LOS ANGELES, Oct. 19, 2022 (GLOBE NEWSWIRE) --
PacWest Bancorp (Nasdaq: PACW) -
THIRD QUARTER 2022 RESULTS
$122.2M |
$1.02 |
24.11% |
8.55% |
Net Earnings Available to
Common Stockholders |
Diluted Earnings
per Common Share |
ROATCE |
CET1 |
THIRD QUARTER 2022 HIGHLIGHTS
- All Regulatory Capital Ratios Increased from 2Q22, With CET1
Increasing from 8.24% to 8.55%
- Total Deposits Up $228 Million or 0.7% from 2Q22; Venture
Banking Deposits Grew $129 Million to $12.2 Billion
- Credit Metrics Remain Steady with Nonperforming Assets Ratio of
34 Basis Points
- Loan Growth of $1.2 Billion or 4.4% from 2Q22
- Net Interest Income (TE) of $338.6 Million in 3Q22 vs. $327.8
Million in 2Q22; Up 3.3%
|
CEO COMMENTARY
Matt Wagner, CEO, commented, “We are pleased with
the growth in our capital ratios during the third quarter of 2022.
The increases in the ratios were due to strong earnings, the
credit-linked notes transaction completed in late September, and
slower growth in loans and loan commitments. Capital remains a
primary focus area and we are targeting a CET1 ratio of 10% by the
end of 2023.”
“We were also pleased with the stabilization in
venture banking deposits, which grew by $129 million to $12.2
billion, contributing to total deposits growing by $228 million in
the third quarter of 2022. After exceptionally strong loan growth
in the first half of 2022, loan growth slowed in the third quarter
of 2022 due to the expected impact from higher interest rates and
our decision to slow loan growth as part of managing our balance
sheet.”
“Credit quality remains strong as evidenced by
credit metrics such as nonperforming assets of 34 basis points and
net charge-offs of three basis points for the quarter and one basis
point on a year-to-date basis.”
“Lastly, on a macroeconomic level as we assess the
current state and direction of the economy we are thinking about
and planning for a weaker economic outlook.”
FINANCIAL HIGHLIGHTS
|
|
|
|
|
|
|
|
|
|
|
|
|
At or For the |
|
|
|
At or For the |
|
|
|
Three Months Ended |
|
|
|
Nine Months Ended |
|
|
|
September 30, |
|
June 30, |
|
Increase |
|
September 30, |
|
Increase |
Financial Highlights (1) |
|
2022 |
|
|
|
2022 |
|
|
(Decrease) |
|
|
2022 |
|
|
|
2021 |
|
|
(Decrease) |
|
(Dollars in thousands, except per share
data) |
Net earnings available to |
|
|
|
|
|
|
|
|
|
|
common stockholders |
$ |
122,224 |
|
|
$ |
122,360 |
|
|
$ |
(136 |
) |
|
$ |
364,712 |
|
|
$ |
470,914 |
|
|
$ |
(106,202 |
) |
Diluted earnings per |
|
|
|
|
|
|
|
|
|
|
common share |
$ |
1.02 |
|
|
$ |
1.02 |
|
|
$ |
- |
|
|
$ |
3.04 |
|
|
$ |
3.96 |
|
|
$ |
(0.92 |
) |
Pre-provision, pre-tax net |
|
|
|
|
|
|
|
|
|
|
revenue ("PPNR") (2) |
$ |
178,182 |
|
|
$ |
174,626 |
|
|
$ |
3,556 |
|
|
$ |
514,917 |
|
|
$ |
478,657 |
|
|
$ |
36,260 |
|
Return on average assets |
|
1.28 |
% |
|
|
1.23 |
% |
|
|
0.05 |
|
|
|
1.24 |
% |
|
|
1.86 |
% |
|
|
(0.62 |
) |
PPNR return on average |
|
|
|
|
|
|
|
|
|
|
assets (2) |
|
1.73 |
% |
|
|
1.75 |
% |
|
|
(0.02 |
) |
|
|
1.71 |
% |
|
|
1.89 |
% |
|
|
(0.18 |
) |
Return on average |
|
|
|
|
|
|
|
|
|
|
tangible common equity (2) |
|
24.11 |
% |
|
|
24.42 |
% |
|
|
(0.31 |
) |
|
|
23.05 |
% |
|
|
25.20 |
% |
|
|
(2.15 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Yield on average loans and |
|
|
|
|
|
|
|
|
|
|
leases (tax equivalent) |
|
5.12 |
% |
|
|
4.65 |
% |
|
|
0.47 |
|
|
|
4.82 |
% |
|
|
5.13 |
% |
|
|
(0.31 |
) |
Cost of average total |
|
|
|
|
|
|
|
|
|
|
deposits |
|
0.70 |
% |
|
|
0.18 |
% |
|
|
0.52 |
|
|
|
0.32 |
% |
|
|
0.10 |
% |
|
|
0.22 |
|
Net interest margin ("NIM") |
|
|
|
|
|
|
|
|
|
|
(tax equivalent) |
|
3.57 |
% |
|
|
3.56 |
% |
|
|
0.01 |
|
|
|
3.52 |
% |
|
|
3.46 |
% |
|
|
0.06 |
|
Efficiency ratio |
|
51.0 |
% |
|
|
49.5 |
% |
|
|
1.5 |
|
|
|
50.2 |
% |
|
|
47.2 |
% |
|
|
3.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets |
$ |
41,404,592 |
|
|
$ |
40,950,723 |
|
|
$ |
453,869 |
|
|
$ |
41,404,592 |
|
|
$ |
35,885,676 |
|
|
$ |
5,518,916 |
|
Loans and leases held |
|
|
|
|
|
|
|
|
|
|
for investment, |
|
|
|
|
|
|
|
|
|
|
net of deferred fees |
$ |
27,660,041 |
|
|
$ |
26,501,137 |
|
|
$ |
1,158,904 |
|
|
$ |
27,660,041 |
|
|
$ |
20,511,020 |
|
|
$ |
7,149,021 |
|
Noninterest-bearing |
|
|
|
|
|
|
|
|
|
|
demand deposits |
$ |
12,775,756 |
|
|
$ |
13,338,029 |
|
|
$ |
(562,273 |
) |
|
$ |
12,775,756 |
|
|
$ |
12,881,806 |
|
|
$ |
(106,050 |
) |
Core deposits |
$ |
28,559,310 |
|
|
$ |
29,218,646 |
|
|
$ |
(659,336 |
) |
|
$ |
28,559,310 |
|
|
$ |
28,140,708 |
|
|
$ |
418,602 |
|
Total deposits |
$ |
34,195,872 |
|
|
$ |
33,968,152 |
|
|
$ |
227,720 |
|
|
$ |
34,195,872 |
|
|
$ |
30,559,745 |
|
|
$ |
3,636,127 |
|
|
|
|
|
|
|
|
|
|
|
|
|
As percentage of total |
|
|
|
|
|
|
|
|
|
|
deposits: |
|
|
|
|
|
|
|
|
|
|
|
Noninterest-bearing |
|
|
|
|
|
|
|
|
|
|
demand deposits |
|
37 |
% |
|
|
39 |
% |
|
|
(2 |
) |
|
|
37 |
% |
|
|
42 |
% |
|
|
(5 |
) |
Core deposits |
|
83 |
% |
|
|
86 |
% |
|
|
(3 |
) |
|
|
83 |
% |
|
|
92 |
% |
|
|
(9 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Equity to assets ratio |
|
9.36 |
% |
|
|
9.72 |
% |
|
|
(0.36 |
) |
|
|
9.36 |
% |
|
|
10.92 |
% |
|
|
(1.56 |
) |
Common equity tier 1 |
|
|
|
|
|
|
|
|
|
|
capital ratio |
|
8.55 |
% |
|
|
8.24 |
% |
|
|
0.31 |
|
|
|
8.55 |
% |
|
|
10.15 |
% |
|
|
(1.60 |
) |
Tier 1 capital ratio |
|
10.46 |
% |
|
|
10.15 |
% |
|
|
0.31 |
|
|
|
10.46 |
% |
|
|
10.65 |
% |
|
|
(0.19 |
) |
Total capital ratio |
|
13.43 |
% |
|
|
13.12 |
% |
|
|
0.31 |
|
|
|
13.43 |
% |
|
|
14.36 |
% |
|
|
(0.93 |
) |
Tangible common equity |
|
|
|
|
|
|
|
|
|
|
ratio (2) |
|
4.85 |
% |
|
|
5.15 |
% |
|
|
(0.30 |
) |
|
|
4.85 |
% |
|
|
7.79 |
% |
|
|
(2.94 |
) |
Book value per common |
|
|
|
|
|
|
|
|
|
|
share |
$ |
28.07 |
|
|
$ |
28.93 |
|
|
$ |
(0.86 |
) |
|
$ |
28.07 |
|
|
$ |
32.77 |
|
|
$ |
(4.70 |
) |
Tangible book value per |
|
|
|
|
|
|
|
|
|
|
common share (2) |
$ |
16.11 |
|
|
$ |
16.93 |
|
|
$ |
(0.82 |
) |
|
$ |
16.11 |
|
|
$ |
22.57 |
|
|
$ |
(6.46 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
(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. |
|
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|
(2) Non-GAAP measure. |
|
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|
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|
|
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|
INCOME STATEMENT HIGHLIGHTS
NET INTEREST INCOME
Net interest income increased by $11.3 million to
$335.2 million for the third quarter of 2022 compared to $323.9
million for the second quarter of 2022. Interest income on loans
and leases increased by $53.3 million in the third quarter of 2022
due to a $1.6 billion increase in the average balance of loans and
leases and a 47 basis point increase in the tax equivalent yield on
average loans and leases compared to the second quarter of 2022.
