PacWest Bancorp (Nasdaq: PACW) today announced a
net loss for the first quarter of 2020 of $1.43 billion, or $12.23
per diluted share, compared to net earnings for the fourth quarter
of 2019 of $117.9 million, or $0.98 per diluted share. The decrease
in net earnings in the first quarter was primarily due to a $1.47
billion goodwill impairment charge and a higher provision for
credit losses attributable primarily to the significant
deterioration in the economic forecast used to estimate the
allowance for credit losses.
Matt Wagner, President and CEO, commented, “The COVID-19
pandemic has significantly impacted the entire economy resulting in
non-essential businesses temporarily closing, record increases in
unemployment, and severe declines in business activity in certain
industries such as travel and restaurants among others. Our first
priority is the health and safety of our employees and customers
and we have implemented social distancing actions including the
temporary closure of 27 bank lobbies where drive-up tellers are
available, the temporary closure of 19 branches where branches are
in close proximity to each other, reducing branch hours, and
enabling virtually all of our non-branch employees to work
remotely. We are also committed to providing essential services to
existing and new customers to help them with their financial needs
during this crisis. We are waiving fees and modifying loans through
payment deferrals and term extensions to help small and
middle-market businesses weather this downturn. All our actions are
focused on doing the right thing for our employees, customers, and
the communities we serve.”
Mr. Wagner continued, “The unprecedented decline in economic
conditions triggered by the COVID-19 pandemic, caused a significant
decline in stock market valuations in March, including our stock
price. As a result, we recorded a goodwill impairment charge as our
estimated fair value was less than our book value. This is a
non-cash charge and has no impact on our regulatory capital ratios,
cash flows or liquidity position. Our operations remain strong as
evidenced by the increase in net interest income and the
significant loan growth in the first quarter including $167.1
million in our Denver market.”
Mr. Wagner added, “We also took a significant provision for
credit losses during the quarter driven by the bleak economic
forecasts and impact from loan downgrades as we performed an
extensive review of our loan portfolio with a special focus on the
segments most impacted by COVID-19, including hotels, aviation,
restaurants, and retail.”
FINANCIAL HIGHLIGHTS
|
|
At or For the |
|
|
|
At or For the |
|
|
|
Three Months Ended |
|
|
|
Three Months Ended |
|
|
|
March 31, |
|
December 31, |
|
Increase |
|
March 31, |
|
Increase |
Financial
Highlights |
|
2020 |
|
|
|
2019 |
|
|
(Decrease) |
|
|
2020 |
|
|
|
2019 |
|
|
(Decrease) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars in thousands, except per share data) |
Net (loss) earnings |
$ |
(1,433,111 |
) |
|
$ |
117,881 |
|
|
$ |
(1,550,992 |
) |
|
$ |
(1,433,111 |
) |
|
$ |
112,604 |
|
|
$ |
(1,545,715 |
) |
Diluted (loss) earnings |
|
|
|
|
|
|
|
|
|
|
|
per share |
$ |
(12.23 |
) |
|
$ |
0.98 |
|
|
$ |
(13.21 |
) |
|
$ |
(12.23 |
) |
|
$ |
0.92 |
|
|
$ |
(13.15 |
) |
Return on average assets |
|
(21.27 |
)% |
|
|
1.77 |
% |
|
|
(23.04 |
) |
|
|
(21.27 |
)% |
|
|
1.77 |
% |
|
|
(23.04 |
) |
Return on average |
|
|
|
|
|
|
|
|
|
|
|
tangible equity (1) |
|
6.88 |
% |
|
|
19.98 |
% |
|
|
(13.10 |
) |
|
|
6.88 |
% |
|
|
20.64 |
% |
|
|
(13.76 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Net interest margin
("NIM") |
|
|
|
|
|
|
|
|
|
|
|
(tax equivalent) |
|
4.31 |
% |
|
|
4.33 |
% |
|
|
(0.02 |
) |
|
|
4.31 |
% |
|
|
4.69 |
% |
|
|
(0.38 |
) |
Yield on average loans
and |
|
|
|
|
|
|
|
|
|
|
|
leases (tax equivalent) |
|
5.54 |
% |
|
|
5.67 |
% |
|
|
(0.13 |
) |
|
|
5.54 |
% |
|
|
6.16 |
% |
|
|
(0.62 |
) |
Cost of average total |
|
|
|
|
|
|
|
|
|
|
|
deposits |
|
0.59 |
% |
|
|
0.71 |
% |
|
|
(0.12 |
) |
|
|
0.59 |
% |
|
|
0.73 |
% |
|
|
(0.14 |
) |
Efficiency ratio |
|
40.6 |
% |
|
|
44.8 |
% |
|
|
(4.2 |
) |
|
|
40.6 |
% |
|
|
42.4 |
% |
|
|
(1.8 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Total assets |
$ |
26,143,267 |
|
|
$ |
26,770,806 |
|
|
$ |
(627,539 |
) |
|
$ |
26,143,267 |
|
|
$ |
26,324,138 |
|
|
$ |
(180,871 |
) |
Loans and leases held |
|
|
|
|
|
|
|
|
|
|
|
for investment, |
|
|
|
|
|
|
|
|
|
|
|
net of deferred fees |
$ |
19,745,305 |
|
|
$ |
18,846,872 |
|
|
$ |
898,433 |
|
|
$ |
19,745,305 |
|
|
$ |
18,307,697 |
|
|
$ |
1,437,608 |
|
Noninterest-bearing |
|
|
|
|
|
|
|
|
|
|
|
demand deposits |
$ |
7,510,218 |
|
|
$ |
7,243,298 |
|
|
$ |
266,920 |
|
|
$ |
7,510,218 |
|
|
$ |
7,712,409 |
|
|
$ |
(202,191 |
) |
Core deposits |
$ |
16,050,522 |
|
|
$ |
16,187,287 |
|
|
$ |
(136,765 |
) |
|
$ |
16,050,522 |
|
|
$ |
16,127,638 |
|
|
$ |
(77,116 |
) |
Total deposits |
$ |
19,575,837 |
|
|
$ |
19,233,036 |
|
|
$ |
342,801 |
|
|
$ |
19,575,837 |
|
|
$ |
19,285,927 |
|
|
$ |
289,910 |
|
|
|
|
|
|
|
|
|
|
|
|
|
As percentage of total |
|
|
|
|
|
|
|
|
|
|
|
deposits: |
|
|
|
|
|
|
|
|
|
|
|
Noninterest-bearing |
|
|
|
|
|
|
|
|
|
|
|
demand deposits |
|
38 |
% |
|
|
38 |
% |
|
|
- |
|
|
|
38 |
% |
|
|
40 |
% |
|
|
(2 |
) |
Core deposits |
|
82 |
% |
|
|
84 |
% |
|
|
(2 |
) |
|
|
82 |
% |
|
|
84 |
% |
|
|
(2 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Equity to assets ratio |
|
12.97 |
% |
|
|
18.51 |
% |
|
|
(5.54 |
) |
|
|
12.97 |
% |
|
|
18.20 |
% |
|
|
(5.23 |
) |
Tangible common equity |
|
|
|
|
|
|
|
|
|
|
|
ratio (1) |
|
9.10 |
% |
|
|
9.79 |
% |
|
|
(0.69 |
) |
|
|
9.10 |
% |
|
|
9.23 |
% |
|
|
(0.13 |
) |
Book value per share |
$ |
28.75 |
|
|
$ |
41.36 |
|
|
$ |
(12.61 |
) |
|
$ |
28.75 |
|
|
$ |
39.86 |
|
|
$ |
(11.11 |
) |
Tangible book value per |
|
|
|
|
|
|
|
|
|
|
|
share (1) |
$ |
19.31 |
|
|
$ |
19.77 |
|
|
$ |
(0.46 |
) |
|
$ |
19.31 |
|
|
$ |
18.22 |
|
|
$ |
1.09 |
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Non-GAAP measure. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INCOME STATEMENT HIGHLIGHTS
Net Interest Income
Net interest income increased by $3.1 million to $249.7 million
for the first quarter of 2020 compared to $246.6 million for the
fourth quarter of 2019 due mainly to a lower cost of average
interest-bearing liabilities and a higher balance of average loans
and leases, partially offset by a lower loan and lease yield and
one less day in the first quarter. The tax equivalent yield on
average loans and leases was 5.54% for the first quarter of 2020
compared to 5.67% for the fourth 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.
The tax equivalent NIM was 4.31% for the first quarter of 2020
compared to 4.33% for the fourth quarter of 2019. The decrease in
the NIM was due mainly to the repricing of variable-rate loans
causing lower coupon interest, offset partially by the lower cost
of average interest-bearing liabilities.
The cost of average total deposits decreased to 0.59% for the
first quarter of 2020 from 0.71% for the fourth quarter of 2019.
The lower cost of average interest-bearing deposits reflected
actions taken to reduce deposit rates in light of the two emergency
interest rate cuts by the Federal Reserve in March of 2020. We
expect these rate reductions to be more fully realized in the
second quarter as evidenced by our cost of deposits at March 31,
2020 of 0.33%.
Provision for Credit Losses
The following table presents details of the provision for credit
losses for the periods indicated:
|
Three Months Ended |
|
|
|
|
March 31, |
|
|
December 31, |
|
Increase |
Provision for Credit
Losses |
|
2020 |
|
|
|
|
2019 |
|
(Decrease) |
|
|
|
|
|
|
|
|
(In thousands) |
Addition to allowance for loan and lease losses |
$ |
98,000 |
|
|
|
$ |
1,000 |
|
$ |
97,000 |
|
Addition to reserve for
unfunded |
|
|
|
|
|
|
loan commitments |
|
14,000 |
|
|
|
|
2,000 |
|
|
12,000 |
|
Total provision for credit losses |
$ |
112,000 |
|
|
|
$ |
3,000 |
|
$ |
109,000 |
|
|
|
|
|
|
|
|
The increase in the provision for credit losses in the first
quarter of 2020 was the result of the impact of the current
economic forecast which reflected a significant deterioration in
key macro-economic forecast variables such as unemployment and GDP,
significant loan downgrades into special mention, and higher
provisions on individually evaluated loans.
