LOS ANGELES, April 19, 2022 (GLOBE NEWSWIRE) --
PacWest Bancorp (Nasdaq: PACW) -
FIRST QUARTER 2022 RESULTS
|
$120.1M |
|
$1.01 |
|
$162.1M |
|
20.93% |
|
|
Net Earnings |
|
Diluted Earnings
per Share |
|
PPNR |
|
ROATE |
|
FIRST QUARTER 2022 HIGHLIGHTS
- Net Earnings of $120.1 Million or $1.01 Per Diluted Share
- PPNR of $162.1 Million, Down 10.8% vs. 4Q21
- Net Interest Income (TE) of $312.7 Million in 1Q22 vs. $304.5
Million in 4Q21
- No Provision for Credit Losses in 1Q22 vs. Benefit of $6.0
Million in 4Q21
- Noninterest Income of $20.8 Million in 1Q22 vs. $57.4 Million
in 4Q21; Warrant Income Down $23.4 Million
- Noninterest Expense of $167.4 Million in 1Q22 vs. $176.1
Million in 4Q21
- Loan Growth of $1.4 Billion or 6.1% from Prior Quarter
- Loan and Lease Production of $2.6 Billion in 1Q22 vs. $3.4
Billion in 4Q21; WAC of 4.31% in 1Q22 vs. 3.89% in 4Q21
- Civic Loan Production of $559 Million in 1Q22 vs. $480 Million
in 4Q21
|
- Classified and Special Mention Loans and Leases Fell $34.0
Million and $14.3 Million from 4Q21
- ACL Ratio of 1.12% and ALLL Ratio of 0.81% at 1Q22 vs. 1.19%
and 0.87% at 4Q21, Respectively
- Net Charge-offs of $1.2 Million
- Core Deposits Down $1.1 Billion or 3.2%, Represents 95% of
Total Deposits
- Cost of Deposits of 7 bps in 1Q22 vs. 8 bps in 4Q21
- Capital Ratios Declined Due to Growth in Risk-Weighted Assets –
CET1 Ratio of 8.64% and Total Capital Ratio of 12.27% at 1Q22
- Tangible Book Value Per Share of $18.42 at 1Q22 vs. $21.31 at
4Q21 (Due to AOCI Change Noted Below)
- Available-for-Sale Securities Decreased from $10.7 Billion at
4Q21 to $10.0 Billion at 1Q22; AOCI on the AFS Portfolio Changed
from a Net Unrealized Gain of $66.0 Million at 4Q21 to a Net
Unrealized Loss of $376.5 Million at 1Q22
|
CEO COMMENTARY
Matt Wagner, President and CEO, commented,
“Although external events and the resulting volatility in the
capital market negatively impacted the first quarter, we continued
to make progress on our strategic priorities of increasing earning
assets through loan growth and growing net interest income while
continuing to improve asset quality. The increase in average loans
and leases of nearly $2.1 billion and decreasing higher-rate
wholesale deposits during the first quarter resulted in an $8.3
million increase in net interest income and helped drive a 19 basis
point increase in our net interest margin compared to the fourth
quarter. Loans grew by $1.4 billion in the first quarter to an
all-time high of $24.4 billion. With the 25 basis point increase by
the Federal Reserve in market rates occurring late in the quarter,
the increase had a minimal impact on first quarter results. Total
deposits decreased by $1.8 billion driven by a decrease of $1.5
billion in venture banking due to declines in capital market
activity, along with the planned reduction in maturing wholesale
deposits of $0.5 billion, offset by deposit growth of $180 million
in community banking.”
“Credit quality continues the improvement seen
throughout 2021 with a $14.3 million decrease in special mention
loans and leases in 1Q22 and a $34.0 million decrease in classified
loans and leases in 1Q22, which, combined with changes in our loan
portfolio composition, resulted in no provision for credit losses
for the quarter.”
“The loan growth particularly over the last three
quarters has increased risk-weighted assets resulting in a decrease
in capital ratios, which remain well above regulatory thresholds.
Capital and balance sheet management remain a focus area as we look
to grow our capital levels to keep pace with our growth
expectations.”
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 (1) |
|
2022 |
|
|
|
2021 |
|
|
(Decrease) |
|
|
2022 |
|
|
|
2021 |
|
|
(Decrease) |
|
(Dollars in thousands, except per share
data) |
Net earnings |
$ |
120,128 |
|
|
$ |
136,045 |
|
|
$ |
(15,917 |
) |
|
$ |
120,128 |
|
|
$ |
150,406 |
|
|
$ |
(30,278 |
) |
Diluted earnings per
share |
$ |
1.01 |
|
|
$ |
1.14 |
|
|
$ |
(0.13 |
) |
|
$ |
1.01 |
|
|
$ |
1.27 |
|
|
$ |
(0.26 |
) |
Pre-provision, pre-tax net
revenue ("PPNR") (2) |
$ |
162,109 |
|
|
$ |
181,677 |
|
|
$ |
(19,568 |
) |
|
$ |
162,109 |
|
|
$ |
155,962 |
|
|
$ |
6,147 |
|
Return on average assets |
|
1.22% |
|
|
|
1.34% |
|
|
|
(0.12 |
) |
|
|
1.22% |
|
|
|
1.94% |
|
|
|
(0.72 |
) |
PPNR return on average assets
(2) |
|
1.65% |
|
|
|
1.79% |
|
|
|
(0.14 |
) |
|
|
1.65% |
|
|
|
2.01% |
|
|
|
(0.36 |
) |
Return on average tangible
equity (2) |
|
20.93% |
|
|
|
22.06% |
|
|
|
(1.13 |
) |
|
|
20.93% |
|
|
|
25.67% |
|
|
|
(4.74 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Yield on average loans and
leases (tax equivalent) |
|
4.66% |
|
|
|
4.93% |
|
|
|
(0.27 |
) |
|
|
4.66% |
|
|
|
5.20% |
|
|
|
(0.54 |
) |
Cost of average total
deposits |
|
0.07% |
|
|
|
0.08% |
|
|
|
(0.01 |
) |
|
|
0.07% |
|
|
|
0.11% |
|
|
|
(0.04 |
) |
Net interest margin ("NIM")
(tax equivalent) |
|
3.43% |
|
|
|
3.24% |
|
|
|
0.19 |
|
|
|
3.43% |
|
|
|
3.69% |
|
|
|
(0.26 |
) |
Efficiency ratio |
|
50.1% |
|
|
|
46.2% |
|
|
|
3.9 |
|
|
|
50.1% |
|
|
|
46.4% |
|
|
|
3.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets |
$ |
39,249,639 |
|
|
$ |
40,443,344 |
|
|
$ |
(1,193,705 |
) |
|
$ |
39,249,639 |
|
|
$ |
32,856,533 |
|
|
$ |
6,393,106 |
|
Loans and leases held for
investment, net of deferred fees |
$ |
24,352,072 |
|
|
$ |
22,941,548 |
|
|
$ |
1,410,524 |
|
|
$ |
24,352,072 |
|
|
$ |
18,979,228 |
|
|
$ |
5,372,844 |
|
Noninterest-bearing demand
deposits |
$ |
14,057,051 |
|
|
$ |
14,543,133 |
|
|
$ |
(486,082 |
) |
|
$ |
14,057,051 |
|
|
$ |
11,017,462 |
|
|
$ |
3,039,589 |
|
Core deposits |
$ |
31,676,404 |
|
|
$ |
32,734,949 |
|
|
$ |
(1,058,545 |
) |
|
$ |
31,676,404 |
|
|
$ |
25,576,348 |
|
|
$ |
6,100,056 |
|
Total deposits |
$ |
33,224,895 |
|
|
$ |
34,997,757 |
|
|
$ |
(1,772,862 |
) |
|
$ |
33,224,895 |
|
|
$ |
28,223,291 |
|
|
$ |
5,001,604 |
|
|
|
|
|
|
|
|
|
|
|
|
|
As percentage of total
deposits: |
|
|
|
|
|
|
|
|
|
|
|
Noninterest-bearing demand deposits |
|
42% |
|
|
|
41% |
|
|
|
1 |
|
|
|
42% |
|
|
|
39% |
|
|
|
3 |
|
Core deposits |
|
95% |
|
|
|
93% |
|
|
|
2 |
|
|
|
95% |
|
|
|
91% |
|
|
|
4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity to assets ratio |
|
9.30% |
|
|
|
9.89% |
|
|
|
(0.59 |
) |
|
|
9.30% |
|
|
|
11.12% |
|
|
|
(1.82 |
) |
Common equity tier 1 capital
ratio |
|
8.64% |
|
|
|
8.86% |
|
|
|
(0.22 |
) |
|
|
8.64% |
|
|
|
10.39% |
|
|
|
(1.75 |
) |
Total capital ratio |
|
12.27% |
|
|
|
12.69% |
|
|
|
(0.42 |
) |
|
|
12.27% |
|
|
|
13.60% |
|
|
|
(1.33 |
) |
Tangible common equity ratio
(2) |
|
5.83% |
|
|
|
6.54% |
|
|
|
(0.71 |
) |
|
|
5.83% |
|
|
|
7.68% |
|
|
|
(1.85 |
) |
Book value per share |
$ |
30.52 |
|
|
$ |
33.45 |
|
|
$ |
(2.93 |
) |
|
$ |
30.52 |
|
|
$ |
30.68 |
|
|
$ |
(0.16 |
) |
Tangible book value per share
(2) |
$ |
18.42 |
|
|
$ |
21.31 |
|
|
$ |
(2.89 |
) |
|
$ |
18.42 |
|
|
$ |
20.39 |
|
|
$ |
(1.97 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
(1) The operations of the HOA Business are included from its
October 8, 2021 acquisition date and the operations of Civic
are included from its February 1, 2021 acquisition date. |
(2) Non-GAAP measure. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INCOME STATEMENT HIGHLIGHTS
NET INTEREST INCOME
Net interest income increased by $8.3 million to
$308.7 million for the first quarter of 2022 compared to $300.4
million for the fourth quarter of 2021 due mainly to higher income
on investment securities and loans and leases primarily resulting
from higher average balances as we deployed our excess liquidity.
Income on investment securities increased by $5.0 million in the
first quarter of 2022 due to a $433 million increase in the average
balance of investment securities and a 15 basis point increase in
the yield on average investment securities. Income on loans and
leases increased by $4.1 million in the first quarter of 2022 due
to a $2.1 billion increase in the average balance of loans and
leases, offset partially by a 27 basis point decrease in the yield
on average loans and leases and two fewer days compared to the
fourth quarter of 2021. The tax equivalent yield on average loans
and leases was 4.66% for the first quarter of 2022 compared to
4.93% for the fourth quarter of 2021. The decrease in the tax
equivalent yield on average loans and leases was due primarily to
loan prepayment fees being lower by $5.8 million and amortized loan
fees being lower by $4.0 million.
The tax equivalent NIM was 3.43% for the first
quarter of 2022 compared to 3.24% for the fourth quarter of 2021.