Interest income on deposits in financial institutions increased by
$6.0 million in the third quarter of 2022 due to a 139 basis point
increase in the yield on average deposits in financial
institutions, offset partially by a $175 million decrease in the
average balance. The tax equivalent yield on average loans and
leases was 5.12% for the third quarter of 2022 compared to 4.65%
for the second quarter of 2022. The increase in the tax equivalent
yield on average loans and leases was due primarily to higher
coupon interest due to increased rates on new production and on
existing variable rate loans. Interest expense on deposits
increased by $45.9 million in the third quarter of 2022 due mainly
to increased market rates and a higher level of wholesale deposits
which contributed to a 52 basis point increase in the cost of
average total deposits. Interest expense on borrowings and
subordinated debt increased by $2.3 million due to a 190 basis
points increase in the cost of average borrowings and subordinated
debt, partially offset by an $851 million decrease in the average
balance.
The tax equivalent NIM was 3.57% for the third
quarter of 2022 compared to 3.56% for the second quarter of 2022.
The slight 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 as a percentage of average
interest-earning assets from 69% to 72%, the decrease in the
balance of average investment securities as a percentage of average
interest-earning assets from 26% to 23%, and the balance of average
deposits in financial institutions as a percentage of average
interest-earning assets remained unchanged at 5%. The balance of
average loans and leases increased by $1.6 billion to $27.0
billion, the balance of average investment securities decreased by
$685 million to $8.8 billion, and the balance of average deposits
in financial institutions decreased by $175 million to $1.8
billion.
The cost of average total deposits was 0.70% for
the third quarter of 2022 compared to 0.18% for the second quarter
of 2022 due mainly to higher average balances and rates on
higher-cost wholesale money market and brokered time deposits, as
well as higher market rates on our deposit products.
PROVISION FOR CREDIT LOSSES
The following table presents details of the
provision for credit losses for the periods indicated:
|
Three Months Ended |
|
|
|
September 30, |
|
June 30, |
|
Increase |
Provision for Credit Losses |
2022 |
|
|
2022 |
|
|
(Decrease) |
|
(In thousands) |
Addition (reduction) in allowance for |
|
|
loan and lease losses |
$ |
3,000 |
|
$ |
(10,000 |
) |
|
$ |
13,000 |
|
Addition to reserve for |
|
|
|
|
unfunded loan commitments |
|
- |
|
|
20,000 |
|
|
|
(20,000 |
) |
Total loan-related provision |
|
3,000 |
|
|
10,000 |
|
|
|
(7,000 |
) |
Addition to allowance for |
|
|
|
held-to-maturity securities |
- |
|
1,500 |
|
|
(1,500 |
) |
Total provision for credit losses |
$ |
3,000 |
|
$ |
11,500 |
|
|
$ |
(8,500 |
) |
|
|
|
|
|
|
The provision for credit losses was $3.0 million for the third
quarter of 2022 compared to $11.5 million for the second quarter of
2022. The $7.0 million decrease in the loan-related provision was
due mainly to a lower level of growth in loans and leases and
unfunded commitments in the third versus the second quarter of 2022
and a decrease in COVID-related qualitative reserves, partially
offset by increased reserves needed due to a less favorable
economic forecast in the third versus the second quarter of
2022.
NONINTEREST INCOME
The following table presents details of
noninterest income for the periods indicated:
|
Three Months Ended |
|
|
|
|
September 30, |
|
June 30, |
|
Increase |
|
Noninterest Income |
2022 |
|
|
2022 |
|
|
(Decrease) |
|
|
(In thousands) |
|
Service charges on deposit accounts |
$ |
3,608 |
|
$ |
3,634 |
|
|
$ |
(26 |
) |
|
Other commissions and fees |
|
10,034 |
|
|
10,813 |
|
|
|
(779 |
) |
|
Leased equipment income |
|
12,835 |
|
|
12,335 |
|
|
|
500 |
|
|
Gain on sale of loans and leases |
|
58 |
|
|
12 |
|
|
|
46 |
|
|
Gain (loss) on sale of securities |
|
86 |
|
|
(1,209 |
) |
|
|
1,295 |
|
|
Dividends and gains on equity investments |
|
3,228 |
|
|
4,097 |
|
|
|
(869 |
) |
|
Warrant income |
|
292 |
|
|
1,615 |
|
|
|
(1,323 |
) |
|
Other income |
|
8,478 |
|
|
3,049 |
|
|
|
5,429 |
|
|
Total noninterest income |
$ |
38,619 |
|
$ |
34,346 |
|
|
$ |
4,273 |
|
|
|
|
|
|
|
|
|
Noninterest income increased by $4.3 million to
$38.6 million for the third quarter of 2022 compared to $34.3
million for the second quarter of 2022 due primarily to increases
of $5.4 million in other income and $1.3 million in gain on sale of
securities, offset partially by a decrease of $1.3 million in
warrant income and a decrease of $0.9 million in dividends and
gains on equity investments. The increase in other income was due
primarily to the receipt of a $5.5 million legal settlement, net of
current year legal fees. The increase in gain on sale of securities
resulted from the sale of $440.4 million of securities for a net
gain of $86,000 compared to sales of $393.4 million of securities
for a net loss of $1.2 million for the second quarter of 2022.
Warrant income was lower due to a lack of capital market
activities. The decrease in dividends and gains on equity
investments was due to lower fair value gains on equity investments
still held and SBIC investments, partially offset by lower losses
on sales of equity investments and increased income distributions
on SBIC investments.
NONINTEREST EXPENSE
The following table presents details of
noninterest expense for the periods indicated:
|
Three Months Ended |
|
|
|
September 30, |
|
June 30, |
|
Increase |
Noninterest Expense |
|
2022 |
|
|
|
2022 |
|
|
(Decrease) |
|
(In thousands) |
Compensation |
$ |
105,933 |
|
|
$ |
102,542 |
|
|
$ |
3,391 |
|
Occupancy |
|
15,574 |
|
|
|
15,268 |
|
|
|
306 |
|
Data processing |
|
9,568 |
|
|
|
9,258 |
|
|
|
310 |
|
Other professional services |
|
10,674 |
|
|
|
6,726 |
|
|
|
3,948 |
|
Insurance and assessments |
|
7,159 |
|
|
|
5,632 |
|
|
|
1,527 |
|
Intangible asset amortization |
|
3,649 |
|
|
|
3,649 |
|
|
|
- |
|
Leased equipment depreciation |
|
8,908 |
|
|
|
8,934 |
|
|
|
(26 |
) |
Foreclosed assets (income) expense, net |
|
(248 |
) |
|
|
(28 |
) |
|
|
(220 |
) |
Customer related expense |
|
12,673 |
|
|
|
11,748 |
|
|
|
925 |
|
Loan expense |
|
6,228 |
|
|
|
7,037 |
|
|
|
(809 |
) |
Other |
|
15,500 |
|
|
|
12,879 |
|
|
|
2,621 |
|
Total noninterest expense |
$ |
195,618 |
|
|
$ |
183,645 |
|
|
$ |
11,973 |
|
|
|
|
|
|
|
Noninterest expense increased by $12.0 million to
$195.6 million for the third quarter of 2022 compared to $183.6
million for the second quarter of 2022 due primarily to increases
of $3.9 million in other professional services, $3.4 million in
compensation expense, $2.6 million in other expense, and $1.5
million in insurance and assessments expense. The increase in other
professional services was due mostly to issuance costs of the
credit-linked notes transaction. The increase in compensation
expense was due mainly to an increase in our headcount by 68 FTEs
during the third quarter primarily related to hiring at Civic and
for our digital and innovation initiatives. The increase in other
expense was due primarily to a legal settlement accrual. The
increase in insurance and assessments expense was due to higher
FDIC assessment expense due to downward trends in core deposits and
capital levels in the first half of 2022. Noninterest expense
includes $7.0 million of non-recurring expenses in the third
quarter of 2022 related to the issuance costs of the credit-linked
notes transaction and a legal settlement accrual.
