,613 |
|
|
|
15,719 |
|
Foreclosed assets
(income) expense, net |
|
(257 |
) |
|
|
(61 |
) |
|
|
2,191 |
|
|
|
(440 |
) |
|
|
2,177 |
|
Acquisition,
integration and |
|
|
|
|
|
|
|
|
|
reorganization costs |
|
800 |
|
|
|
- |
|
|
|
1,450 |
|
|
|
800 |
|
|
|
3,650 |
|
Loan expense |
|
2,249 |
|
|
|
3,058 |
|
|
|
3,421 |
|
|
|
7,578 |
|
|
|
10,692 |
|
Other expense |
|
11,127 |
|
|
|
11,657 |
|
|
|
11,053 |
|
|
|
35,238 |
|
|
|
34,921 |
|
Total noninterest expense |
|
128,153 |
|
|
|
126,449 |
|
|
|
118,542 |
|
|
|
381,997 |
|
|
|
352,793 |
|
|
|
|
|
|
|
|
|
|
|
Earnings before income
taxes |
|
157,576 |
|
|
|
158,021 |
|
|
|
144,968 |
|
|
|
479,261 |
|
|
|
414,254 |
|
Income tax
expense |
|
(41,289 |
) |
|
|
(42,286 |
) |
|
|
(37,945 |
) |
|
|
(128,963 |
) |
|
|
(140,473 |
) |
Net earnings |
$ |
116,287 |
|
|
$ |
115,735 |
|
|
$ |
107,023 |
|
|
$ |
350,298 |
|
|
$ |
273,781 |
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted
earnings per share |
$ |
0.94 |
|
|
$ |
0.92 |
|
|
$ |
0.84 |
|
|
$ |
2.79 |
|
|
$ |
2.26 |
|
|
|
|
|
|
|
|
|
|
|
|
PACWEST BANCORP AND
SUBSIDIARIES |
NET EARNINGS PER SHARE CALCULATIONS |
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Nine Months Ended |
|
September 30, |
|
June 30, |
|
September 30, |
|
September 30, |
|
2018 |
|
2018 |
|
2017 |
|
2018 |
|
2017 |
|
(In thousands, except per share
data) |
Basic Earnings
Per Share: |
|
|
|
|
|
|
|
|
|
Net
earnings |
$ |
116,287 |
|
|
$ |
115,735 |
|
|
$ |
101,466 |
|
|
$ |
350,298 |
|
|
$ |
273,781 |
|
Less:
earnings allocated to unvested |
|
|
|
|
|
|
|
|
|
restricted stock (1) |
|
(1,428 |
) |
|
|
(1,348 |
) |
|
|
(1,149 |
) |
|
|
(3,899 |
) |
|
|
(3,239 |
) |
Net
earnings allocated to common |
|
|
|
|
|
|
|
|
|
shares |
$ |
114,859 |
|
|
$ |
114,387 |
|
|
$ |
100,317 |
|
|
$ |
346,399 |
|
|
$ |
270,542 |
|
|
|
|
|
|
|
|
|
|
|
Weighted-average basic shares and |
|
|
|
|
|
|
|
|
|
unvested
restricted stock outstanding |
|
123,657 |
|
|
|
126,082 |
|
|
|
121,447 |
|
|
|
125,728 |
|
|
|
121,405 |
|
Less:
weighted-average unvested |
|
|
|
|
|
|
|
|
|
restricted stock outstanding |
|
(1,537 |
) |
|
|
(1,466 |
) |
|
|
(1,394 |
) |
|
|
(1,473 |
) |
|
|
(1,450 |
) |
Weighted-average basic shares |
|
|
|
|
|
|
|
|
|
outstanding |
|
122,120 |
|
|
|
124,616 |
|
|
|
120,053 |
|
|
|
124,255 |
|
|
|
119,955 |
|
|
|
|
|
|
|
|
|
|
|
Basic
earnings per share |
$ |
0.94 |
|
|
$ |
0.92 |
|
|
$ |
0.84 |
|
|
$ |
2.79 |
|
|
$ |
2.26 |
|
|
|
|
|
|
|
|
|
|
|
Diluted
Earnings Per Share: |
|
|
|
|
|
|
|
|
|
Net
earnings allocated to common |
|
|
|
|
|
|
|
|
|
shares |
$ |
114,859 |
|
|
$ |
114,387 |
|
|
$ |
100,317 |
|
|
$ |
346,399 |
|
|
$ |
270,542 |
|
|
|
|
|
|
|
|
|
|
|
Weighted-average basic shares |
|
|
|
|
|
|
|
|
|
outstanding |
|
122,120 |
|
|
|
124,616 |
|
|
|
120,053 |
|
|
|
124,255 |
|
|
|
119,955 |
|
|
|
|
|
|
|
|
|
|
|
Diluted
earnings per share |
$ |
0.94 |
|
|
$ |
0.92 |
|
|
$ |
0.84 |
|
|
$ |
2.79 |
|
|
$ |
2.26 |
|
|
|
|
|
|
|
|
|
|
|
(1)
Represents cash dividends paid to holders of unvested stock, net of
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 |
|
September 30, 2018 |
|
June 30, 2018 |
|
September 30, 2017 |
|
|
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: |
|
|
|
|
|
|
|
|
|
|
|
Loans and leases
(1)(2) |
$ |
16,913,792 |
|
264,371 |
6.20 |
% |
|
$ |
16,576,361 |
$ |