Noninterest Income
The following table presents details of noninterest income for
the periods indicated:
|
Three Months Ended |
|
|
|
March 31, |
|
December 31, |
|
Increase |
Noninterest
Income |
|
2020 |
|
|
|
2019 |
|
|
(Decrease) |
|
|
|
|
|
|
|
(In thousands) |
Service charges on deposit accounts |
$ |
2,658 |
|
|
$ |
3,611 |
|
|
$ |
(953 |
) |
Other commissions and
fees |
|
9,721 |
|
|
|
10,170 |
|
|
|
(449 |
) |
Leased equipment income |
|
12,251 |
|
|
|
10,648 |
|
|
|
1,603 |
|
Gain on sale of loans and
leases |
|
87 |
|
|
|
23 |
|
|
|
64 |
|
Gain on sale of
securities |
|
182 |
|
|
|
184 |
|
|
|
(2 |
) |
Other income: |
|
|
|
|
|
Dividends and gains (losses) on equity investments |
|
28 |
|
|
|
(794 |
) |
|
|
822 |
|
Warrant income |
|
837 |
|
|
|
1,240 |
|
|
|
(403 |
) |
Other |
|
3,336 |
|
|
|
2,094 |
|
|
|
1,242 |
|
Total noninterest income |
$ |
29,100 |
|
|
$ |
27,176 |
|
|
$ |
1,924 |
|
|
|
|
|
|
|
Noninterest income increased by $1.9 million to $29.1 million
for the first quarter of 2020 compared to $27.2 million for the
fourth quarter of 2019 due primarily to a $1.6 million increase in
leased equipment income and a $1.2 million increase in other
income, offset partially by a $1.0 million decrease in deposit
service charges. The increase in leased equipment income was due to
early lease terminations, which resulted in higher termination
gains and accretion of deferred fees. The increase in other income
was due mainly to $1.1 million of bankruptcy proceeds received
related to a former credit. The decrease in deposit service charges
was due mainly to waivers of various fees (service charges, wire
fees, overdraft fees, NSF fees) to offer assistance to our
customers during the COVID-19 crisis.
Noninterest Expense
The following table presents details of noninterest expense for
the periods indicated:
|
|
|
|
|
|
|
Three Months Ended |
|
|
|
March 31, |
|
December 31, |
|
Increase |
Noninterest
Expense |
|
2020 |
|
|
|
2019 |
|
|
(Decrease) |
|
|
|
|
|
|
|
(In thousands) |
Compensation |
$ |
61,282 |
|
|
$ |
74,637 |
|
|
$ |
(13,355 |
) |
Occupancy |
|
14,207 |
|
|
|
14,541 |
|
|
|
(334 |
) |
Data processing |
|
6,454 |
|
|
|
6,770 |
|
|
|
(316 |
) |
Other professional
services |
|
4,258 |
|
|
|
4,261 |
|
|
|
(3 |
) |
Insurance and assessments |
|
4,249 |
|
|
|
4,168 |
|
|
|
81 |
|
Intangible asset
amortization |
|
3,948 |
|
|
|
4,153 |
|
|
|
(205 |
) |
Leased equipment
depreciation |
|
7,205 |
|
|
|
6,856 |
|
|
|
349 |
|
Foreclosed assets expense
(income), net |
|
66 |
|
|
|
(3,446 |
) |
|
|
3,512 |
|
Acquisition, integration and
reorganization costs |
|
- |
|
|
|
(269 |
) |
|
|
269 |
|
Customer related expense |
|
3,932 |
|
|
|
3,952 |
|
|
|
(20 |
) |
Loan expense |
|
2,650 |
|
|
|
2,967 |
|
|
|
(317 |
) |
Other |
|
9,719 |
|
|
|
5,138 |
|
|
|
4,581 |
|
Total operating expense |
|
117,970 |
|
|
|
123,728 |
|
|
|
(5,758 |
) |
Goodwill impairment |
|
1,470,000 |
|
|
|
- |
|
|
|
1,470,000 |
|
Total noninterest expense |
$ |
1,587,970 |
|
|
$ |
123,728 |
|
|
$ |
1,464,242 |
|
|
|
|
|
|
|
Noninterest expense increased by $1.5 billion to $1.59 billion
for the first quarter of 2020 compared to $123.7 million for the
fourth quarter of 2019 attributable primarily to a $1.47 billion
goodwill impairment charge. Excluding the goodwill impairment
charge, noninterest expense decreased to $118.0 million or a
decrease of $5.8 million. This $5.8 million decrease was mainly due
to a $13.4 million decrease in compensation expense, partially
offset by a $4.6 million increase in other expense and a $3.5
million increase in foreclosed assets expense. Compensation expense
decreased mainly due to lower bonus accruals, partially offset by
higher payroll tax expense. Other expense increased due primarily
to the prior quarter including $2.8 million of credits related to
the reversal of accrued merger costs and franchise tax refunds,
while the first quarter includes a $1.5 million accrual for
operational loss contingencies related to a system outage at a
service provider. Foreclosed assets expense increased as the prior
quarter included a $3.3 million gain on the sale of a repossessed
asset.
Income Taxes
The effective income tax rate was (0.8)% in the first quarter of
2020 compared to 19.8% for the fourth quarter of 2019. Excluding
non-deductible goodwill impairment, the effective income tax rate
was 24.5%. The fourth quarter 2019 effective tax rate was lower due
primarily to $9.1 million of benefits related to changes in state
apportionment net of the federal tax effect. Excluding the
non-deductible goodwill impairment, the effective tax rate for the
full year 2020 is currently estimated to be in the range of
26-28%.
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 |
Roll Forward of Loans
and Leases Held |
March 31, |
|
December 31, |
for Investment, Net of Deferred Fees (1) |
|
2020 |
|
|
|
2019 |
|
|
|
|
|
|
|
|
|
|
(Dollars in thousands) |
Balance, beginning of
period |
$ |
18,846,872 |
|
|
$ |
18,735,543 |
|
Additions: |
|
|
|
Production |
|
789,746 |
|
|
|
1,021,334 |
|
Disbursements |
|
1,997,080 |
|
|
|
1,317,389 |
|
Total production and disbursements |
|
2,786,826 |
|
|
|
2,338,723 |
|
Reductions: |
|
|
|
Payoffs |
|
(812,707 |
) |
|
|
(816,134 |
) |
Paydowns |
|
(1,053,705 |
) |
|
|
(1,406,475 |
) |
Total payoffs and paydowns |
|
(1,866,412 |
) |
|
|
(2,222,609 |
) |
Sales |
|
- |
|
|
|
(43 |
) |
Transfers to foreclosed assets |
|
(1,776 |
) |
|
|
(83 |
) |
Charge-offs |
|
(20,205 |
) |
|
|
(4,659 |
) |
Total reductions |
|
(1,888,393 |
) |
|
|
(2,227,394 |
) |
Net increase |
|
898,433 |
|
|
|
111,329 |
|
Balance, end of period |
$ |
19,745,305 |
|
|
$ |
18,846,872 |
|
|
|
|
|
Weighted average rate on
production (2) |
|
4.31 |
% |
|
|
4.73 |
% |
|
|
|
|
(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 20
basis points to loan |
yields in 2020. |
Loans and leases held for investment, net of deferred fees,
increased by $898.4 million, or 19.2% annualized, in the first
quarter of 2020, to $19.7 billion at March 31, 2020. The net loan
growth in the first quarter was primarily from the venture capital
and asset-based loan portfolio classes, along with ongoing fundings
in the residential real estate construction loan class. The growth
in venture capital, primarily from drawdown activity, included $241
million in expansion stage, $203 million in equity funds and $63
million in late stage loans.
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:
|
|
March 31, 2020 |
|
December 31, 2019 |
|
March 31, 2019 |
|
|
% of |
|
|
% of |
|
|
% of |
Loan and Lease
Portfolio |
Balance |
Total |
|
Balance |
Total |
|
Balance |
Total |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(In thousands) |
Real estate mortgage: |
|
|
|
|
|
|
|
|
Commercial |
$ |
4,220,649 |
21 |
% |
|
$ |
4,202,687 |
22 |
% |
|
$ |
4,640,510 |
25 |
% |
Income producing and other |
|
|
|
|
|
|
|
|
residential |
|
3,788,295 |
19 |
% |
|
|
3,770,060 |
20 |
% |
|
|
3,518,948 |
19 |
% |
Total real estate mortgage |
|
8,008,944 |
40 |
% |
|
|
7,972,747 |
42 |
% |
|
|
8,159,458 |
44 |
% |
Real estate construction and
land: |
|
|
|
|
|
|
|
|
Commercial |
|
1,087,505 |
6 |
% |
|
|
1,082,368 |
6 |
% |
|
|
943,596 |
5 |
% |
Residential |
|
1,792,748 |
9 |
% |
|
|
1,655,434 |
9 |
% |
|
|
1,408,128 |
8 |
% |
Total real estate construction |
|
|
|
|
|
|
|
|
and land |
|
2,880,253 |
15 |
% |
|
|
2,737,802 |
15 |
% |
|
|
2,351,724 |
13 |
% |
Total real estate |
|
10,889,197 |
55 |
% |
|
|
10,710,549 |
57 |
% |
|
|
10,511,182 |
57 |
% |
Commercial: |
|
|
|
|
|
|
|
|
Asset-based |
|
3,938,402 |
20 |
% |
|
|
3,748,407 |
20 |
% |
|
|
3,422,202 |
19 |
% |
Venture capital |
|
2,715,837 |
14 |
% |
|
|
2,179,422 |
12 |
% |
|
|
2,027,450 |
11 |
% |
Other commercial |
|
1,771,985 |
9 |
% |
|
|
1,767,667 |
9 |
% |
|
|
1,974,702 |
11 |
% |
Total commercial |
|
8,426,224 |
43 |
% |
|
|
7,695,496 |
41 |
% |
|
|
7,424,354 |
41 |
% |
Consumer |
|
429,884 |
2 |
% |
|
|
440,827 |
2 |
% |
|
|
372,161 |
2 |
% |
Total loans and leases held for |
|
|
|
|
|
|
|
|
investment, net of deferred fees |
$ |
19,745,305 |
100 |
% |
|
$ |
18,846,872 |
100 |
% |
|
$ |
18,307,697 |
100 |
% |
|
|
|
|
|
|
|
|
|
Total unfunded loan
commitments |
$ |
7,697,724 |
|
|
$ |
8,183,158 |
|
|
$ |
7,465,392 |
|
|
|
|
|
|
|
|
|
|
Allowance for Credit Losses
The following tables present roll forwards of the allowance for
credit losses for the periods indicated:
|
Three Months Ended March 31, 2020 |
|
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 |
$ |
138,785 |
|
|
$ |
35,861 |
|
|
$ |
174,646 |
|
Charge-offs |
|
(20,205 |
) |
|
|
- |
|
|
|
(20,205 |
) |
Recoveries |
|
1,095 |
|
|
|
- |
|
|
|
1,095 |
|
Net charge-offs |
|
(19,110 |
) |
|
|
- |
|
|
|
(19,110 |
) |
Provision |
|
98,000 |
|
|
|
14,000 |
|
|
|
112,000 |
|
Cumulative effect of change in |
|
|
|
|
|
accounting principle - CECL |
|
3,617 |
|
|
|
3,710 |
|
|
|
7,327 |
|
Ending balance |
$ |
221,292 |
|
|
$ |
53,571 |
|
|
$ |
274,863 |
|
|
|
|
|
|
|
|
Three Months Ended December 31, 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 |
$ |
138,552 |
|
|
$ |
33,861 |
|
|
$ |
172,413 |
|
Charge-offs |
|
(4,659 |
) |
|
|
- |
|
|
|
(4,659 |
) |
Recoveries |
|
3,892 |
|
|
|
- |
|
|
|
3,892 |
|
Net charge-offs |
|
(767 |
) |
|
|
- |
|
|
|
(767 |
) |
Provision |
|
1,000 |
|
|
|
2,000 |
|
|
|
3,000 |
|
Ending balance |
$ |
138,785 |
|
|
$ |
35,861 |
|
|
$ |
174,646 |
|
|
|
|
|
|
|
|
|
|
|
|
|
We adopted CECL on January 1, 2020, which resulted in an
increase in the allowance for credit losses of $7.3 million on the
adoption date. The significant ACL increase during the first
quarter was primarily attributable to the dramatic decline in the
economic forecast, the significant increase in special mention
loans caused by loan downgrades in the loan portfolios most
impacted by the sudden decline in the economy, the loan growth
during the quarter, and increased provisions for individually
evaluated loans.
