PacWest Bancorp (Nasdaq: PACW) today announced net
earnings for the third quarter of 2019 of $110.0 million, or $0.92
per diluted share, compared to net earnings for the second quarter
of 2019 of $128.1 million, or $1.07 per diluted share. The decrease
in net earnings in the third quarter of 2019 was due primarily to a
$22.2 million pre-tax gain on the sale of securities in the second
quarter of 2019 that contributed $0.13 per diluted share.
Matt Wagner, President and CEO, commented, “We had a solid
quarter highlighted by very strong core deposits growth, another
quarter of consistent loan production from all of our business
groups, and the continuation of our trend of lower credit costs.
Our third quarter of 2019 results produced a return on assets of
1.65% and a return on tangible equity of 19.01%.”
Mr. Wagner continued, “In a very competitive market, we achieved
our largest core deposit growth quarter ever with growth of $854
million in the third quarter. Core deposits generation, with an
emphasis on noninterest-bearing deposits, remains a priority in
this declining-rate environment. We achieved solid loan and lease
production of $1.2 billion in the third quarter bringing our net
loan growth to $778 million, or 6% annualized, for the first nine
months of 2019.”
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 |
|
2019 |
|
|
|
2019 |
|
|
|
(Decrease) |
|
|
|
2019 |
|
|
|
2018 |
|
|
|
(Decrease) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars in thousands, except per share data) |
Net earnings |
$ |
110,026 |
|
|
$ |
128,125 |
|
|
$ |
(18,099 |
) |
|
$ |
350,755 |
|
|
$ |
350,298 |
|
|
$ |
457 |
|
Diluted earnings per share |
$ |
0.92 |
|
|
$ |
1.07 |
|
|
$ |
(0.15 |
) |
|
$ |
2.91 |
|
|
$ |
2.79 |
|
|
$ |
0.12 |
|
Return on average assets |
1.65 |
% |
|
1.99 |
% |
|
(0.34 |
) |
|
1.80 |
% |
|
1.94 |
% |
|
(0.14 |
) |
Return on average |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
tangible equity (1) |
19.01 |
% |
|
23.15 |
% |
|
(4.14 |
) |
|
20.90 |
% |
|
21.22 |
% |
|
(0.32 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest margin ("NIM") |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(tax equivalent) |
4.46 |
% |
|
4.72 |
% |
|
(0.26 |
) |
|
4.62 |
% |
|
5.09 |
% |
|
(0.47 |
) |
Yield on average loans
and |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
leases (tax equivalent) |
5.91 |
% |
|
6.26 |
% |
|
(0.35 |
) |
|
6.11 |
% |
|
6.20 |
% |
|
(0.09 |
) |
Cost of average
total |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
deposits |
0.83 |
% |
|
0.81 |
% |
|
0.02 |
|
|
0.79 |
% |
|
0.38 |
% |
|
0.41 |
|
Efficiency ratio |
42.3 |
% |
|
41.6 |
% |
|
0.7 |
|
|
42.1 |
% |
|
40.8 |
% |
|
1.3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets |
$ |
26,724,627 |
|
|
$ |
26,344,414 |
|
|
$ |
380,213 |
|
|
$ |
26,724,627 |
|
|
$ |
24,782,126 |
|
|
$ |
1,942,501 |
|
Loans and leases held |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
for investment, |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
net of deferred fees |
$ |
18,735,543 |
|
|
$ |
18,472,852 |
|
|
$ |
262,691 |
|
|
$ |
18,735,543 |
|
|
$ |
17,230,146 |
|
|
$ |
1,505,397 |
|
Noninterest-bearing |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
demand deposits |
$ |
7,441,185 |
|
|
$ |
7,299,213 |
|
|
$ |
141,972 |
|
|
$ |
7,441,185 |
|
|
$ |
7,834,480 |
|
|
$ |
(393,295 |
) |
Core deposits |
$ |
16,471,264 |
|
|
$ |
15,617,488 |
|
|
$ |
853,776 |
|
|
$ |
16,471,264 |
|
|
$ |
15,512,742 |
|
|
$ |
958,522 |
|
Total deposits |
$ |
19,733,203 |
|
|
$ |
18,805,756 |
|
|
$ |
927,447 |
|
|
$ |
19,733,203 |
|
|
$ |
17,879,543 |
|
|
$ |
1,853,660 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As percentage of total |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
deposits: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest-bearing |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
demand deposits |
38 |
% |
|
39 |
% |
|
(1 |
) |
|
38 |
% |
|
44 |
% |
|
(6 |
) |
Core deposits |
84 |
% |
|
83 |
% |
|
1 |
|
|
84 |
% |
|
87 |
% |
|
(3 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity to assets ratio |
18.41 |
% |
|
18.42 |
% |
|
(0.01 |
) |
|
18.41 |
% |
|
19.13 |
% |
|
(0.72 |
) |
Tangible common equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ratio (1) |
9.65 |
% |
|
9.50 |
% |
|
0.15 |
|
|
9.65 |
% |
|
9.61 |
% |
|
0.04 |
|
Book value per share |
$ |
41.06 |
|
|
$ |
40.49 |
|
|
$ |
0.57 |
|
|
$ |
41.06 |
|
|
$ |
38.46 |
|
|
$ |
2.60 |
|
Tangible book value per |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
share (1) |
$ |
19.43 |
|
|
$ |
18.83 |
|
|
$ |
0.60 |
|
|
$ |
19.43 |
|
|
$ |
17.28 |
|
|
$ |
2.15 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Non-GAAP measure. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INCOME STATEMENT HIGHLIGHTS
Net Interest Income
Net interest income decreased by $8.7 million to $252.2 million
for the third quarter of 2019 compared to $260.9 million for the
second quarter of 2019 due mainly to a lower yield on average loans
and leases, offset partially by a higher balance of average loans
and leases and one more day in the third quarter of 2019. The tax
equivalent yield on average loans and leases was 5.91% for the
third quarter of 2019 compared to 6.26% for the second quarter of
2019. The decrease in the yield on average loans and leases was due
principally to the repricing of variable-rate loans causing lower
coupon interest in addition to lower loan prepayment fees in the
third quarter compared to the second quarter. The prepayment fees
added five basis points to the third quarter loan and lease yield
and 14 basis points to the second quarter loan and lease yield.
The tax equivalent NIM was 4.46% for the third quarter of 2019
compared to 4.72% for the second quarter of 2019. The decrease in
the NIM was due mainly to lower coupon interest, lower loan
prepayment fees, and lower loan fee income.
The cost of average total deposits increased to 0.83% for the
third quarter of 2019 from 0.81% for the second quarter of 2019 due
to a higher average balance of core interest-bearing deposits
combined with a lower average balance of noninterest-bearing
deposits. The cost of average interest-bearing deposits declined by
one basis point in the third quarter and the cost of average total
deposits for the month of September was 0.80%, reflecting actions
taken to reduce certain deposit rates in light of the fed funds
target rate cuts during the third quarter.
Provision for Credit Losses
The following table presents details of the provision for credit
losses for the periods indicated:
|
Three Months Ended |
|
|
|
|
|
September 30, |
|
|
June 30, |
|
|
Increase |
|
Provision for Credit Losses |
2019 |
|
|
2019 |
|
|
(Decrease) |
|
|
|
|
|
|
(In thousands) |
|
|
|
|
|
Addition to allowance for loan and lease losses |
$ |
8,000 |
|
|
$ |
10,000 |
|
|
$ |
(2,000 |
) |
Reduction to reserve for unfunded loan commitments |
(1,000 |
) |
|
(2,000 |
) |
|
1,000 |
|
Total provision for credit losses |
$ |
7,000 |
|
|
$ |
8,000 |
|
|
$ |
(1,000 |
) |
Noninterest Income
The following table presents details of noninterest income for
the periods indicated:
|
Three Months Ended |
|
|
|
|
|
September 30, |
|
June 30, |
|
|
Increase |
|
Noninterest Income |
2019 |
|
2019 |
|
|
(Decrease) |
|
|
|
|
|
(In thousands) |
|
|
|
|
|
Service charges on deposit accounts |
$ |
3,525 |
|
$ |
3,771 |
|
|
$ |
(246 |
) |
Other commissions and
fees |
10,855 |
|
11,590 |
|
|
(735 |
) |
Leased equipment income |
9,615 |
|
9,182 |
|
|
433 |
|
Gain on sale of loans and
leases |
765 |
|
326 |
|
|
439 |
|
Gain on sale of
securities |
908 |
|
22,192 |
|
|
(21,284 |
) |
Other income: |
|
|
|
|
|
|
|
Dividends and gains (losses) on equity investments |
14 |
|
(83 |
) |
|
97 |
|
Warrant income |
3,936 |
|
1,214 |
|
|
2,722 |
|
Other |
3,811 |
|
2,701 |
|
|
1,110 |
|
Total noninterest income |
$ |
33,429 |
|
$ |
50,893 |
|
|
$ |
(17,464 |
) |
Noninterest income decreased by $17.5 million to $33.4 million
for the third quarter of 2019 compared to $50.9 million for the
second quarter of 2019 due primarily to a $21.3 million decrease in
the gain on sale of securities attributable to a $0.9 million net
gain on sales of $143 million in the third quarter of 2019 compared
to a $22.2 million net gain on sales of $980 million in the second
quarter of 2019. We re-positioned a portion of our securities
portfolio in the second quarter to shorten the duration of the
portfolio and to enhance liquidity. Partially offsetting the
decrease in the gain on sale of securities was a $2.7 million
increase in warrant income and a $1.1 million increase in other
income for the third quarter of 2019. The increase in warrant
income was due to higher gains resulting from exercised warrants.