260,529 |
6.30 |
% |
|
$ |
15,575,030 |
$ |
235,818 |
6.01 |
% |
Investment securities
(3) |
|
3,844,201 |
|
29,711 |
3.07 |
% |
|
|
3,803,590 |
|
29,967 |
3.16 |
% |
|
|
3,510,956 |
|
29,495 |
3.33 |
% |
Deposits in
financial |
|
|
|
|
|
|
|
|
|
|
|
institutions |
|
108,485 |
|
519 |
1.90 |
% |
|
|
112,170 |
|
484 |
1.73 |
% |
|
|
171,455 |
|
538 |
1.24 |
% |
Total
interest-earning |
|
|
|
|
|
|
|
|
|
|
|
assets
(4) |
|
20,866,478 |
|
294,601 |
5.60 |
% |
|
|
20,492,121 |
|
290,980 |
5.70 |
% |
|
|
19,257,441 |
|
265,851 |
5.48 |
% |
Other assets |
|
3,491,293 |
|
|
|
|
3,507,516 |
|
|
|
|
2,880,433 |
|
|
Total
assets |
$ |
24,357,771 |
|
|
|
$ |
23,999,637 |
|
|
|
$ |
22,137,874 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities
and |
|
|
|
|
|
|
|
|
|
|
|
Stockholders' Equity: |
|
|
|
|
|
|
|
|
|
|
|
Interest checking |
$ |
2,433,837 |
|
5,135 |
0.84 |
% |
|
$ |
2,243,767 |
|
3,932 |
0.70 |
% |
|
$ |
2,146,125 |
|
2,960 |
0.55 |
% |
Money market |
|
5,270,297 |
|
10,689 |
0.80 |
% |
|
|
5,013,119 |
|
8,072 |
0.65 |
% |
|
|
4,914,803 |
|
6,307 |
0.51 |
% |
Savings |
|
629,241 |
|
233 |
0.15 |
% |
|
|
656,310 |
|
245 |
0.15 |
% |
|
|
707,367 |
|
289 |
0.16 |
% |
Time |
|
1,778,552 |
|
5,064 |
1.13 |
% |
|
|
1,790,415 |
|
4,118 |
0.92 |
% |
|
|
2,256,259 |
|
3,515 |
0.62 |
% |
Total
interest-bearing |
|
|
|
|
|
|
|
|
|
|
|
deposits |
|
10,111,927 |
|
21,121 |
0.83 |
% |
|
|
9,703,611 |
|
16,367 |
0.68 |
% |
|
|
10,024,554 |
|
13,071 |
0.52 |
% |
Borrowings |
|
720,449 |
|
3,814 |
2.10 |
% |
|
|
549,665 |
|
2,649 |
1.93 |
% |
|
|
61,071 |
|
188 |
1.22 |
% |
Subordinated
debentures |
|
452,312 |
|
7,390 |
6.48 |
% |
|
|
451,973 |
|
7,166 |
6.36 |
% |
|
|
447,012 |
|
6,017 |
5.34 |
% |
Total
interest-bearing |
|
|
|
|
|
|
|
|
|
|
|
liabilities |
|
11,284,688 |
|
32,325 |
1.14 |
% |
|
|
10,705,249 |
|
26,182 |
0.98 |
% |
|
|
10,532,637 |
|
19,276 |
0.73 |
% |
Noninterest-bearing |
|
|
|
|
|
|
|
|
|
|
|
demand
deposits |
|
8,120,306 |
|
|
|
|
8,253,413 |
|
|
|
|
6,858,816 |
|
|
Other liabilities |
|
203,958 |
|
|
|
|
208,495 |
|
|
|
|
153,932 |
|
|
Total
liabilities |
|
19,608,952 |
|
|
|
|
19,167,157 |
|
|
|
|
17,545,385 |
|
|
Stockholders'
equity |
|
4,748,819 |
|
|
|
|
4,832,480 |
|
|
|
|
4,592,489 |
|
|
Total
liabilities and |
|
|
|
|
|
|
|
|
|
|
|
stockholders' equity |
$ |
24,357,771 |
|
|
|
$ |
23,999,637 |
|
|
|
$ |
22,137,874 |
|
|
Net interest income
(4) |
|
$ |
262,276 |
|
|
|
$ |
264,798 |
|
|
|
$ |
246,575 |
|
Net interest spread
(4) |
|
|
4.46 |
% |
|
|
|
4.72 |
% |
|
|
|
4.75 |
% |
Net interest margin
(4) |
|
|
4.99 |
% |
|
|
|
5.18 |
% |
|
|
|
5.08 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Total deposits (5) |
$ |
18,232,233 |
$ |
21,121 |
0.46 |
% |
|
$ |
17,957,024 |
$ |
16,367 |
0.37 |
% |
|
$ |
16,883,370 |
$ |
13,071 |
0.31 |
% |
Funding sources
(6) |
$ |
19,404,994 |
$ |
32,325 |
0.66 |
% |
|
$ |
18,958,662 |
$ |
26,182 |
0.55 |
% |
|
$ |
17,391,453 |
$ |
19,276 |
0.44 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
(1)
Starting with the third quarter of 2017, includes tax-equivalent
adjustments related to tax-exempt interest on loans. |
|
|
|
|
(2)
Includes discount accretion on acquired loans of $6.1 million, $8.7
million, and $5.5 million for the three months ended September 30,
2018, June 30, 2018, and September 30, 2017,