INCOME TAXES
The effective income tax rate was 24.9% for the
third quarter of 2022 compared to 25.0% for the second quarter of
2022. 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:
|
September 30, 2022
|
|
June 30,
2022
|
|
September 30, 2021
|
|
|
% of |
|
|
% of |
|
|
% of |
Deposit Composition |
Balance |
Total |
|
Balance |
Total |
|
Balance |
Total |
|
(Dollars in
thousands)
|
Noninterest-bearing demand |
$ |
12,775,756 |
37 |
% |
|
$ |
13,338,029 |
39 |
% |
|
$ |
12,881,806 |
42 |
% |
Interest checking |
|
6,780,900 |
20 |
% |
|
|
6,197,234 |
18 |
% |
|
|
7,168,472 |
24 |
% |
Money market |
|
8,361,779 |
24 |
% |
|
|
9,029,433 |
27 |
% |
|
|
7,463,261 |
24 |
% |
Savings |
|
640,875 |
2 |
% |
|
|
653,950 |
2 |
% |
|
|
627,169 |
2 |
% |
Total core deposits |
|
28,559,310 |
83 |
% |
|
|
29,218,646 |
86 |
% |
|
|
28,140,708 |
92 |
% |
Wholesale non-maturity deposits |
|
2,367,544 |
7 |
% |
|
|
2,185,248 |
6 |
% |
|
|
960,438 |
3 |
% |
Total non-maturity deposits |
|
30,926,854 |
90 |
% |
|
|
31,403,894 |
92 |
% |
|
|
29,101,146 |
95 |
% |
Retail time deposits |
|
1,778,325 |
5 |
% |
|
|
1,354,198 |
4 |
% |
|
|
1,262,864 |
4 |
% |
Brokered time deposits |
|
1,490,693 |
5 |
% |
|
|
1,210,060 |
4 |
% |
|
|
195,735 |
1 |
% |
Total time deposits (1) |
|
3,269,018 |
10 |
% |
|
|
2,564,258 |
8 |
% |
|
|
1,458,599 |
5 |
% |
Total deposits |
$ |
34,195,872 |
100 |
% |
|
$ |
33,968,152 |
100 |
% |
|
$ |
30,559,745 |
100 |
% |
|
|
|
|
|
|
|
|
|
(1) Includes time deposits over $250,000 of $1.0 billion, $665.9
million, and $576.0 million at September 30, 2022, June 30,
2022, |
|
|
and September 30, 2021, respectively. |
|
|
|
|
|
|
|
Total deposits increased by $228 million or 0.7%
in the third quarter of 2022 due to a $705 million increase in time
deposits and a $182 million increase in wholesale non-maturity
deposits, offset partially by a decrease in core deposits. Total
venture banking deposits increased from $12.1 billion as of June
30, 2022 to $12.2 billion as of September 30, 2022. At September
30, 2022, core deposits totaled $28.6 billion or 83% of total
deposits, including $12.8 billion of noninterest-bearing demand
deposits or 37% of total deposits. Core deposits decreased by $659
million or 2.3% in the third quarter of 2022 driven primarily by a
$586 million decrease in balances from our community banking
clients primarily in September due to client business activity.
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 decreased from $2.1
billion as of June 30, 2022 to $1.8 billion as of September 30,
2022, of which $1.1 billion was managed by PWAM. The decrease of
$0.3 billion was primarily attributable to deposit transfers by
venture banking clients back onto our balance sheet.
LOANS AND LEASES
The following table presents roll forwards of
loans and leases held for investment, net of deferred fees, for the
periods indicated:
|
Three Months Ended
|
|
Nine Months Ended |
Roll Forward of Loans and Leases Held |
September 30, |
|
June 30, |
|
September 30, |
for Investment, Net of Deferred Fees |
|
2022 |
|
|
|
2022 |
|
|
|
2022 |
|
|
(Dollars in
thousands)
|
Balance, beginning of period |
$ |
26,501,137 |
|
|
$ |
24,352,072 |
|
|
$ |
22,941,548 |
|
Additions: |
|
|
|
|
Production |
|
1,758,107 |
|
|
|
2,815,181 |
|
|
|
7,148,148 |
|
Disbursements |
|
1,677,795 |
|
|
|
1,871,627 |
|
|
|
5,138,574 |
|
Total production and disbursements |
|
3,435,902 |
|
|
|
4,686,808 |
|
|
|
12,286,722 |
|
Reductions: |
|
|
|
|
Payoffs |
|
(977,654 |
) |
|
|
(1,347,447 |
) |
|
|
(3,773,781 |
) |
Paydowns |
|
(1,256,557 |
) |
|
|
(1,183,178 |
) |
|
|
(3,704,306 |
) |
Total payoffs and paydowns |
|
(2,234,211 |
) |
|
|
(2,530,625 |
) |
|
|
(7,478,087 |
) |
Sales |
|
(19,635 |
) |
|
|
(4,319 |
) |
|
|
(60,652 |
) |
Transfers to foreclosed assets |
|
(2,966 |
) |
|
|
- |
|
|
|
(3,271 |
) |
Charge-offs |
|
(4,652 |
) |
|
|
(2,799 |
) |
|
|
(10,685 |
) |
Transfers to loans held for sale |
|
(15,534 |
) |
|
|
- |
|
|
|
(15,534 |
) |
Total reductions |
|
(2,276,998 |
) |
|
|
(2,537,743 |
) |
|
|
(7,568,229 |
) |
Net increase |
|
1,158,904 |
|
|
|
2,149,065 |
|
|
|
4,718,493 |
|
Balance, end of period |
$ |
27,660,041 |
|
|
$ |
26,501,137 |
|
|
$ |
27,660,041 |
|
|
|
|
|
|
|
Weighted average rate on production (1) |
|
5.92 |
% |
|
|
4.61 |
% |
|
|
4.82 |
% |
|
|
|
|
|
|
(1) The weighted average rate on production presents contractual
rates on a tax equivalent basis and excludes |
amortized fees. Amortized fees added approximately 22 basis points
to loan yields in 2022. |
Loans and leases held for investment, net of deferred fees,
increased by $1.2 billion or 4.4% in the third quarter of 2022 to
$27.7 billion at September 30, 2022. The overall increase in the
loans and leases balance for the third quarter of 2022 was due
primarily to increases in the residential real estate mortgage and
residential real estate construction portfolios.
Civic loan production was $831 million for the
third quarter of 2022 compared to $847 million for the second
quarter of 2022. The Civic loan portfolio as of September 30, 2022
totaled $2.9 billion.
The weighted average rate on the $1.8 billion of
production for the third quarter of 2022 increased to 5.92% from
4.61% for the second quarter of 2022 due primarily to the loan mix
(lower percentage of multi-family production, no single-family loan
pool purchases, and a higher percentage of Civic production) and
the increase in market interest rates.