The increase in the NIM was due mainly to the change in the
interest-earning assets mix driven by the increase in the balance
of average loans and leases and investment securities as a
percentage of average interest-earning assets from 84% to 92% and
the decrease in the balance of average deposits in financial
institutions as a percentage of average interest-earning assets
from 16% to 8%, partially offset by a lower yield on average loans
and leases. The average balance of loans and leases increased by
$2.1 billion, the average balance of investment securities
increased by $433 million, and the average balance of deposits in
financial institutions decreased by $2.9 billion to $3.1 billion.
The increase in the average balances of loans and leases and
investment securities was the result of the Company’s effort to
deploy our excess liquidity efficiently.
The cost of average total deposits was 0.07% in
the first quarter of 2022 compared to 0.08% in the fourth quarter
of 2021.
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 |
|
2022 |
|
|
|
2021 |
|
|
(Decrease) |
|
(In thousands)
|
Reduction in allowance for loan and lease losses |
$ |
(2,000 |
) |
|
$ |
(3,000 |
) |
|
$ |
1,000 |
Addition to (reduction in)
reserve for unfunded loan commitments |
|
2,000 |
|
|
|
(3,000 |
) |
|
|
5,000 |
Total provision for credit losses |
$ |
- |
|
|
$ |
(6,000 |
) |
|
$ |
6,000 |
|
|
|
|
|
|
There was no provision for credit losses for the first quarter
of 2022 compared to a benefit of $6.0 million for the fourth
quarter of 2021. In the first quarter of 2022, the continued credit
quality improvement combined with changes in our loan portfolio
composition, offset by the provision needed for growth in loans and
unfunded commitments, resulted in no provision for the
quarter.
NONINTEREST INCOME
The following table presents details of
noninterest income for the periods indicated:
|
Three Months Ended |
|
|
|
March 31, |
|
December 31, |
|
Increase |
Noninterest Income |
|
2022 |
|
|
|
2021 |
|
|
(Decrease) |
|
(In thousands)
|
Service charges on deposit accounts |
$ |
3,571 |
|
|
$ |
3,476 |
|
|
$ |
95 |
|
Other commissions and fees |
|
11,580 |
|
|
|
10,633 |
|
|
|
947 |
|
Leased equipment income |
|
13,094 |
|
|
|
12,602 |
|
|
|
492 |
|
Gain on sale of loans and leases |
|
60 |
|
|
|
172 |
|
|
|
(112 |
) |
Gain on sale of securities |
|
104 |
|
|
|
999 |
|
|
|
(895 |
) |
Dividends and (losses) gains on equity investments |
|
(11,375 |
) |
|
|
(1,570 |
) |
|
|
(9,805 |
) |
Warrant income |
|
629 |
|
|
|
23,990 |
|
|
|
(23,361 |
) |
Other income |
|
3,155 |
|
|
|
7,080 |
|
|
|
(3,925 |
) |
Total noninterest income |
$ |
20,818 |
|
|
$ |
57,382 |
|
|
$ |
(36,564 |
) |
|
|
|
|
|
|
Noninterest income decreased by $36.6 million to $20.8 million
for the first quarter of 2022 compared to $57.4 million for the
fourth quarter of 2021 due primarily to decreases of $23.4 million
in warrant income, $9.8 million in dividends and gains on equity
investments, and $3.9 million in other income. Warrant income
decreased to $0.6 million in the first quarter of 2022 from a
record quarterly high of $24.0 million in the fourth quarter of
2021 due to decreased capital market activity and volatility
resulting from geopolitical tensions and inflationary pressures.
The capital market volatility also impacted the fair values of our
equity investments in the first quarter of 2022. Dividends and
gains on equity investments decreased due primarily to lower gains
on sales of equity investments, higher fair value losses on equity
investments still held, and lower income distributions and fair
value marks on SBIC investments. The net realized and unrealized
losses on equity investments were $12.2 million in the first
quarter of 2022, with one equity investment accounting for $7.5
million of the total net losses. As of March 31, 2022, we held six
equity investments with a carrying value of $8.8 million, two of
which were sold in April reducing the balance to $0.1 million.
Other income decreased due to an early lease termination of $4.9
million recorded in the fourth quarter of 2021, partially offset by
a $1.0 million increase in foreign currency translation
gains.
NONINTEREST EXPENSE
The following table presents details of
noninterest expense for the periods indicated:
|
Three Months Ended |
|
|
|
March 31, |
|
December 31, |
|
Increase |
Noninterest Expense |
|
2022 |
|
|
|
2021 |
|
|
(Decrease) |
|
(In
thousands)
|
Compensation |
$ |
92,240 |
|
|
$ |
99,700 |
|
|
$ |
(7,460 |
) |
Occupancy |
|
15,200 |
|
|
|
14,656 |
|
|
|
544 |
|
Data processing |
|
9,629 |
|
|
|
8,171 |
|
|
|
1,458 |
|
Other professional services |
|
5,954 |
|
|
|
5,946 |
|
|
|
8 |
|
Insurance and assessments |
|
5,490 |
|
|
|
5,032 |
|
|
|
458 |
|
Intangible asset amortization |
|
3,649 |
|
|
|
3,876 |
|
|
|
(227 |
) |
Leased equipment depreciation |
|
9,189 |
|
|
|
9,569 |
|
|
|
(380 |
) |
Foreclosed assets (income) expense, net |
|
(3,353 |
) |
|
|
(260 |
) |
|
|
(3,093 |
) |
Acquisition, integration and reorganization costs |
|
- |
|
|
|
5,590 |
|
|
|
(5,590 |
) |
Customer related expense |
|
12,655 |
|
|
|
6,175 |
|
|
|
6,480 |
|
Loan expense |
|
5,157 |
|
|
|
5,627 |
|
|
|
(470 |
) |
Other |
|
11,616 |
|
|
|
12,028 |
|
|
|
(412 |
) |
Total noninterest expense |
$ |
167,426 |
|
|
$ |
176,110 |
|
|
$ |
(8,684 |
) |
|
|
|
|
|
|
Noninterest expense decreased by $8.7 million to $167.4 million
for the first quarter of 2022 compared to $176.1 million for the
fourth quarter of 2021 due primarily to a decrease in compensation
expense of $7.5 million, a decrease in acquisition, integration and
reorganization costs of $5.6 million, and an increase in foreclosed
assets income of $3.1 million, partially offset by an increase in
customer related expense of $6.5 million. The decrease in
compensation expense was due mainly to lower commissions and bonus
expense, partially offset by a seasonal increase in payroll taxes.
There were no acquisition, integration and reorganization costs in
the first quarter of 2022 compared to $5.6 million in the fourth
quarter of 2021 related to the October 8, 2021 HOA Business
acquisition. The increase in foreclosed assets income was due to a
$3.2 million gain on the sale of our largest foreclosed property.
The increase in customer related expense was due to increased
third-party expenses related to the HOA Business.
INCOME TAXES
The effective income tax rate was 25.9% for the
first quarter of 2022 compared to 27.5% for the fourth quarter of
2021. The decrease was due primarily to a lower blended state tax
rate. The effective tax rate for the full year 2022 is currently
estimated to be in the range of 25% to 27%.
BALANCE SHEET HIGHLIGHTS
DEPOSITS AND CLIENT INVESTMENT FUNDS
The following table presents the composition of
our deposit portfolio as of the dates indicated:
|
March 31, 2022 |
|
December 31, 2021 |
|
March 31, 2021 |
|
|
% of |
|
|
% of |
|
|
% of |
Deposit Composition |
Balance |
Total |
|
Balance |
Total |
|
Balance |
Total |
|
(Dollars in thousands) |
Noninterest-bearing demand |
$ |
14,057,051 |
|
42 |
% |
|
$ |
14,543,133 |
|
41 |
% |
|
$ |
11,017,462 |
|
39 |
% |
Interest checking |
|
6,673,696 |
|
20 |
% |
|
|
7,319,898 |
|
21 |
% |
|
|
6,862,398 |
|
25 |
% |
Money market |
|
10,301,996 |
|
31 |
% |
|
|
10,241,265 |
|
29 |
% |
|
|
7,112,610 |
|
25 |
% |
Savings |
|
643,661 |
|
2 |
% |
|
|
630,653 |
|
2 |
% |
|
|
583,878 |
|
2 |
% |
Total core deposits |
|
31,676,404 |
|
95 |
% |
|
|
32,734,949 |
|
93 |
% |
|
|
25,576,348 |
|
91 |
% |
Non-core non-maturity deposits |
|
322,732 |
|
1 |
% |
|
|
889,976 |
|
3 |
% |
|
|
1,162,590 |
|
4 |
% |
Total non-maturity deposits |
|
31,999,136 |
|
96 |
% |
|
|
33,624,925 |
|
96 |
% |
|
|
26,738,938 |
|
95 |
% |
Time deposits $250,000 and under |
|
878,383 |
|
3 |
% |
|
|
885,938 |
|
3 |
% |
|
|
940,340 |
|
3 |
% |
Time deposits over $250,000 |
|
347,376 |
|
1 |
% |
|
|
486,894 |
|
1 |
% |
|
|
544,013 |
|
2 |
% |
Total time deposits |
|
1,225,759 |
|
4 |
% |
|
|
1,372,832 |
|
4 |
% |
|
|
1,484,353 |
|
5 |
% |
Total deposits |
$ |
33,224,895 |
|
100 |
% |
|
$ |
34,997,757 |
|
100 |
% |
|
$ |
28,223,291 |
|
100 |
% |
|
|
|
|
|
|
|
|
|
At March 31, 2022, core deposits totaled $31.7 billion or 95% of
total deposits, including $14.1 billion of noninterest-bearing
demand deposits or 42% of total deposits. Core deposits decreased
by $1.1 billion or 3.2% in the first quarter of 2022 driven
primarily by a decrease in balances from our venture banking
clients, offset partially by an increase in community banking
deposits. Total deposits decreased by $1.8 billion or 5.1% in the
first quarter of 2022 due to the $1.5 billion decrease in venture
banking deposits and a $0.6 billion decrease in non-core
non-maturity deposits, of which $0.5 billion was scheduled for
maturity during the quarter, offset partially by an increase of
$180 million in community banking deposits. Total venture banking
deposits decreased from $15.5 billion as of December 31, 2021 to
$14.0 billion as of March 31, 2022.
In addition to deposit products, we also offer
alternative, non-depository cash investment options for select
clients. These alternative options 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 increased from $1.4
billion as of December 31, 2021 to $1.7 billion as of March 31,
2022, of which $1.0 billion was managed by PWAM. The increase was
primarily attributable to our venture banking clients.