The increase in other income was mainly due to higher gains from
lease terminations.
Noninterest Expense
The following table presents details of noninterest expense for
the periods indicated:
|
Three Months Ended |
|
|
|
|
|
September 30, |
|
June 30, |
|
|
Increase |
|
Noninterest Expense |
2019 |
|
2019 |
|
|
(Decrease) |
|
|
|
|
|
(In thousands) |
|
|
|
|
|
Compensation |
$ |
71,424 |
|
$ |
68,956 |
|
|
$ |
2,468 |
|
Occupancy |
14,089 |
|
14,457 |
|
|
(368 |
) |
Data processing |
7,044 |
|
6,817 |
|
|
227 |
|
Other professional
services |
4,400 |
|
4,629 |
|
|
(229 |
) |
Insurance and assessments |
4,100 |
|
4,098 |
|
|
2 |
|
Intangible asset
amortization |
4,833 |
|
4,870 |
|
|
(37 |
) |
Leased equipment
depreciation |
5,951 |
|
5,558 |
|
|
393 |
|
Foreclosed assets expense
(income), net |
8 |
|
(146 |
) |
|
154 |
|
Loan expense |
3,628 |
|
3,451 |
|
|
177 |
|
Other |
11,332 |
|
12,737 |
|
|
(1,405 |
) |
Total noninterest expense |
$ |
126,809 |
|
$ |
125,427 |
|
|
$ |
1,382 |
|
Noninterest expense increased by $1.4 million to $126.8 million
for the third quarter of 2019 compared to $125.4 million for the
second quarter of 2019 attributable primarily to a $2.5 million
increase in compensation expense, offset partially by a $1.4
million decrease in other expense. Compensation expense increased
due mainly to higher incentives expense and higher stock
compensation expense, partially offset by lower payroll taxes and
benefits expense. Other expense decreased primarily due to lower
business development expense and a loss on the early termination of
an office lease in the second quarter.
Income Taxes
The overall effective income tax rate was 27.5% for the third
quarter of 2019 and 28.2% for the second quarter of 2019. The
effective tax rate for the full year 2019 is estimated to be in the
range of 27-28%.
BALANCE SHEET HIGHLIGHTS
Loans and Leases
The following table presents roll forwards of loans and leases
held for investment, net of deferred fees, for the periods
indicated:
|
Three Months Ended |
|
|
Nine Months Ended |
Roll Forward of Loans
and Leases Held |
September 30, |
|
|
June 30, |
|
|
September 30, |
for Investment, Net of
Deferred Fees (1) |
2019 |
|
|
2019 |
|
|
2019 |
|
|
|
|
|
(Dollars in thousands) |
|
|
|
|
|
Balance, beginning of period |
$ |
18,472,852 |
|
|
$ |
18,307,697 |
|
|
$ |
17,957,713 |
|
Additions: |
|
|
|
|
|
|
|
|
Production |
1,230,817 |
|
|
1,436,299 |
|
|
3,841,954 |
|
Disbursements |
1,288,111 |
|
|
1,293,747 |
|
|
3,774,830 |
|
Total production and disbursements |
2,518,928 |
|
|
2,730,046 |
|
|
7,616,784 |
|
Reductions: |
|
|
|
|
|
|
|
|
Payoffs |
(1,390,883 |
) |
|
(1,529,213 |
) |
|
(3,853,396 |
) |
Paydowns |
(837,551 |
) |
|
(979,987 |
) |
|
(2,856,502 |
) |
Total payoffs and paydowns |
(2,228,434 |
) |
|
(2,509,200 |
) |
|
(6,709,898 |
) |
Sales |
(21,302 |
) |
|
(38,054 |
) |
|
(76,292 |
) |
Transfers to foreclosed assets |
- |
|
|
- |
|
|
(37 |
) |
Charge-offs |
(6,501 |
) |
|
(17,637 |
) |
|
(27,603 |
) |
Transfers to loans held for sale |
- |
|
|
- |
|
|
(25,124 |
) |
Total reductions |
(2,256,237 |
) |
|
(2,564,891 |
) |
|
(6,838,954 |
) |
Net increase |
262,691 |
|
|
165,155 |
|
|
777,830 |
|
Balance, end of period |
$ |
18,735,543 |
|
|
$ |
18,472,852 |
|
|
$ |
18,735,543 |
|
|
|
|
|
|
|
|
|
|
Weighted average rate on
production (2) |
5.45 |
% |
|
5.15 |
% |
|
5.21 |
% |
|
|
|
|
|
|
|
|
|
(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 30 basis points to loan yields in 2019 and 31
basis points to loan yields in 2018. |
Loans and leases held for investment, net of deferred fees,
increased by $262.7 million, or 6% annualized, in the third quarter
of 2019 to $18.7 billion at September 30, 2019. The net loan growth
in the third quarter was primarily from the asset-based loan
portfolio class and residential real estate construction loan
portfolio class.
The following table presents the composition of loans and leases
held for investment by loan portfolio segment and class, net of
deferred fees, as of the dates indicated:
|
September 30, 2019 |
|
|
June 30, 2019 |
|
|
September 30, 2018 |
|
|
|
% of |
|
|
|
% of |
|
|
|
% of |
|
Loan and Lease
Portfolio |
Amount |
Total |
|
|
Amount |
Total |
|
|
Amount |
Total |
|
|
|
|
|
|
(In thousands) |
|
|
|
|
|
Real estate mortgage: |
|
|
|
|
|
|
|
|
|
|
|
Commercial |
$ |
4,300,566 |
23 |
% |
|
$ |
4,435,274 |
24 |
% |
|
$ |
4,932,823 |
28 |
% |
Income producing and other |
|
|
|
|
|
|
|
|
|
|
|
residential |
3,596,358 |
19 |
% |
|
3,640,752 |
20 |
% |
|
2,745,837 |
16 |
% |
Total real estate mortgage |
7,896,924 |
42 |
% |
|
8,076,026 |
44 |
% |
|
7,678,660 |
44 |
% |
Real estate construction and
land: |
|
|
|
|
|
|
|
|
|
|
|
Commercial |
1,009,362 |
6 |
% |
|
972,891 |
5 |
% |
|
854,346 |
5 |
% |
Residential |
1,542,112 |
8 |
% |
|
1,403,239 |
8 |
% |
|
1,146,611 |
7 |
% |
Total real estate construction |
|
|
|
|
|
|
|
|
|
|
|
and land |
2,551,474 |
14 |
% |
|
2,376,130 |
13 |
% |
|
2,000,957 |
12 |
% |
Total real estate |
10,448,398 |
56 |
% |
|
10,452,156 |
57 |
% |
|
9,679,617 |
56 |
% |
Commercial: |
|
|
|
|
|
|
|
|
|
|
|
Asset-based |
3,810,741 |
20 |
% |
|
3,606,007 |
19 |
% |
|
3,222,311 |
19 |
% |
Venture capital |
2,209,649 |
12 |
% |
|
2,194,743 |
12 |
% |
|
2,031,895 |
12 |
% |
Other commercial |
1,858,167 |
10 |
% |
|
1,773,564 |
10 |
% |
|
1,897,852 |
11 |
% |
Total commercial |
7,878,557 |
42 |
% |
|
7,574,314 |
41 |
% |
|
7,152,058 |
42 |
% |
Consumer |
408,588 |
2 |
% |
|
446,382 |
2 |
% |
|
398,471 |
2 |
% |
Total loans and leases held for |
|
|
|
|
|
|
|
|
|
|
|
investment, net of deferred fees |
$ |
18,735,543 |
100 |
% |
|
$ |
18,472,852 |
100 |
% |
|
$ |
17,230,146 |
100 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Total unfunded loan
commitments |
$ |
7,790,796 |
|
|
|
$ |
7,610,899 |
|
|
|
$ |
7,055,833 |
|
|
Allowance for Credit Losses
The following tables present roll forwards of the allowance for
credit losses for the periods indicated:
|
Three Months Ended September 30, 2019 |
|
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 |
$ |
135,037 |
|
|
$ |
34,861 |
|
|
$ |
169,898 |
|
Charge-offs |
(6,501 |
) |
|
- |
|
|
(6,501 |
) |
Recoveries |
2,016 |
|
|
- |
|
|
2,016 |
|
Net charge-offs |
(4,485 |
) |
|
- |
|
|
(4,485 |
) |
Provision |
8,000 |
|
|
(1,000 |
) |
|
7,000 |
|
Ending balance |
$ |
138,552 |
|
|
$ |
33,861 |
|
|
$ |
172,413 |
|
|
Three Months Ended June 30, 2019 |
|
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 |
$ |
136,281 |
|
|
$ |
36,861 |
|
|
$ |
173,142 |
|
Charge-offs |
(17,637 |
) |
|
- |
|
|
(17,637 |
) |
Recoveries |
6,393 |
|
|
- |
|
|
6,393 |
|
Net charge-offs |
(11,244 |
) |
|
- |
|
|
(11,244 |
) |
Provision |
10,000 |
|
|
(2,000 |
) |
|
8,000 |
|
Ending balance |
$ |
135,037 |
|
|
$ |
34,861 |
|
|
$ |
169,898 |
|
The allowance for credit losses as a percentage of loans and
leases held for investment was 0.92% at both September 30, 2019 and
June 30, 2019.