The allowance for credit losses as a percentage of loans and
leases held for investment was 1.39% at March 31, 2020 under CECL
and 0.93% at December 31, 2019 under the incurred loss model.
Gross charge-offs for the first quarter of 2020 were $20.2
million and included $11.5 million for an asset-based oil industry
loan and $7.3 million for other commercial loans compared to gross
charge-offs for the fourth quarter of 2019 of $4.7 million that
included $3.2 million for venture capital loans and $1.0 million
for other commercial loans.
Recoveries for the first quarter of 2020 were $1.1 million and
included $0.4 million for other commercial loans and $0.4 million
for asset-based loans compared to recoveries for the fourth quarter
of 2019 of $3.9 million that included $1.8 million for other
commercial loans, $0.9 million for asset-based loans, and $0.6
million for venture capital loans.
For the first quarter of 2020 and fourth quarter of 2019,
annualized net charge-offs to average loans and leases were 0.40%
and 0.02%.
Deposits and Client Investment Funds
The following table presents the composition of our deposit
portfolio as of the dates indicated:
|
March 31, 2020 |
|
December 31, 2019 |
|
March 31, 2019 |
|
|
% of |
|
|
% of |
|
|
% of |
Deposit
Composition |
Balance |
Total |
|
Balance |
Total |
|
Balance |
Total |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars in thousands) |
Noninterest-bearing demand |
$ |
7,510,218 |
38 |
% |
|
$ |
7,243,298 |
38 |
% |
|
$ |
7,712,409 |
40 |
% |
Interest checking |
|
3,333,147 |
17 |
% |
|
|
3,753,978 |
19 |
% |
|
|
3,163,228 |
16 |
% |
Money market |
|
4,712,118 |
24 |
% |
|
|
4,690,420 |
24 |
% |
|
|
4,714,078 |
25 |
% |
Savings |
|
495,039 |
3 |
% |
|
|
499,591 |
3 |
% |
|
|
537,923 |
3 |
% |
Total core deposits |
|
16,050,522 |
82 |
% |
|
|
16,187,287 |
84 |
% |
|
|
16,127,638 |
84 |
% |
Non-core non-maturity
deposits |
|
836,157 |
4 |
% |
|
|
496,407 |
3 |
% |
|
|
454,277 |
2 |
% |
Total non-maturity deposits |
|
16,886,679 |
86 |
% |
|
|
16,683,694 |
87 |
% |
|
|
16,581,915 |
86 |
% |
Time deposits $250,000 and
under |
|
2,086,188 |
11 |
% |
|
|
2,065,733 |
11 |
% |
|
|
2,258,989 |
12 |
% |
Time deposits over
$250,000 |
|
602,970 |
3 |
% |
|
|
483,609 |
2 |
% |
|
|
445,023 |
2 |
% |
Total time deposits |
|
2,689,158 |
14 |
% |
|
|
2,549,342 |
13 |
% |
|
|
2,704,012 |
14 |
% |
Total deposits |
$ |
19,575,837 |
100 |
% |
|
$ |
19,233,036 |
100 |
% |
|
$ |
19,285,927 |
100 |
% |
|
|
|
|
|
|
|
|
|
At March 31, 2020, core deposits totaled $16.1 billion, or 82%
of total deposits, including $7.5 billion of noninterest-bearing
demand deposits, or 38% 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 Pacific Western Asset
Management Inc. (“PWAM”), our registered investment advisor
subsidiary, and third-party sweep products. Total off-balance sheet
client investment funds at March 31, 2020 were $1.4 billion, of
which $1.1 billion was managed by PWAM.
CREDIT QUALITY
The following table presents loan and lease credit quality
metrics as of the dates indicated:
|
|
March 31, |
|
December 31, |
|
Increase |
Credit Quality
Metrics |
|
2020 |
|
|
|
2019 |
|
|
(Decrease) |
|
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars in thousands) |
NPAs and Performing
TDRs: |
|
|
|
|
|
Nonaccrual loans and leases held for investment (1) |
$ |
95,602 |
|
|
$ |
92,353 |
|
|
$ |
3,249 |
|
Accruing loans contractually
past due 90 days or more |
|
- |
|
|
|
- |
|
|
|
- |
|
Foreclosed assets, net |
|
1,701 |
|
|
|
440 |
|
|
|
1,261 |
|
Total nonperforming assets ("NPAs") |
$ |
97,303 |
|
|
$ |
92,793 |
|
|
$ |
4,510 |
|
|
|
|
|
|
|
Performing TDRs held for
investment |
$ |
8,978 |
|
|
$ |
12,257 |
|
|
$ |
(3,279 |
) |
|
|
|
|
|
|
Nonaccrual loans and leases
held for investment |
|
|
|
|
|
to loans and leases held for investment |
|
0.48 |
% |
|
|
0.49 |
% |
|
|
Nonperforming assets to loans
and leases |
|
|
|
|
|
held for investment and foreclosed assets |
|
0.49 |
% |
|
|
0.49 |
% |
|
|
|
|
|
|
|
|
Loan and Lease Credit
Risk Ratings: |
|
|
|
|
|
Pass |
$ |
18,698,942 |
|
|
$ |
18,348,004 |
|
|
$ |
350,938 |
|
Special mention |
|
898,658 |
|
|
|
322,956 |
|
|
|
575,702 |
|
Classified |
|
147,705 |
|
|
|
175,912 |
|
|
|
(28,207 |
) |
Total loans and leases held for investment, |
|
|
|
|
|
net of deferred fees |
$ |
19,745,305 |
|
|
$ |
18,846,872 |
|
|
$ |
898,433 |
|
|
|
|
|
|
|
Classified loans and leases
held for investment |
|
|
|
|
|
to loans and leases held for investment |
|
0.75 |
% |
|
|
0.93 |
% |
|
|
|
|
|
|
|
|
Allowance for Credit
Losses: |
|
|
|
|
|
Allowance for credit
losses |
$ |
274,863 |
|
|
$ |
174,646 |
|
|
$ |
100,217 |
|
Provision for credit losses
(for the quarter) |
$ |
112,000 |
|
|
$ |
3,000 |
|
|
$ |
109,000 |
|
Net charge-offs (for the
quarter) |
$ |
19,110 |
|
|
$ |
767 |
|
|
$ |
18,343 |
|
Net charge-offs to average
loans and leases |
|
|
|
|
|
(for the quarter) |
|
0.40 |
% |
|
|
0.02 |
% |
|
|
Allowance for credit losses to
loans and leases |
|
|
|
|
|
held for investment |
|
1.39 |
% |
|
|
0.93 |
% |
|
|
Allowance for credit losses to
nonaccrual loans |
|
|
|
|
|
and leases held for investment |
|
287.5 |
% |
|
|
189.1 |
% |
|
|
|
|
|
|
|
|
(1) Nonaccrual
loans include guaranteed amounts of $16.0 million at March 31, 2020
and $17.5 million |
at December 31, 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, including loan downgrades,
which were higher than usual triggered by the economic impact from
the COVID-19 pandemic.
During the first quarter of 2020, nonaccrual loans and leases
increased by $3.2 million, while classified loans and leases
decreased by $28.2 million and special mention loans and leases
increased by $575.7 million. The decrease in the classified loans
and leases category was primarily due to charge-offs totaling
approximately $18.0 million, which included an $11.5 million
charge-off on a previously classified asset-based oil industry loan
and charge-offs totaling $6.1 million on two security monitoring
loans. The increase in special mention loans and leases in the
first quarter was attributable to loan downgrades primarily in the
categories most acutely impacted by COVID-19 including hotels,
aviation, restaurants, retail, and small business loans.