respectively. |
(3)
Includes tax-equivalent adjustments of $1.5 million, $2.1 million,
and $4.7 million for the three months ended September 30,
2018, June 30, 2018, and September 30, 2017 related to
tax-exempt income on municipal securities. The federal
statutory tax-rate utilized was 21% for the 2018 periods and
35% for the 2017 period. |
(4) Tax
equivalent. |
(5) Total
deposits is the sum of total 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. |
(6)
Funding sources is the sum of total 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 |
|
|
|
|
|
|
|
|
|
|
|
September 30, |
|
June 30, |
|
March 31, |
|
December 31, |
|
September 30, |
|
2018
|
|
2018
|
|
2018
|
|
2017
|
|
2017
|
|
|
|
(Dollars in thousands, except per share
data) |
ASSETS: |
|
|
|
|
|
|
|
|
|
Cash and due from
banks |
$ |
196,502 |
|
|
$ |
245,998 |
|
|
$ |
235,061 |
|
|
$ |
233,215 |
|
|
$ |
147,579 |
|
Interest-earning
deposits in financial |
|
|
|
|
|
|
|
|
|
institutions |
|
185,284 |
|
|
|
205,567 |
|
|
|
312,735 |
|
|
|
165,222 |
|
|
|
122,439 |
|
Total cash and cash
equivalents |
|
381,786 |
|
|
|
451,565 |
|
|
|
547,796 |
|
|
|
398,437 |
|
|
|
270,018 |
|
|
|
|
|
|
|
|
|
|
|
Securities
available-for-sale |
|
3,820,333 |
|
|
|
3,857,788 |
|
|
|
3,801,986 |
|
|
|
3,774,431 |
|
|
|
3,532,230 |
|
Federal Home Loan Bank
stock |
|
31,077 |
|
|
|
26,271 |
|
|
|
17,250 |
|
|
|
20,790 |
|
|
|
17,250 |
|
Total investment securities |
|
3,851,410 |
|
|
|
3,884,059 |
|
|
|
3,819,236 |
|
|
|
3,795,221 |
|
|
|
3,549,480 |
|
|
|
|
|
|
|
|
|
|
|
Loans held for
sale |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
481,100 |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
Gross loans and leases
held for investment |
|
17,295,589 |
|
|
|
16,947,502 |
|
|
|
16,516,627 |
|
|
|
17,032,221 |
|
|
|
15,756,285 |
|
Deferred fees, net |
|
(65,443 |
) |
|
|
(62,310 |
) |
|
|
(61,342 |
) |
|
|
(59,478 |
) |
|
|
(65,768 |
) |
Total
loans and leases held for |
|
|
|
|
|
|
|
|
|
investment, net of deferred fees |
|
17,230,146 |
|
|
|
16,885,192 |
|
|
|
16,455,285 |
|
|
|
16,972,743 |
|
|
|
15,690,517 |
|
Allowance for loan and
lease losses |
|
(141,920 |
) |
|
|
(132,139 |
) |
|
|
(134,275 |
) |
|
|
(139,456 |
) |
|
|
(159,606 |
) |
Total loans and leases held for |
|
|
|
|
|
|
|
|
|
investment, net |
|
17,088,226 |
|
|
|
16,753,053 |
|
|
|
16,321,010 |
|
|
|
16,833,287 |
|
|
|
15,530,911 |
|
|
|
|
|
|
|
|
|
|
|
Equipment leased to
others under |
|
|
|
|
|
|
|
|
|
operating
leases |
|
275,707 |
|
|
|
266,576 |
|
|
|
280,648 |
|
|
|
284,631 |
|
|
|
233,866 |
|
Premises and equipment,
net |
|
34,012 |
|
|
|
34,513 |
|
|
|
33,686 |
|
|
|
31,852 |
|
|
|
28,910 |
|
Foreclosed assets, net |
|
4,407 |
|
|
|
2,231 |
|
|
|
1,236 |
|
|
|
1,329 |
|
|
|
11,630 |
|
Deferred tax asset,
net |
|
41,280 |
|
|
|
25,551 |
|
|
|
12,584 |
|
|
|
- |
|
|
|
65,321 |
|
Goodwill |
|
2,548,670 |
|
|
|
2,548,670 |
|
|
|
2,548,670 |
|
|
|
2,548,670 |
|
|
|
2,173,949 |
|
Core deposit and
customer relationship |
|
|
|
|
|
|
|
|
|
intangibles, net |
|
62,106 |
|
|
|
67,693 |
|
|
|
73,280 |
|
|
|
79,626 |
|
|
|
27,188 |
|
Other assets |
|
494,522 |
|
|
|
495,646 |
|
|
|
511,184 |
|
|
|
540,723 |
|
|
|
351,659 |
|
Total assets |
$ |
24,782,126 |
|
|
$ |
24,529,557 |
|
|
$ |
24,149,330 |
|
|
$ |
24,994,876 |
|
|
$ |
22,242,932 |