Gross charge-offs for the third quarter of 2019 were $6.5
million and included $4.4 million for venture capital loans and
$1.7 million for other commercial loans compared to gross
charge-offs for the second quarter of 2019 of $17.6 million that
included $11.8 million for a single asset-based loan, $3.7 million
for other commercial loans, and $1.5 million for venture capital
loans.
Recoveries for the third quarter of 2019 were $2.0 million and
included $1.2 million for other commercial loans and $0.4 million
for venture capital loans compared to recoveries for the second
quarter of 2019 of $6.4 million that included $4.8 million for
venture capital loans and $1.0 million for other commercial
loans.
For the third quarter of 2019 and second quarter of 2019,
annualized net charge-offs to average loans and leases were 0.10%
and 0.25%.
Deposits and Client Investment Funds
The following table presents the composition of our deposit
portfolio as of the dates indicated:
|
September 30, 2019 |
|
|
June 30, 2019 |
|
|
September 30, 2018 |
|
|
|
% of |
|
|
|
% of |
|
|
|
% of |
|
Deposit
Composition |
Amount |
Total |
|
|
Amount |
Total |
|
|
Amount |
Total |
|
|
|
|
|
|
(Dollars in thousands) |
|
|
|
|
|
Noninterest-bearing demand |
$ |
7,441,185 |
38 |
% |
|
$ |
7,299,213 |
39 |
% |
|
$ |
7,834,480 |
44 |
% |
Interest checking |
3,645,660 |
18 |
% |
|
3,220,353 |
17 |
% |
|
2,277,537 |
13 |
% |
Money market |
4,870,344 |
25 |
% |
|
4,578,083 |
24 |
% |
|
4,782,724 |
27 |
% |
Savings |
514,075 |
3 |
% |
|
519,839 |
3 |
% |
|
618,001 |
3 |
% |
Total core deposits |
16,471,264 |
84 |
% |
|
15,617,488 |
83 |
% |
|
15,512,742 |
87 |
% |
Non-core non-maturity
deposits |
479,732 |
2 |
% |
|
436,833 |
2 |
% |
|
483,528 |
3 |
% |
Total non-maturity deposits |
16,950,996 |
86 |
% |
|
16,054,321 |
85 |
% |
|
15,996,270 |
90 |
% |
Time deposits $250,000 and
under |
2,282,976 |
12 |
% |
|
2,284,023 |
12 |
% |
|
1,509,214 |
8 |
% |
Time deposits over
$250,000 |
499,231 |
2 |
% |
|
467,412 |
3 |
% |
|
374,059 |
2 |
% |
Total time deposits |
2,782,207 |
14 |
% |
|
2,751,435 |
15 |
% |
|
1,883,273 |
10 |
% |
Total deposits |
$ |
19,733,203 |
100 |
% |
|
$ |
18,805,756 |
100 |
% |
|
$ |
17,879,543 |
100 |
% |
At September 30, 2019, core deposits totaled $16.5 billion, or
84% of total deposits, including $7.4 billion of
noninterest-bearing demand deposits, or 38% of total deposits. The
$854 million increase in core deposits for the third quarter of
2019 included strong growth in both our Venture Banking and
Community Banking groups.
In addition to deposit products, we also offer alternative
non-depository cash investment options for select clients; these
alternatives include investments managed by Pacific Western Asset
Management Inc. (“PWAM”), our registered investment advisor
subsidiary, and third-party sweep products. Total off-balance sheet
client investment funds at September 30, 2019 were $1.8 billion, of
which $1.5 billion was managed by PWAM.
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 |
2019 |
|
|
2019 |
|
|
(Decrease) |
|
|
|
|
|
(Dollars in thousands) |
|
|
|
|
NPAs and Performing
TDRs: |
|
|
|
|
|
|
|
|
Nonaccrual loans and leases held for investment (1) |
$ |
99,113 |
|
|
$ |
81,265 |
|
|
$ |
17,848 |
|
Accruing loans contractually
past due 90 days or more |
- |
|
|
- |
|
|
- |
|
Foreclosed assets, net |
1,366 |
|
|
1,472 |
|
|
(106 |
) |
Total nonperforming
assets ("NPAs") |
$ |
100,479 |
|
|
$ |
82,737 |
|
|
$ |
17,742 |
|
|
|
|
|
|
|
|
|
|
Nonaccrual loans and leases
held for investment |
|
|
|
|
|
|
|
|
to loans and leases held for investment |
0.53 |
% |
|
0.44 |
% |
|
|
|
Nonperforming assets to loans
and leases |
|
|
|
|
|
|
|
|
held for investment and foreclosed assets |
0.54 |
% |
|
0.45 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Nonaccrual loans and leases
held for investment (1) |
$ |
99,113 |
|
|
$ |
81,265 |
|
|
$ |
17,848 |
|
Performing TDRs held for
investment |
16,329 |
|
|
16,464 |
|
|
(135 |
) |
Total impaired loans and leases |
$ |
115,442 |
|
|
$ |
97,729 |
|
|
$ |
17,713 |
|
|
|
|
|
|
|
|
|
|
Loan and Lease Credit
Risk Ratings: |
|
|
|
|
|
|
|
|
Pass |
$ |
18,279,011 |
|
|
$ |
18,042,569 |
|
|
$ |
236,442 |
|
Special mention |
267,925 |
|
|
239,304 |
|
|
28,621 |
|
Classified |
188,607 |
|
|
190,979 |
|
|
(2,372 |
) |
Total loans and leases held for investment, |
|
|
|
|
|
|
|
|
net of deferred fees |
$ |
18,735,543 |
|
|
$ |
18,472,852 |
|
|
$ |
262,691 |
|
|
|
|
|
|
|
|
|
|
Classified loans and leases
held for investment |
|
|
|
|
|
|
|
|
to loans and leases held for investment |
1.01 |
% |
|
1.03 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for Credit
Losses: |
|
|
|
|
|
|
|
|
Allowance for credit
losses |
$ |
172,413 |
|
|
$ |
169,898 |
|
|
$ |
2,515 |
|
Provision for credit losses
(for the quarter) |
$ |
7,000 |
|
|
$ |
8,000 |
|
|
$ |
(1,000 |
) |
Net charge-offs (for the
quarter) |
$ |
4,485 |
|
|
$ |
11,244 |
|
|
$ |
(6,759 |
) |
Net charge-offs to average
loans and leases |
|
|
|
|
|
|
|
|
(for the quarter) |
0.10 |
% |
|
0.25 |
% |
|
|
|
Allowance for credit losses to
loans and leases |
|
|
|
|
|
|
|
|
held for investment |
0.92 |
% |
|
0.92 |
% |
|
|
|
Allowance for credit losses to
nonaccrual loans |
|
|
|
|
|
|
|
|
and leases held for investment |
174.0 |
% |
|
209.1 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
(1) Nonaccrual
loans include guaranteed amounts of $15.4 million at September 30,
2019 and $13.0 million at June 30, 2019. |
Nonaccrual, classified, and special mention loans and leases
fluctuate from period to period as a result of loan repayments and
our ongoing active portfolio monitoring.