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 |
|
2022 |
|
|
|
2021 |
|
|
(Dollars in thousands) |
Balance, beginning of period |
$ |
22,941,548 |
|
|
$ |
20,511,020 |
|
Additions: |
|
|
|
Production |
|
2,574,860 |
|
|
|
3,372,815 |
|
Disbursements |
|
1,589,152 |
|
|
|
1,917,195 |
|
Total production and disbursements |
|
4,164,012 |
|
|
|
5,290,010 |
|
Reductions: |
|
|
|
Payoffs |
|
(1,448,680 |
) |
|
|
(2,000,293 |
) |
Paydowns |
|
(1,264,571 |
) |
|
|
(845,443 |
) |
Total payoffs and paydowns |
|
(2,713,251 |
) |
|
|
(2,845,736 |
) |
Sales |
|
(36,698 |
) |
|
|
(15,837 |
) |
Transfers to foreclosed assets |
|
(305 |
) |
|
|
- |
|
Charge-offs |
|
(3,234 |
) |
|
|
(4,395 |
) |
Total reductions |
|
(2,753,488 |
) |
|
|
(2,865,968 |
) |
Loans acquired through acquisitions |
|
- |
|
|
|
6,486 |
|
Net increase (decrease) |
|
1,410,524 |
|
|
|
2,430,528 |
|
Balance, end of period |
$ |
24,352,072 |
|
|
$ |
22,941,548 |
|
|
|
|
|
Weighted average rate on production (1) |
|
4.31 |
% |
|
|
3.89 |
% |
|
|
|
|
(1) The weighted average rate on production presents contractual
rates on a tax equivalent basis and excludes amortized fees.
Amortized fees added approximately 24 basis points to loan
yields in 2022. |
|
|
|
Loans and leases held for investment, net of deferred fees,
increased by $1.4 billion or 6.1% in the first quarter of 2022 to
$24.4 billion at March 31, 2022. The overall increase in the loans
and leases balance for the first quarter of 2022 was due primarily
to increases in the income producing and other residential,
asset-based, and residential real estate construction portfolios,
offset partially by reductions in the venture capital and other
commercial portfolios.
Civic loan production was $559 million in the
first quarter of 2022 compared to $480 million in the fourth
quarter of 2021. The Civic loan portfolio as of March 31, 2022
totaled $1.7 billion.
PPP loans declined by $86.3 million in the first
quarter of 2022, as the program continues to wind down. Net fees
for PPP loans were $2.5 million in the first quarter of 2022, down
from $3.6 million in the fourth quarter of 2021. Remaining PPP
loans totaled $70.4 million as of March 31, 2022, with $1.7 million
of net fees to amortize over the remaining life of the loans.
The weighted average rate on the $2.6 billion of
production for the first quarter of 2022 increased to 4.31% from
3.89% in the fourth quarter of 2021 due primarily to the loan mix
(lower levels of single-family loan pool purchases and higher level
of Civic fundings). In the first quarter of 2022, we purchased $587
million of single-family loan pools compared to $1.1 billion in the
fourth quarter of 2021. The single-family loan pool purchase
portfolio as of March 31, 2022 totaled $2.9 billion.
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, 2022 |
|
December 31, 2021 |
|
March 31, 2021 |
|
|
% of |
|
|
% of |
|
|
% of |
Loan and Lease Portfolio |
Balance |
Total |
|
Balance |
Total |
|
Balance |
Total |
|
(Dollars in thousands) |
Real estate mortgage: |
|
|
|
|
|
|
|
|
Commercial |
$ |
3,669,741 |
|
15 |
% |
|
$ |
3,762,299 |
|
17 |
% |
|
$ |
3,941,610 |
|
21 |
% |
Residential |
|
8,369,550 |
|
35 |
% |
|
|
7,416,421 |
|
32 |
% |
|
|
4,045,603 |
|
21 |
% |
Total real estate mortgage |
|
12,039,291 |
|
50 |
% |
|
|
11,178,720 |
|
49 |
% |
|
|
7,987,213 |
|
42 |
% |
Real estate construction and land: |
|
|
|
|
|
|
|
|
Commercial |
|
802,022 |
|
3 |
% |
|
|
832,591 |
|
4 |
% |
|
|
990,035 |
|
5 |
% |
Residential |
|
2,891,467 |
|
12 |
% |
|
|
2,604,536 |
|
11 |
% |
|
|
2,575,788 |
|
14 |
% |
Total real estate construction and land |
|
3,693,489 |
|
15 |
% |
|
|
3,437,127 |
|
15 |
% |
|
|
3,565,823 |
|
19 |
% |
Total real estate |
|
15,732,780 |
|
65 |
% |
|
|
14,615,847 |
|
64 |
% |
|
|
11,553,036 |
|
61 |
% |
Commercial: |
|
|
|
|
|
|
|
|
Asset-based |
|
4,739,220 |
|
19 |
% |
|
|
4,075,477 |
|
18 |
% |
|
|
3,383,403 |
|
18 |
% |
Venture capital |
|
2,077,339 |
|
9 |
% |
|
|
2,320,593 |
|
10 |
% |
|
|
1,495,798 |
|
8 |
% |
Other commercial |
|
1,298,136 |
|
5 |
% |
|
|
1,471,981 |
|
6 |
% |
|
|
2,206,639 |
|
11 |
% |
Total commercial |
|
8,114,695 |
|
33 |
% |
|
|
7,868,051 |
|
34 |
% |
|
|
7,085,840 |
|
37 |
% |
Consumer |
|
504,597 |
|
2 |
% |
|
|
457,650 |
|
2 |
% |
|
|
340,352 |
|
2 |
% |
Total loans and leases held for investment, net of deferred
fees |
$ |
24,352,072 |
|
100 |
% |
|
$ |
22,941,548 |
|
100 |
% |
|
$ |
18,979,228 |
|
100 |
% |
|
|
|
|
|
|
|
|
|
Total unfunded loan commitments |
$ |
9,899,345 |
|
|
|
$ |
9,006,350 |
|
|
|
$ |
8,127,999 |
|
|
|
|
|
|
|
|
|
|
|
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, 2022 |
|
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 |
$ |
200,564 |
|
|
$ |
73,071 |
|
|
$ |
273,635 |
|
Charge-offs |
|
(3,234 |
) |
|
|
- |
|
|
|
(3,234 |
) |
Recoveries |
|
2,068 |
|
|
|
- |
|
|
|
2,068 |
|
Net charge-offs |
|
(1,166 |
) |
|
|
- |
|
|
|
(1,166 |
) |
Provision |
|
(2,000 |
) |
|
|
2,000 |
|
|
|
- |
|
Ending balance |
$ |
197,398 |
|
|
$ |
75,071 |
|
|
$ |
272,469 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31, 2021 |
|
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 |
$ |
203,733 |
|
|
$ |
76,071 |
|
|
$ |
279,804 |
|
Charge-offs |
|
(4,395 |
) |
|
|
- |
|
|
|
(4,395 |
) |
Recoveries |
|
4,226 |
|
|
|
- |
|
|
|
4,226 |
|
Net charge-offs |
|
(169 |
) |
|
|
- |
|
|
|
(169 |
) |
Provision |
|
(3,000 |
) |
|
|
(3,000 |
) |
|
|
(6,000 |
) |
Ending balance |
$ |
200,564 |
|
|
$ |
73,071 |
|
|
$ |
273,635 |
|
|
|
|
|
|
|
The following table presents allowance for credit losses
information as of and for the dates and periods indicated:
|
March 31, |
|
December 31, |
|
Increase |
Allowance for Credit Losses |
|
2022 |
|
|
|
2021 |
|
|
(Decrease) |
|
(Dollars in thousands) |
Allowance for loan and lease losses |
$ |
197,398 |
|
|
$ |
200,564 |
|
|
$ |
(3,166 |
) |
Reserve for unfunded loan commitments |
|
75,071 |
|
|
|
73,071 |
|
|
|
2,000 |
|
Allowance for credit losses |
$ |
272,469 |
|
|
$ |
273,635 |
|
|
$ |
(1,166 |
) |
|
|
|
|
|
|
Provision for credit losses (for the quarter) |
$ |
- |
|
|
$ |
(6,000 |
) |
|
$ |
6,000 |
|
Net charge-offs (recoveries) (for the quarter) |
$ |
1,166 |
|
|
$ |
169 |
|
|
$ |
997 |
|
Net charge-offs (recoveries)
to average loans and leases (for the quarter) |
|
0.02 |
% |
|
|
0.00 |
% |
|
|
Allowance for loan and lease
losses to loans and leases held for investment |
|
0.81 |
% |
|
|
0.87 |
% |
|
|
Allowance for loan and lease
losses to loans and leases held for investment, excluding PPP
loans |
|
0.81 |
% |
|
|
0.88 |
% |
|
|
Allowance for credit losses to
loans and leases held for investment |
|
1.12 |
% |
|
|
1.19 |
% |
|
|
Allowance for credit losses to
loans and leases held for investment, excluding PPP loans |
|
1.12 |
% |
|
|
1.20 |
% |
|
|
|
|
|
|
|
|
The allowance for credit losses decreased by $1.2 million in the
first quarter of 2022 to $272.5 million at March 31, 2022. The
decrease in the allowance for credit losses during the first
quarter of 2022 was attributable to $1.2 million in net
charge-offs. The allowance for credit losses ratio, excluding PPP
loans, of 1.12% remains robust and moderately higher than the
pre-pandemic level of 0.97% as of the January 1, 2020 CECL adoption
date.
Net charge-offs were $1.2 million for the first
quarter of 2022 as gross charge-offs of $3.2 million were reduced
by recoveries of $2.0 million.
Net charge-offs were $0.2 million for the fourth
quarter of 2021 as gross charge-offs of $4.4 million were reduced
by recoveries of $4.2 million.
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 |
|
2022 |
|
|
|
2021 |
|
|
(Decrease) |
|
(Dollars in thousands) |
NPAs and Performing TDRs: |
|
|
|
|
|
Nonaccrual loans and leases held for investment (1) |
$ |
66,538 |
|
|
$ |
61,174 |
|
|
$ |
5,364 |
|
Accruing loans contractually past due 90 days or more |
|
- |
|
|
|
- |
|
|
|
- |
|
Foreclosed assets, net |
|
304 |
|
|
|
12,843 |
|
|
|
(12,539 |
) |
Total nonperforming assets ("NPAs") |
$ |
66,842 |
|
|
$ |
74,017 |
|
|
$ |
(7,175 |
) |
|
|
|
|
|
|
Performing TDRs held for investment |
$ |
16,781 |
|
|
$ |
24,430 |
|
|
$ |
(7,649 |
) |
|
|
|
|
|
|
Nonaccrual loans and leases
held for investment to loans and leases held for investment |
|
0.27 |
% |
|
|
0.27 |
% |
|
|
Nonperforming assets to loans
and leases held for investment and foreclosed assets |
|
0.27 |
% |
|
|
0.32 |
% |
|
|
Allowance for credit losses to
nonaccrual loans and leases held for investment |
|
409.5 |
% |
|
|
447.3 |
% |
|
|
|
|
|
|
|
|
Loan and Lease Credit Risk Ratings: |
|
|
|
|
|
Pass |
$ |
23,892,689 |
|
|
$ |
22,433,833 |
|
|
$ |
1,458,856 |
|
Special mention |
|
377,315 |
|
|
|
391,611 |
|
|
|
(14,296 |
) |
Classified |
|
82,068 |
|
|
|
116,104 |
|
|
|
(34,036 |
) |
Total loans and leases held for investment, net of deferred
fees |
$ |
24,352,072 |
|
|
$ |
22,941,548 |
|
|
$ |
1,410,524 |
|
|
|
|
|
|
|
Classified loans and leases
held for investment to loans and leases held for investment |
|
0.34 |
% |
|
|
0.51 |
% |
|
|
|
|
|
|
|
|
(1) Nonaccrual loans include SBA guaranteed amounts of $13.4
million at March 31, 2022 and $22.1 million at December 31,
2021. |
|
|
|
|
|
|
|
|
|
|
Since downgrading certain loans at the onset of the pandemic in
the first quarter of 2020 given all the uncertainty at the time,
special mention loans and leases have decreased by $521.3 million
or 58% from their peak in the first quarter of 2020, while
classified loans and leases have decreased by $211.2 million or 72%
from their peak in the second quarter of 2020, and each have
continued to decline in the first quarter of 2022. Classified loans
and leases are now below pre-pandemic levels, while special mention
loans and leases are also approaching pre-pandemic levels.