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES: |
|
|
|
|
|
|
|
|
|
Noninterest-bearing
deposits |
$ |
7,834,480 |
|
|
$ |
8,126,153 |
|
|
$ |
8,232,140 |
|
|
$ |
8,508,044 |
|
|
$ |
6,911,874 |
|
Interest-bearing
deposits |
|
10,045,063 |
|
|
|
9,803,039 |
|
|
|
9,846,648 |
|
|
|
10,357,492 |
|
|
|
9,861,371 |
|
Total deposits |
|
17,879,543 |
|
|
|
17,929,192 |
|
|
|
18,078,788 |
|
|
|
18,865,536 |
|
|
|
16,773,245 |
|
Borrowings |
|
1,513,166 |
|
|
|
1,187,226 |
|
|
|
575,284 |
|
|
|
467,342 |
|
|
|
250,399 |
|
Subordinated
debentures |
|
452,944 |
|
|
|
451,878 |
|
|
|
452,223 |
|
|
|
462,437 |
|
|
|
448,126 |
|
Accrued interest
payable and other |
|
|
|
|
|
|
|
|
|
liabilities |
|
194,788 |
|
|
|
183,302 |
|
|
|
175,545 |
|
|
|
221,963 |
|
|
|
160,494 |
|
Total liabilities |
|
20,040,441 |
|
|
|
19,751,598 |
|
|
|
19,281,840 |
|
|
|
20,017,278 |
|
|
|
17,632,264 |
|
STOCKHOLDERS'
EQUITY (1) |
|
4,741,685 |
|
|
|
4,777,959 |
|
|
|
4,867,490 |
|
|
|
4,977,598 |
|
|
|
4,610,668 |
|
Total liabilities and
stockholders’ |
|
|
|
|
|
|
|
|
|
equity |
$ |
24,782,126 |
|
|
$ |
24,529,557 |
|
|
$ |
24,149,330 |
|
|
$ |
24,994,876 |
|
|
$ |
22,242,932 |
|
|
|
|
|
|
|
|
|
|
|
Book value per share |
$ |
38.46 |
|
|
$ |
38.36 |
|
|
$ |
38.47 |
|
|
$ |
38.65 |
|
|
$ |
37.96 |
|
Tangible book value per share (2) |
$ |
17.28 |
|
|
$ |
17.35 |
|
|
$ |
17.75 |
|
|
$ |
18.24 |
|
|
$ |
19.84 |
|
Shares outstanding |
|
123,283,450 |
|
|
|
124,567,950 |
|
|
|
126,537,871 |
|
|
|
128,782,878 |
|
|
|
121,449,794 |
|
|
|
|
|
|
|
|
|
|
|
(1) Includes net
unrealized (loss) gain on |
|
|
|
|
|
|
|
|
|
securities available-for-sale, net |
$ |
(43,854 |
) |
|
$ |
(22,340 |
) |
|
$ |
(11,936 |
) |
|
$ |
31,171 |
|
|
$ |
33,613 |
|
(2)
Non-GAAP measure. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PACWEST BANCORP AND
SUBSIDIARIES |
FIVE QUARTER STATEMENT OF EARNINGS |
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
September 30, |
|
June 30, |
|
March 31, |
|
December 31, |
|
September 30, |
|
2018 |
|
2018 |
|
2018 |
|
2017 |
|
2017 |
|
(Dollars in thousands, except per share
data) |
Interest
income: |
|
|
|
|
|
|
|
|
|
Loans and leases |
$ |
264,062 |
|
|
$ |
260,300 |
|
|
$ |
251,085 |
|
|
$ |
258,309 |
|
|
$ |
235,666 |
|
Investment
securities |
|
28,061 |
|
|
|
27,730 |
|
|
|
26,138 |
|
|
|
25,712 |
|
|
|
24,762 |
|
Deposits in financial
institutions |
|
519 |
|
|
|
484 |
|
|
|
552 |
|
|
|
576 |
|
|
|
538 |
|
Total interest income |
|
292,642 |
|
|
|
288,514 |
|
|
|
277,775 |
|
|
|
284,597 |
|
|
|
260,966 |
|
|
|
|
|
|
|
|
|
|
|
Interest
expense: |
|
|
|
|
|
|
|
|
|
Deposits |
|
21,121 |
|
|
|
16,367 |
|
|
|
13,818 |
|
|
|
14,041 |
|
|
|
13,071 |
|
Borrowings |
|
3,814 |
|
|
|
2,649 |
|
|
|
920 |
|
|
|
1,366 |
|
|
|
188 |
|
Subordinated
debentures |
|
7,390 |
|
|
|
7,166 |
|
|
|
6,537 |
|
|
|
6,234 |
|
|
|
6,017 |
|
Total interest expense |
|
32,325 |
|
|
|
26,182 |
|
|
|
21,275 |
|
|
|
21,641 |
|
|
|
19,276 |
|
|
|
|
|
|
|
|
|
|
|
Net interest income |
|
260,317 |
|
|
|
262,332 |
|
|
|
256,500 |
|
|
|
262,956 |
|
|
|
241,690 |
|
Provision for credit
losses |
|
11,500 |
|
|
|
17,500 |
|
|
|
4,000 |
|
|
|
6,406 |
|
|
|
15,119 |
|
Net interest income after
provision |
|
|
|
|
|
|
|
|
|
for credit losses |
|
248,817 |
|
|
|
244,832 |
|
|
|
252,500 |
|
|
|
256,550 |
|
|
|
226,571 |