During the third quarter of 2019, nonaccrual loans and leases
increased by $17.8 million, while classified loans and leases
decreased by $2.4 million and special mention loans and leases
increased by $28.6 million. The increase in nonaccrual loans was
primarily attributable to one previously classified $14.9 million
security monitoring commercial loan. The increase in special
mention loans and leases was due primarily to the downgrade of two
security monitoring commercial loans totaling $49 million,
partially offset by a net decrease from other activity.
The following table presents nonaccrual loans and leases and
accruing loans and leases past due between 30 and 89 days by loan
portfolio segment and class as of the dates indicated:
|
Nonaccrual Loans and Leases |
|
Accruing and |
|
September 30, 2019 |
|
|
June 30, 2019 |
|
|
30-89 Days Past Due |
|
|
% of |
|
|
|
% of |
|
|
September 30, |
|
June 30, |
|
|
Loan |
|
|
|
Loan |
|
|
2019 |
|
2019 |
|
Amount |
Category |
|
|
Amount |
Category |
|
|
Amount |
|
Amount |
|
|
|
|
|
(Dollars in thousands) |
|
|
|
|
|
Real estate mortgage: |
|
|
|
|
|
|
|
|
|
|
|
Commercial |
$ |
19,515 |
0.5 |
% |
|
$ |
17,012 |
0.4 |
% |
|
$ |
- |
|
$ |
3,948 |
Income producing and other |
|
|
|
|
|
|
|
|
|
|
|
residential |
2,868 |
0.1 |
% |
|
2,883 |
0.1 |
% |
|
3,750 |
|
3,262 |
Total real estate mortgage |
22,383 |
0.3 |
% |
|
19,895 |
0.2 |
% |
|
3,750 |
|
7,210 |
Real estate construction and
land: |
|
|
|
|
|
|
|
|
|
|
|
Commercial |
377 |
0.0 |
% |
|
390 |
0.0 |
% |
|
- |
|
- |
Residential |
- |
0.0 |
% |
|
- |
0.0 |
% |
|
2,622 |
|
4,672 |
Total real estate |
|
|
|
|
|
|
|
|
|
|
|
construction and land |
377 |
0.0 |
% |
|
390 |
0.0 |
% |
|
2,622 |
|
4,672 |
Commercial: |
|
|
|
|
|
|
|
|
|
|
|
Asset-based |
33,015 |
0.9 |
% |
|
32,236 |
0.9 |
% |
|
48 |
|
12,382 |
Venture capital |
20,131 |
0.9 |
% |
|
22,501 |
1.0 |
% |
|
- |
|
- |
Other commercial |
22,554 |
1.2 |
% |
|
5,799 |
0.3 |
% |
|
4,068 |
|
439 |
Total commercial |
75,700 |
1.0 |
% |
|
60,536 |
0.8 |
% |
|
4,116 |
|
12,821 |
Consumer |
653 |
0.2 |
% |
|
444 |
0.1 |
% |
|
795 |
|
964 |
Total held for investment |
$ |
99,113 |
0.5 |
% |
|
$ |
81,265 |
0.4 |
% |
|
$ |
11,283 |
|
$ |
25,667 |
STOCK REPURCHASE PROGRAM
During the third quarter of 2019, there were no stock
repurchases. At September 30, 2019, the remaining amount that could
be used to repurchase shares under the $225 million Stock
Repurchase Program was $124.7 million.
ABOUT PACWEST BANCORP
PacWest Bancorp (“PacWest”) is a bank holding company with over
$26 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
groups. National Lending provides asset-based, equipment, real
estate and security monitoring 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.pacwest.com.
FORWARD LOOKING STATEMENTS
This communication contains certain forward-looking information
about PacWest 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 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.
PACWEST
BANCORP AND SUBSIDIARIES |
CONDENSED
CONSOLIDATED BALANCE SHEET |
|
|
|
|
|
|
|
|
|
|
September 30, |
|
|
June 30, |
|
|
December 31, |
|
|
2019 |
|
|
2019 |
|
|
2018 |
|
|
|
|
|
|
|
|
|
|
|
(Dollars in thousands, except per share
data) |
ASSETS: |
|
|
|
|
|
|
|
|
Cash and due from banks |
$ |
252,596 |
|
|
$ |
185,075 |
|
|
$ |
175,830 |
|
Interest-earning deposits in
financial institutions |
483,405 |
|
|
422,663 |
|
|
209,937 |
|
Total cash and cash equivalents |
736,001 |
|
|
607,738 |
|
|
385,767 |
|
|
|
|
|
|
|
|
|
|
Securities available-for-sale,
at estimated fair value |
3,817,348 |
|
|
3,807,244 |
|
|
4,009,431 |
|
Federal Home Loan Bank stock,
at cost |
26,865 |
|
|
43,146 |
|
|
32,103 |
|
Total investment securities |
3,844,213 |
|
|
3,850,390 |
|
|
4,041,534 |
|
|
|
|
|
|
|
|
|
|
Loans held for
sale |
- |
|
|
- |
|
|
- |
|
|
|
|
|
|
|
|
|
|
Gross loans and leases held
for investment |
18,796,011 |
|
|
18,532,740 |
|
|
18,026,365 |
|
Deferred fees, net |
(60,468 |
) |
|
(59,888 |
) |
|
(68,652 |
) |
Total loans and leases held for investment, |
|
|
|
|
|
|
|
|
net of deferred fees |
18,735,543 |
|
|
18,472,852 |
|
|
17,957,713 |
|
Allowance for loan and lease
losses |
(138,552 |
) |
|
(135,037 |
) |
|
(132,472 |
) |
Total loans and leases held for investment,
net |
18,596,991 |
|
|
18,337,815 |
|
|
17,825,241 |
|
|
|
|
|
|
|
|
|
|
Equipment leased to others
under operating leases |
295,854 |
|
|
300,668 |
|
|
292,677 |
|
Premises and equipment,
net |
37,926 |
|
|
38,162 |
|
|
34,661 |
|
Foreclosed assets, net |
1,366 |
|
|
1,472 |
|
|
5,299 |
|
Deferred tax asset, net |
- |
|
|
- |
|
|
17,489 |
|
Goodwill |
2,548,670 |
|
|
2,548,670 |
|
|
2,548,670 |
|
Core deposit and customer
relationship intangibles, net |
42,547 |
|
|
47,380 |
|
|
57,120 |
|
Other assets |
621,059 |
|
|
612,119 |
|
|
522,896 |
|
Total assets |
$ |
26,724,627 |
|
|
$ |
26,344,414 |
|
|
$ |
25,731,354 |
|
|
|
|
|
|
|
|
|
|
LIABILITIES: |
|
|
|
|
|
|
|
|
Noninterest-bearing
deposits |
$ |
7,441,185 |
|
|
$ |
7,299,213 |
|
|
$ |
7,888,915 |
|
Interest-bearing deposits |
12,292,018 |
|
|
11,506,543 |
|
|
10,981,586 |
|
Total deposits |
19,733,203 |
|
|
18,805,756 |
|
|
18,870,501 |
|
Borrowings |
1,253,031 |
|
|
1,913,059 |
|
|
1,371,114 |
|
Subordinated debentures |
456,145 |
|
|
456,112 |
|
|
453,846 |
|
Accrued interest payable and
other liabilities |
362,140 |
|
|
317,477 |
|
|
210,305 |
|
Total liabilities |
21,804,519 |
|
|
21,492,404 |
|
|
20,905,766 |
|
STOCKHOLDERS' EQUITY
(1) |
4,920,108 |
|
|
4,852,010 |
|
|
4,825,588 |
|
Total liabilities and stockholders’ equity |
$ |
26,724,627 |
|
|
$ |
26,344,414 |
|
|
$ |
25,731,354 |
|
|
|
|
|
|
|
|
|
|
Book value per share |
$ |
41.06 |
|
|
$ |
40.49 |
|
|
$ |
39.17 |
|
Tangible book value per share
(2) |
$ |
19.43 |
|
|
$ |
18.83 |
|
|
$ |
18.02 |
|
Shares outstanding |
119,831,192 |
|
|
119,829,104 |
|
|
123,189,833 |
|
|
|
|
|
|
|
|
|
|
(1) Includes net unrealized
gain (loss) on securities |
|
|
|
|
|
|
|
|
available-for-sale, net |
$ |
95,887 |
|
|
$ |
73,066 |
|
|
$ |
(6,075 |
) |
(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, |
|
|
2019 |
|
2019 |
|
|
2018 |
|
|
2019 |
|
|
2018 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars in thousands, except per share
data) |
Interest
income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans and leases |
$ |
275,978 |
|
$ |
284,236 |
|
|
$ |
264,062 |
|
|
$ |
834,443 |
|
|
$ |
775,447 |
|
Investment securities |
28,806 |
|
28,948 |
|
|
28,061 |
|
|
87,434 |
|
|
81,929 |
|
Deposits in financial
institutions |
2,424 |
|
1,349 |
|
|
519 |
|
|
4,423 |
|
|
1,555 |
|
Total interest income |
307,208 |
|
314,533 |
|
|
292,642 |
|
|
926,300 |
|
|
858,931 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expense: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposits |
40,703 |
|
38,720 |
|
|
21,121 |
|
|
113,658 |
|
|
51,306 |
|
Borrowings |
6,852 |