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 |
|
March 31, 2020 |
|
December 31, 2019 |
|
30-89 Days Past Due |
|
|
% of |
|
|
% of |
|
March 31, |
|
December 31, |
|
|
Loan |
|
|
Loan |
|
|
2020 |
|
|
|
2019 |
|
|
Balance |
Category |
|
Balance |
Category |
|
Balance |
|
Balance |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars in thousands) |
Real estate mortgage: |
|
|
|
|
|
|
|
|
|
Commercial |
$ |
19,088 |
0.5 |
% |
|
$ |
18,346 |
0.4 |
% |
|
$ |
1,807 |
|
|
$ |
1,735 |
|
Income producing and other |
|
|
|
|
|
|
|
|
|
residential |
|
2,308 |
0.1 |
% |
|
|
2,478 |
0.1 |
% |
|
|
1,064 |
|
|
|
2,094 |
|
Total real estate mortgage |
|
21,396 |
0.3 |
% |
|
|
20,824 |
0.3 |
% |
|
|
2,871 |
|
|
|
3,829 |
|
Real estate construction and
land: |
|
|
|
|
|
|
|
|
|
Commercial |
|
351 |
0.0 |
% |
|
|
364 |
0.0 |
% |
|
|
- |
|
|
|
- |
|
Residential |
|
- |
0.0 |
% |
|
|
- |
0.0 |
% |
|
|
241 |
|
|
|
1,429 |
|
Total real estate |
|
|
|
|
|
|
|
|
|
construction and land |
|
351 |
0.0 |
% |
|
|
364 |
0.0 |
% |
|
|
241 |
|
|
|
1,429 |
|
Commercial: |
|
|
|
|
|
|
|
|
|
Asset-based |
|
17,104 |
0.4 |
% |
|
|
30,162 |
0.8 |
% |
|
|
- |
|
|
|
19 |
|
Venture capital |
|
18,612 |
0.7 |
% |
|
|
12,916 |
0.6 |
% |
|
|
183 |
|
|
|
- |
|
Other commercial |
|
37,726 |
2.1 |
% |
|
|
27,594 |
1.6 |
% |
|
|
4,393 |
|
|
|
2,258 |
|
Total commercial |
|
73,442 |
0.9 |
% |
|
|
70,672 |
0.9 |
% |
|
|
4,576 |
|
|
|
2,277 |
|
Consumer |
|
413 |
0.1 |
% |
|
|
493 |
0.1 |
% |
|
|
518 |
|
|
|
1,006 |
|
Total held for investment |
$ |
95,602 |
0.5 |
% |
|
$ |
92,353 |
0.5 |
% |
|
$ |
8,206 |
|
|
$ |
8,541 |
|
|
|
|
|
|
|
|
|
|
|
CAPITAL
Effective March 31, 2020, we elected the 5-year phase-in as
allowed under the recently issued interim regulatory capital rule
(IFR) revising the transition for CECL. The IFR allows the addback
of 100% of the capital effect of the day one CECL transition
adjustment and 25% of subsequent increases in the allowance for
credit losses to regulatory capital through December 31, 2021. This
cumulative amount will then be reduced from capital over a three
year phase-in period. This election increased our regulatory
capital ratios by approximately 12 basis points at March 31, 2020.
The capital ratios are presented on page 21.
STOCK REPURCHASE PROGRAM
During February 2020, we repurchased 1,953,711 shares at an
average price of $35.83 and a total cost of $70.0 million under the
previous share repurchase program which expired on February 29,
2020. At March 31, 2020, the remaining amount that could be used to
repurchase shares under the $200 million Stock Repurchase Program
approved on February 12, 2020 was $200.0 million. The previously
announced suspension of share repurchases through June 30, 2020 has
been extended indefinitely in light of recent COVID-19 related
developments.
ABOUT PACWEST BANCORP
PacWest Bancorp (“PacWest”) is a bank holding company with over
$26 billion in assets headquartered in Los Angeles, California,
with executive offices in Denver, Colorado, with one wholly-owned
banking subsidiary, Pacific Western Bank (the “Bank”). The Bank has
74 full-service branches located in California, one branch located
in Durham, North Carolina, and one branch located in Denver,
Colorado. The Bank provides community banking products including
lending and comprehensive deposit and treasury management services
to small and medium-sized businesses conducted primarily through
our California-based branch offices and Denver, Colorado branch
office. The Bank offers national lending products including
asset-based, equipment, and real estate loans and treasury
management services to established middle-market businesses on a
national basis. The Bank also offers venture banking products
including a comprehensive suite of financial services focused on
entrepreneurial and venture-backed 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 or Pacific Western Bank, visit
www.pacwest.com.
FORWARD LOOKING STATEMENTS
This communication contains certain forward-looking information
about PacWest Bancorp that is intended to be covered by the safe
harbor for “forward-looking statements” provided by the Private
Securities Litigation Reform Act of 1995. Statements that are not
historical or current facts, including statements about future
financial and operational results, expectations, or intentions are
forward-looking statements. Such statements are based on
information available at the time of the 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. The COVID-19
pandemic is adversely affecting PacWest Bancorp, its employees,
customers and third-party service providers, and the ultimate
extent of the impacts on its business, financial position, results
of operations, liquidity and prospects is uncertain. Continued
deterioration in general business and economic conditions could
adversely affect PacWest Bancorp’s revenues and the values of its
assets and liabilities, lead to a tightening of credit and increase
stock price volatility. In addition, PacWest Bancorp’s results
could be adversely affected by changes in interest rates, further
increases in unemployment rates, deterioration in the credit
quality of its loan portfolio or in the value of the collateral
securing those loans, deterioration in the value of its investment
securities, legal and regulatory developments, the price of crude
oil and the adoption of the CECL accounting standard. Actual
results may differ materially from those set forth or implied in
the forward-looking statements due to a variety of factors,
including the risk factors described in documents filed by the
Company with the U.S. 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 |
|
|
March 31, |
|
December 31, |
|
March 31, |
|
|
2020 |
|
|
|
2019 |
|
|
|
2019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars in thousands, except per share data) |
ASSETS: |
|
|
|
|
|
Cash and due from banks |
$ |
172,570 |
|
|
$ |
172,585 |
|
|
$ |
224,758 |
|
Interest-earning deposits in
financial institutions |
|
439,690 |
|
|
|
465,039 |
|
|
|
332,124 |
|
Total cash and cash equivalents |
|
612,260 |
|
|
|
637,624 |
|
|
|
556,882 |
|
|
|
|
|
|
|
Securities available-for-sale,
at estimated fair value |
|
3,757,663 |
|
|
|
3,797,187 |
|
|
|
3,994,708 |
|
Federal Home Loan Bank stock,
at cost |
|
54,244 |
|
|
|
40,924 |
|
|
|
29,430 |
|
Total investment securities |
|
3,811,907 |
|
|
|
3,838,111 |
|
|
|
4,024,138 |
|
|
|
|
|
|
|
Loans held for
sale |
|
- |
|
|
|
- |
|
|
|
25,124 |
|
|
|
|
|
|
|
Gross loans and leases held
for investment |
|
19,806,394 |
|
|
|
18,910,740 |
|
|
|
18,371,295 |
|
Deferred fees, net |
|
(61,089 |
) |
|
|
(63,868 |
) |
|
|
(63,598 |
) |
Total loans and leases held for investment, |
|
|
|
|
|
net of deferred fees |
|
19,745,305 |
|
|
|
18,846,872 |
|
|
|
18,307,697 |
|
Allowance for loan and lease
losses |
|
(221,292 |
) |
|
|
(138,785 |
) |
|
|
(136,281 |
) |
Total loans and leases held for investment,
net |
|
19,524,013 |
|
|
|
18,708,087 |
|
|
|
18,171,416 |
|
|
|
|
|
|
|
Equipment leased to others