The following table presents the composition of
loans and leases held for investment by loan portfolio segment and
class, net of deferred fees, as of the dates indicated:
|
September 30, 2022 |
|
June 30, 2022 |
|
September 30, 2021 |
|
|
% of |
|
|
% of |
|
|
% of |
Loan and Lease Portfolio |
Balance |
Total |
|
Balance |
Total |
|
Balance |
Total |
|
(Dollars in thousands) |
Real estate mortgage: |
|
|
|
|
|
|
|
Commercial |
$ |
3,770,706 |
14 |
% |
|
$ |
3,670,515 |
14 |
% |
|
$ |
3,694,597 |
18 |
% |
Residential |
|
10,860,043 |
39 |
% |
|
|
9,879,131 |
37 |
% |
|
|
5,886,360 |
29 |
% |
Total real estate mortgage |
|
14,630,749 |
53 |
% |
|
|
13,549,646 |
51 |
% |
|
|
9,580,957 |
47 |
% |
Real estate construction and land: |
|
|
|
|
|
|
Commercial |
|
843,086 |
3 |
% |
|
|
837,423 |
3 |
% |
|
|
992,003 |
5 |
% |
Residential |
|
3,450,430 |
12 |
% |
|
|
3,153,616 |
12 |
% |
|
|
2,659,870 |
13 |
% |
Total real estate construction |
|
|
|
|
|
|
and land |
|
4,293,516 |
15 |
% |
|
|
3,991,039 |
15 |
% |
|
|
3,651,873 |
18 |
% |
Total real estate |
|
18,924,265 |
68 |
% |
|
|
17,540,685 |
66 |
% |
|
|
13,232,830 |
65 |
% |
Commercial: |
|
|
|
|
|
|
|
Asset-based |
|
5,154,654 |
19 |
% |
|
|
5,068,112 |
19 |
% |
|
|
3,661,769 |
18 |
% |
Venture capital |
|
2,001,086 |
7 |
% |
|
|
2,179,190 |
8 |
% |
|
|
1,632,861 |
8 |
% |
Other commercial |
|
1,115,442 |
4 |
% |
|
|
1,229,504 |
5 |
% |
|
|
1,577,592 |
7 |
% |
Total commercial |
|
8,271,182 |
30 |
% |
|
|
8,476,806 |
32 |
% |
|
|
6,872,222 |
33 |
% |
Consumer |
|
464,594 |
2 |
% |
|
|
483,646 |
2 |
% |
|
|
405,968 |
2 |
% |
Total loans and leases held for |
|
|
|
|
|
|
investment, net of deferred fees |
$ |
27,660,041 |
100 |
% |
|
$ |
26,501,137 |
100 |
% |
|
$ |
20,511,020 |
100 |
% |
|
|
|
|
|
|
|
|
|
Total unfunded loan commitments |
$ |
11,227,234 |
|
|
$ |
11,866,437 |
|
|
$ |
8,480,599 |
|
ALLOWANCE FOR CREDIT LOSSES ON
LOANS AND LEASES
The following tables present roll forwards of the
allowance for credit losses on loans and leases for the periods
indicated:
|
|
|
|
|
|
|
|
Three Months Ended September 30, 2022 |
|
Allowance for Credit |
Allowance
for |
|
Reserve
for |
|
Total |
|
Losses on Loans and |
Loan
and |
|
Unfunded
Loan |
|
Allowance
for |
|
Leases Rollforward |
Lease Losses |
|
Commitments |
|
Credit Losses |
|
|
(In
thousands) |
|
Beginning
balance |
$ |
188,705 |
|
|
$ |
95,071 |
|
$ |
283,776 |
|
|
Charge-offs |
|
(4,652 |
) |
|
|
- |
|
|
(4,652 |
) |
|
Recoveries |
|
2,274 |
|
|
|
- |
|
|
2,274 |
|
|
Net charge-offs |
|
(2,378 |
) |
|
|
- |
|
|
(2,378 |
) |
|
Provision |
|
3,000 |
|
|
|
- |
|
|
3,000 |
|
|
Ending
balance |
$ |
189,327 |
|
|
$ |
95,071 |
|
$ |
284,398 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, 2022 |
|
Allowance for Credit |
Allowance
for |
|
Reserve
for |
|
Total |
|
Losses on Loans and |
Loan
and |
|
Unfunded
Loan |
|
Allowance
for |
|
Leases Rollforward |
Lease Losses |
|
Commitments |
|
Credit Losses |
|
|
(In
thousands) |
|
Beginning
balance |
$ |
197,398 |
|
|
$ |
75,071 |
|
$ |
272,469 |
|
|
Charge-offs |
|
(2,799 |
) |
|
|
- |
|
|
(2,799 |
) |
|
Recoveries |
|
4,106 |
|
|
|
- |
|
|
4,106 |
|
|
Net recoveries |
|
1,307 |
|
|
|
- |
|
|
1,307 |
|
|
Provision |
|
(10,000 |
) |
|
|
20,000 |
|
|
10,000 |
|
|
Ending
balance |
$ |
188,705 |
|
|
$ |
95,071 |
|
$ |
283,776 |
|
|
The following table presents allowance for credit
losses information on loans and leases as of and for the dates and
periods indicated:
|
|
|
|
|
|
|
Allowance for Credit Losses |
September
30, |
|
June
30, |
|
Increase |
|
on Loans and Leases |
|
2022 |
|
|
|
2022 |
|
|
(Decrease) |
|
|
(Dollars
in thousands) |
|
Allowance
for loan and lease losses |
$ |
189,327 |
|
|
$ |
188,705 |
|
|
$ |
622 |
|
|
Reserve for
unfunded loan commitments |
|
95,071 |
|
|
|
95,071 |
|
|
|
- |
|
|
Allowance for credit losses |
$ |
284,398 |
|
|
$ |
283,776 |
|
|
$ |
622 |
|
|
|
|
|
|
|
|
|
Provision
for credit losses (for the quarter) |
$ |
3,000 |
|
|
$ |
10,000 |
|
|
$ |
(7,000 |
) |
|
Net
charge-offs (recoveries) (for the quarter) |
$ |
2,378 |
|
|
$ |
(1,307 |
) |
|
$ |
3,685 |
|
|
Net
charge-offs (recoveries) to average loans |
|
|
|
|
|
|
and leases (for the quarter) |
|
0.03 |
% |
|
|
(0.02 |
)% |
|
|
|
Allowance
for loan and lease losses to loans |
|
|
|
|
|
|
and leases held for investment |
|
0.68 |
% |
|
|
0.71 |
% |
|
|
|
Allowance
for credit losses to loans and leases |
|
|
|
|
|
|
held for investment |
|
1.03 |
% |
|
|
1.07 |
% |
|
|
|
The allowance for credit losses increased by $0.6
million in the third quarter of 2022 to $284.4 million at September
30, 2022. This increase was attributable mainly to a $3.0 million
provision for credit losses, offset partially by $2.4 million in
net charge-offs.
Net charge-offs over the trailing twelve months
were $2.4 million, which results in net charge-offs to average
loans and leases over the trailing twelve months of 0.1%.
CREDIT QUALITY
The following table presents loan and lease credit
quality metrics as of the dates indicated:
|
|
|
|
|
|
|
|
September
30, |
|
June
30, |
|
Increase |
|
Credit Quality Metrics |
|
2022 |
|
|
|
2022 |
|
|
(Decrease) |
|
|
(Dollars
in thousands) |
|
NPAs
and Performing TDRs: |
|
|
|
|
|
|
Nonaccrual loans and leases held for investment (1) |
$ |
89,742 |
|
|
$ |
78,527 |
|
|
$ |
11,215 |
|
|
Accruing
loans contractually past due 90 days or more |
|
- |
|
|
|
- |
|
|
|
- |
|
|
Foreclosed
assets, net |
|
2,967 |
|
|
|
- |
|
|
|
2,967 |
|
|
Total nonperforming assets ("NPAs") |
$ |
92,709 |
|
|
$ |
78,527 |
|
|
$ |
14,182 |
|
|
|
|
|
|
|
|
|
Performing
TDRs held for investment |
$ |
8,106 |
|
|
$ |
11,723 |
|
|
$ |
(3,617 |
) |
|
|
|
|
|
|
|
|
Nonaccrual
loans and leases held for investment |
|
|
|
|
|
|
to loans and leases held for investment |
|
0.32 |
% |
|
|
0.30 |
% |
|
|
|
Nonperforming assets to loans and leases |
|
|
|
|
|
|
held for investment and foreclosed assets |
|
0.34 |
% |
|
|
0.30 |
% |
|
|
|
Allowance
for credit losses to nonaccrual loans |
|
|
|
|
|
|
and leases held for investment |
|
316.9 |
% |
|
|
361.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Nonaccrual loans include SBA guaranteed amounts of $17.2
million at September 30, 2022 and $13.8 million at June 30,
2022. |
|
|
|
|
|
|
|
|
|
|
Nonaccrual loans and leases increased by $11.2
million to $89.7 million in the third quarter of 2022 due primarily
to a $15.5 million office building loan.