|
7,210 |
|
|
3,814 |
|
|
21,772 |
|
|
7,383 |
|
Subordinated debentures |
7,417 |
|
7,705 |
|
|
7,390 |
|
|
22,860 |
|
|
21,093 |
|
Total interest expense |
54,972 |
|
53,635 |
|
|
32,325 |
|
|
158,290 |
|
|
79,782 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income |
252,236 |
|
260,898 |
|
|
260,317 |
|
|
768,010 |
|
|
779,149 |
|
Provision for credit
losses |
7,000 |
|
8,000 |
|
|
11,500 |
|
|
19,000 |
|
|
33,000 |
|
Net interest income after |
|
|
|
|
|
|
|
|
|
|
|
|
|
provision for credit losses |
245,236 |
|
252,898 |
|
|
248,817 |
|
|
749,010 |
|
|
746,149 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest
income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Service charges on deposit
accounts |
3,525 |
|
3,771 |
|
|
3,979 |
|
|
11,026 |
|
|
12,418 |
|
Other commissions and
fees |
10,855 |
|
11,590 |
|
|
12,397 |
|
|
33,453 |
|
|
34,429 |
|
Leased equipment income |
9,615 |
|
9,182 |
|
|
9,120 |
|
|
28,079 |
|
|
28,497 |
|
Gain on sale of loans and
leases |
765 |
|
326 |
|
|
- |
|
|
1,091 |
|
|
4,675 |
|
Gain on sale of
securities |
908 |
|
22,192 |
|
|
826 |
|
|
25,261 |
|
|
7,390 |
|
Other income |
7,761 |
|
3,832 |
|
|
10,590 |
|
|
16,476 |
|
|
27,700 |
|
Total noninterest income |
33,429 |
|
50,893 |
|
|
36,912 |
|
|
115,386 |
|
|
115,109 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest
expense: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Compensation |
71,424 |
|
68,956 |
|
|
72,333 |
|
|
211,225 |
|
|
213,269 |
|
Occupancy |
14,089 |
|
14,457 |
|
|
13,069 |
|
|
42,866 |
|
|
39,867 |
|
Data processing |
7,044 |
|
6,817 |
|
|
6,740 |
|
|
20,786 |
|
|
20,295 |
|
Other professional
services |
4,400 |
|
4,629 |
|
|
6,058 |
|
|
13,542 |
|
|
15,754 |
|
Insurance and assessments |
4,100 |
|
4,098 |
|
|
5,446 |
|
|
12,236 |
|
|
16,503 |
|
Intangible asset
amortization |
4,833 |
|
4,870 |
|
|
5,587 |
|
|
14,573 |
|
|
17,520 |
|
Leased equipment
depreciation |
5,951 |
|
5,558 |
|
|
5,001 |
|
|
17,160 |
|
|
15,613 |
|
Foreclosed assets expense
(income), net |
8 |
|
(146 |
) |
|
(257 |
) |
|
(109 |
) |
|
(440 |
) |
Acquisition, integration
and |
|
|
|
|
|
|
|
|
|
|
|
|
|
reorganization costs |
- |
|
- |
|
|
800 |
|
|
618 |
|
|
800 |
|
Loan expense |
3,628 |
|
3,451 |
|
|
2,249 |
|
|
9,964 |
|
|
7,578 |
|
Other expense |
11,332 |
|
12,737 |
|
|
11,127 |
|
|
35,662 |
|
|
35,238 |
|
Total noninterest expense |
126,809 |
|
125,427 |
|
|
128,153 |
|
|
378,523 |
|
|
381,997 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings before income
taxes |
151,856 |
|
178,364 |
|
|
157,576 |
|
|
485,873 |
|
|
479,261 |
|
Income tax expense |
41,830 |
|
50,239 |
|
|
41,289 |
|
|
135,118 |
|
|
128,963 |
|
Net earnings |
$ |
110,026 |
|
$ |
128,125 |
|
|
$ |
116,287 |
|
|
$ |
350,755 |
|
|
$ |
350,298 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted earnings per
share |
$ |
0.92 |
|
$ |
1.07 |
|
|
$ |
0.94 |
|
|
$ |
2.91 |
|
|
$ |
2.79 |
|
Dividends declared and paid per
share |
$ |
0.60 |
|
$ |
0.60 |
|
|
$ |
0.60 |
|
|
$ |
1.80 |
|
|
$ |
1.70 |
|
PACWEST
BANCORP AND SUBSIDIARIES |
NET
EARNINGS PER SHARE CALCULATIONS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Nine Months Ended |
|
September 30, |
|
|
June 30, |
|
|
September 30, |
|
|
September 30, |
|
2019 |
|
|
2019 |
|
|
2018 |
|
|
2019 |
|
|
2018 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(In thousands, except per share data) |
Basic Earnings Per
Share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings |
$ |
110,026 |
|
|
$ |
128,125 |
|
|
$ |
116,287 |
|
|
$ |
350,755 |
|
|
$ |
350,298 |
|
Less: earnings allocated to unvested |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
restricted stock (1) |
(1,369 |
) |
|
(1,190 |
) |
|
(1,428 |
) |
|
(3,725 |
) |
|
(3,899 |
) |
Net earnings allocated to common |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
shares |
$ |
108,657 |
|
|
$ |
126,935 |
|
|
$ |
114,859 |
|
|
$ |
347,030 |
|
|
$ |
346,399 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average basic shares and |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
unvested restricted stock outstanding |
119,831 |
|
|
120,042 |
|
|
123,657 |
|
|
120,691 |
|
|
125,728 |
|
Less: weighted-average unvested |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
restricted stock outstanding |
(1,622 |
) |
|
(1,462 |
) |
|
(1,537 |
) |
|
(1,480 |
) |
|
(1,473 |
) |
Weighted-average basic shares |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
outstanding |
118,209 |
|
|
118,580 |
|
|
122,120 |
|
|
119,211 |
|
|
124,255 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per share |
$ |
0.92 |
|
|
$ |
1.07 |
|
|
$ |
0.94 |
|
|
$ |
2.91 |
|
|
$ |
2.79 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted Earnings Per
Share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings allocated to common |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
shares |
$ |
108,657 |
|
|
$ |
126,935 |
|
|
$ |
114,859 |
|
|
$ |
347,030 |
|
|
$ |
346,399 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average basic shares |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
outstanding |
118,209 |
|
|
118,580 |
|
|
122,120 |
|
|
119,211 |
|
|
124,255 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per share |
$ |
0.92 |
|
|
$ |
1.07 |
|
|
$ |
0.94 |
|
|
$ |
2.91 |
|
|
$ |
2.79 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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, 2019 |
|
|
June 30, 2019 |
|
|
September 30, 2018 |
|
|
|
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) |
$ |
18,539,281 |
$ |
276,309 |
5.91 |
% |
|
$ |
18,239,690 |
$ |
284,513 |
6.26 |
% |
|
$ |
16,913,792 |
$ |
264,371 |
6.20 |
% |
Investment securities (3) |
3,809,243 |
32,213 |
3.36 |
% |
|
3,790,436 |
29,462 |
3.12 |
% |
|
3,844,201 |
29,711 |
3.07 |
% |
Deposits in
financial |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
institutions |
445,152 |
2,424 |
2.16 |
% |
|
228,702 |
1,349 |
2.37 |
% |
|
108,485 |
519 |
1.90 |
% |
Total interest-earning |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
assets (1) |
22,793,676 |
310,946 |
5.41 |
% |
|
22,258,828 |
315,324 |
5.68 |
% |
|
20,866,478 |
294,601 |
5.60 |
% |
Other assets |
3,612,927 |
|
|
|
|
3,590,361 |
|
|
|
|
3,491,293 |
|
|
|
Total assets |
$ |
26,406,603 |
|
|
|
|
$ |
25,849,189 |
|
|
|
|
$ |
24,357,771 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities
and |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders' Equity: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest checking |
$ |
3,598,698 |
11,942 |
1.32 |
% |
|
$ |
3,242,960 |
10,644 |
1.32 |
% |
|
$ |
2,433,837 |
5,135 |
0.84 |
% |
Money market |
5,121,856 |
14,807 |
1.15 |
% |
|
5,046,021 |
14,604 |
1.16 |
% |
|
5,270,297 |
10,689 |
0.80 |
% |
Savings |
515,649 |
218 |
0.17 |
% |
|
525,648 |
227 |
0.17 |
% |
|
629,241 |
233 |
0.15 |
% |
Time |
2,795,573 |
13,736 |
1.95 |
% |
|
2,731,156 |
13,245 |
1.95 |