Nonaccrual loans and leases increased by $5.4 million to $66.5
million in the first quarter of 2022 due primarily to an increase
in nonaccrual short-term, single-family residential renovation
loans. With this product, it is common for the borrower to let the
loan become delinquent once they enter escrow to sell the renovated
home as the loan will be paid off through the closing of
escrow.
In the first quarter of 2022, we sold our largest
foreclosed asset with a book value of $12.6 million, which resulted
in a gain on sale of $3.2 million.
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:
|
March 31, 2022 |
|
December 31, 2021 |
|
Increase (Decrease) |
|
|
|
Accruing |
|
|
|
Accruing |
|
|
|
Accruing |
|
|
|
and 30-89 |
|
|
|
and 30-89 |
|
|
|
and 30-89 |
|
|
|
Days Past |
|
|
|
Days Past |
|
|
|
Days Past |
|
Nonaccrual |
|
Due |
|
Nonaccrual |
|
Due |
|
Nonaccrual |
|
Due |
|
(In thousands) |
Real estate mortgage: |
|
|
|
|
|
|
|
|
|
|
|
Commercial |
$ |
32,071 |
|
$ |
2,090 |
|
$ |
27,540 |
|
$ |
2,165 |
|
$ |
4,531 |
|
|
$ |
(75 |
) |
Income producing and other residential |
|
17,463 |
|
|
31,103 |
|
|
12,292 |
|
|
39,929 |
|
|
5,171 |
|
|
|
(8,826 |
) |
Total real estate mortgage |
|
49,534 |
|
|
33,193 |
|
|
39,832 |
|
|
42,094 |
|
|
9,702 |
|
|
|
(8,901 |
) |
Real estate construction and land: |
|
|
|
|
|
|
|
|
|
|
|
Commercial |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
|
- |
|
Residential |
|
6,215 |
|
|
21,413 |
|
|
4,715 |
|
|
5,031 |
|
|
1,500 |
|
|
|
16,382 |
|
Total real estate construction and land |
|
6,215 |
|
|
21,413 |
|
|
4,715 |
|
|
5,031 |
|
|
1,500 |
|
|
|
16,382 |
|
Commercial: |
|
|
|
|
|
|
|
|
|
|
|
Asset-based |
|
1,323 |
|
|
- |
|
|
1,464 |
|
|
- |
|
|
(141 |
) |
|
|
- |
|
Venture capital |
|
3,659 |
|
|
- |
|
|
2,799 |
|
|
- |
|
|
860 |
|
|
|
- |
|
Other commercial |
|
5,420 |
|
|
47 |
|
|
11,950 |
|
|
630 |
|
|
(6,530 |
) |
|
|
(583 |
) |
Total commercial |
|
10,402 |
|
|
47 |
|
|
16,213 |
|
|
630 |
|
|
(5,811 |
) |
|
|
(583 |
) |
Consumer |
|
387 |
|
|
994 |
|
|
414 |
|
|
1,004 |
|
|
(27 |
) |
|
|
(10 |
) |
Total held for investment |
$ |
66,538 |
|
$ |
55,647 |
|
$ |
61,174 |
|
$ |
48,759 |
|
$ |
5,364 |
|
|
$ |
6,888 |
|
|
|
|
|
|
|
|
|
|
|
|
|
The increase in accruing and 30-89 days past due loans in the
residential real estate construction category is primarily due to
an increase in short-term, single-family residential renovation
loans. With this product, it is common for the borrower to let the
loan become delinquent once they enter escrow to sell the renovated
home as the loan will be paid off through the closing of escrow.
This increase in accruing and 30-89 days past due loans was offset
partially by a decrease in the income producing and other
residential loans category, which was due mainly to a reduction in
past due purchased single-family loans.
CAPITAL
Our capital ratios decreased during the first
quarter of 2022 as risk-weighted assets grew by $1.8 billion
primarily as a result of loan growth. We are considering various
non-common equity capital enhancing strategies, such as a preferred
offering depending on market conditions, to increase capital given
our growth in the last three quarters and anticipated future loan
growth. The following table presents certain actual capital ratios
and ratios excluding PPP loans:
|
March 31, 2022 |
|
|
|
|
|
Excluding |
|
December 31, |
|
|
|
PPP |
|
|
2021 |
|
|
Actual (1) |
|
Loans (1) |
|
Actual |
PacWest Bancorp Consolidated: |
|
|
|
|
|
Tier 1 leverage capital ratio |
|
7.11 |
% |
|
|
7.13 |
% |
(3) |
|
6.84 |
% |
Common equity tier 1 capital ratio |
|
8.64 |
% |
|
|
8.64 |
% |
|
|
8.86 |
% |
Tier 1 capital ratio |
|
9.07 |
% |
|
|
9.07 |
% |
|
|
9.32 |
% |
Total capital ratio |
|
12.27 |
% |
|
|
12.27 |
% |
|
|
12.69 |
% |
Risk-weighted assets (in thousands) |
$ |
30,297,945 |
|
|
$ |
30,297,945 |
|
|
$ |
28,508,808 |
|
Tangible common equity ratio (2) |
|
5.83 |
% |
|
|
5.84 |
% |
(3) |
|
6.54 |
% |
|
|
|
|
|
|
(1) Capital information for March 31, 2022 is preliminary. |
|
|
|
|
(2) Non-GAAP measure. |
|
|
|
|
(3) PPP loans have been excluded from total assets in the
denominator as they are zero risk-weighted. |
|
|
|
|
|
|
|
|
|
ABOUT PACWEST BANCORP
PacWest Bancorp (“PacWest”) is a bank holding
company with over $39 billion in assets headquartered in Los
Angeles, California, with an executive office in Denver, Colorado,
with one wholly-owned banking subsidiary, Pacific Western Bank (the
“Bank”). The Bank is focused on relationship-based business banking
to small, middle-market, and venture-backed businesses nationwide.
The Bank offers a broad range of loan and lease and deposit
products and services through 69 full-service branches located in
California, one branch located in Durham, North Carolina, one
branch located in Denver, Colorado, and numerous loan production
offices across the country. 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 provides 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. The Bank also
offers financing of business-purpose, non-owner-occupied investor
properties through Civic, a wholly-owned subsidiary. The Bank also
provides a specialized suite of services for the HOA industry. 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 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, which may cause actual results, performance, or
achievements to differ materially from those expressed in them. The
ongoing COVID-19 pandemic continues to affect PacWest, 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 due in
part to the new variants of COVID-19. The risks from the COVID-19
pandemic have decreased as the pandemic subsides, however, new
variants may continue to impact key macro-economic indicators such
as unemployment and GDP and may have a material impact on our
allowance for credit losses and related provision for credit
losses. Continued deterioration in general business and economic
conditions could adversely affect PacWest’s revenues and the values
of its assets, including goodwill, and liabilities, lead to a
tightening of credit, and increase stock price volatility. In
addition, PacWest’s results could be adversely affected by changes
in interest rates, sustained high 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, and legal and regulatory developments.
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
PacWest with the U.S. Securities and Exchange Commission.