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:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30, 2022 |
|
June 30, 2022 |
|
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 |
$ |
42,772 |
|
$ |
14 |
|
$ |
28,529 |
|
$ |
14 |
|
$ |
14,243 |
|
|
$ |
- |
|
|
Residential |
|
25,950 |
|
|
21,700 |
|
|
27,524 |
|
|
13,577 |
|
|
(1,574 |
) |
|
|
8,123 |
|
|
Total real estate mortgage |
|
68,722 |
|
|
21,714 |
|
|
56,053 |
|
|
13,591 |
|
|
12,669 |
|
|
|
8,123 |
|
|
Real estate
construction and land: |
|
|
|
|
|
|
|
|
|
|
|
|
Commercial |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
|
- |
|
|
Residential |
|
7,101 |
|
|
3,051 |
|
|
13,287 |
|
|
25,981 |
|
|
(6,186 |
) |
|
|
(22,930 |
) |
|
Total real estate |
|
|
|
|
|
|
|
|
|
|
|
|
construction and land |
|
7,101 |
|
|
3,051 |
|
|
13,287 |
|
|
25,981 |
|
|
(6,186 |
) |
|
|
(22,930 |
) |
|
Commercial: |
|
|
|
|
|
|
|
|
|
|
|
|
Asset-based |
|
2,127 |
|
|
- |
|
|
1,189 |
|
|
- |
|
|
938 |
|
|
|
- |
|
|
Venture capital |
|
3,809 |
|
|
- |
|
|
3,120 |
|
|
- |
|
|
689 |
|
|
|
- |
|
|
Other commercial |
|
7,616 |
|
|
265 |
|
|
4,655 |
|
|
9,503 |
|
|
2,961 |
|
|
|
(9,238 |
) |
|
Total commercial |
|
13,552 |
|
|
265 |
|
|
8,964 |
|
|
9,503 |
|
|
4,588 |
|
|
|
(9,238 |
) |
|
Consumer |
|
367 |
|
|
1,996 |
|
|
223 |
|
|
1,711 |
|
|
144 |
|
|
|
285 |
|
|
Total held for investment |
$ |
89,742 |
|
$ |
27,026 |
|
$ |
78,527 |
|
$ |
50,786 |
|
$ |
11,215 |
|
|
$ |
(23,760 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans and leases accruing and 30-89 days
past due generally fluctuate from period to period. The $23.8
million decrease in the third quarter of 2022 was primarily in
Civic residential construction loans and in the other commercial
category, offset partially by an increase in the residential
mortgage loans category.
CAPITAL
Our CET1, Tier 1, Total capital, and Tier 1
leverage capital ratios increased during the third quarter of 2022
due mainly to strong earnings and the completion of the
credit-linked notes transaction on September 29, 2022, which added
approximately 20 basis points to the CET1 ratio. The notes sold had
an aggregate principal amount of $132.8 million with net proceeds
of approximately $128.7 million. The notes are linked to the credit
risk of an approximately $2.66 billion reference pool of previously
purchased single-family residential mortgage loans. The notes were
issued in five classes with a blended interest rate of SOFR plus
11%. The transaction results in a lower risk-weighting on the
reference pool of loans for regulatory capital purposes. The
following table presents capital ratios as of the dates
indicated:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September
30, |
|
June
30, |
|
September
30, |
|
|
|
2022 |
|
|
|
2022 |
|
|
|
2021 |
|
|
PacWest Bancorp Consolidated: |
|
|
|
|
|
|
Common equity tier 1 capital ratio (1) |
|
8.55 |
% |
|
|
8.24 |
% |
|
|
10.15 |
% |
|
Tier 1 capital ratio (1) |
|
10.46 |
% |
|
|
10.15 |
% |
|
|
10.65 |
% |
|
Total capital ratio (1) |
|
13.43 |
% |
|
|
13.12 |
% |
|
|
14.36 |
% |
|
Tier 1 leverage capital ratio (1) |
|
8.63 |
% |
|
|
8.52 |
% |
|
|
8.05 |
% |
|
Risk-weighted assets (1) (in thousands) |
$ |
33,055,996 |
|
|
$ |
33,009,455 |
|
|
$ |
26,057,583 |
|
|
Tangible common equity ratio (2) |
|
4.85 |
% |
|
|
5.15 |
% |
|
|
7.79 |
% |
|
Tangible common equity ratio excluding |
|
|
|
|
|
|
the impact of AOCI for securities (2) |
|
6.97 |
% |
|
|
6.79 |
% |
|
|
7.50 |
% |
|
|
|
|
|
|
|
|
(1) Capital information for September 30, 2022 is preliminary. |
|
|
|
|
|
(2) Non-GAAP
measure. |
|
|
|
|
|
|
|
|
|
|
|
|
|
CONFERENCE CALL
PacWest Bancorp (“PacWest”) will host a conference
call at 8:00 AM PT/ 11:00 AM ET on Thursday, October 20, 2022 to
discuss the Company’s performance for the third quarter of
2022.
Participants may access the conference
call/webcast at:
Participant Dial-in: (800) 458-4121
Participant Webcast Link: https://event.webcasts.com/starthere.jsp?ei=1562576&tp_key=817f59ebeb
Confirmation Code: 8001555
The call will be recorded and made available for
replay on October 20, 2022, after 12:00 PM PT. The recording may be
accessed through the link above or at https://www.pacwestbancorp.com/news-market-data/presentations/default.aspx.
ABOUT PACWEST BANCORP
PacWest is a bank holding company with over $41
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 innovation 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 often use words such as “anticipates,” “targets,”
“expects,” “estimates,” “intends,” “plans,” “believes,” “continue”
and other similar expressions or future or conditional verbs such
as “will,” “may,” “might,” “should,” “would” and “could.” Such
statements are based on information available at the time of the
communication and are based on current beliefs and expectations of
PacWest’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
risks and impacts of the COVID-19 pandemic appear to have largely
subsided, however, new variants may continue to impact key
macro-economic indicators such as unemployment and GDP and may have
a material impact on our business, financial position, results of
operations, liquidity, and our allowance for credit losses and the
related provision for credit losses. Continued deterioration in
general business and economic conditions, uncertainty in U.S.