% |
|
1,778,552 |
5,064 |
1.13 |
% |
Total interest-bearing |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
deposits |
12,031,776 |
40,703 |
1.34 |
% |
|
11,545,785 |
38,720 |
1.35 |
% |
|
10,111,927 |
21,121 |
0.83 |
% |
Borrowings |
1,181,313 |
6,852 |
2.30 |
% |
|
1,142,223 |
7,210 |
2.53 |
% |
|
720,449 |
3,814 |
2.10 |
% |
Subordinated debentures |
456,011 |
7,417 |
6.45 |
% |
|
454,901 |
7,705 |
6.79 |
% |
|
452,312 |
7,390 |
6.48 |
% |
Total interest-bearing |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
liabilities |
13,669,100 |
54,972 |
1.60 |
% |
|
13,142,909 |
53,635 |
1.64 |
% |
|
11,284,688 |
32,325 |
1.14 |
% |
Noninterest-bearing |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
demand deposits |
7,487,555 |
|
|
|
|
7,544,027 |
|
|
|
|
8,120,306 |
|
|
|
Other liabilities |
359,202 |
|
|
|
|
343,364 |
|
|
|
|
203,958 |
|
|
|
Total liabilities |
21,515,857 |
|
|
|
|
21,030,300 |
|
|
|
|
19,608,952 |
|
|
|
Stockholders' equity |
4,890,746 |
|
|
|
|
4,818,889 |
|
|
|
|
4,748,819 |
|
|
|
Total liabilities and |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
stockholders' equity |
$ |
26,406,603 |
|
|
|
|
$ |
25,849,189 |
|
|
|
|
$ |
24,357,771 |
|
|
|
Net interest income (1) |
|
$ |
255,974 |
|
|
|
|
$ |
261,689 |
|
|
|
|
$ |
262,276 |
|
|
Net interest spread (1) |
|
|
3.81 |
% |
|
|
|
4.04 |
% |
|
|
|
4.46 |
% |
Net interest margin (1) |
|
|
4.46 |
% |
|
|
|
4.72 |
% |
|
|
|
4.99 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total deposits (4) |
$ |
19,519,331 |
$ |
40,703 |
0.83 |
% |
|
$ |
19,089,812 |
$ |
38,720 |
0.81 |
% |
|
$ |
18,232,233 |
$ |
21,121 |
0.46 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Tax
equivalent. |
(2) Includes
discount accretion on acquired loans of $2.6 million, $3.5 million,
and $6.1 million for the three months ended September 30,
2019, June 30, 2019, and September 30, 2018,
respectively. |
(3) Includes
tax-equivalent adjustments of $3.4 million, $0.5 million, and $1.7
million for the three months ended September 30, 2019, June
30, 2019, and September 30, 2018 related to tax-exempt income on
investment securities. |
The federal statutory tax rate utilized was 21%. |
(4) 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 total deposits
divided by average total deposits. |
PACWEST BANCORP AND
SUBSIDIARIES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FIVE QUARTER BALANCE
SHEET |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30, |
|
|
June 30, |
|
|
March 31, |
|
|
December 31, |
|
|
September 30, |
|
|
2019 |
|
|
2019 |
|
|
2019 |
|
|
2018 |
|
|
2018 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars in thousands, except per share data) |
ASSETS: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and due from banks |
$ |
252,596 |
|
|
$ |
185,075 |
|
|
$ |
224,758 |
|
|
$ |
175,830 |
|
|
$ |
196,502 |
|
Interest-earning deposits in
financial |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
institutions |
483,405 |
|
|
422,663 |
|
|
332,124 |
|
|
209,937 |
|
|
185,284 |
|
Total cash and cash equivalents |
736,001 |
|
|
607,738 |
|
|
556,882 |
|
|
385,767 |
|
|
381,786 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Securities
available-for-sale |
3,817,348 |
|
|
3,807,244 |
|
|
3,994,708 |
|
|
4,009,431 |
|
|
3,820,333 |
|
Federal Home Loan Bank
stock |
26,865 |
|
|
43,146 |
|
|
29,430 |
|
|
32,103 |
|
|
31,077 |
|
Total
investment securities |
3,844,213 |
|
|
3,850,390 |
|
|
4,024,138 |
|
|
4,041,534 |
|
|
3,851,410 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans held for
sale |
- |
|
|
- |
|
|
25,124 |
|
|
- |
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross loans and leases held
for investment |
18,796,011 |
|
|
18,532,740 |
|
|
18,371,295 |
|
|
18,026,365 |
|
|
17,295,589 |
|
Deferred fees, net |
(60,468 |
) |
|
(59,888 |
) |
|
(63,598 |
) |
|
(68,652 |
) |
|
(65,443 |
) |
Total loans and leases held for |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
investment, net of deferred fees |
18,735,543 |
|
|
18,472,852 |
|
|
18,307,697 |
|
|
17,957,713 |
|
|
17,230,146 |
|
Allowance for loan and lease
losses |
(138,552 |
) |
|
(135,037 |
) |
|
(136,281 |
) |
|
(132,472 |
) |
|
(141,920 |
) |
Total loans and leases held for |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
investment, net |
18,596,991 |
|
|
18,337,815 |
|
|
18,171,416 |
|
|
17,825,241 |
|
|
17,088,226 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equipment leased to others
under |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
operating leases |
295,854 |
|
|
300,668 |
|
|
293,853 |
|
|
292,677 |
|
|
275,707 |
|
Premises and equipment,
net |
37,926 |
|
|
38,162 |
|
|
37,783 |
|
|
34,661 |
|
|
34,012 |
|
Foreclosed assets, net |
1,366 |
|
|
1,472 |
|
|
3,291 |
|
|
5,299 |
|
|
4,407 |
|
Deferred tax asset, net |
- |
|
|
- |
|
|
- |
|
|
17,489 |
|
|
41,280 |
|
Goodwill |
2,548,670 |
|
|
2,548,670 |
|
|
2,548,670 |
|
|
2,548,670 |
|
|
2,548,670 |
|
Core deposit and customer
relationship |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
intangibles, net |
42,547 |
|
|
47,380 |
|
|
52,250 |
|
|
57,120 |
|
|
62,106 |
|
Other assets |
621,059 |
|
|
612,119 |
|
|
610,731 |
|
|
522,896 |
|
|
494,522 |
|
Total assets |
$ |
26,724,627 |
|
|
$ |
26,344,414 |
|
|
$ |
26,324,138 |
|
|
$ |
25,731,354 |
|
|
$ |
24,782,126 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest-bearing
deposits |
$ |
7,441,185 |
|
|
$ |
7,299,213 |
|
|
$ |
7,712,409 |
|
|
$ |
7,888,915 |
|
|
$ |
7,834,480 |
|
Interest-bearing deposits |
12,292,018 |
|
|
11,506,543 |
|
|
11,573,518 |
|
|
10,981,586 |
|
|
10,045,063 |
|
Total deposits |
19,733,203 |
|
|
18,805,756 |
|
|
19,285,927 |
|
|
18,870,501 |
|
|
17,879,543 |
|
Borrowings |
1,253,031 |
|
|
1,913,059 |
|
|
1,481,087 |
|
|
1,371,114 |
|
|
1,513,166 |
|
Subordinated debentures |
456,145 |
|
|
456,112 |
|
|
454,458 |
|
|
453,846 |
|
|
452,944 |
|
Accrued interest payable and
other |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
liabilities |
362,140 |
|
|
317,477 |
|
|
311,684 |
|
|
210,305 |
|
|
194,788 |
|
Total liabilities |
21,804,519 |
|
|
21,492,404 |
|
|
21,533,156 |
|
|
20,905,766 |
|
|
20,040,441 |
|
STOCKHOLDERS' EQUITY
(1) |
4,920,108 |
|
|
4,852,010 |
|
|
4,790,982 |
|
|
4,825,588 |
|
|
4,741,685 |
|
Total liabilities and stockholders’ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
equity |
$ |
26,724,627 |
|
|
$ |
26,344,414 |
|
|
$ |
26,324,138 |
|
|
$ |
25,731,354 |
|
|
$ |
24,782,126 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Book value per share |
$ |
41.06 |
|
|
$ |
40.49 |
|
|
$ |
39.86 |
|
|
$ |
39.17 |
|
|
$ |
38.46 |
|
Tangible book value per share
(2) |
$ |
19.43 |
|
|
$ |
18.83 |
|
|
$ |
18.22 |
|
|
$ |
18.02 |
|
|
$ |
17.28 |
|
Shares outstanding |
119,831,192 |
|
|
119,829,104 |
|
|
120,201,149 |
|
|
123,189,833 |
|
|
123,283,450 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Includes net unrealized