under operating leases |
|
306,530 |
|
|
|
324,084 |
|
|
|
293,853 |
|
Premises and equipment,
net |
|
39,799 |
|
|
|
38,585 |
|
|
|
37,783 |
|
Foreclosed assets, net |
|
1,701 |
|
|
|
440 |
|
|
|
3,291 |
|
Goodwill |
|
1,078,670 |
|
|
|
2,548,670 |
|
|
|
2,548,670 |
|
Core deposit and customer
relationship intangibles, net |
|
34,446 |
|
|
|
38,394 |
|
|
|
52,250 |
|
Other assets |
|
733,941 |
|
|
|
636,811 |
|
|
|
610,731 |
|
Total assets |
$ |
26,143,267 |
|
|
$ |
26,770,806 |
|
|
$ |
26,324,138 |
|
|
|
|
|
|
|
LIABILITIES: |
|
|
|
|
|
Noninterest-bearing
deposits |
$ |
7,510,218 |
|
|
$ |
7,243,298 |
|
|
$ |
7,712,409 |
|
Interest-bearing deposits |
|
12,065,619 |
|
|
|
11,989,738 |
|
|
|
11,573,518 |
|
Total deposits |
|
19,575,837 |
|
|
|
19,233,036 |
|
|
|
19,285,927 |
|
Borrowings |
|
2,295,000 |
|
|
|
1,759,008 |
|
|
|
1,481,087 |
|
Subordinated debentures |
|
458,994 |
|
|
|
458,209 |
|
|
|
454,458 |
|
Accrued interest payable and
other liabilities |
|
423,047 |
|
|
|
365,856 |
|
|
|
311,684 |
|
Total liabilities |
|
22,752,878 |
|
|
|
21,816,109 |
|
|
|
21,533,156 |
|
STOCKHOLDERS' EQUITY
(1) |
|
3,390,389 |
|
|
|
4,954,697 |
|
|
|
4,790,982 |
|
Total liabilities and stockholders’ equity |
$ |
26,143,267 |
|
|
$ |
26,770,806 |
|
|
$ |
26,324,138 |
|
|
|
|
|
|
|
Book value per share |
$ |
28.75 |
|
|
$ |
41.36 |
|
|
$ |
39.86 |
|
Tangible book value per share
(2) |
$ |
19.31 |
|
|
$ |
19.77 |
|
|
$ |
18.22 |
|
Shares outstanding |
|
117,916,789 |
|
|
|
119,781,605 |
|
|
|
120,201,149 |
|
|
|
|
|
|
|
(1) Includes net unrealized
gain on securities |
|
|
|
|
|
available-for-sale, net |
$ |
90,916 |
|
|
$ |
78,658 |
|
|
$ |
37,258 |
|
(2) Non-GAAP measure. |
|
|
|
|
|
|
|
|
|
|
|
PACWEST
BANCORP AND SUBSIDIARIES |
CONDENSED
CONSOLIDATED STATEMENT OF EARNINGS |
|
|
Three Months Ended |
|
March 31, |
|
December 31, |
|
March 31, |
|
|
2020 |
|
|
|
2019 |
|
|
|
2019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars in thousands, except per share data) |
Interest
income: |
|
|
|
|
|
Loans and leases |
$ |
262,278 |
|
|
$ |
263,402 |
|
|
$ |
274,229 |
|
Investment securities |
|
27,446 |
|
|
|
28,135 |
|
|
|
29,680 |
|
Deposits in financial
institutions |
|
1,608 |
|
|
|
2,056 |
|
|
|
650 |
|
Total interest income |
|
291,332 |
|
|
|
293,593 |
|
|
|
304,559 |
|
|
|
|
|
|
|
Interest
expense: |
|
|
|
|
|
Deposits |
|
28,247 |
|
|
|
34,802 |
|
|
|
34,235 |
|
Borrowings |
|
6,778 |
|
|
|
5,189 |
|
|
|
7,710 |
|
Subordinated debentures |
|
6,560 |
|
|
|
6,983 |
|
|
|
7,738 |
|
Total interest expense |
|
41,585 |
|
|
|
46,974 |
|
|
|
49,683 |
|
|
|
|
|
|
|
Net interest income |
|
249,747 |
|
|
|
246,619 |
|
|
|
254,876 |
|
Provision for credit
losses |
|
112,000 |
|
|
|
3,000 |
|
|
|
4,000 |
|
Net interest income after |
|
|
|
|
|
provision for credit losses |
|
137,747 |
|
|
|
243,619 |
|
|
|
250,876 |
|
|
|
|
|
|
|
Noninterest
income: |
|
|
|
|
|
Service charges on deposit
accounts |
|
2,658 |
|
|
|
3,611 |
|
|
|
3,730 |
|
Other commissions and
fees |
|
9,721 |
|
|
|
10,170 |
|
|
|
11,008 |
|
Leased equipment income |
|
12,251 |
|
|
|
10,648 |
|
|
|
9,282 |
|
Gain on sale of loans and
leases |
|
87 |
|
|
|
23 |
|
|
|
- |
|
Gain on sale of
securities |
|
182 |
|
|
|
184 |
|
|
|
2,161 |
|
Other income |
|
4,201 |
|
|
|
2,540 |
|
|
|
4,883 |
|
Total noninterest income |
|
29,100 |
|
|
|
27,176 |
|
|
|
31,064 |
|
|
|
|
|
|
|
Noninterest
expense: |
|
|
|
|
|
Compensation |
|
61,282 |
|
|
|
74,637 |
|
|
|
70,845 |
|
Occupancy |
|
14,207 |
|
|
|
14,541 |
|
|
|
14,320 |
|
Data processing |
|
6,454 |
|
|
|
6,770 |
|
|
|
6,925 |
|
Other professional
services |
|
4,258 |
|
|
|
4,261 |
|
|
|
4,513 |
|
Insurance and assessments |
|
4,249 |
|
|
|
4,168 |
|
|
|
4,038 |
|
Intangible asset
amortization |
|
3,948 |
|
|
|
4,153 |
|
|
|
4,870 |
|
Leased equipment
depreciation |
|
7,205 |
|
|
|
6,856 |
|
|
|
5,651 |
|
Foreclosed assets expense
(income), net |
|
66 |
|
|
|
(3,446 |
) |
|
|
29 |
|
Acquisition, integration
and |
|
|
|
|
|
reorganization costs |
|
- |
|
|
|
(269 |
) |
|
|
618 |
|
Customer related expense |
|
3,932 |
|
|
|
3,952 |
|
|
|
2,943 |
|
Loan expense |
|
2,650 |
|
|
|
2,967 |
|
|
|
2,885 |
|
Goodwill impairment |
|
1,470,000 |
|
|
|
- |
|
|
|
- |
|
Other expense |
|
9,719 |
|
|
|
5,138 |
|
|
|
8,650 |
|
Total noninterest expense |
|
1,587,970 |
|
|
|
123,728 |
|
|
|
126,287 |
|
|
|
|
|
|
|
(Loss) earnings before income
taxes |
|
(1,421,123 |
) |
|
|
147,067 |
|
|
|
155,653 |
|
Income tax expense |
|
11,988 |
|
|
|
29,186 |
|
|
|
43,049 |
|
Net (loss) earnings |
$ |
(1,433,111 |
) |
|
$ |
117,881 |
|
|
$ |
112,604 |
|
|
|
|
|
|
|
Basic and diluted (loss) earnings
per share |
$ |
(12.23 |
) |
|
$ |
0.98 |
|
|
$ |
0.92 |
|
Dividends declared and paid per
share |
$ |
0.60 |
|
|
$ |
0.60 |
|
|
$ |
0.60 |
|
|
|
|
|
|
|
PACWEST
BANCORP AND SUBSIDIARIES |
NET
EARNINGS PER SHARE CALCULATIONS |
|
|
Three Months Ended |
|
March 31, |
|
December 31, |
|
March 31, |
|
|
2020 |
|
|
|
2019 |
|
|
|
2019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(In thousands, except per share data) |
Basic Earnings Per
Share: |
|
|
|
|
|
Net (loss) earnings |
$ |
(1,433,111 |
) |
|
$ |
117,881 |
|
|
$ |
112,604 |
|
Less: earnings allocated to unvested |
|
|
|
|
|
restricted stock (1) |
|
(939 |
) |
|
|
(1,458 |
) |
|
|
(1,163 |
) |
Net (loss) earnings allocated to |
|
|
|
|
|
common shares |
$ |
(1,434,050 |
) |
|
$ |
116,423 |
|
|
$ |
111,441 |
|
|
|
|
|
|
|
Weighted-average basic shares and |
|
|
|
|
|
unvested restricted stock outstanding |
|
118,775 |
|
|
|
119,804 |
|
|
|
122,227 |
|
Less: weighted-average unvested |
|
|
|
|
|
restricted stock outstanding |
|
(1,495 |
) |
|
|
(1,566 |
) |
|
|
(1,352 |
) |
Weighted-average basic shares |
|
|
|
|
|
outstanding |
|
117,280 |
|
|
|
118,238 |
|
|
|
120,875 |
|
|
|
|
|
|
|
Basic (loss) earnings per share |
$ |
(12.23 |
) |
|
$ |
0.98 |
|
|
$ |
0.92 |
|
|
|
|
|
|
|
Diluted Earnings Per
Share: |
|
|
|
|
|
Net (loss) earnings allocated to |
|
|
|
|
|
common shares |
$ |
(1,434,050 |
) |
|
$ |
116,423 |
|
|
$ |
111,441 |
|
|
|
|
|
|
|
Weighted-average diluted shares |
|
|
|
|
|
outstanding |
|
117,280 |
|
|
|
118,238 |
|
|
|
120,875 |
|
|
|
|
|
|
|
Diluted (loss) earnings per share |
$ |
(12.23 |
) |
|
$ |
0.98 |
|
|
$ |
0.92 |
|
|
|
|
|
|
|
(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 |
|
|
March 31, 2020 |
|
December 31, 2019 |
|
March 31, 2019 |
|
|
|
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) |
$ |
19,065,035 |
$ |
262,764 |
5.54 |
% |
|
$ |
18,470,583 |
$ |
263,783 |
5.67 |
% |
|
$ |
18,064,230 |
$ |
274,513 |
6.16 |
% |
|
Investment securities (3) |
|
3,853,217 |
|
28,641 |
2.99 |
% |
|
|
3,811,216 |
|
29,509 |
3.07 |
% |
|
|
3,968,531 |
|
30,572 |
3.12 |
% |
|
Deposits in financial |
|
|
|
|
|
|
|
|
|
|
|
|
institutions |
|
537,384 |
|
1,608 |
1.20 |
% |
|
|
498,068 |
|
2,056 |
1.64 |
% |
|
|
111,950 |
|
650 |
2.35 |
% |
|
Total interest-earning |
|
|
|
|
|
|
|
|
|
|
|
|
assets (1) |
|
23,455,636 |
|
293,013 |
5.02 |
% |
|
|
22,779,867 |
|
295,348 |
5.14 |