|
|
|
|
|
|
|
|
|
|
|
Noninterest
income: |
|
|
|
|
|
|
|
|
|
Service charges on
deposit accounts |
|
3,979 |
|
|
|
4,265 |
|
|
|
4,174 |
|
|
|
4,574 |
|
|
|
3,465 |
|
Other commissions and
fees |
|
12,397 |
|
|
|
11,767 |
|
|
|
10,265 |
|
|
|
10,505 |
|
|
|
9,944 |
|
Leased equipment
income |
|
9,120 |
|
|
|
9,790 |
|
|
|
9,587 |
|
|
|
8,258 |
|
|
|
8,332 |
|
Gain on sale of loans
and leases |
|
- |
|
|
|
106 |
|
|
|
4,569 |
|
|
|
1,988 |
|
|
|
2,848 |
|
Gain (loss) on sale of
securities |
|
826 |
|
|
|
253 |
|
|
|
6,311 |
|
|
|
(3,329 |
) |
|
|
1,236 |
|
Other income |
|
10,590 |
|
|
|
13,457 |
|
|
|
3,653 |
|
|
|
4,799 |
|
|
|
5,557 |
|
Total noninterest income |
|
36,912 |
|
|
|
39,638 |
|
|
|
38,559 |
|
|
|
26,795 |
|
|
|
31,382 |
|
|
|
|
|
|
|
|
|
|
|
Noninterest
expense: |
|
|
|
|
|
|
|
|
|
Compensation |
|
72,333 |
|
|
|
69,913 |
|
|
|
71,023 |
|
|
|
71,986 |
|
|
|
64,413 |
|
Occupancy |
|
13,069 |
|
|
|
13,575 |
|
|
|
13,223 |
|
|
|
12,715 |
|
|
|
12,729 |
|
Data processing |
|
6,740 |
|
|
|
6,896 |
|
|
|
6,659 |
|
|
|
6,764 |
|
|
|
6,459 |
|
Other professional
services |
|
6,058 |
|
|
|
5,257 |
|
|
|
4,439 |
|
|
|
5,786 |
|
|
|
4,213 |
|
Insurance and
assessments |
|
5,446 |
|
|
|
5,330 |
|
|
|
5,727 |
|
|
|
5,384 |
|
|
|
4,702 |
|
Intangible asset
amortization |
|
5,587 |
|
|
|
5,587 |
|
|
|
6,346 |
|
|
|
5,062 |
|
|
|
3,049 |
|
Leased equipment
depreciation |
|
5,001 |
|
|
|
5,237 |
|
|
|
5,375 |
|
|
|
5,048 |
|
|
|
4,862 |
|
Foreclosed assets
(income) expense, net |
|
(257 |
) |
|
|
(61 |
) |
|
|
(122 |
) |
|
|
(475 |
) |
|
|
2,191 |
|
Acquisition,
integration and |
|
|
|
|
|
|
|
|
|
reorganization costs |
|
800 |
|
|
|
- |
|
|
|
- |
|
|
|
16,085 |
|
|
|
1,450 |
|
Loan expense |
|
2,249 |
|
|
|
3,058 |
|
|
|
2,271 |
|
|
|
3,140 |
|
|
|
3,421 |
|
Other expense |
|
11,127 |
|
|
|
11,657 |
|
|
|
12,454 |
|
|
|
11,373 |
|
|
|
11,053 |
|
Total noninterest expense |
|
128,153 |
|
|
|
126,449 |
|
|
|
127,395 |
|
|
|
142,868 |
|
|
|
118,542 |
|
|
|
|
|
|
|
|
|
|
|
Earnings before income
taxes |
|
157,576 |
|
|
|
158,021 |
|
|
|
163,664 |
|
|
|
140,477 |
|
|
|
139,411 |
|
Income tax expense |
|
(41,289 |
) |
|
|
(42,286 |
) |
|
|
(45,388 |
) |
|
|
(56,440 |
) |
|
|
(37,945 |
) |
Net earnings |
$ |
116,287 |
|
|
$ |
115,735 |
|
|
$ |
118,276 |
|
|
$ |
84,037 |
|
|
$ |
101,466 |
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted
earnings per share |
$ |
0.94 |
|
|
$ |
0.92 |
|
|
$ |
0.93 |
|
|
$ |
0.66 |
|
|
$ |
0.84 |
|
|
|
|
|
|
|
|
|
|
|
PACWEST BANCORP AND
SUBSIDIARIES |
|
|
|
|
|
|
|
|
FIVE QUARTER SELECTED FINANCIAL DATA |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At or For the Three Months Ended |
|
September 30, |
|
June 30, |
|
March 31, |
|
December 31, |
|
September 30, |
|
2018 |
|
2018 |
|
2018 |
|
2017 |
|
2017 |
|
|
|
(Dollars in
thousands)
|
Performance
Ratios: |
|
|
|
|
|
|
|
|
|
Return on
average assets (1) |
|
1.89 |
% |
|
|
1.93 |
% |
|
|
1.99 |
% |
|
|
1.34 |
% |
|
|
1.82 |
% |
Return on
average equity (1) |
|
9.72 |
% |
|
|
9.61 |
% |
|
|
9.79 |
% |
|
|
6.78 |
% |
|
|
8.77 |
% |
Return on
average tangible equity (1)(2) |
|
21.61 |
% |
|
|
20.98 |
% |
|
|
21.08 |
% |
|
|
13.75 |
% |
|
|
16.85 |
% |
|
|
|
|
|
|
|
|
|
|
Yield on
average loans and leases (1)(3) |
|
6.20 |
% |
|
|
6.30 |
% |
|
|
6.11 |
% |
|
|
5.89 |
% |
|
|
6.01 |