gain (loss) on |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
securities available-for-sale, net |
$ |
95,887 |
|
|
$ |
73,066 |
|
|
$ |
37,258 |
|
|
$ |
(6,075 |
) |
|
$ |
(43,854 |
) |
(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, |
|
|
2019 |
|
2019 |
|
|
2019 |
|
2018 |
|
|
2018 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars in thousands, except per share data) |
Interest
income: |
|
|
|
|
|
|
|
|
|
|
|
|
Loans and leases |
$ |
275,978 |
|
$ |
284,236 |
|
|
$ |
274,229 |
|
$ |
272,522 |
|
|
$ |
264,062 |
|
Investment securities |
28,806 |
|
28,948 |
|
|
29,680 |
|
29,690 |
|
|
28,061 |
|
Deposits in financial
institutions |
2,424 |
|
1,349 |
|
|
650 |
|
527 |
|
|
519 |
|
Total interest income |
307,208 |
|
314,533 |
|
|
304,559 |
|
302,739 |
|
|
292,642 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expense: |
|
|
|
|
|
|
|
|
|
|
|
|
Deposits |
40,703 |
|
38,720 |
|
|
34,235 |
|
28,834 |
|
|
21,121 |
|
Borrowings |
6,852 |
|
7,210 |
|
|
7,710 |
|
4,602 |
|
|
3,814 |
|
Subordinated debentures |
7,417 |
|
7,705 |
|
|
7,738 |
|
7,538 |
|
|
7,390 |
|
Total interest expense |
54,972 |
|
53,635 |
|
|
49,683 |
|
40,974 |
|
|
32,325 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income |
252,236 |
|
260,898 |
|
|
254,876 |
|
261,765 |
|
|
260,317 |
|
Provision for credit
losses |
7,000 |
|
8,000 |
|
|
4,000 |
|
12,000 |
|
|
11,500 |
|
Net interest income after |
|
|
|
|
|
|
|
|
|
|
|
|
provision for credit losses |
245,236 |
|
252,898 |
|
|
250,876 |
|
249,765 |
|
|
248,817 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest
income: |
|
|
|
|
|
|
|
|
|
|
|
|
Service charges on deposit
accounts |
3,525 |
|
3,771 |
|
|
3,730 |
|
4,091 |
|
|
3,979 |
|
Other commissions and
fees |
10,855 |
|
11,590 |
|
|
11,008 |
|
11,114 |
|
|
12,397 |
|
Leased equipment income |
9,615 |
|
9,182 |
|
|
9,282 |
|
9,384 |
|
|
9,120 |
|
Gain on sale of loans and
leases |
765 |
|
326 |
|
|
- |
|
- |
|
|
- |
|
Gain on sale of
securities |
908 |
|
22,192 |
|
|
2,161 |
|
786 |
|
|
826 |
|
Other income |
7,761 |
|
3,832 |
|
|
4,883 |
|
8,151 |
|
|
10,590 |
|
Total noninterest income |
33,429 |
|
50,893 |
|
|
31,064 |
|
33,526 |
|
|
36,912 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest
expense: |
|
|
|
|
|
|
|
|
|
|
|
|
Compensation |
71,424 |
|
68,956 |
|
|
70,845 |
|
69,299 |
|
|
72,333 |
|
Occupancy |
14,089 |
|
14,457 |
|
|
14,320 |
|
13,356 |
|
|
13,069 |
|
Data processing |
7,044 |
|
6,817 |
|
|
6,925 |
|
6,930 |
|
|
6,740 |
|
Other professional
services |
4,400 |
|
4,629 |
|
|
4,513 |
|
6,198 |
|
|
6,058 |
|
Insurance and assessments |
4,100 |
|
4,098 |
|
|
4,038 |
|
4,202 |
|
|
5,446 |
|
Intangible asset
amortization |
4,833 |
|
4,870 |
|
|
4,870 |
|
4,986 |
|
|
5,587 |
|
Leased equipment
depreciation |
5,951 |
|
5,558 |
|
|
5,651 |
|
5,758 |
|
|
5,001 |
|
Foreclosed assets expense
(income), net |
8 |
|
(146 |
) |
|
29 |
|
(311 |
) |
|
(257 |
) |
Acquisition, integration
and |
|
|
|
|
|
|
|
|
|
|
|
|
reorganization costs |
- |
|
- |
|
|
618 |
|
970 |
|
|
800 |
|
Loan expense |
3,628 |
|
3,451 |
|
|
2,885 |
|
2,991 |
|
|
2,249 |
|
Other expense |
11,332 |
|
12,737 |
|
|
11,593 |
|
14,856 |
|
|
11,127 |
|
Total noninterest expense |
126,809 |
|
125,427 |
|
|
126,287 |
|
129,235 |
|
|
128,153 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings before income
taxes |
151,856 |
|
178,364 |
|
|
155,653 |
|
154,056 |
|
|
157,576 |
|
Income tax expense |
41,830 |
|
50,239 |
|
|
43,049 |
|
39,015 |
|
|
41,289 |
|
Net earnings |
$ |
110,026 |
|
$ |
128,125 |
|
|
$ |
112,604 |
|
$ |
115,041 |
|
|
$ |
116,287 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted earnings per
share |
$ |
0.92 |
|
$ |
1.07 |
|
|
$ |
0.92 |
|
$ |
0.93 |
|
|
$ |
0.94 |
|
Dividends declared and paid per
share |
$ |
0.60 |
|
$ |
0.60 |
|
|
$ |
0.60 |
|
$ |
0.60 |
|
|
$ |
0.60 |
|
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, |
|
|
2019 |
|
|
2019 |
|
|
2019 |
|
|
2018 |
|
|
2018 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars in thousands) |
Performance
Ratios: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on average assets (1) |
1.65 |
% |
|
1.99 |
% |
|
1.77 |
% |
|
1.84 |
% |
|
1.89 |
% |
Return on average equity (1) |
8.93 |
% |
|
10.66 |
% |
|
9.48 |
% |
|
9.59 |
% |
|
9.72 |
% |
Return on average tangible equity (1)(2) |
19.01 |
% |
|
23.15 |
% |
|
20.64 |
% |
|
21.23 |
% |
|
21.61 |
% |
Efficiency ratio |
42.3 |
% |
|
41.6 |
% |
|
42.4 |
% |
|
41.7 |
% |
|
40.9 |
% |
Noninterest expense as a percentage |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
of average assets (1) |
1.91 |
% |
|
1.95 |
% |
|
1.99 |
% |
|
2.07 |
% |
|
2.09 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average Yields/Costs
(1): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Yield on: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average loans and leases (3) |
5.91 |
% |
|
6.26 |
% |
|
6.16 |
% |
|
6.27 |
% |
|
6.20 |
% |
Average interest-earning assets (3) |
5.41 |
% |
|
5.68 |
% |
|
5.60 |
% |
|
5.68 |
% |
|
5.60 |
% |
Cost of: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average interest-bearing deposits |
1.34 |
% |
|
1.35 |
% |
|
1.24 |
% |
|
1.10 |
% |
|
0.83 |
% |
Average total deposits |
0.83 |
% |
|
0.81 |
% |
|
0.73 |
% |
|
0.62 |
% |
|
0.46 |
% |
Average interest-bearing liabilities |
1.60 |
% |
|
1.64 |
% |
|
1.57 |
% |
|
1.40 |
% |
|
1.14 |
% |
Net interest spread (3) |
3.81 |
% |
|
4.04 |
% |
|
4.03 |
% |
|
4.28 |
% |
|
4.46 |
% |
Net interest margin (3) |
4.46 |
% |
|
4.72 |
% |
|
4.69 |
% |
|
4.91 |
% |
|
4.99 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average
Balances: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans and leases, net of deferred fees |
$ |
18,539,281 |
|
|
$ |
18,239,690 |
|
|
$ |
18,064,230 |
|
|
$ |
17,275,343 |
|
|
$ |
16,913,792 |
|
Interest-earning assets |
22,793,676 |
|
|
22,258,828 |
|
|
22,144,711 |
|
|
21,269,363 |
|
|
20,866,478 |
|
Total assets |
26,406,603 |
|
|
25,849,189 |
|
|
25,775,949 |
|
|
24,784,462 |
|
|
24,357,771 |
|
Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest-bearing deposits |
7,487,555 |
|
|
7,544,027 |
|
|
7,783,652 |
|
|
8,163,699 |
|
|
8,120,306 |
|
Interest-bearing deposits |
12,031,776 |
|
|
11,545,785 |
|
|
11,156,773 |
|
|
10,422,761 |
|
|
10,111,927 |
|
Total deposits |
19,519,331 |
|
|
19,089,812 |
|
|
18,940,425 |
|
|
18,586,460 |
|
|
18,232,233 |
|
Borrowings |
1,181,313 |
|
|
1,142,223 |
|
|
1,218,319 |
|
|
764,039 |
|
|
720,449 |
|
Subordinated debentures |
456,011 |
|
|
454,901 |
|
|
454,203 |
|
|
452,998 |
|
|
452,312 |
|
Interest-bearing liabilities |
13,669,100 |
|
|
13,142,909 |
|
|
12,829,295 |
|
|
11,639,798 |
|
|
11,284,688 |
|
Stockholders' equity |
4,890,746 |
|
|
4,818,889 |
|
|
4,815,965 |
|
|
4,758,401 |
|
|