All forward-looking statements in this
communication are based on information available at the time the
statement is made. 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, |
|
|
2022 |
|
|
|
2021 |
|
|
|
2021 |
|
|
(Dollars in thousands, except per share
data) |
ASSETS: |
|
|
|
|
|
Cash and due from banks |
$ |
205,446 |
|
|
$ |
112,548 |
|
|
$ |
177,199 |
|
Interest-earning deposits in financial institutions |
|
1,865,235 |
|
|
|
3,944,686 |
|
|
|
5,517,667 |
|
Total cash and cash equivalents |
|
2,070,681 |
|
|
|
4,057,234 |
|
|
|
5,694,866 |
|
|
|
|
|
|
|
Securities available-for-sale, at estimated fair value |
|
9,975,109 |
|
|
|
10,694,458 |
|
|
|
5,941,690 |
|
Federal Home Loan Bank stock, at cost |
|
17,250 |
|
|
|
17,250 |
|
|
|
17,250 |
|
Total investment securities |
|
9,992,359 |
|
|
|
10,711,708 |
|
|
|
5,958,940 |
|
|
|
|
|
|
|
Loans held for sale |
|
- |
|
|
|
- |
|
|
|
25,554 |
|
|
|
|
|
|
|
Gross loans and leases held for investment |
|
24,439,749 |
|
|
|
23,026,308 |
|
|
|
19,055,165 |
|
Deferred fees, net |
|
(87,677 |
) |
|
|
(84,760 |
) |
|
|
(75,937 |
) |
Total loans and leases held for investment, net of deferred
fees |
|
24,352,072 |
|
|
|
22,941,548 |
|
|
|
18,979,228 |
|
Allowance for loan and lease losses |
|
(197,398 |
) |
|
|
(200,564 |
) |
|
|
(292,445 |
) |
Total loans and leases held for investment,
net |
|
24,154,674 |
|
|
|
22,740,984 |
|
|
|
18,686,783 |
|
|
|
|
|
|
|
Equipment leased to others under operating leases |
|
325,305 |
|
|
|
339,150 |
|
|
|
327,413 |
|
Premises and equipment, net |
|
51,011 |
|
|
|
46,740 |
|
|
|
39,622 |
|
Foreclosed assets, net |
|
304 |
|
|
|
12,843 |
|
|
|
14,298 |
|
Goodwill |
|
1,405,736 |
|
|
|
1,405,736 |
|
|
|
1,204,092 |
|
Core deposit and customer relationship intangibles, net |
|
41,308 |
|
|
|
44,957 |
|
|
|
21,312 |
|
Other assets |
|
1,208,261 |
|
|
|
1,083,992 |
|
|
|
883,653 |
|
Total assets |
$ |
39,249,639 |
|
|
$ |
40,443,344 |
|
|
$ |
32,856,533 |
|
|
|
|
|
|
|
LIABILITIES: |
|
|
|
|
|
Noninterest-bearing deposits |
$ |
14,057,051 |
|
|
$ |
14,543,133 |
|
|
$ |
11,017,462 |
|
Interest-bearing deposits |
|
19,167,844 |
|
|
|
20,454,624 |
|
|
|
17,205,829 |
|
Total deposits |
|
33,224,895 |
|
|
|
34,997,757 |
|
|
|
28,223,291 |
|
Borrowings |
|
991,000 |
|
|
|
- |
|
|
|
19,750 |
|
Subordinated debt |
|
863,880 |
|
|
|
863,283 |
|
|
|
465,814 |
|
Accrued interest payable and other liabilities |
|
519,269 |
|
|
|
582,674 |
|
|
|
493,541 |
|
Total liabilities |
|
35,599,044 |
|
|
|
36,443,714 |
|
|
|
29,202,396 |
|
STOCKHOLDERS' EQUITY (1) |
|
3,650,595 |
|
|
|
3,999,630 |
|
|
|
3,654,137 |
|
Total liabilities and stockholders’ equity |
$ |
39,249,639 |
|
|
$ |
40,443,344 |
|
|
$ |
32,856,533 |
|
|
|
|
|
|
|
Book value per share |
$ |
30.52 |
|
|
$ |
33.45 |
|
|
$ |
30.68 |
|
Tangible book value per share (2) |
$ |
18.42 |
|
|
$ |
21.31 |
|
|
$ |
20.39 |
|
Shares outstanding |
|
119,601,766 |
|
|
|
119,584,854 |
|
|
|
119,105,642 |
|
|
|
|
|
|
|
(1) Includes net unrealized
(loss) gain on securities available-for-sale, net |
$ |
(376,475 |
) |
|
$ |
65,968 |
|
|
$ |
106,381 |
|
(2) Non-GAAP measure. |
|
|
|
|
|
|
|
|
|
|
|
PACWEST BANCORP AND SUBSIDIARIES |
|
|
|
|
|
CONDENSED CONSOLIDATED STATEMENT OF EARNINGS |
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
March 31, |
|
December 31, |
|
March 31, |
|
|
2022 |
|
|
|
2021 |
|
|
|
2021 |
|
|
(In thousands, except per share
data) |
Interest income: |
|
|
|
|
|
Loans and leases |
$ |
267,759 |
|
|
$ |
263,662 |
|
|
$ |
241,544 |
|
Investment securities |
|
53,422 |
|
|
|
48,469 |
|
|
|
30,265 |
|
Deposits in financial institutions |
|
1,723 |
|
|
|
2,674 |
|
|
|
1,528 |
|
Total interest income |
|
322,904 |
|
|
|
314,805 |
|
|
|
273,337 |
|
|
|
|
|
|
|
Interest expense: |
|
|
|
|
|
Deposits |
|
6,208 |
|
|
|
6,622 |
|
|
|
7,500 |
|
Borrowings |
|
161 |
|
|
|
64 |
|
|
|
193 |
|
Subordinated debt |
|
7,818 |
|
|
|
7,714 |
|
|
|
4,375 |
|
Total interest expense |
|
14,187 |
|
|
|
14,400 |
|
|
|
12,068 |
|
|
|
|
|
|
|
Net interest income |
|
308,717 |
|
|
|
300,405 |
|
|
|
261,269 |
|
Provision for credit losses |
|
- |
|
|
|
(6,000 |
) |
|
|
(48,000 |
) |
Net interest income after provision for credit losses |
|
308,717 |
|
|
|
306,405 |
|
|
|
309,269 |
|
|
|
|
|
|
|
Noninterest income: |
|
|
|
|
|
Service charges on deposit accounts |
|
3,571 |
|
|
|
3,476 |
|
|
|
2,934 |
|
Other commissions and fees |
|
11,580 |
|
|
|
10,633 |
|
|
|
9,158 |
|
Leased equipment income |
|
13,094 |
|
|
|
12,602 |
|
|
|
11,354 |
|
Gain on sale of loans and leases |
|
60 |
|
|
|
172 |
|
|
|
139 |
|
Gain on sale of securities |
|
104 |
|
|
|
999 |
|
|
|
101 |
|
Dividends and (losses) gains on equity investments |
|
(11,375 |
) |
|
|
(1,570 |
) |
|
|
10,904 |
|
Warrant income |
|
629 |
|
|
|
23,990 |
|
|
|
6,123 |
|
Other income |
|
3,155 |
|
|
|
7,080 |
|
|
|
4,116 |
|
Total noninterest income |
|
20,818 |
|
|
|
57,382 |
|
|
|
44,829 |
|
|
|
|
|
|
|
Noninterest expense: |
|
|
|
|
|
Compensation |
|
92,240 |
|
|
|
99,700 |
|
|
|
79,882 |
|
Occupancy |
|
15,200 |
|
|
|
14,656 |
|
|
|
14,054 |
|
Data processing |
|
9,629 |
|
|
|
8,171 |
|
|
|
6,957 |
|
Other professional services |
|
5,954 |
|
|
|
5,946 |
|
|
|
5,126 |
|
Insurance and assessments |
|
5,490 |
|
|
|
5,032 |
|
|
|
4,903 |
|
Intangible asset amortization |
|
3,649 |
|
|
|
3,876 |
|
|
|
3,079 |
|
Leased equipment depreciation |
|
9,189 |
|
|
|
9,569 |
|
|
|
8,969 |
|
Foreclosed assets (income) expense, net |
|
(3,353 |
) |
|
|
(260 |
) |
|
|
1 |
|
Acquisition, integration and reorganization costs |
|
- |
|
|
|
5,590 |
|
|
|
3,425 |
|
Customer related expense |
|
12,655 |
|
|
|
6,175 |
|
|
|
4,818 |
|
Loan expense |
|
5,157 |
|
|
|
5,627 |
|
|
|
3,193 |
|
Other expense |
|
11,616 |
|
|
|
12,028 |
|
|
|
15,729 |
|
Total noninterest expense |
|
167,426 |
|
|
|
176,110 |
|
|
|
150,136 |
|
|
|
|
|
|
|
Earnings before income taxes |
|
162,109 |
|
|
|
187,677 |
|
|
|
203,962 |
|
Income tax expense |
|
41,981 |
|
|
|
51,632 |
|
|
|
53,556 |
|
Net earnings |
$ |
120,128 |
|
|
$ |
136,045 |
|
|
$ |
150,406 |
|
|
|
|
|
|
|
Basic and diluted earnings per share |
$ |
1.01 |
|
|
$ |
1.14 |
|
|
$ |
1.27 |
|
Dividends declared and paid per share |
$ |
0.25 |
|
|
$ |
0.25 |
|
|
$ |
0.25 |
|
|
|
|
|
|
|
PACWEST BANCORP AND SUBSIDIARIES |
NET EARNINGS PER SHARE CALCULATIONS |
|
|
|
|
|
|
|
Three Months Ended |
|
March 31, |
|
December 31, |
|
March 31, |
|
2022 |
|
2021 |
|
2021 |
|
(Dollars in thousands, except per share
data) |
Basic Earnings Per Share: |
|
|
|
|
|
Net earnings |
$ |
120,128 |
|
|
$ |
136,045 |
|
|
$ |
150,406 |
|
Less: earnings allocated to unvested restricted stock (1) |
|
(2,037 |
) |
|
|
(2,311 |
) |
|
|
(2,355 |
) |
Net earnings allocated to common shares |
$ |
118,091 |
|
|
$ |
133,734 |
|
|
$ |
148,051 |
|
|
|
|
|
|
|
Weighted average basic shares and unvested restricted stock
outstanding |
|
119,595 |
|
|
|
119,577 |
|
|
|
118,852 |
|
Less: weighted average unvested restricted stock outstanding |
|
(2,246 |
) |
|
|
(2,314 |
) |
|
|
(2,003 |
) |
Weighted average basic shares outstanding |
|
117,349 |
|
|
|
117,263 |
|
|
|
116,849 |
|
|
|
|
|
|
|
Basic earnings per share |
$ |
1.01 |
|
|
$ |
1.14 |
|
|
$ |
1.27 |
|
|
|
|
|
|
|
Diluted Earnings Per Share: |
|
|
|
|
|
Net earnings allocated to common shares |
$ |
118,091 |
|
|
$ |
133,734 |
|
|
$ |
148,051 |
|
|
|
|
|
|
|
Weighted average diluted shares outstanding |
|
117,349 |
|
|
|
117,263 |
|
|
|
116,849 |
|
|
|
|
|
|
|
Diluted earnings per share |
$ |
1.01 |
|
|
$ |
1.14 |
|
|
$ |
1.27 |
|
|
|
|
|
|
|