% |
|
|
22,144,711 |
|
305,735 |
5.60 |
% |
|
Other assets |
|
3,643,404 |
|
|
|
|
3,600,872 |
|
|
|
|
3,631,238 |
|
|
|
Total assets |
$ |
27,099,040 |
|
|
|
$ |
26,380,739 |
|
|
|
$ |
25,775,949 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities
and |
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders' Equity: |
|
|
|
|
|
|
|
|
|
|
|
|
Interest checking |
$ |
3,466,812 |
|
7,135 |
0.83 |
% |
|
$ |
3,731,696 |
|
10,031 |
1.07 |
% |
|
$ |
3,041,822 |
|
9,321 |
1.24 |
% |
|
Money market |
|
5,247,866 |
|
10,016 |
0.77 |
% |
|
|
5,117,553 |
|
12,063 |
0.94 |
% |
|
|
5,274,987 |
|
14,908 |
1.15 |
% |
|
Savings |
|
497,959 |
|
160 |
0.13 |
% |
|
|
509,497 |
|
204 |
0.16 |
% |
|
|
553,032 |
|
242 |
0.18 |
% |
|
Time |
|
2,684,143 |
|
10,936 |
1.64 |
% |
|
|
2,744,156 |
|
12,504 |
1.81 |
% |
|
|
2,286,932 |
|
9,764 |
1.73 |
% |
|
Total interest-bearing |
|
|
|
|
|
|
|
|
|
|
|
|
deposits |
|
11,896,780 |
|
28,247 |
0.95 |
% |
|
|
12,102,902 |
|
34,802 |
1.14 |
% |
|
|
11,156,773 |
|
34,235 |
1.24 |
% |
|
Borrowings |
|
2,026,749 |
|
6,778 |
1.35 |
% |
|
|
1,179,220 |
|
5,189 |
1.75 |
% |
|
|
1,218,319 |
|
7,710 |
2.57 |
% |
|
Subordinated debentures |
|
458,399 |
|
6,560 |
5.76 |
% |
|
|
456,997 |
|
6,983 |
6.06 |
% |
|
|
454,203 |
|
7,738 |
6.91 |
% |
|
Total interest-bearing |
|
|
|
|
|
|
|
|
|
|
|
|
liabilities |
|
14,381,928 |
|
41,585 |
1.16 |
% |
|
|
13,739,119 |
|
46,974 |
1.36 |
% |
|
|
12,829,295 |
|
49,683 |
1.57 |
% |
|
Noninterest-bearing |
|
|
|
|
|
|
|
|
|
|
|
|
demand deposits |
|
7,357,717 |
|
|
|
|
7,338,888 |
|
|
|
|
7,783,652 |
|
|
|
Other liabilities |
|
402,617 |
|
|
|
|
372,550 |
|
|
|
|
347,037 |
|
|
|
Total liabilities |
|
22,142,262 |
|
|
|
|
21,450,557 |
|
|
|
|
20,959,984 |
|
|
|
Stockholders' equity |
|
4,956,778 |
|
|
|
|
4,930,182 |
|
|
|
|
4,815,965 |
|
|
|
Total liabilities and |
|
|
|
|
|
|
|
|
|
|
|
|
stockholders' equity |
$ |
27,099,040 |
|
|
|
$ |
26,380,739 |
|
|
|
$ |
25,775,949 |
|
|
|
Net interest income (1) |
|
$ |
251,428 |
|
|
|
$ |
248,374 |
|
|
|
$ |
256,052 |
|
|
Net interest spread (1) |
|
|
3.86 |
% |
|
|
|
3.78 |
% |
|
|
|
4.03 |
% |
|
Net interest margin (1) |
|
|
4.31 |
% |
|
|
|
4.33 |
% |
|
|
|
4.69 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total deposits (4) |
$ |
19,254,497 |
$ |
28,247 |
0.59 |
% |
|
$ |
19,441,790 |
$ |
34,802 |
0.71 |
% |
|
$ |
18,940,425 |
$ |
34,235 |
0.73 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Tax
equivalent. |
(2) Includes
discount accretion on acquired loans of $4.8 million, $3.0 million,
and $3.0 million for the three months ended March 31, 2020, |
December 31, 2019, and March 31, 2019, respectively. |
(3) Includes
tax-equivalent adjustments of $1.2 million, $1.4 million, and $0.9
million for the three months ended March 31, 2020, |
December 31, 2019, and March 31, 2019 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 |
|
|
March 31, |
|
December 31, |
|
September 30, |
|
June 30, |
|
March 31, |
|
|
2020 |
|
|
|
2019 |
|
|
|
2019 |
|
|
|
2019 |
|
|
|
2019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars in thousands, except per share data) |
ASSETS: |
|
|
|
|
|
|
|
|
|
Cash and due from banks |
$ |
172,570 |
|
|
$ |
172,585 |
|
|
$ |
252,596 |
|
|
$ |
185,075 |
|
|
$ |
224,758 |
|
Interest-earning deposits in
financial |
|
|
|
|
|
|
|
|
|
institutions |
|
439,690 |
|
|
|
465,039 |
|
|
|
483,405 |
|
|
|
422,663 |
|
|
|
332,124 |
|
Total cash and cash equivalents |
|
612,260 |
|
|
|
637,624 |
|
|
|
736,001 |
|
|
|
607,738 |
|
|
|
556,882 |
|
|
|
|
|
|
|
|
|
|
|
Securities
available-for-sale |
|
3,757,663 |
|
|
|
3,797,187 |
|
|
|
3,817,348 |
|
|
|
3,807,244 |
|
|
|
3,994,708 |
|
Federal Home Loan Bank
stock |
|
54,244 |
|
|
|
40,924 |
|
|
|
26,865 |
|
|
|
43,146 |
|
|
|
29,430 |
|
Total investment securities |
|
3,811,907 |
|
|
|
3,838,111 |
|
|
|
3,844,213 |
|
|
|
3,850,390 |
|
|
|
4,024,138 |
|
|
|
|
|
|
|
|
|
|
|
Loans held for
sale |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
25,124 |
|
|
|
|
|
|
|
|
|
|
|
Gross loans and leases held
for investment |
|
19,806,394 |
|
|
|
18,910,740 |
|
|
|
18,796,011 |
|
|
|
18,532,740 |
|
|
|
18,371,295 |
|
Deferred fees, net |
|
(61,089 |
) |
|
|
(63,868 |
) |
|
|
(60,468 |
) |
|
|
(59,888 |
) |
|
|
(63,598 |
) |
Total loans and leases held for |
|
|
|
|
|
|
|
|
|
investment, net of deferred fees |
|
19,745,305 |
|
|
|
18,846,872 |
|
|
|
18,735,543 |
|
|
|
18,472,852 |
|
|
|
18,307,697 |
|
Allowance for loan and lease
losses |
|
(221,292 |
) |
|
|
(138,785 |
) |
|
|
(138,552 |
) |
|
|
(135,037 |
) |
|
|
(136,281 |
) |
Total loans and leases held for |
|
|
|
|
|
|
|
|
|
investment, net |
|
19,524,013 |
|
|
|
18,708,087 |
|
|
|
18,596,991 |
|
|
|
18,337,815 |
|
|
|
18,171,416 |
|
|
|
|
|
|
|
|
|
|
|
Equipment leased to others
under |
|
|
|
|
|
|
|
|
|
operating leases |
|
306,530 |
|
|
|
324,084 |
|
|
|
295,854 |
|
|
|
300,668 |
|
|
|
293,853 |
|
Premises and equipment,
net |
|
39,799 |
|
|
|
38,585 |
|
|
|
37,926 |
|
|
|
38,162 |
|
|
|
37,783 |
|
Foreclosed assets, net |
|
1,701 |
|
|
|
440 |
|
|
|
1,366 |
|
|
|
1,472 |
|
|
|
3,291 |
|
Goodwill |
|
1,078,670 |
|
|
|
2,548,670 |
|
|
|
2,548,670 |
|
|
|
2,548,670 |
|
|
|
2,548,670 |
|
Core deposit and customer
relationship |
|
|
|
|
|
|
|
|
|
intangibles, net |
|
34,446 |
|
|
|
38,394 |
|
|
|
42,547 |
|
|
|
47,380 |
|
|
|
52,250 |
|
Other assets |
|
733,941 |
|
|
|
636,811 |
|
|
|
621,059 |
|
|
|
612,119 |
|
|
|
610,731 |
|
Total assets |
$ |
26,143,267 |
|
|
$ |
26,770,806 |
|
|
$ |
26,724,627 |
|
|
$ |
26,344,414 |
|
|
$ |
26,324,138 |
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES: |
|
|
|
|
|
|
|
|
|
Noninterest-bearing
deposits |
$ |
7,510,218 |
|
|
$ |
7,243,298 |
|
|
$ |
7,441,185 |
|
|
$ |
7,299,213 |
|
|
$ |
7,712,409 |
|
Interest-bearing deposits |
|
12,065,619 |
|
|
|
11,989,738 |
|
|
|
12,292,018 |
|
|
|
11,506,543 |
|
|
|
11,573,518 |
|
Total deposits |
|
19,575,837 |
|
|
|
19,233,036 |
|
|
|
19,733,203 |
|
|
|
18,805,756 |
|
|
|
19,285,927 |
|
Borrowings |
|
2,295,000 |
|
|
|
1,759,008 |
|
|
|
1,253,031 |
|
|
|
1,913,059 |
|
|
|
1,481,087 |
|
Subordinated debentures |
|
458,994 |
|
|
|
458,209 |
|
|
|
456,145 |
|
|
|
456,112 |
|
|
|
454,458 |
|
Accrued interest payable and
other |
|
|
|
|
|
|
|
|
|
liabilities |
|
423,047 |
|
|
|
365,856 |
|
|
|
362,140 |
|
|
|
317,477 |
|
|
|
311,684 |
|
Total liabilities |
|
22,752,878 |
|
|
|
21,816,109 |
|
|
|
21,804,519 |
|
|
|
21,492,404 |
|
|
|
21,533,156 |
|
STOCKHOLDERS' EQUITY
(1) |
|
3,390,389 |
|
|
|
4,954,697 |
|
|
|
4,920,108 |
|
|
|
4,852,010 |
|
|
|
4,790,982 |
|
Total liabilities and stockholders’ |
|
|
|
|
|
|
|
|
|
equity |
$ |
26,143,267 |
|
|
$ |
26,770,806 |
|
|
$ |
26,724,627 |
|
|
$ |
26,344,414 |
|
|
$ |
26,324,138 |
|
|
|
|
|
|
|
|
|
|
|
Book value per share |
$ |
28.75 |
|
|
$ |
41.36 |
|
|
$ |
41.06 |
|
|
$ |
40.49 |
|
|
$ |
39.86 |
|
Tangible book value per share
(2) |
$ |
19.31 |
|
|
$ |
19.77 |
|
|
$ |
19.43 |
|
|
$ |
18.83 |
|
|
$ |
18.22 |
|
Shares outstanding |
|
117,916,789 |
|
|
|
119,781,605 |
|
|
|
119,831,192 |