% |
Yield on
average interest-earning |
|
|
|
|
|
|
|
|
|
assets
(1)(4) |
|
5.60 |
% |
|
|
5.70 |
% |
|
|
5.53 |
% |
|
|
5.37 |
% |
|
|
5.48 |
% |
Cost of
average total deposits (1) |
|
0.46 |
% |
|
|
0.37 |
% |
|
|
0.31 |
% |
|
|
0.30 |
% |
|
|
0.31 |
% |
Cost of
average time deposits (1) |
|
1.13 |
% |
|
|
0.92 |
% |
|
|
0.78 |
% |
|
|
0.68 |
% |
|
|
0.62 |
% |
Cost of
average interest-bearing |
|
|
|
|
|
|
|
|
|
liabilities (1) |
|
1.14 |
% |
|
|
0.98 |
% |
|
|
0.81 |
% |
|
|
0.75 |
% |
|
|
0.73 |
% |
Cost of
average funding sources (1) |
|
0.66 |
% |
|
|
0.55 |
% |
|
|
0.45 |
% |
|
|
0.44 |
% |
|
|
0.44 |
% |
Net
interest spread (1)(4) |
|
4.46 |
% |
|
|
4.72 |
% |
|
|
4.72 |
% |
|
|
4.62 |
% |
|
|
4.75 |
% |
Net
interest margin (1)(4) |
|
4.99 |
% |
|
|
5.18 |
% |
|
|
5.11 |
% |
|
|
4.97 |
% |
|
|
5.08 |
% |
|
|
|
|
|
|
|
|
|
|
Efficiency ratio |
|
40.9 |
% |
|
|
39.8 |
% |
|
|
41.7 |
% |
|
|
41.0 |
% |
|
|
39.6 |
% |
Noninterest expense as a percentage |
|
|
|
|
|
|
|
|
|
of
average assets (1) |
|
2.09 |
% |
|
|
2.11 |
% |
|
|
2.15 |
% |
|
|
2.29 |
% |
|
|
2.12 |
% |
|
|
|
|
|
|
|
|
|
|
Average
Balances: |
|
|
|
|
|
|
|
|
|
Loans and
leases, net of deferred fees |
$ |
16,913,792 |
|
|
$ |
16,576,361 |
|
|
$ |
16,682,124 |
|
|
$ |
17,426,873 |
|
|
$ |
15,575,030 |
|
Interest-earning assets |
|
20,866,478 |
|
|
|
20,492,121 |
|
|
|
20,514,936 |
|
|
|
21,414,180 |
|
|
|
19,257,441 |
|
Total
assets |
|
24,357,771 |
|
|
|
23,999,637 |
|
|
|
24,071,148 |
|
|
|
24,789,836 |
|
|
|
22,137,874 |
|
Noninterest-bearing deposits |
|
8,120,306 |
|
|
|
8,253,413 |
|
|
|
8,311,104 |
|
|
|
8,190,134 |
|
|
|
6,858,816 |
|
Interest-bearing deposits |
|
10,111,927 |
|
|
|
9,703,611 |
|
|
|
9,959,243 |
|
|
|
10,578,568 |
|
|
|
10,024,554 |
|
Total
deposits |
|
18,232,233 |
|
|
|
17,957,024 |
|
|
|
18,270,347 |
|
|
|
18,768,702 |
|
|
|
16,883,370 |
|
Borrowings and subordinated |
|
|
|
|
|
|
|
|
|
debentures |
|
1,172,761 |
|
|
|
1,001,638 |
|
|
|
700,941 |
|
|
|
903,375 |
|
|
|
508,083 |
|
Interest-bearing liabilities |
|
11,284,688 |
|
|
|
10,705,249 |
|
|
|
10,660,184 |
|
|
|
11,481,943 |
|
|
|
10,532,637 |
|
Funding
sources |
|
19,404,994 |
|
|
|
18,958,662 |
|
|
|
18,971,288 |
|
|
|
19,672,077 |
|
|
|
17,391,453 |
|
Stockholders' equity |
|
4,748,819 |
|
|
|
4,832,480 |
|
|
|
4,901,207 |
|
|
|
4,920,498 |
|
|
|
4,592,489 |
|
|
|
|
|
|
|
|
|
|
|
(1) Annualized. |
|
|
|
|
|
|
|
|
(2) Non-GAAP measure. |
(3) Tax equivalent starting with the third quarter of
2017. |
(4) Tax equivalent. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PACWEST BANCORP AND
SUBSIDIARIES |
|
|
|
|
|
|
|
|
FIVE QUARTER SELECTED FINANCIAL DATA |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At or For the Three Months Ended |
|
September 30, |
|
June 30, |
|
March 31, |
|
December 31, |
|
September 30, |
|
2018 |
|
2018 |
|
2018 |
|
2017 |
|
2017 |
|
|
|
(Dollars in
thousands)
|
Credit Quality
Ratios (1): |
|
|
|
|
|
|
|
|
|
Nonaccrual loans and leases held for |
|
|
|
|
|
|
|
|
|
investment to loans and leases held |
|
|
|
|
|
|
|
|
|
for
investment |
|
0.66 |
% |
|
|
0.67 |
% |
|
|
0.63 |
% |
|
|
0.92 |
% |
|
|
1.01 |
% |
Nonperforming assets to loans and |
|
|
|
|
|
|
|
|
|
leases
held for investment and |
|
|
|
|
|
|
|
|
|
foreclosed assets |
|
0.68 |
% |
|
|
0.69 |
% |
|
|
0.64 |
% |
|
|