(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, 2022 |
|
December 31, 2021 |
|
March 31, 2021 |
|
|
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) |
$ |
23,433,019 |
$ |
269,521 |
4.66 |
% |
|
$ |
21,367,665 |
$ |
265,549 |
4.93 |
% |
|
$ |
18,927,314 |
$ |
242,846 |
5.20 |
% |
Investment securities (3) |
|
10,397,709 |
|
55,594 |
2.17 |
% |
|
|
9,964,568 |
|
50,710 |
2.02 |
% |
|
|
5,383,140 |
|
32,329 |
2.44 |
% |
Deposits in financial
institutions |
|
3,083,159 |
|
1,723 |
0.23 |
% |
|
|
5,961,104 |
|
2,674 |
0.18 |
% |
|
|
4,790,231 |
|
1,528 |
0.13 |
% |
Total interest-earning assets (1) |
|
36,913,887 |
|
326,838 |
3.59 |
% |
|
|
37,293,337 |
|
318,933 |
3.39 |
% |
|
|
29,100,685 |
|
276,703 |
3.86 |
% |
Other assets |
|
2,969,417 |
|
|
|
|
3,064,810 |
|
|
|
|
2,315,197 |
|
|
Total assets |
$ |
39,883,304 |
|
|
|
$ |
40,358,147 |
|
|
|
$ |
31,415,882 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Stockholders'
Equity: |
|
|
|
|
|
|
|
|
|
|
|
Interest checking |
$ |
7,094,623 |
|
1,776 |
0.10 |
% |
|
$ |
7,767,211 |
|
2,041 |
0.10 |
% |
|
$ |
6,401,869 |
|
2,232 |
0.14 |
% |
Money market |
|
10,852,454 |
|
3,461 |
0.13 |
% |
|
|
10,226,366 |
|
3,400 |
0.13 |
% |
|
|
7,975,996 |
|
3,278 |
0.17 |
% |
Savings |
|
642,709 |
|
39 |
0.02 |
% |
|
|
634,874 |
|
39 |
0.02 |
% |
|
|
572,959 |
|
35 |
0.02 |
% |
Time |
|
1,278,609 |
|
932 |
0.30 |
% |
|
|
1,421,859 |
|
1,142 |
0.32 |
% |
|
|
1,493,267 |
|
1,955 |
0.53 |
% |
Total interest-bearing deposits |
|
19,868,395 |
|
6,208 |
0.13 |
% |
|
|
20,050,310 |
|
6,622 |
0.13 |
% |
|
|
16,444,091 |
|
7,500 |
0.18 |
% |
Borrowings |
|
298,444 |
|
161 |
0.22 |
% |
|
|
234,391 |
|
64 |
0.11 |
% |
|
|
226,053 |
|
193 |
0.35 |
% |
Subordinated debt |
|
863,572 |
|
7,818 |
3.67 |
% |
|
|
862,777 |
|
7,714 |
3.55 |
% |
|
|
466,101 |
|
4,375 |
3.81 |
% |
Total interest-bearing liabilities |
|
21,030,411 |
|
14,187 |
0.27 |
% |
|
|
21,147,478 |
|
14,400 |
0.27 |
% |
|
|
17,136,245 |
|
12,068 |
0.29 |
% |
Noninterest-bearing demand
deposits |
|
14,463,667 |
|
|
|
|
14,713,385 |
|
|
|
|
10,173,459 |
|
|
Other liabilities |
|
541,745 |
|
|
|
|
543,017 |
|
|
|
|
488,930 |
|
|
Total liabilities |
|
36,035,823 |
|
|
|
|
36,403,880 |
|
|
|
|
27,798,634 |
|
|
Stockholders' equity |
|
3,847,481 |
|
|
|
|
3,954,267 |
|
|
|
|
3,617,248 |
|
|
Total liabilities and stockholders' equity |
$ |
39,883,304 |
|
|
|
$ |
40,358,147 |
|
|
|
$ |
31,415,882 |
|
|
Net interest income (1) |
|
$ |
312,651 |
|
|
|
$ |
304,533 |
|
|
|
$ |
264,635 |
|
Net interest spread (1) |
|
|
3.32 |
% |
|
|
|
3.12 |
% |
|
|
|
3.57 |
% |
Net interest margin (1) |
|
|
3.43 |
% |
|
|
|
3.24 |
% |
|
|
|
3.69 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Total deposits (4) |
$ |
34,332,062 |
$ |
6,208 |
0.07 |
% |
|
$ |
34,763,695 |
$ |
6,622 |
0.08 |
% |
|
$ |
26,617,550 |
$ |
7,500 |
0.11 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
(1) Tax equivalent. |
(2) Includes net loan premium amortization of $5.7 million, $6.4
million, and $1.2 million for the three months ended March 31,
2022, December 31, 2021, and March 31, 2021,
respectively. |
(3) Includes tax-equivalent adjustments of $2.2 million, $2.2
million, and $2.1 million for the three months ended March 31,
2022, December 31, 2021, and March 31, 2021 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, |
|
|
2022 |
|
|
|
2021 |
|
|
|
2021 |
|
|
|
2021 |
|
|
|
2021 |
|
|
(Dollars in thousands, except per share
data) |
ASSETS: |
|
|
|
|
|
|
|
|
|
Cash and due from banks |
$ |
205,446 |
|
|
$ |
112,548 |
|
|
$ |
174,585 |
|
|
$ |
179,505 |
|
|
$ |
177,199 |
|
Interest-earning deposits in
financial institutions |
|
1,865,235 |
|
|
|
3,944,686 |
|
|
|
3,524,613 |
|
|
|
5,678,587 |
|
|
|
5,517,667 |
|
Total cash and cash equivalents |
|
2,070,681 |
|
|
|
4,057,234 |
|
|
|
3,699,198 |
|
|
|
5,858,092 |
|
|
|
5,694,866 |
|
|
|
|
|
|
|
|
|
|
|
Securities available-for-sale |
|
9,975,109 |
|
|
|
10,694,458 |
|
|
|
9,276,926 |
|
|
|
7,198,608 |
|
|
|
5,941,690 |
|
Federal Home Loan Bank stock |
|
17,250 |
|
|
|
17,250 |
|
|
|
17,250 |
|
|
|
17,250 |
|
|
|
17,250 |
|
Total investment securities |
|
9,992,359 |
|
|
|
10,711,708 |
|
|
|
9,294,176 |
|
|
|
7,215,858 |
|
|
|
5,958,940 |
|
|
|
|
|
|
|
|
|
|
|
Loans held for sale |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
25,554 |
|
|
|
|
|
|
|
|
|
|
|
Gross loans and leases held for investment |
|
24,439,749 |
|
|
|
23,026,308 |
|
|
|
20,588,255 |
|
|
|
19,580,731 |
|
|
|
19,055,165 |
|
Deferred fees, net |
|
(87,677 |
) |
|
|
(84,760 |
) |
|
|
(77,235 |
) |
|
|
(74,474 |
) |
|
|
(75,937 |
) |
Total loans and leases held for investment, net of deferred
fees |
|
24,352,072 |
|
|
|
22,941,548 |
|
|
|
20,511,020 |
|
|
|
19,506,257 |
|
|
|
18,979,228 |
|
Allowance for loan and lease losses |
|
(197,398 |
) |
|
|
(200,564 |
) |
|
|
(203,733 |
) |
|
|
(225,600 |
) |
|
|
(292,445 |
) |
Total loans and leases held for investment,
net |
|
24,154,674 |
|
|
|
22,740,984 |
|
|
|
20,307,287 |
|
|
|
19,280,657 |
|
|
|
18,686,783 |
|
|
|
|
|
|
|
|
|
|
|
Equipment leased to others
under operating leases |
|
325,305 |
|
|
|
339,150 |
|
|
|
334,275 |
|
|
|
313,574 |
|
|
|
327,413 |
|
Premises and equipment, net |
|
51,011 |
|
|
|
46,740 |
|
|
|
47,246 |
|
|
|
39,541 |
|
|
|
39,622 |
|
Foreclosed assets, net |
|
304 |
|
|
|
12,843 |
|
|
|
13,364 |
|
|
|
13,227 |
|
|
|
14,298 |
|
Goodwill |
|
1,405,736 |
|
|
|
1,405,736 |
|
|
|
1,204,118 |
|
|
|
1,204,118 |
|
|
|
1,204,092 |
|
Core deposit and customer
relationship intangibles, net |
|
41,308 |
|
|
|
44,957 |
|
|
|
15,533 |
|
|
|
18,423 |
|
|
|
21,312 |
|
Other assets |
|
1,208,261 |
|
|
|
1,083,992 |
|
|
|
970,479 |
|
|
|
924,497 |
|
|
|
883,653 |
|
Total assets |
$ |
39,249,639 |
|
|
$ |
40,443,344 |
|
|
$ |
35,885,676 |
|
|
$ |
34,867,987 |
|
|
$ |
32,856,533 |
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES: |
|
|
|
|
|
|
|
|
|
Noninterest-bearing deposits |
$ |
14,057,051 |
|
|
$ |
14,543,133 |
|
|
$ |
12,881,806 |
|
|
$ |
11,252,286 |
|
|
$ |
11,017,462 |
|
Interest-bearing deposits |
|
19,167,844 |
|
|
|
20,454,624 |
|
|
|
17,677,939 |
|
|
|
18,394,748 |
|
|
|
17,205,829 |
|
Total deposits |
|
33,224,895 |
|
|
|
34,997,757 |
|
|
|
30,559,745 |
|
|
|
29,647,034 |
|
|
|
28,223,291 |
|
Borrowings |
|
991,000 |
|
|
|
- |
|
|
|
- |
|
|
|
6,625 |
|
|
|
19,750 |
|
Subordinated debt |
|
863,880 |
|
|
|
863,283 |
|
|
|
862,447 |
|
|
|
861,788 |
|
|
|
465,814 |
|
Accrued interest payable and
other liabilities |
|
519,269 |
|
|
|
582,674 |
|
|
|
545,050 |
|
|
|
505,859 |
|
|
|
493,541 |
|
Total liabilities |
|
35,599,044 |
|
|
|
36,443,714 |
|
|
|
31,967,242 |
|
|
|
31,021,306 |
|
|
|
29,202,396 |
|
STOCKHOLDERS' EQUITY (1) |
|
3,650,595 |
|
|
|
3,999,630 |
|
|
|
3,918,434 |
|
|
|
3,846,681 |
|
|
|
3,654,137 |
|
Total liabilities and stockholders’ equity |
$ |
39,249,639 |
|
|
$ |
40,443,344 |
|
|
$ |
35,885,676 |
|
|
$ |
34,867,987 |
|
|
$ |
32,856,533 |
|
|
|
|
|
|
|
|
|
|
|
Book value per share |
$ |
30.52 |
|
|
$ |
33.45 |
|
|
$ |
32.77 |
|
|
$ |
32.17 |
|
|
$ |
30.68 |
|
Tangible book value per share (2) |
$ |
18.42 |
|
|
$ |
21.31 |
|
|
$ |
22.57 |
|
|
$ |
21.95 |
|
|
$ |
20.39 |
|
Shares outstanding |
|
119,601,766 |
|
|
|
119,584,854 |
|
|
|
119,579,566 |
|
|
|
119,555,102 |
|
|
|
119,105,642 |
|
|
|
|
|
|
|
|
|
|
|
(1) Includes net unrealized
(loss) gain on securities available-for-sale, net |
$ |
(376,475 |
) |
|
$ |
65,968 |
|
|
$ |
98,859 |
|
|
$ |
145,516 |
|
|
$ |
106,381 |
|
(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, |
|
|
2022 |
|
|
|
2021 |
|
|
|
2021 |
|
|
|
2021 |