fiscal monetary policy, including the interest rate policies of the
Federal Reserve Board, and volatility and disruptions in credit and
capital markets 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, inflation, 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 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September
30, |
|
June
30, |
|
September
30, |
|
|
|
2022 |
|
|
|
2022 |
|
|
|
2021 |
|
|
|
(Dollars
in thousands, except per share data) |
|
ASSETS: |
|
|
|
|
|
|
Cash and due
from banks |
$ |
216,436 |
|
|
$ |
197,027 |
|
|
$ |
174,585 |
|
|
Interest-earning deposits in financial institutions |
|
2,244,272 |
|
|
|
2,192,877 |
|
|
|
3,524,613 |
|
|
Total cash and cash equivalents |
|
2,460,708 |
|
|
|
2,389,904 |
|
|
|
3,699,198 |
|
|
|
|
|
|
|
|
|
Securities
available-for-sale, at estimated fair value |
|
5,891,328 |
|
|
|
6,780,648 |
|
|
|
9,276,926 |
|
|
Securities
held-to-maturity, at amortized cost, |
|
|
|
|
|
|
net of allowance for credit losses |
|
2,264,601 |
|
|
|
2,260,367 |
|
|
|
- |
|
|
Federal Home
Loan Bank stock, at cost |
|
36,990 |
|
|
|
33,210 |
|
|
|
17,250 |
|
|
Total investment securities |
|
8,192,919 |
|
|
|
9,074,225 |
|
|
|
9,294,176 |
|
|
|
|
|
|
|
|
|
Loans held for sale |
|
15,534 |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
|
Gross loans
and leases held for investment |
|
27,775,962 |
|
|
|
26,608,541 |
|
|
|
20,588,255 |
|
|
Deferred
fees, net |
|
(115,921 |
) |
|
|
(107,404 |
) |
|
|
(77,235 |
) |
|
Total loans and leases held for investment, |
|
|
|
|
|
|
net of deferred fees |
|
27,660,041 |
|
|
|
26,501,137 |
|
|
|
20,511,020 |
|
|
Allowance
for loan and lease losses |
|
(189,327 |
) |
|
|
(188,705 |
) |
|
|
(203,733 |
) |
|
Total loans and leases held for investment,
net |
|
27,470,714 |
|
|
|
26,312,432 |
|
|
|
20,307,287 |
|
|
|
|
|
|
|
|
|
Equipment
leased to others under operating leases |
|
338,691 |
|
|
|
324,233 |
|
|
|
334,275 |
|
|
Premises and
equipment, net |
|
50,781 |
|
|
|
51,083 |
|
|
|
47,246 |
|
|
Foreclosed
assets, net |
|
2,967 |
|
|
|
- |
|
|
|
13,364 |
|
|
Goodwill |
|
1,405,736 |
|
|
|
1,405,736 |
|
|
|
1,204,118 |
|
|
Core deposit
and customer relationship intangibles, net |
|
34,010 |
|
|
|
37,659 |
|
|
|
15,533 |
|
|
Other
assets |
|
1,432,532 |
|
|
|
1,355,451 |
|
|
|
970,479 |
|
|
Total assets |
$ |
41,404,592 |
|
|
$ |
40,950,723 |
|
|
$ |
35,885,676 |
|
|
|
|
|
|
|
|
|
LIABILITIES: |
|
|
|
|
|
|
Noninterest-bearing deposits |
$ |
12,775,756 |
|
|
$ |
13,338,029 |
|
|
$ |
12,881,806 |
|
|
Interest-bearing deposits |
|
21,420,116 |
|
|
|
20,630,123 |
|
|
|
17,677,939 |
|
|
Total deposits |
|
34,195,872 |
|
|
|
33,968,152 |
|
|
|
30,559,745 |
|
|
Borrowings |
|
1,864,815 |
|
|
|
1,592,000 |
|
|
|
- |
|
|
Subordinated
debt |
|
863,379 |
|
|
|
863,756 |
|
|
|
862,447 |
|
|
Accrued
interest payable and other liabilities |
|
604,581 |
|
|
|
548,412 |
|
|
|
545,050 |
|
|
Total liabilities |
|
37,528,647 |
|
|
|
36,972,320 |
|
|
|
31,967,242 |
|
|
STOCKHOLDERS' EQUITY (1) |
|
3,875,945 |
|
|
|
3,978,403 |
|
|
|
3,918,434 |
|
|
Total liabilities and stockholders’ equity |
$ |
41,404,592 |
|
|
$ |
40,950,723 |
|
|
$ |
35,885,676 |
|
|
|
|
|
|
|
|
|
Book value
per common share |
$ |
28.07 |
|
|
$ |
28.93 |
|
|
$ |
32.77 |
|
|
Tangible
book value per common share (2) |
$ |
16.11 |
|
|
$ |
16.93 |
|
|
$ |
22.57 |
|
|
Common
shares outstanding |
|
120,314,023 |
|
|
|
120,288,024 |
|
|
|
119,579,566 |
|
|
|
|
|
|
|
|
|
(1) Includes
net unrealized (loss) gain on: |
|
|
|
|
|
|
Securities available-for-sale, net |
$ |
(637,346 |
) |
|
$ |
(428,242 |
) |
|
$ |
98,859 |
|
|
Securities held to maturity |
|
(210,868 |
) |
|
|
(216,508 |
) |
|
|
- |
|
|
Total |
$ |
(848,214 |
) |
|
$ |
(644,750 |
) |
|
$ |
98,859 |
|
|
(2) Non-GAAP
measure. |
|
|
|
|
|
|
|
|
|
|
|
|
|
PACWEST BANCORP AND SUBSIDIARIES |
|
|
|
|
|
|
|
|
|
|
CONDENSED CONSOLIDATED STATEMENT OF EARNINGS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Nine Months
Ended |
|
|
September
30, |
|
June
30, |
|
September
30, |
|
September 30, |
|
|
|
2022 |
|
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
|
|
(In
thousands, except per share data) |
|
Interest income: |
|
|
|
|
|
|
|
|
|
|
Loans and
leases |
$ |
346,550 |
|
|
$ |
293,286 |
|
|
$ |
246,722 |
|
|
$ |
907,595 |
|
|
$ |
732,795 |
|
|
Investment
securities |
|
53,135 |
|
|
|
52,902 |
|
|
|
40,780 |
|
|
|
159,459 |
|
|
|
104,999 |
|
|
Deposits in
financial institutions |
|
10,359 |
|
|
|
4,330 |
|
|
|
2,580 |
|
|
|
16,412 |
|
|
|
6,130 |
|
|
Total interest income |
|
410,044 |
|
|
|
350,518 |
|
|
|
290,082 |
|
|
|
1,083,466 |
|
|
|
843,924 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense: |
|
|
|
|
|
|
|
|
|
|
Deposits |
|
61,288 |
|
|
|
15,362 |
|
|
|
6,417 |
|
|
|
82,858 |
|
|
|
21,186 |
|
|
Borrowings |
|
3,081 |
|
|
|
2,441 |
|
|
|
101 |
|
|
|
5,683 |
|
|
|
559 |
|
|
Subordinated
debt |
|
10,494 |
|
|
|
8,790 |
|
|
|
7,722 |
|
|
|
27,102 |
|
|
|
18,760 |
|
|
Total interest expense |
|
74,863 |
|
|
|
26,593 |
|
|
|
14,240 |
|
|
|
115,643 |
|
|
|
40,505 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income |
|
335,181 |
|
|
|
323,925 |
|
|
|
275,842 |
|
|
|
967,823 |
|
|
|
803,419 |
|
|
Provision
for credit losses |
|
3,000 |
|
|
|
11,500 |
|
|
|
(20,000 |
) |
|
|
14,500 |
|
|
|
(156,000 |
) |
|
Net interest income after provision |
|
|
|
|
|
|
|
|
|
|
for credit losses |
|
332,181 |
|
|
|
312,425 |
|
|
|
295,842 |
|
|
|
953,323 |
|
|
|
959,419 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest income: |
|
|
|
|
|
|
|
|
|
|
Service
charges on deposit accounts |
|
3,608 |
|
|
|
3,634 |
|
|
|
3,407 |
|
|
|
10,813 |
|
|
|
9,793 |
|
|
Other
commissions and fees |
|
10,034 |
|
|
|
10,813 |
|
|
|
11,792 |
|
|
|
32,427 |
|
|
|
31,654 |
|
|
Leased
equipment income |
|
12,835 |
|
|
|
12,335 |
|
|
|
10,943 |
|
|
|
38,264 |
|
|
|
33,144 |
|
|
Gain on sale
of loans and leases |
|
58 |
|
|
|
12 |
|
|
|
- |
|
|
|
130 |
|
|
|
1,561 |
|
|
Gain (loss)