0.93 |
% |
|
|
1.08 |
% |
Classified loans and leases held for |
|
|
|
|
|
|
|
|
|
investment to loans and leases held |
|
|
|
|
|
|
|
|
|
for
investment |
|
1.51 |
% |
|
|
1.40 |
% |
|
|
1.26 |
% |
|
|
1.65 |
% |
|
|
2.21 |
% |
Trailing
12 months net charge-offs |
|
|
|
|
|
|
|
|
|
to
average loans and leases |
|
|
|
|
|
|
|
|
|
held for
investment |
|
0.28 |
% |
|
|
0.28 |
% |
|
|
0.31 |
% |
|
|
0.40 |
% |
|
|
0.35 |
% |
Allowance
for credit losses to loans |
|
|
|
|
|
|
|
|
|
and
leases held for investment |
|
1.03 |
% |
|
|
0.99 |
% |
|
|
1.02 |
% |
|
|
0.96 |
% |
|
|
1.11 |
% |
Allowance
for credit losses to |
|
|
|
|
|
|
|
|
|
nonaccrual loans and leases held |
|
|
|
|
|
|
|
|
|
for
investment |
|
156.9 |
% |
|
|
147.3 |
% |
|
|
161.1 |
% |
|
|
103.8 |
% |
|
|
110.1 |
% |
|
|
|
|
|
|
|
|
|
|
PacWest Bancorp
Consolidated |
|
|
|
|
|
|
|
|
|
Capital: |
|
|
|
|
|
|
|
|
|
Tier 1
leverage ratio (2) |
|
10.10 |
% |
|
|
10.33 |
% |
|
|
10.66 |
% |
|
|
10.66 |
% |
|
|
12.02 |
% |
Common
equity tier 1 capital ratio (2) |
|
10.17 |
% |
|
|
10.59 |
% |
|
|
11.16 |
% |
|
|
10.91 |
% |
|
|
12.52 |
% |
Tier 1
capital ratio (2) |
|
10.17 |
% |
|
|
10.59 |
% |
|
|
11.16 |
% |
|
|
10.91 |
% |
|
|
12.52 |
% |
Total
capital ratio (2) |
|
13.02 |
% |
|
|
13.48 |
% |
|
|
14.11 |
% |
|
|
13.75 |
% |
|
|
15.74 |
% |
Risk-weighted assets (2) |
$ |
21,669,323 |
|
|
$ |
20,929,325 |
|
|
$ |
20,523,487 |
|
|
$ |
21,657,591 |
|
|
$ |
19,086,798 |
|
|
|
|
|
|
|
|
|
|
|
Equity to
assets ratio |
|
19.13 |
% |
|
|
19.48 |
% |
|
|
20.16 |
% |
|
|
19.91 |
% |
|
|
20.73 |
% |
Tangible
common equity ratio (3) |
|
9.61 |
% |
|
|
9.86 |
% |
|
|
10.43 |
% |
|
|
10.50 |
% |
|
|
12.02 |
% |
Book
value per share |
$ |
38.46 |
|
|
$ |
38.36 |
|
|
$ |
38.47 |
|
|
$ |
38.65 |
|
|
$ |
37.96 |
|
Tangible
book value per share (3) |
$ |
17.28 |
|
|
$ |
17.35 |
|
|
$ |
17.75 |
|
|
$ |
18.24 |
|
|
$ |
19.84 |
|
|
|
|
|
|
|
|
|
|
|
Pacific Western
Bank Capital: |
|
|
|
|
|
|
|
|
|
Tier 1
leverage ratio (2) |
|
10.78 |
% |
|
|
11.11 |
% |
|
|
11.33 |
% |
|
|
11.75 |
% |
|
|
11.46 |
% |
Common
equity tier 1 capital ratio (2) |
|
10.86 |
% |
|
|
11.40 |
% |
|
|
11.86 |
% |
|
|
11.91 |
% |
|
|
11.95 |
% |
Tier 1
capital ratio (2) |
|
10.86 |
% |
|
|
11.40 |
% |
|
|
11.86 |
% |
|
|
11.91 |
% |
|
|
11.95 |
% |
Total
capital ratio (2) |
|
11.68 |
% |
|
|
12.21 |
% |
|
|
12.67 |
% |
|
|
12.69 |
% |
|
|
12.89 |
% |
|
|
|
|
|
|
|
|
|
|
(1) Ratios
related to 2018 periods are for total loans and leases.
Ratios related to 2017 periods are for Non-PCI loans and
leases. |
(2)
Capital information for September 30, 2018 is
preliminary. |
(3) Non-GAAP measure. |
|
|
|
|
|
|
|
|
|
|
GAAP TO NON-GAAP RECONCILIATIONS
This press release contains certain non-GAAP financial
disclosures for: (1) return on average tangible equity, (2)
tangible common equity ratio, and (3) tangible book value per
share. The Company uses these 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. In particular,
the use of return on average tangible equity, tangible common
equity ratio, and tangible book value per share is prevalent among
banking regulators, investors and analysts. Accordingly, we
disclose the non-GAAP measures in addition to the related GAAP
measures of: (1) return on average equity, (2) equity to assets
ratio, and (3) book value per share.