|
|
|
2021 |
|
|
(In thousands, except per share
data) |
Interest income: |
|
|
|
|
|
|
|
|
|
Loans and leases |
$ |
267,759 |
|
|
$ |
263,662 |
|
|
$ |
246,722 |
|
|
$ |
244,529 |
|
|
$ |
241,544 |
|
Investment securities |
|
53,422 |
|
|
|
48,469 |
|
|
|
40,780 |
|
|
|
33,954 |
|
|
|
30,265 |
|
Deposits in financial institutions |
|
1,723 |
|
|
|
2,674 |
|
|
|
2,580 |
|
|
|
2,022 |
|
|
|
1,528 |
|
Total interest income |
|
322,904 |
|
|
|
314,805 |
|
|
|
290,082 |
|
|
|
280,505 |
|
|
|
273,337 |
|
|
|
|
|
|
|
|
|
|
|
Interest expense: |
|
|
|
|
|
|
|
|
|
Deposits |
|
6,208 |
|
|
|
6,622 |
|
|
|
6,417 |
|
|
|
7,269 |
|
|
|
7,500 |
|
Borrowings |
|
161 |
|
|
|
64 |
|
|
|
101 |
|
|
|
265 |
|
|
|
193 |
|
Subordinated debt |
|
7,818 |
|
|
|
7,714 |
|
|
|
7,722 |
|
|
|
6,663 |
|
|
|
4,375 |
|
Total interest expense |
|
14,187 |
|
|
|
14,400 |
|
|
|
14,240 |
|
|
|
14,197 |
|
|
|
12,068 |
|
|
|
|
|
|
|
|
|
|
|
Net interest income |
|
308,717 |
|
|
|
300,405 |
|
|
|
275,842 |
|
|
|
266,308 |
|
|
|
261,269 |
|
Provision for credit losses |
|
- |
|
|
|
(6,000 |
) |
|
|
(20,000 |
) |
|
|
(88,000 |
) |
|
|
(48,000 |
) |
Net interest income after provision for credit losses |
|
308,717 |
|
|
|
306,405 |
|
|
|
295,842 |
|
|
|
354,308 |
|
|
|
309,269 |
|
|
|
|
|
|
|
|
|
|
|
Noninterest income: |
|
|
|
|
|
|
|
|
|
Service charges on deposit accounts |
|
3,571 |
|
|
|
3,476 |
|
|
|
3,407 |
|
|
|
3,452 |
|
|
|
2,934 |
|
Other commissions and fees |
|
11,580 |
|
|
|
10,633 |
|
|
|
11,792 |
|
|
|
10,704 |
|
|
|
9,158 |
|
Leased equipment income |
|
13,094 |
|
|
|
12,602 |
|
|
|
10,943 |
|
|
|
10,847 |
|
|
|
11,354 |
|
Gain on sale of loans and leases |
|
60 |
|
|
|
172 |
|
|
|
- |
|
|
|
1,422 |
|
|
|
139 |
|
Gain on sale of securities |
|
104 |
|
|
|
999 |
|
|
|
515 |
|
|
|
- |
|
|
|
101 |
|
Dividends and (losses) gains on equity investments |
|
(11,375 |
) |
|
|
(1,570 |
) |
|
|
8,387 |
|
|
|
5,394 |
|
|
|
10,904 |
|
Warrant income |
|
629 |
|
|
|
23,990 |
|
|
|
13,578 |
|
|
|
5,650 |
|
|
|
6,123 |
|
Other income |
|
3,155 |
|
|
|
7,080 |
|
|
|
2,723 |
|
|
|
2,902 |
|
|
|
4,116 |
|
Total noninterest income |
|
20,818 |
|
|
|
57,382 |
|
|
|
51,345 |
|
|
|
40,371 |
|
|
|
44,829 |
|
|
|
|
|
|
|
|
|
|
|
Noninterest expense: |
|
|
|
|
|
|
|
|
|
Compensation |
|
92,240 |
|
|
|
99,700 |
|
|
|
98,061 |
|
|
|
90,807 |
|
|
|
79,882 |
|
Occupancy |
|
15,200 |
|
|
|
14,656 |
|
|
|
14,928 |
|
|
|
14,784 |
|
|
|
14,054 |
|
Data processing |
|
9,629 |
|
|
|
8,171 |
|
|
|
7,391 |
|
|
|
7,758 |
|
|
|
6,957 |
|
Other professional services |
|
5,954 |
|
|
|
5,946 |
|
|
|
5,164 |
|
|
|
5,256 |
|
|
|
5,126 |
|
Insurance and assessments |
|
5,490 |
|
|
|
5,032 |
|
|
|
3,685 |
|
|
|
3,745 |
|
|
|
4,903 |
|
Intangible asset amortization |
|
3,649 |
|
|
|
3,876 |
|
|
|
2,890 |
|
|
|
2,889 |
|
|
|
3,079 |
|
Leased equipment depreciation |
|
9,189 |
|
|
|
9,569 |
|
|
|
8,603 |
|
|
|
8,614 |
|
|
|
8,969 |
|
Foreclosed assets (income) expense, net |
|
(3,353 |
) |
|
|
(260 |
) |
|
|
165 |
|
|
|
(119 |
) |
|
|
1 |
|
Acquisition, integration and reorganization costs |
|
- |
|
|
|
5,590 |
|
|
|
200 |
|
|
|
200 |
|
|
|
3,425 |
|
Customer related expense |
|
12,655 |
|
|
|
6,175 |
|
|
|
4,538 |
|
|
|
4,973 |
|
|
|
4,818 |
|
Loan expense |
|
5,157 |
|
|
|
5,627 |
|
|
|
4,180 |
|
|
|
4,031 |
|
|
|
3,193 |
|
Other expense |
|
11,616 |
|
|
|
12,028 |
|
|
|
9,616 |
|
|
|
8,812 |
|
|
|
15,729 |
|
Total noninterest expense |
|
167,426 |
|
|
|
176,110 |
|
|
|
159,421 |
|
|
|
151,750 |
|
|
|
150,136 |
|
|
|
|
|
|
|
|
|
|
|
Earnings before income taxes |
|
162,109 |
|
|
|
187,677 |
|
|
|
187,766 |
|
|
|
242,929 |
|
|
|
203,962 |
|
Income tax expense |
|
41,981 |
|
|
|
51,632 |
|
|
|
47,770 |
|
|
|
62,417 |
|
|
|
53,556 |
|
Net earnings |
$ |
120,128 |
|
|
$ |
136,045 |
|
|
$ |
139,996 |
|
|
$ |
180,512 |
|
|
$ |
150,406 |
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted earnings per share |
$ |
1.01 |
|
|
$ |
1.14 |
|
|
$ |
1.17 |
|
|
$ |
1.52 |
|
|
$ |
1.27 |
|
Dividends declared and paid per share |
$ |
0.25 |
|
|
$ |
0.25 |
|
|
$ |
0.25 |
|
|
$ |
0.25 |
|
|
$ |
0.25 |
|
|
|
|
|
|
|
|
|
|
|
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, |
|
|
2022 |
|
|
|
2021 |
|
|
|
2021 |
|
|
|
2021 |
|
|
|
2021 |
|
|
(Dollars in thousands) |
Performance Ratios: |
|
|
|
|
|
|
|
|
|
Return on average assets (1) |
|
1.22 |
% |
|
|
1.34 |
% |
|
|
1.55 |
% |
|
|
2.11 |
% |
|
|
1.94 |
% |
Pre-provision, pre-tax net revenue ("PPNR") return on average
assets (1)(2) |
|
1.65 |
% |
|
|
1.79 |
% |
|
|
1.86 |
% |
|
|
1.81 |
% |
|
|
2.01 |
% |
Return on average equity (1) |
|
12.66 |
% |
|
|
13.65 |
% |
|
|
14.18 |
% |
|
|
19.36 |
% |
|
|
16.86 |
% |
Return on average tangible equity (1)(2) |
|
20.93 |
% |
|
|
22.06 |
% |
|
|
21.03 |
% |
|
|
29.25 |
% |
|
|
25.67 |
% |
Efficiency ratio |
|
50.1 |
% |
|
|
46.2 |
% |
|
|
47.2 |
% |
|
|
47.9 |
% |
|
|
46.4 |
% |
Noninterest expense as a percentage of average assets (1) |
|
1.70 |
% |
|
|
1.73 |
% |
|
|
1.76 |
% |
|
|
1.77 |
% |
|
|
1.94 |
% |
|
|
|
|
|
|
|
|
|
|
Average Yields/Costs (1): |
|
|
|
|
|
|
|
|
|
Yield on: |
|
|
|
|
|
|
|
|
|
Average loans and leases (3) |
|
4.66 |
% |
|
|
4.93 |
% |
|
|
5.01 |
% |
|
|
5.18 |
% |
|
|
5.20 |
% |
Average investment securities (3) |
|
2.17 |
% |
|
|
2.02 |
% |
|
|
2.12 |
% |
|
|
2.23 |
% |
|
|
2.44 |
% |
Average interest-earning assets (3) |
|
3.59 |
% |
|
|
3.39 |
% |
|
|
3.50 |
% |
|
|
3.57 |
% |
|
|
3.86 |
% |
Cost of: |
|
|
|
|
|
|
|
|
|
Average interest-bearing deposits |
|
0.13 |
% |
|
|
0.13 |
% |
|
|
0.14 |
% |
|
|
0.16 |
% |
|
|
0.18 |
% |
Average total deposits |
|
0.07 |
% |
|
|
0.08 |
% |
|
|
0.08 |
% |
|
|
0.10 |
% |
|
|
0.11 |
% |
Average interest-bearing liabilities |
|
0.27 |
% |
|
|
0.27 |
% |
|
|
0.29 |
% |
|
|
0.30 |
% |
|
|
0.29 |
% |
Net interest spread (3) |
|
3.32 |
% |
|
|
3.12 |
% |
|
|
3.21 |
% |
|
|
3.27 |
% |
|
|
3.57 |
% |
Net interest margin (3) |
|
3.43 |
% |
|
|
3.24 |
% |
|
|
3.33 |
% |
|
|
3.40 |
% |
|
|
3.69 |
% |
|
|
|
|
|
|
|
|
|
|
Average Balances: |
|
|
|
|
|
|
|
|
|
Assets: |
|
|
|
|
|
|
|
|
|
Loans and leases, net of deferred fees |
$ |
23,433,019 |
|
|
$ |
21,367,665 |
|
|
$ |
19,670,671 |
|
|
$ |
19,057,420 |
|
|
$ |
18,927,314 |
|
Investment securities |
|
10,397,709 |
|
|
|
9,964,568 |
|
|
|
8,047,098 |
|
|
|
6,492,721 |
|
|
|
5,383,140 |
|
Deposits in financial institutions |
|
3,083,159 |
|
|
|
5,961,104 |
|
|
|
5,657,768 |
|
|
|
6,347,764 |
|
|
|
4,790,231 |
|
Interest-earning assets |
|
36,913,887 |
|
|
|
37,293,337 |
|
|
|
33,375,537 |
|
|
|
31,897,905 |
|
|
|
29,100,685 |
|
Total assets |
|
39,883,304 |
|
|
|
40,358,147 |
|
|
|
35,871,664 |
|
|
|
34,326,112 |
|
|
|
31,415,882 |
|
Liabilities: |
|
|
|
|
|
|
|
|
|
Noninterest-bearing deposits |
|
14,463,667 |
|
|
|
14,713,385 |
|
|
|
12,198,313 |
|
|
|
11,304,757 |
|
|
|
10,173,459 |
|
Interest-bearing deposits |
|
19,868,395 |
|
|
|
20,050,310 |
|
|
|
18,130,694 |
|
|
|
17,817,053 |
|
|
|
16,444,091 |
|
Total deposits |
|
34,332,062 |
|
|
|
34,763,695 |
|
|
|
30,329,007 |
|
|
|
29,121,810 |
|
|
|
26,617,550 |
|
Borrowings |
|
298,444 |
|
|
|
234,391 |
|
|
|
238,335 |
|
|
|
225,446 |
|
|
|
226,053 |
|
Subordinated debt |
|
863,572 |
|
|
|
862,777 |
|
|
|
862,272 |
|
|
|
735,725 |
|
|
|
466,101 |
|
Interest-bearing liabilities |
|
21,030,411 |
|
|
|
21,147,478 |
|
|
|
19,231,301 |
|
|
|
18,778,224 |
|
|
|
17,136,245 |
|
Stockholders' equity |
|
3,847,481 |
|
|
|
3,954,267 |
|
|
|
3,916,621 |
|
|
|
3,739,042 |
|
|
|
3,617,248 |
|
|
|
|
|
|
|
|
|
|
|
(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, |
|
|
2022 |
|
|
|
2021 |