on sale of securities |
|
86 |
|
|
|
(1,209 |
) |
|
|
515 |
|
|
|
(1,019 |
) |
|
|
616 |
|
|
Dividends
and gains (losses) on equity investments |
|
3,228 |
|
|
|
4,097 |
|
|
|
8,387 |
|
|
|
(4,050 |
) |
|
|
24,685 |
|
|
Warrant
income |
|
292 |
|
|
|
1,615 |
|
|
|
13,578 |
|
|
|
2,536 |
|
|
|
25,351 |
|
|
Other
income |
|
8,478 |
|
|
|
3,049 |
|
|
|
2,723 |
|
|
|
14,682 |
|
|
|
9,741 |
|
|
Total noninterest income |
|
38,619 |
|
|
|
34,346 |
|
|
|
51,345 |
|
|
|
93,783 |
|
|
|
136,545 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest expense: |
|
|
|
|
|
|
|
|
|
|
Compensation |
|
105,933 |
|
|
|
102,542 |
|
|
|
98,061 |
|
|
|
300,715 |
|
|
|
268,750 |
|
|
Occupancy |
|
15,574 |
|
|
|
15,268 |
|
|
|
14,928 |
|
|
|
46,042 |
|
|
|
43,766 |
|
|
Data
processing |
|
9,568 |
|
|
|
9,258 |
|
|
|
7,391 |
|
|
|
28,455 |
|
|
|
22,106 |
|
|
Other
professional services |
|
10,674 |
|
|
|
6,726 |
|
|
|
5,164 |
|
|
|
23,354 |
|
|
|
15,546 |
|
|
Insurance
and assessments |
|
7,159 |
|
|
|
5,632 |
|
|
|
3,685 |
|
|
|
18,281 |
|
|
|
12,333 |
|
|
Intangible
asset amortization |
|
3,649 |
|
|
|
3,649 |
|
|
|
2,890 |
|
|
|
10,947 |
|
|
|
8,858 |
|
|
Leased
equipment depreciation |
|
8,908 |
|
|
|
8,934 |
|
|
|
8,603 |
|
|
|
27,031 |
|
|
|
26,186 |
|
|
Foreclosed
assets (income) expense, net |
|
(248 |
) |
|
|
(28 |
) |
|
|
165 |
|
|
|
(3,629 |
) |
|
|
47 |
|
|
Acquisition,
integration and reorganization costs |
|
- |
|
|
|
- |
|
|
|
200 |
|
|
|
- |
|
|
|
3,825 |
|
|
Customer
related expense |
|
12,673 |
|
|
|
11,748 |
|
|
|
4,538 |
|
|
|
37,076 |
|
|
|
14,329 |
|
|
Loan
expense |
|
6,228 |
|
|
|
7,037 |
|
|
|
4,180 |
|
|
|
18,422 |
|
|
|
11,404 |
|
|
Other
expense |
|
15,500 |
|
|
|
12,879 |
|
|
|
9,616 |
|
|
|
39,995 |
|
|
|
34,157 |
|
|
Total noninterest expense |
|
195,618 |
|
|
|
183,645 |
|
|
|
159,421 |
|
|
|
546,689 |
|
|
|
461,307 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings
before income taxes |
|
175,182 |
|
|
|
163,126 |
|
|
|
187,766 |
|
|
|
500,417 |
|
|
|
634,657 |
|
|
Income tax
expense |
|
43,566 |
|
|
|
40,766 |
|
|
|
47,770 |
|
|
|
126,313 |
|
|
|
163,743 |
|
|
Net earnings |
|
131,616 |
|
|
|
122,360 |
|
|
|
139,996 |
|
|
|
374,104 |
|
|
|
470,914 |
|
|
Preferred
stock dividends |
|
9,392 |
|
|
|
- |
|
|
|
- |
|
|
|
9,392 |
|
|
|
- |
|
|
Net earnings available to |
|
|
|
|
|
|
|
|
|
|
common stockholders |
$ |
122,224 |
|
|
$ |
122,360 |
|
|
$ |
139,996 |
|
|
$ |
364,712 |
|
|
$ |
470,914 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and
diluted earnings per common share |
$ |
1.02 |
|
|
$ |
1.02 |
|
|
$ |
1.17 |
|
|
$ |
3.04 |
|
|
$ |
3.96 |
|
|
Dividends
declared and paid per common share |
$ |
0.25 |
|
|
$ |
0.25 |
|
|
$ |
0.25 |
|
|
$ |
0.75 |
|
|
$ |
0.75 |
|
|
|
|
|
|
|
|
|
|
|
|
|
PACWEST BANCORP AND SUBSIDIARIES |
|
|
|
|
|
|
|
|
|
NET EARNINGS PER COMMON SHARE |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Nine Months
Ended |
|
|
September
30, |
|
June
30, |
|
September
30, |
|
September 30, |
|
|
|
2022 |
|
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
|
|
(Dollars
in thousands, except per share data) |
|
Basic Earnings Per Common Share: |
|
|
|
|
|
|
|
|
|
|
Net earnings |
$ |
131,616 |
|
|
$ |
122,360 |
|
|
$ |
139,996 |
|
|
$ |
374,104 |
|
|
$ |
470,914 |
|
|
Less: Preferred stock dividends |
|
(9,392 |
) |
|
|
- |
|
|
|
- |
|
|
|
(9,392 |
) |
|
|
- |
|
|
Net earnings available to |
|
|
|
|
|
|
|
|
|
|
common stockholders |
|
122,224 |
|
|
|
122,360 |
|
|
|
139,996 |
|
|
|
364,712 |
|
|
|
470,914 |
|
|
Less: Earnings allocated to |
|
|
|
|
|
|
|
|
|
|
unvested restricted stock (1) |
|
(2,331 |
) |
|
|
(2,351 |
) |
|
|
(2,417 |
) |
|
|
(6,721 |
) |
|
|
(7,930 |
) |
|
Net earnings allocated to |
|
|
|
|
|
|
|
|
|
|
common shares |
$ |
119,893 |
|
|
$ |
120,009 |
|
|
$ |
137,579 |
|
|
$ |
357,991 |
|
|
$ |
462,984 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average basic shares |
|
|
|
|
|
|
|
|
|
|
and unvested restricted stock |
|
|
|
|
|
|
|
|
|
|
outstanding |
|
120,342 |
|
|
|
120,022 |
|
|
|
119,569 |
|
|
|
119,989 |
|
|
|
119,272 |
|
|
Less: weighted average unvested |
|
|
|
|
|
|
|
|
|
|
restricted stock outstanding |
|
(2,556 |
) |
|
|
(2,460 |
) |
|
|
(2,340 |
) |
|
|
(2,422 |
) |
|
|
(2,235 |
) |
|
Weighted average basic shares |
|
|
|
|
|
|
|
|
|
|
outstanding |
|
117,786 |
|
|
|
117,562 |
|
|
|
117,229 |
|
|
|
117,567 |
|
|
|
117,037 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per common share |
$ |
1.02 |
|
|
$ |
1.02 |
|
|
$ |
1.17 |
|
|
$ |
3.04 |
|
|
$ |
3.96 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted Earnings Per Common Share: |
|
|
|
|
|
|
|
|
|
|
Net earnings allocated to |
|
|
|
|
|
|
|
|
|
|
common shares |
$ |
119,893 |
|
|
$ |
120,009 |
|
|
$ |
137,579 |
|
|
$ |
357,991 |
|
|
$ |
462,984 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average diluted shares |
|
|
|
|
|
|
|
|
|
|
outstanding |
|
117,786 |
|
|
|
117,562 |
|
|
|
117,229 |
|
|
|
117,567 |
|
|
|
117,037 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per common share |
$ |
1.02 |
|
|
$ |
1.02 |
|
|
$ |
1.17 |
|
|
$ |
3.04 |
|
|
$ |
3.96 |
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Represents cash dividends paid to holders of unvested stock,
net of forfeitures, plus |
|
|
|
|
|
|
undistributed earnings amounts available to holders of unvested
restricted stock, if any. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PACWEST BANCORP AND SUBSIDIARIES |
|
|
|
|
|
|
|
|
|
|
AVERAGE BALANCE SHEET AND YIELD ANALYSIS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
September 30, 2022 |
|
June 30, 2022 |
|
September 30, 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) |
$ |
27,038,873 |
$ |
348,639 |
5.12 |
% |
|
$ |
25,449,773 |
$ |
295,154 |
4.65 |
% |
|
$ |
19,670,671 |
$ |
248,485 |
5.01 |
% |
|
Investment
securities (3) |
|
8,803,349 |
|
54,423 |
2.45 |
% |
|
|
9,488,653 |
|
54,910 |
2.32 |
% |
|
|
8,047,098 |
|
42,952 |
2.12 |
% |
|
Deposits in
financial |
|