4,748,819 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Annualized. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2) Non-GAAP measure. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(3) 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, |
|
|
2019 |
|
|
2019 |
|
|
2019 |
|
|
2018 |
|
|
2018 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars in thousands) |
Credit Quality
Ratios: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonaccrual loans and leases held for |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
investment to loans and leases |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
held for investment |
0.53 |
% |
|
0.44 |
% |
|
0.48 |
% |
|
0.44 |
% |
|
0.66 |
% |
Nonperforming assets to loans and |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
leases held for investment and |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
foreclosed assets |
0.54 |
% |
|
0.45 |
% |
|
0.50 |
% |
|
0.47 |
% |
|
0.68 |
% |
Classified loans and leases held for |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
investment to loans and leases |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
held for investment |
1.01 |
% |
|
1.03 |
% |
|
1.04 |
% |
|
1.32 |
% |
|
1.51 |
% |
Provision for credit losses (for the |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
quarter) to average loans and leases |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
held for investment (annualized) |
0.15 |
% |
|
0.18 |
% |
|
0.09 |
% |
|
0.28 |
% |
|
0.27 |
% |
Net charge-offs (for the quarter) to |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
average loans and leases held |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
for investment (annualized) |
0.10 |
% |
|
0.25 |
% |
|
0.00 |
% |
|
0.46 |
% |
|
0.04 |
% |
Trailing 12 months net charge-offs |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
to average loans and leases |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
held for investment |
0.20 |
% |
|
0.18 |
% |
|
0.22 |
% |
|
0.26 |
% |
|
0.28 |
% |
Allowance for credit losses to loans |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
and leases held for investment |
0.92 |
% |
|
0.92 |
% |
|
0.95 |
% |
|
0.94 |
% |
|
1.03 |
% |
Allowance for credit losses to |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
nonaccrual loans and leases |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
held for investment |
174.0 |
% |
|
209.1 |
% |
|
195.6 |
% |
|
213.5 |
% |
|
156.9 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PacWest Bancorp
Consolidated |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tier 1 leverage ratio (1) |
9.50 |
% |
|
9.49 |
% |
|
9.38 |
% |
|
10.13 |
% |
|
10.10 |
% |
Common equity tier 1 capital ratio (1) |
9.55 |
% |
|
9.53 |
% |
|
9.48 |
% |
|
10.01 |
% |
|
10.18 |
% |
Tier 1 capital ratio (1) |
9.55 |
% |
|
9.53 |
% |
|
9.48 |
% |
|
10.01 |
% |
|
10.18 |
% |
Total capital ratio (1) |
12.16 |
% |
|
12.18 |
% |
|
12.15 |
% |
|
12.72 |
% |
|
13.03 |
% |
Risk-weighted assets (1) |
$ |
23,579,614 |
|
|
$ |
23,117,199 |
|
|
$ |
22,939,074 |
|
|
$ |
22,525,096 |
|
|
$ |
21,650,542 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity to assets ratio |
18.41 |
% |
|
18.42 |
% |
|
18.20 |
% |
|
18.75 |
% |
|
19.13 |
% |
Tangible common equity ratio (2) |
9.65 |
% |
|
9.50 |
% |
|
9.23 |
% |
|
9.60 |
% |
|
9.61 |
% |
Book value per share |
$ |
41.06 |
|
|
$ |
40.49 |
|
|
$ |
39.86 |
|
|
$ |
39.17 |
|
|
$ |
38.46 |
|
Tangible book value per share (2) |
$ |
19.43 |
|
|
$ |
18.83 |
|
|
$ |
18.22 |
|
|
$ |
18.02 |
|
|
$ |
17.28 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pacific Western Bank
Capital: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tier 1 leverage ratio (1) |
10.72 |
% |
|
10.76 |
% |
|
10.57 |
% |
|
10.80 |
% |
|
10.78 |
% |
Common equity tier 1 capital ratio (1) |
10.79 |
% |
|
10.80 |
% |
|
10.69 |
% |
|
10.68 |
% |
|
10.87 |
% |
Tier 1 capital ratio (1) |
10.79 |
% |
|
10.80 |
% |
|
10.69 |
% |
|
10.68 |
% |
|
10.87 |
% |
Total capital ratio (1) |
11.52 |
% |
|
11.53 |
% |
|
11.45 |
% |
|
11.44 |
% |
|
11.69 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Capital information for
September 30, 2019 is preliminary. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2) 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 |
2019 |
|
|
2019 |
|
|
2018 |
|
|
2019 |
|
|
2018 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars in thousands) |
|
Net earnings |
$ |
110,026 |
|
|
$ |
128,125 |
|
|
$ |
116,287 |
|
|
$ |
350,755 |
|
|
$ |
350,298 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average stockholders'
equity |
$ |
4,890,746 |
|
|
$ |
4,818,889 |
|
|
$ |
4,748,819 |
|
|
$ |
4,842,140 |
|
|
$ |
4,826,944 |
|
Less: Average intangible
assets |
2,593,925 |
|
|
2,598,762 |
|
|
2,614,055 |
|
|
2,598,806 |
|
|
2,619,624 |
|
Average tangible common equity |
$ |
2,296,821 |
|
|
$ |
2,220,127 |
|
|
$ |
2,134,764 |
|
|
$ |
2,243,334 |
|
|
$ |
2,207,320 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on average equity
(1) |
8.93 |
% |
|
10.66 |
% |
|
9.72 |
% |
|
9.68 |
% |
|
9.70 |
% |
Return on average tangible
equity (2) |
19.01 |
% |
|
23.15 |
% |
|
21.61 |
% |
|
20.90 |
% |
|
21.22 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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 |
2019 |
|
|
2019 |
|
|
2019 |
|
|
2018 |
|
|
2018 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars in thousands, except per share
data) |
Stockholders' equity |
$ |
4,920,108 |
|
|
$ |
4,852,010 |
|
|
$ |
4,790,982 |
|
|
$ |
4,825,588 |
|
|
$ |
4,741,685 |
|
Less: Intangible assets |
2,591,217 |
|
|
2,596,050 |
|
|
2,600,920 |
|
|
2,605,790 |
|
|
2,610,776 |
|
Tangible common equity |
$ |
2,328,891 |
|
|
$ |
2,255,960 |
|
|
$ |
2,190,062 |
|
|
$ |
2,219,798 |
|
|
$ |
2,130,909 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets |
$ |
26,724,627 |
|
|
$ |
26,344,414 |
|
|
$ |
26,324,138 |
|
|
$ |
25,731,354 |
|
|
$ |
24,782,126 |
|
Less: Intangible assets |
2,591,217 |
|
|
2,596,050 |
|
|
2,600,920 |
|
|
2,605,790 |
|
|
2,610,776 |
|
Tangible assets |
$ |
24,133,410 |
|
|
$ |
23,748,364 |
|
|
$ |
23,723,218 |
|
|
$ |
23,125,564 |
|
|
$ |
22,171,350 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity to assets ratio |
18.41 |
% |
|
18.42 |
% |
|
18.20 |
% |
|
18.75 |
% |
|
19.13 |
% |
Tangible common equity ratio
(1) |
9.65 |
% |
|
9.50 |
% |
|
9.23 |
% |
|
9.60 |
% |
|
9.61 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Book value per share |
$ |
41.06 |
|
|
$ |
40.49 |
|
|
$ |
39.86 |
|
|
$ |
39.17 |
|
|
$ |
38.46 |
|
Tangible book value per share
(2) |
$ |
19.43 |
|
|
$ |
18.83 |
|
|
$ |
18.22 |
|
|
$ |
18.02 |
|
|
$ |
17.28 |
|
Shares outstanding |
119,831,192 |
|
|
119,829,104 |
|
|
120,201,149 |
|
|
123,189,833 |
|
|
123,283,450 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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 |
PacWest Bancorp (NASDAQ:PACW)
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