The tables below present the reconciliations of these GAAP
financial measures to the related non-GAAP financial measures:
|
Three Months Ended |
|
Nine Months Ended |
|
September 30, |
|
June 30, |
|
September 30, |
|
September 30, |
Return on
Average Tangible Equity |
2018 |
|
2018 |
|
2017 |
|
2018 |
|
2017 |
|
|
|
(Dollars in thousands) |
Net earnings |
$ |
116,287 |
|
|
$ |
115,735 |
|
|
$ |
101,466 |
|
|
$ |
350,298 |
|
|
$ |
273,781 |
|
|
|
|
|
|
|
|
|
|
|
Average stockholders'
equity |
$ |
4,748,819 |
|
|
$ |
4,832,480 |
|
|
$ |
4,592,489 |
|
|
$ |
4,826,944 |
|
|
$ |
4,547,472 |
|
Less: Average
intangible assets |
|
2,614,055 |
|
|
|
2,619,351 |
|
|
|
2,202,922 |
|
|
|
2,619,624 |
|
|
|
2,205,927 |
|
Average tangible common
equity |
$ |
2,134,764 |
|
|
$ |
2,213,129 |
|
|
$ |
2,389,567 |
|
|
$ |
2,207,320 |
|
|
$ |
2,341,545 |
|
|
|
|
|
|
|
|
|
|
|
Return on average
equity (1) |
|
9.72 |
% |
|
|
9.61 |
% |
|
|
8.77 |
% |
|
|
9.70 |
% |
|
|
8.05 |
% |
Return on average
tangible equity (2) |
|
21.61 |
% |
|
|
20.98 |
% |
|
|
16.85 |
% |
|
|
21.22 |
% |
|
|
15.63 |
% |
|
|
|
|
|
|
|
|
|
|
(1)
Annualized net earnings divided by average stockholders'
equity. |
|
|
|
|
(2)
Annualized net earnings divided by average tangible common
equity. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tangible Common
Equity Ratio/ |
September 30, |
|
June 30, |
|
March 31, |
|
December 31, |
|
September 30, |
Tangible
Book Value Per Share |
2018 |
|
2018 |
|
2018 |
|
2017 |
|
2017 |
|
|
|
(Dollars in thousands, except per share
data)
|
Stockholders' equity |
$ |
4,741,685 |
|
|
$ |
4,777,959 |
|
|
$ |
4,867,490 |
|
|
$ |
4,977,598 |
|
|
$ |
4,610,668 |
|
Less:
Intangible assets |
|
2,610,776 |
|
|
|
2,616,363 |
|
|
|
2,621,950 |
|
|
|
2,628,296 |
|
|
|
2,201,137 |
|
Tangible
common equity |
$ |
2,130,909 |
|
|
$ |
2,161,596 |
|
|
$ |
2,245,540 |
|
|
$ |
2,349,302 |
|
|
$ |
2,409,531 |
|
|
|
|
|
|
|
|
|
|
|
Total
assets |
$ |
24,782,126 |
|
|
$ |
24,529,557 |
|
|
$ |
24,149,330 |
|
|
$ |
24,994,876 |
|
|
$ |
22,242,932 |
|
Less:
Intangible assets |
|
2,610,776 |
|
|
|
2,616,363 |
|
|
|
2,621,950 |
|
|
|
2,628,296 |
|
|
|
2,201,137 |
|
Tangible
assets |
$ |
22,171,350 |
|
|
$ |
21,913,194 |
|
|
$ |
21,527,380 |
|
|
$ |
22,366,580 |
|
|
$ |
20,041,795 |
|
|
|
|
|
|
|
|
|
|
|
Equity
to assets ratio |
|
19.13 |
% |
|
|
19.48 |
% |
|
|
20.16 |
% |
|
|
19.91 |
% |
|
|
20.73 |
% |
Tangible
common equity ratio (1) |
|
9.61 |
% |
|
|
9.86 |
% |
|
|
10.43 |
% |
|
|
10.50 |
% |
|
|
12.02 |
% |
|
|
|
|
|
|
|
|
|
|
Book
value per share |
$ |
38.46 |
|
|
$ |
38.36 |
|
|
$ |
38.47 |
|
|
$ |
38.65 |
|
|
$ |
37.96 |
|
Tangible
book value per share (2) |
$ |
17.28 |
|
|
$ |
17.35 |
|
|
$ |
17.75 |
|
|
$ |
18.24 |
|
|
$ |
19.84 |
|
Shares
outstanding |
|
123,283,450 |
|
|
|
124,567,950 |
|
|
|
126,537,871 |
|
|
|
128,782,878 |
|
|
|
121,449,794 |
|
|
|
|
|
|
|
|
|
|
|
(1)
Tangible common equity divided by tangible assets. |
|
|
|
|
(2)
Tangible common equity divided by shares outstanding. |
|
|
|
|
|
|
|
|
|
|
|
|
|
Contact: |
Matthew P. Wagner |
Patrick J. Rusnak |
|
President and CEO |
Executive Vice President and CFO |
Phone: |
310-887-8520 |
714-989-4705 |
|
|
|
Contact: |
Donald D. Destino |
|
|
Executive Vice President |
|
|
Corporate Development and Investor
Relations |
|
Phone: |
310-887-8521 |
|
PacWest Bancorp (NASDAQ:PACW)
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Von Jun 2024 bis Jul 2024
PacWest Bancorp (NASDAQ:PACW)
Historical Stock Chart
Von Jul 2023 bis Jul 2024