|
|
|
2021 |
|
|
|
2021 |
|
|
|
2021 |
|
|
(Dollars in thousands, except per share
data) |
Credit Quality Ratios: |
|
|
|
|
|
|
|
|
|
Nonaccrual loans and leases held for investment to loans and leases
held for investment |
|
0.27 |
% |
|
|
0.27 |
% |
|
|
0.31 |
% |
|
|
0.29 |
% |
|
|
0.36 |
% |
Nonperforming assets to loans and leases held for investment and
foreclosed assets |
|
0.27 |
% |
|
|
0.32 |
% |
|
|
0.38 |
% |
|
|
0.36 |
% |
|
|
0.43 |
% |
Classified loans and leases held for investment to loans and leases
held for investment |
|
0.34 |
% |
|
|
0.51 |
% |
|
|
0.69 |
% |
|
|
0.75 |
% |
|
|
0.86 |
% |
Provision for credit losses (for the quarter) to average loans and
leases held for investment (annualized) |
|
0.00 |
% |
|
|
(0.11 |
)% |
|
|
(0.40 |
)% |
|
|
(1.85 |
)% |
|
|
(1.03 |
)% |
Net charge-offs (for the quarter) to average loans and leases held
for investment (annualized) |
|
0.02 |
% |
|
|
0.00 |
% |
|
|
0.01 |
% |
|
|
(0.11 |
)% |
|
|
0.06 |
% |
Trailing 12 months net charge-offs to average loans and leases held
for investment |
|
(0.02 |
)% |
|
|
(0.01 |
)% |
|
|
0.09 |
% |
|
|
0.27 |
% |
|
|
0.37 |
% |
Allowance for loan and lease losses to loans and leases held for
investment |
|
0.81 |
% |
|
|
0.87 |
% |
|
|
0.99 |
% |
|
|
1.16 |
% |
|
|
1.54 |
% |
Allowance for credit losses to loans and leases held for
investment |
|
1.12 |
% |
|
|
1.19 |
% |
|
|
1.36 |
% |
|
|
1.54 |
% |
|
|
2.02 |
% |
Allowance for credit losses to nonaccrual loans and leases held for
investment |
|
409.5 |
% |
|
|
447.3 |
% |
|
|
433.8 |
% |
|
|
528.4 |
% |
|
|
566.2 |
% |
|
|
|
|
|
|
|
|
|
|
PacWest Bancorp Consolidated: |
|
|
|
|
|
|
|
|
|
Tier 1 leverage capital ratio (1) |
|
7.11 |
% |
|
|
6.84 |
% |
|
|
8.05 |
% |
|
|
7.67 |
% |
|
|
7.95 |
% |
Common equity tier 1 capital ratio (1) |
|
8.64 |
% |
|
|
8.86 |
% |
|
|
10.15 |
% |
|
|
10.41 |
% |
|
|
10.39 |
% |
Tier 1 capital ratio (1) |
|
9.07 |
% |
|
|
9.32 |
% |
|
|
10.65 |
% |
|
|
10.41 |
% |
|
|
10.39 |
% |
Total capital ratio (1) |
|
12.27 |
% |
|
|
12.69 |
% |
|
|
14.36 |
% |
|
|
14.99 |
% |
|
|
13.60 |
% |
Risk-weighted assets (1) |
$ |
30,297,945 |
|
|
$ |
28,508,808 |
|
|
$ |
26,057,583 |
|
|
$ |
24,274,256 |
|
|
$ |
23,012,350 |
|
|
|
|
|
|
|
|
|
|
|
Equity to assets ratio |
|
9.30 |
% |
|
|
9.89 |
% |
|
|
10.92 |
% |
|
|
11.03 |
% |
|
|
11.12 |
% |
Tangible common equity ratio (2) |
|
5.83 |
% |
|
|
6.54 |
% |
|
|
7.79 |
% |
|
|
7.80 |
% |
|
|
7.68 |
% |
Book value per share |
$ |
30.52 |
|
|
$ |
33.45 |
|
|
$ |
32.77 |
|
|
$ |
32.17 |
|
|
$ |
30.68 |
|
Tangible book value per share (2) |
$ |
18.42 |
|
|
$ |
21.31 |
|
|
$ |
22.57 |
|
|
$ |
21.95 |
|
|
$ |
20.39 |
|
|
|
|
|
|
|
|
|
|
|
Pacific Western Bank: |
|
|
|
|
|
|
|
|
|
Tier 1 leverage capital ratio (1) |
|
7.31 |
% |
|
|
7.00 |
% |
|
|
8.40 |
% |
|
|
8.47 |
% |
|
|
8.83 |
% |
Common equity tier 1 capital ratio (1) |
|
9.32 |
% |
|
|
9.56 |
% |
|
|
11.12 |
% |
|
|
11.51 |
% |
|
|
11.54 |
% |
Tier 1 capital ratio (1) |
|
9.32 |
% |
|
|
9.56 |
% |
|
|
11.12 |
% |
|
|
11.51 |
% |
|
|
11.54 |
% |
Total capital ratio (1) |
|
11.45 |
% |
|
|
11.80 |
% |
|
|
13.59 |
% |
|
|
14.22 |
% |
|
|
12.80 |
% |
|
|
|
|
|
|
|
|
|
|
(1) Capital information for March 31, 2022 is preliminary. |
|
|
|
|
(2) Non-GAAP measure. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP TO NON-GAAP
RECONCILIATIONS
This press release contains certain non-GAAP
financial disclosures for: (1) Pre-provision, pre-tax net revenue
(“PPNR”), (2) PPNR return on average assets (3) return on average
tangible equity, (4) tangible common equity ratio, and (5) 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 PPNR, 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) net earnings, (2) return on average assets, (3)
return on average equity, (4) equity to assets ratio, and (5) 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
|
PPNR and PPNR Return |
March 31,
|
|
December 31, |
|
March 31, |
on Average Assets |
2022 |
|
2021 |
|
2021 |
|
(Dollars in
thousands)
|
Net earnings |
$ |
120,128 |
|
|
$ |
136,045 |
|
|
$ |
150,406 |
|
Add: Provision for credit losses |
- |
|
|
|
(6,000 |
) |
|
|
(48,000 |
) |
Add: Income tax expense |
41,981 |
|
|
51,632 |
|
|
53,556 |
|
Pre-provision, pre-tax net revenue ("PPNR") |
$ |
162,109 |
|
|
$ |
181,677 |
|
|
$ |
155,962 |
|
|
|
|
|
|
|
Average assets |
$ |
39,883,304 |
|
|
$ |
40,358,147 |
|
|
$ |
31,415,882 |
|
|
|
|
|
|
|
Return on average assets (1) |
|
1.22 |
% |
|
|
1.34 |
% |
|
|
1.94 |
% |
PPNR return on average assets (2) |
|
1.65 |
% |
|
|
1.79 |
% |
|
|
2.01 |
% |
|
|
|
|
|
|
(1) Annualized net earnings divided by average assets. |
|
|
|
|
|
(2) Annualized PPNR divided by average assets. |
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
March 31, |
|
December 31, |
|
March 31, |
Return on Average Tangible Equity |
2022 |
|
2021 |
|
2021 |
|
(Dollars in thousands)
|
Net earnings |
$ |
120,128 |
|
|
$ |
136,045 |
|
|
$ |
150,406 |
|
Add: Intangible asset amortization |
3,649 |
|
|
3,876 |
|
|
3,079 |
|
Adjusted net earnings |
$ |
123,777 |
|
|
$ |
139,921 |
|
|
$ |
153,485 |
|
|
|
|
|
|
|
|
|
|
Average stockholders' equity |
$ |
3,847,481 |
|
|
$ |
3,954,267 |
|
|
$ |
3,617,248 |
|
Less: Average intangible assets |
1,449,056 |
|
|
1,437,780 |
|
|
1,192,780 |
|
Average tangible common equity |
$ |
2,398,425 |
|
|
$ |
2,516,487 |
|
|
$ |
2,424,468 |
|
|
|
|
|
|
|
|
|
|
Return on average equity (1) |
12.66 |
% |
|
13.65 |
% |
|
16.86 |
% |
Return on average tangible equity (2) |
20.93 |
% |
|
22.06 |
% |
|
25.67 |
% |
|
|
|
|
|
|
|
|
|
(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 |
|
2022 |
|
|
|
2021 |
|
|
|
2021 |
|
|
|
2021 |
|
|
|
2021 |
|
|
(Dollars in thousands, except per share
data) |
Stockholders' equity |
$ |
3,650,595 |
|
|
$ |
3,999,630 |
|
|
$ |
3,918,434 |
|
|
$ |
3,846,681 |
|
|
$ |
3,654,137 |
|
Less: Intangible assets |
|
1,447,044 |
|
|
|
1,450,693 |
|
|
|
1,219,651 |
|
|
|
1,222,541 |
|
|
|
1,225,404 |
|
Tangible common equity |
$ |
2,203,551 |
|
|
$ |
2,548,937 |
|
|
$ |
2,698,783 |
|
|
$ |
2,624,140 |
|
|
$ |
2,428,733 |
|
|
|
|
|
|
|
|
|
|
|
Total assets |
$ |
39,249,639 |
|
|
$ |
40,443,344 |
|
|
$ |
35,885,676 |
|
|
$ |
34,867,987 |
|
|
$ |
32,856,533 |
|
Less: Intangible assets |
|
1,447,044 |
|
|
|
1,450,693 |
|
|
|
1,219,651 |
|
|
|
1,222,541 |
|
|
|
1,225,404 |
|
Tangible assets |
$ |
37,802,595 |
|
|
$ |
38,992,651 |
|
|
$ |
34,666,025 |
|
|
$ |
33,645,446 |
|
|
$ |
31,631,129 |
|
|
|
|
|
|
|
|
|
|
|
Equity to assets ratio |
|
9.30 |
% |
|
|
9.89 |
% |
|
|
10.92 |
% |
|
|
11.03 |
% |
|
|
11.12 |
% |
Tangible common equity ratio (1) |
|
5.83 |
% |
|
|
6.54 |
% |
|
|
7.79 |
% |
|
|
7.80 |
% |
|
|
7.68 |
% |
|
|
|
|
|
|
|
|
|
|
Book value per share |
$ |
30.52 |
|
|
$ |
33.45 |
|
|
$ |
32.77 |
|
|
$ |
32.17 |
|
|
$ |
30.68 |
|
Tangible book value per share (2) |
$ |
18.42 |
|
|
$ |
21.31 |
|
|
$ |
22.57 |
|
|
$ |
21.95 |
|
|
$ |
20.39 |
|
Shares outstanding |
|
119,601,766 |
|
|
|
119,584,854 |
|
|
|
119,579,566 |
|
|
|
119,555,102 |
|
|
|
119,105,642 |
|
|
|
|
|
|
|
|
|
|
|
(1) Tangible common equity divided by tangible assets. |
|
|
|
|
|
|
|
|
|
(2) Tangible common equity divided by shares outstanding. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CONTACTS
Matthew P. Wagner
President and CEO
303.802.8900 |
Bart
R. Olson
EVP and CFO
714.989.4149 |
William J. Black
EVP Strategy and Corporate Development
919.597.7466 |
|
|
|
PacWest Bancorp (NASDAQ:PACW)
Historical Stock Chart
Von Sep 2024 bis Okt 2024
PacWest Bancorp (NASDAQ:PACW)
Historical Stock Chart
Von Okt 2023 bis Okt 2024