|
|
|
119,829,104 |
|
|
|
120,201,149 |
|
|
|
|
|
|
|
|
|
|
|
(1) Includes net unrealized
gain on |
|
|
|
|
|
|
|
|
|
securities available-for-sale, net |
$ |
90,916 |
|
|
$ |
78,658 |
|
|
$ |
95,887 |
|
|
$ |
73,066 |
|
|
$ |
37,258 |
|
(2) Non-GAAP measure. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PACWEST
BANCORP AND SUBSIDIARIES |
FIVE
QUARTER STATEMENT OF EARNINGS |
|
|
Three Months Ended |
|
March 31, |
|
December 31, |
|
September 30, |
|
June 30, |
|
March 31, |
|
|
2020 |
|
|
|
2019 |
|
|
|
2019 |
|
|
|
2019 |
|
|
|
2019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars in thousands, except per share data) |
Interest
income: |
|
|
|
|
|
|
|
|
|
Loans and leases |
$ |
262,278 |
|
|
$ |
263,402 |
|
|
$ |
275,978 |
|
|
$ |
284,236 |
|
|
$ |
274,229 |
|
Investment securities |
|
27,446 |
|
|
|
28,135 |
|
|
|
28,806 |
|
|
|
28,948 |
|
|
|
29,680 |
|
Deposits in financial
institutions |
|
1,608 |
|
|
|
2,056 |
|
|
|
2,424 |
|
|
|
1,349 |
|
|
|
650 |
|
Total interest income |
|
291,332 |
|
|
|
293,593 |
|
|
|
307,208 |
|
|
|
314,533 |
|
|
|
304,559 |
|
|
|
|
|
|
|
|
|
|
|
Interest
expense: |
|
|
|
|
|
|
|
|
|
Deposits |
|
28,247 |
|
|
|
34,802 |
|
|
|
40,703 |
|
|
|
38,720 |
|
|
|
34,235 |
|
Borrowings |
|
6,778 |
|
|
|
5,189 |
|
|
|
6,852 |
|
|
|
7,210 |
|
|
|
7,710 |
|
Subordinated debentures |
|
6,560 |
|
|
|
6,983 |
|
|
|
7,417 |
|
|
|
7,705 |
|
|
|
7,738 |
|
Total interest expense |
|
41,585 |
|
|
|
46,974 |
|
|
|
54,972 |
|
|
|
53,635 |
|
|
|
49,683 |
|
|
|
|
|
|
|
|
|
|
|
Net interest income |
|
249,747 |
|
|
|
246,619 |
|
|
|
252,236 |
|
|
|
260,898 |
|
|
|
254,876 |
|
Provision for credit
losses |
|
112,000 |
|
|
|
3,000 |
|
|
|
7,000 |
|
|
|
8,000 |
|
|
|
4,000 |
|
Net interest income after |
|
|
|
|
|
|
|
|
|
provision for credit losses |
|
137,747 |
|
|
|
243,619 |
|
|
|
245,236 |
|
|
|
252,898 |
|
|
|
250,876 |
|
|
|
|
|
|
|
|
|
|
|
Noninterest
income: |
|
|
|
|
|
|
|
|
|
Service charges on deposit
accounts |
|
2,658 |
|
|
|
3,611 |
|
|
|
3,525 |
|
|
|
3,771 |
|
|
|
3,730 |
|
Other commissions and
fees |
|
9,721 |
|
|
|
10,170 |
|
|
|
10,855 |
|
|
|
11,590 |
|
|
|
11,008 |
|
Leased equipment income |
|
12,251 |
|
|
|
10,648 |
|
|
|
9,615 |
|
|
|
9,182 |
|
|
|
9,282 |
|
Gain on sale of loans and
leases |
|
87 |
|
|
|
23 |
|
|
|
765 |
|
|
|
326 |
|
|
|
- |
|
Gain on sale of
securities |
|
182 |
|
|
|
184 |
|
|
|
908 |
|
|
|
22,192 |
|
|
|
2,161 |
|
Other income |
|
4,201 |
|
|
|
2,540 |
|
|
|
7,761 |
|
|
|
3,832 |
|
|
|
4,883 |
|
Total noninterest income |
|
29,100 |
|
|
|
27,176 |
|
|
|
33,429 |
|
|
|
50,893 |
|
|
|
31,064 |
|
|
|
|
|
|
|
|
|
|
|
Noninterest
expense: |
|
|
|
|
|
|
|
|
|
Compensation |
|
61,282 |
|
|
|
74,637 |
|
|
|
71,424 |
|
|
|
68,956 |
|
|
|
70,845 |
|
Occupancy |
|
14,207 |
|
|
|
14,541 |
|
|
|
14,089 |
|
|
|
14,457 |
|
|
|
14,320 |
|
Data processing |
|
6,454 |
|
|
|
6,770 |
|
|
|
7,044 |
|
|
|
6,817 |
|
|
|
6,925 |
|
Other professional
services |
|
4,258 |
|
|
|
4,261 |
|
|
|
4,400 |
|
|
|
4,629 |
|
|
|
4,513 |
|
Insurance and assessments |
|
4,249 |
|
|
|
4,168 |
|
|
|
4,100 |
|
|
|
4,098 |
|
|
|
4,038 |
|
Intangible asset
amortization |
|
3,948 |
|
|
|
4,153 |
|
|
|
4,833 |
|
|
|
4,870 |
|
|
|
4,870 |
|
Leased equipment
depreciation |
|
7,205 |
|
|
|
6,856 |
|
|
|
5,951 |
|
|
|
5,558 |
|
|
|
5,651 |
|
Foreclosed assets expense
(income), net |
|
66 |
|
|
|
(3,446 |
) |
|
|
8 |
|
|
|
(146 |
) |
|
|
29 |
|
Acquisition, integration
and |
|
|
|
|
|
|
|
|
|
reorganization costs |
|
- |
|
|
|
(269 |
) |
|
|
- |
|
|
|
- |
|
|
|
618 |
|
Customer related expense |
|
3,932 |
|
|
|
3,952 |
|
|
|
3,539 |
|
|
|
3,405 |
|
|
|
2,943 |
|
Loan expense |
|
2,650 |
|
|
|
2,967 |
|
|
|
3,628 |
|
|
|
3,451 |
|
|
|
2,885 |
|
Goodwill impairment |
|
1,470,000 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
Other expense |
|
9,719 |
|
|
|
5,138 |
|
|
|
7,793 |
|
|
|
9,332 |
|
|
|
8,650 |
|
Total noninterest expense |
|
1,587,970 |
|
|
|
123,728 |
|
|
|
126,809 |
|
|
|
125,427 |
|
|
|
126,287 |
|
|
|
|
|
|
|
|
|
|
|
(Loss) earnings before income
taxes |
|
(1,421,123 |
) |
|
|
147,067 |
|
|
|
151,856 |
|
|
|
178,364 |
|
|
|
155,653 |
|
Income tax expense |
|
11,988 |
|
|
|
29,186 |
|
|
|
41,830 |
|
|
|
50,239 |
|
|
|
43,049 |
|
Net (loss) earnings |
$ |
(1,433,111 |
) |
|
$ |
117,881 |
|
|
$ |
110,026 |
|
|
$ |
128,125 |
|
|
$ |
112,604 |
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted (loss)
earnings per share |
$ |
(12.23 |
) |
|
$ |
0.98 |
|
|
$ |
0.92 |
|
|
$ |
1.07 |
|
|
$ |
0.92 |
|
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 |
|
March 31, |
|
December 31, |
|
September 30, |
|
June 30, |
|
March 31, |
|
|
2020 |
|
|
|
2019 |
|
|
|
2019 |
|
|
|
2019 |
|
|
|
2019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars in thousands) |
Performance
Ratios: |
|
|
|
|
|
|
|
|
|
Return on average assets (1) |
|
(21.27 |
)% |
|
|
1.77 |
% |
|
|
1.65 |
% |
|
|
1.99 |
% |
|
|
1.77 |
% |
Return on average equity (1) |
|
(116.28 |
)% |
|
|
9.49 |
% |
|
|
8.93 |
% |
|
|
10.66 |
% |
|
|
9.48 |
% |
Return on average tangible equity (1)(2) |
|
6.88 |
% |
|
|
19.98 |
% |
|
|
19.01 |
% |
|
|
23.15 |
% |
|
|
20.64 |
% |
Efficiency ratio |
|
40.6 |
% |
|
|
44.8 |
% |
|
|
42.3 |
% |
|
|
41.6 |
% |
|
|
42.4 |
% |
Noninterest expense as a percentage |
|
|
|
|
|
|
|
|
|
of average assets (1) |
|
23.57 |
% |
|
|
1.86 |
% |
|
|
1.91 |
% |
|
|
1.95 |
% |
|
|
1.99 |
% |
|
|
|
|
|
|
|
|
|
|
Average Yields/Costs
(1): |
|
|
|
|
|
|
|
|
|
Yield on: |
|
|
|
|
|
|
|
|
|
Average loans and leases (3) |
|
5.54 |
% |
|
|
5.67 |
% |
|
|
5.91 |
% |
|
|
6.26 |
% |
|
|
6.16 |
% |
Average interest-earning assets (3) |
|
5.02 |
% |
|
|
5.14 |
% |
|
|
5.41 |
% |
|
|
5.68 |
% |
|
|
5.60 |
% |
Cost of: |
|
|
|
|
|
|
|
|
|
Average interest-bearing deposits |
|
0.95 |
% |
|
|
1.14 |
% |
|
|
1.34 |
% |
|
|
1.35 |
% |
|
|
1.24 |
% |
Average total deposits |
|
0.59 |
% |
|
|
0.71 |
% |
|
|
0.83 |
% |
|
|
0.81 |
% |
|
|
0.73 |
% |
Average interest-bearing liabilities |
|
1.16 |
% |
|
|
1.36 |
% |
|
|
1.60 |
% |
|
|
1.64 |
% |
|
|
1.57 |
% |
Net interest spread (3) |
|
3.86 |
% |
|
|
3.78 |
% |
|
|
3.81 |
% |
|
|
4.04 |
% |
|
|
4.03 |
% |
Net interest margin (3) |
|
4.31 |
% |
|
|
4.33 |
% |
|
|
4.46 |
% |
|
|
4.72 |
% |
|
|
4.69 |
% |
|
|
|
|
|
|
|
|
|
|
Average
Balances: |
|
|
|
|
|
|
|
|
|
Assets: |
|
|
|
|
|
|
|
|
|
Loans and leases, net of deferred fees |
$ |
19,065,035 |
|
|
$ |
18,470,583 |
|
|
$ |
18,539,281 |
|
|
$ |
18,239,690 |
|
|
$ |
18,064,230 |
|
Interest-earning assets |
|
23,455,636 |
|
|
|
22,779,867 |
|
|
|
22,793,676 |
|
|
|
22,258,828 |
|
|
|
22,144,711 |
|
Total assets |
|
27,099,040 |
|
|
|
26,380,739 |
|
|
|
26,406,603 |
|
|
|
25,849,189 |
|
|
|
25,775,949 |
|
Liabilities: |
|
|
|
|
|
|
|
|
|
Noninterest-bearing deposits |
|
7,357,717 |
|
|
|
7,338,888 |
|
|
|
7,487,555 |
|
|
|
7,544,027 |
|
|
|
7,783,652 |
|
Interest-bearing deposits |
|
11,896,780 |
|
|
|
12,102,902 |
|
|
|
12,031,776 |
|
|
|
11,545,785 |
|
|
|
11,156,773 |
|
Total deposits |
|
19,254,497 |
|
|
|
19,441,790 |
|
|
|
19,519,331 |
|
|
|
19,089,812 |
|
|
|
18,940,425 |
|
Borrowings |
|
2,026,749 |
|
|
|
1,179,220 |
|
|
|
1,181,313 |
|
|
|
1,142,223 |
|
|
|
1,218,319 |
|
Subordinated debentures |
|
458,399 |
|
|
|
456,997 |
|
|
|
456,011 |
|
|
|
454,901 |
|
|
|
454,203 |
|
Interest-bearing liabilities |
|
14,381,928 |
|
|
|
13,739,119 |
|
|
|
13,669,100 |
|
|
|
13,142,909 |
|
|
|
12,829,295 |
|
Stockholders' equity |
|
4,956,778 |
|
|
|
4,930,182 |
|
|
|
4,890,746 |
|
|
|
4,818,889 |
|
|
|
4,815,965 |
|
|
|
|
|
|
|
|
|
|
|
(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 |
|
March 31, |
|
December 31, |
|
September 30, |
|
June 30, |
|
March 31, |
|
|
2020 |
|
|
|
2019 |
|
|
|
2019 |
|
|
|
2019 |
|
|
|
2019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars in thousands) |
Credit Quality
Ratios: |
|
|
|
|
|
|
|
|
|
Nonaccrual loans and leases held for |
|
|
|
|
|
|
|
|
|
investment to loans and leases |
|
|
|
|
|
|
|
|
|
held for investment |
|
0.48 |
% |
|
|
0.49 |
% |
|
|
0.53 |
% |
|
|
0.44 |
% |
|
|
0.48 |
% |
Nonperforming assets to loans and |
|
|
|
|
|
|
|
|
|
leases held for investment and |
|
|
|
|
|
|
|
|
|
foreclosed assets |
|
0.49 |
% |
|
|
0.49 |
% |
|
|
0.54 |
% |
|
|
0.45 |
% |
|
|
0.50 |
% |
Classified loans and leases held for |
|
|
|
|
|
|
|
|
|
investment to loans and leases |
|
|
|
|
|
|
|
|
|
held for investment |
|
0.75 |
% |
|
|
0.93 |
% |
|
|
1.01 |
% |
|
|
1.03 |
% |
|
|
1.04 |
% |
Provision for credit losses (for the |
|
|
|
|
|
|
|
|
|
quarter) to average loans and leases |
|
|
|
|
|
|
|
|
|
held for investment (annualized) |
|
2.36 |
% |
|
|
0.06 |
% |
|
|
0.15 |
% |
|
|
0.18 |
% |
|
|
0.09 |
% |
Net charge-offs (for the quarter) to |
|
|
|
|
|
|
|
|
|
average loans and leases held |
|
|
|
|
|
|
|
|
|
for investment (annualized) |
|
0.40 |
% |
|
|
0.02 |
% |
|
|
0.10 |
% |
|
|
0.25 |
% |
|
|
0.00 |
% |
Trailing 12 months net charge-offs |
|
|
|
|
|
|
|
|
|
to average loans and leases |
|
|
|
|
|
|
|
|
|
held for investment |
|
0.19 |
% |
|
|
0.09 |
% |
|
|
0.20 |
% |
|
|
0.18 |
% |
|
|
0.22 |
% |
Allowance for credit losses to loans |
|
|
|
|
|
|
|
|
|
and leases held for investment |
|
1.39 |
% |
|
|
0.93 |
% |
|
|
0.92 |
% |
|
|
0.92 |
% |
|
|
0.95 |
% |
Allowance for credit losses to |
|
|
|
|
|
|
|
|
|
nonaccrual loans and leases |
|
|
|
|
|
|
|
|
|
held for investment |
|
287.5 |
% |
|
|
189.1 |
% |
|
|
174.0 |
% |
|
|
209.1 |
% |
|
|
195.6 |
% |
|
|
|
|
|
|
|
|
|
|
PacWest Bancorp
Consolidated |
|
|
|
|
|
|
|
|
|
Capital: |
|
|
|
|
|
|
|
|
|
Tier 1 leverage ratio (1) |
|
8.64 |
% |
|
|
9.74 |
% |
|
|
9.50 |
% |
|
|
9.49 |
% |
|
|
9.38 |
% |
Common equity tier 1 capital ratio (1) |
|
9.23 |
% |
|
|
9.78 |
% |
|
|
9.55 |
% |
|
|
9.53 |
% |
|
|
9.48 |
% |
Tier 1 capital ratio (1) |
|
9.23 |
% |
|
|
9.78 |
% |
|
|
9.55 |
% |
|
|
9.53 |
% |
|
|
9.48 |
% |
Total capital ratio (1) |
|
12.21 |
% |
|
|
12.41 |
% |
|
|
12.16 |
% |
|
|
12.18 |
% |
|
|
12.15 |
% |
Risk-weighted assets (1) |
$ |
24,178,995 |
|
|
$ |
23,582,495 |
|
|
$ |
23,579,614 |
|
|
$ |
23,117,199 |
|
|
$ |
22,939,074 |
|
|
|
|
|
|
|
|
|
|
|
Equity to assets ratio |
|
12.97 |
% |
|
|
18.51 |
% |
|
|
18.41 |
% |
|
|
18.42 |
% |
|
|
18.20 |
% |
Tangible common equity ratio (2) |
|
9.10 |
% |
|
|
9.79 |
% |
|
|
9.65 |
% |
|
|
9.50 |
% |
|
|
9.23 |
% |
Book value per share |
$ |
28.75 |
|
|
$ |
41.36 |
|
|
$ |
41.06 |
|
|
$ |
40.49 |
|
|
$ |
39.86 |
|
Tangible book value per share (2) |
$ |
19.31 |
|
|
$ |
19.77 |
|
|
$ |
19.43 |
|
|
$ |
18.83 |
|
|
$ |
18.22 |
|
|
|
|
|
|
|
|
|
|
|
Pacific Western Bank
Capital: |
|
|
|
|
|
|
|
|
|
Tier 1 leverage ratio (1) |
|
9.72 |
% |
|
|
10.95 |
% |
|
|
10.72 |
% |
|
|
10.76 |
% |
|
|
10.57 |
% |
Common equity tier 1 capital ratio (1) |
|
10.39 |
% |
|
|
11.00 |
% |
|
|
10.79 |
% |
|
|
10.80 |
% |
|
|
10.69 |
% |
Tier 1 capital ratio (1) |
|
10.39 |
% |
|
|
11.00 |
% |
|
|
10.79 |
% |
|
|
10.80 |
% |
|
|
10.69 |
% |
Total capital ratio (1) |
|
11.53 |
% |
|
|
11.74 |
% |
|
|
11.52 |
% |
|
|
11.53 |
% |
|
|
11.45 |
% |
|
|
|
|
|
|
|
|
|
|
(1) Capital
information for March 31, 2020 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 |
|
March 31, |
|
December 31, |
|
March 31, |
Return on Average Tangible Equity |
|
2020 |
|
|
|
2019 |
|
|
|
2019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars in thousands) |
Net (loss) earnings |
$ |
(1,433,111 |
) |
|
$ |
117,881 |
|
|
$ |
112,604 |
|
Add: Intangible asset
amortization |
|
3,948 |
|
|
|
- |
|
|
|
- |
|
Add: Goodwill
amortization |
|
1,470,000 |
|
|
|
- |
|
|
|
- |
|
Adjusted net earnings |
$ |
40,837 |
|
|
$ |
117,881 |
|
|
$ |
112,604 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Average stockholders'
equity |
$ |
4,956,778 |
|
|
$ |
4,930,182 |
|
|
$ |
4,815,965 |
|
Less: Average intangible
assets |
|
2,569,189 |
|
|
|
2,589,217 |
|
|
|
2,603,842 |
|
Average tangible common equity |
$ |
2,387,589 |
|
|
$ |
2,340,965 |
|
|
$ |
2,212,123 |
|
|
|
|
|
|
|
Return on average equity
(1) |
|
(116.28 |
)% |
|
|
9.49 |
% |
|
|
9.48 |
% |
Return on average tangible
equity (2) |
|
6.88 |
% |
|
|
19.98 |
% |
|
|
20.64 |
% |
|
|
|
|
|
|
(1) Annualized net
earnings divided by average stockholders' equity. |
|
|
(2) Annualized
adjusted net earnings divided by average tangible common
equity. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tangible Common Equity
Ratio/ |
March 31, |
|
December 31, |
|
September 30, |
|
June 30, |
|
March 31, |
Tangible Book Value Per Share |
|
2020 |
|
|
|
2019 |
|
|
|
2019 |
|
|
|
2019 |
|
|
|
2019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars in thousands, except per share data) |
Stockholders' equity |
$ |
3,390,389 |
|
|
$ |
4,954,697 |
|
|
$ |
4,920,108 |
|
|
$ |
4,852,010 |
|
|
$ |
4,790,982 |
|
Less: Intangible assets |
|
1,113,116 |
|
|
|
2,587,064 |
|
|
|
2,591,217 |
|
|
|
2,596,050 |
|
|
|
2,600,920 |
|
Tangible common equity |
$ |
2,277,273 |
|
|
$ |
2,367,633 |
|
|
$ |
2,328,891 |
|
|
$ |
2,255,960 |
|
|
$ |
2,190,062 |
|
|
|
|
|
|
|
|
|
|
|
Total assets |
$ |
26,143,267 |
|
|
$ |
26,770,806 |
|
|
$ |
26,724,627 |
|
|
$ |
26,344,414 |
|
|
$ |
26,324,138 |
|
Less: Intangible assets |
|
1,113,116 |
|
|
|
2,587,064 |
|
|
|
2,591,217 |
|
|
|
2,596,050 |
|
|
|
2,600,920 |
|
Tangible assets |
$ |
25,030,151 |
|
|
$ |
24,183,742 |
|
|
$ |
24,133,410 |
|
|
$ |
23,748,364 |
|
|
$ |
23,723,218 |
|
|
|
|
|
|
|
|
|
|
|
Equity to assets ratio |
|
12.97 |
% |
|
|
18.51 |
% |
|
|
18.41 |
% |
|
|
18.42 |
% |
|
|
18.20 |
% |
Tangible common equity ratio
(1) |
|
9.10 |
% |
|
|
9.79 |
% |
|
|
9.65 |
% |
|
|
9.50 |
% |
|
|
9.23 |
% |
|
|
|
|
|
|
|
|
|
|
Book value per share |
$ |
28.75 |
|
|
$ |
41.36 |
|
|
$ |
41.06 |
|
|
$ |
40.49 |
|
|
$ |
39.86 |
|
Tangible book value per share
(2) |
$ |
19.31 |
|
|
$ |
19.77 |
|
|
$ |
19.43 |
|
|
$ |
18.83 |
|
|
$ |
18.22 |
|
Shares outstanding |
|
117,916,789 |
|
|
|
119,781,605 |
|
|
|
119,831,192 |
|
|
|
119,829,104 |
|
|
|
120,201,149 |
|
|
|
|
|
|
|
|
|
|
|
(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 |
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