|
|
|
|
|
|
|
|
|
|
|
institutions |
|
1,809,809 |
|
10,359 |
2.27 |
% |
|
|
1,984,751 |
|
4,330 |
0.88 |
% |
|
|
5,657,768 |
|
2,580 |
0.18 |
% |
|
Total interest-earning |
|
|
|
|
|
|
|
|
|
|
|
|
assets (1) |
|
37,652,031 |
|
413,421 |
4.36 |
% |
|
|
36,923,177 |
|
354,394 |
3.85 |
% |
|
|
33,375,537 |
|
294,017 |
3.50 |
% |
|
Other
assets |
|
3,189,241 |
|
|
|
|
3,108,714 |
|
|
|
|
2,496,127 |
|
|
|
Total assets |
$ |
40,841,272 |
|
|
|
$ |
40,031,891 |
|
|
|
$ |
35,871,664 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and |
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders' Equity: |
|
|
|
|
|
|
|
|
|
|
|
Interest
checking |
$ |
6,650,477 |
|
19,475 |
1.16 |
% |
|
$ |
6,517,381 |
|
3,816 |
0.23 |
% |
|
$ |
7,372,859 |
|
2,042 |
0.11 |
% |
|
Money
market |
|
10,914,027 |
|
31,780 |
1.16 |
% |
|
|
10,553,942 |
|
8,448 |
0.32 |
% |
|
|
8,662,449 |
|
2,997 |
0.14 |
% |
|
Savings |
|
649,574 |
|
42 |
0.03 |
% |
|
|
650,479 |
|
41 |
0.03 |
% |
|
|
620,079 |
|
38 |
0.02 |
% |
|
Time |
|
3,000,187 |
|
9,991 |
1.32 |
% |
|
|
1,939,816 |
|
3,057 |
0.63 |
% |
|
|
1,475,307 |
|
1,340 |
0.36 |
% |
|
Total interest-bearing |
|
|
|
|
|
|
|
|
|
|
|
|
deposits |
|
21,214,265 |
|
61,288 |
1.15 |
% |
|
|
19,661,618 |
|
15,362 |
0.31 |
% |
|
|
18,130,694 |
|
6,417 |
0.14 |
% |
|
Borrowings |
|
505,482 |
|
3,081 |
2.42 |
% |
|
|
1,356,616 |
|
2,441 |
0.72 |
% |
|
|
238,335 |
|
101 |
0.17 |
% |
|
Subordinated
debt |
|
863,719 |
|
10,494 |
4.82 |
% |
|
|
863,653 |
|
8,790 |
4.08 |
% |
|
|
862,272 |
|
7,722 |
3.55 |
% |
|
Total interest-bearing |
|
|
|
|
|
|
|
|
|
|
|
|
liabilities |
|
22,583,466 |
|
74,863 |
1.32 |
% |
|
|
21,881,887 |
|
26,593 |
0.49 |
% |
|
|
19,231,301 |
|
14,240 |
0.29 |
% |
|
Noninterest-bearing |
|
|
|
|
|
|
|
|
|
|
|
|
demand deposits |
|
13,653,177 |
|
|
|
|
13,987,398 |
|
|
|
|
12,198,313 |
|
|
|
Other
liabilities |
|
593,450 |
|
|
|
|
510,238 |
|
|
|
|
525,429 |
|
|
|
Total liabilities |
|
36,830,093 |
|
|
|
|
36,379,523 |
|
|
|
|
31,955,043 |
|
|
|
Stockholders' equity |
|
4,011,179 |
|
|
|
|
3,652,368 |
|
|
|
|
3,916,621 |
|
|
|
Total liabilities and |
|
|
|
|
|
|
|
|
|
|
|
|
stockholders' equity |
$ |
40,841,272 |
|
|
|
$ |
40,031,891 |
|
|
|
$ |
35,871,664 |
|
|
|
Net interest
income (1) |
|
$ |
338,558 |
|
|
|
$ |
327,801 |
|
|
|
$ |
279,777 |
|
|
Net interest
spread (1) |
|
|
3.04 |
% |
|
|
|
3.36 |
% |
|
|
|
3.21 |
% |
|
Net interest
margin (1) |
|
|
3.57 |
% |
|
|
|
3.56 |
% |
|
|
|
3.33 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
deposits (4) |
$ |
34,867,442 |
$ |
61,288 |
0.70 |
% |
|
$ |
33,649,016 |
$ |
15,362 |
0.18 |
% |
|
$ |
30,329,007 |
$ |
6,417 |
0.08 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Tax
equivalent. |
|
|
|
|
|
|
|
|
|
|
|
|
(2) Includes net loan
premium amortization of $3.8 million, $5.8 million, and $2.4
million for the three months ended September 30, 2022, |
June 30, 2022, and September 30, 2021, respectively. |
|
|
|
|
|
|
|
|
|
(3) Includes
tax-equivalent adjustments of $1.3 million, $2.0 million, and $2.2
million for the three months ended September 30, 2022, |
|
June 30, 2022, and September 30, 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 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September
30, |
|
June
30, |
|
March
31, |
|
December
31, |
|
September
30, |
|
|
|
2022 |
|
|
|
2022 |
|
|
|
2022 |
|
|
|
2021 |
|
|
|
2021 |
|
|
|
(Dollars
in thousands, except per share data) |
|
ASSETS: |
|
|
|
|
|
|
|
|
|
|
Cash and due
from banks |
$ |
216,436 |
|
|
$ |
197,027 |
|
|
$ |
205,446 |
|
|
$ |
112,548 |
|
|
$ |
174,585 |
|
|
Interest-earning deposits in financial |
|
|
|
|
|
|
|
|
|
|
institutions |
|
2,244,272 |
|
|
|
2,192,877 |
|
|
|
1,865,235 |
|
|
|
3,944,686 |
|
|
|
3,524,613 |
|
|
Total cash and cash equivalents |
|
2,460,708 |
|
|
|
2,389,904 |
|
|
|
2,070,681 |
|
|
|
4,057,234 |
|
|
|
3,699,198 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Securities
available-for-sale |
|
5,891,328 |
|
|
|
6,780,648 |
|
|
|
9,975,109 |
|
|
|
10,694,458 |
|
|
|
9,276,926 |
|
|
Securities
held-to-maturity |
|
2,264,601 |
|
|
|
2,260,367 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
Federal Home
Loan Bank stock |
|
36,990 |
|
|
|
33,210 |
|
|
|
17,250 |
|
|
|
17,250 |
|
|
|
17,250 |
|
|
Total investment securities |
|
8,192,919 |
|
|
|
9,074,225 |
|
|
|
9,992,359 |
|
|
|
10,711,708 |
|
|
|
9,294,176 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans held for sale |
|
15,534 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross loans
and leases held for investment |
|
27,775,962 |
|
|
|
26,608,541 |
|
|
|
24,439,749 |
|
|
|
23,026,308 |
|
|
|
20,588,255 |
|
|
Deferred
fees, net |
|
(115,921 |
) |
|
|
(107,404 |
) |
|
|
(87,677 |
) |
|
|
(84,760 |
) |
|
|
(77,235 |
) |
|
Total loans and leases held for |
|
|
|
|
|
|
|
|
|
|
investment, net of deferred fees |
|
27,660,041 |
|
|
|
26,501,137 |
|
|
|
24,352,072 |
|
|
|
22,941,548 |
|
|
|
20,511,020 |
|
|
Allowance
for loan and lease losses |
|
(189,327 |
) |
|
|
(188,705 |
) |
|
|
(197,398 |
) |
|
|
(200,564 |
) |
|
|
(203,733 |
) |
|
Total loans and leases held for |
|
|
|
|
|
|
|
|
|
|
investment, net |
|
27,470,714 |
|
|
|
26,312,432 |
|
|
|
24,154,674 |
|
|
|
22,740,984 |
|
|
|
20,307,287 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Equipment
leased to others under |
|
|
|
|
|
|
|
|
|
|
operating leases |
|
338,691 |
|
|
|
324,233 |
|
|
|
325,305 |
|
|
|
339,150 |
|
- |
|
334,275 |
|
|
Premises and
equipment, net |
|
50,781 |
|
|
|
51,083 |
|
|
|
51,011 |
|
|
|
46,740 |
|
|
|
47,246 |
|
|
Foreclosed
assets, net |
|
2,967 |
|
|
|
- |
|
|
|
304 |
|
|
|
12,843 |
|
|
|
13,364 |
|
|
Goodwill |
|
1,405,736 |
|
|
|
1,405,736 |
|
|
|
1,405,736 |
|
|
|
1,405,736 |
|
|
|
1,204,118 |
|
|
Core deposit
and customer relationship |
|
|
|
|
|
|
|
|
|
|
intangibles, net |
|
34,010 |
|
|
|
37,659 |
|
|
|
41,308 |
|
|
|
44,957 |
|
|
|
15,533 |
|
|
Other
assets |
|
1,432,532 |
|
|
|
1,355,451 |
|
|
|
1,208,261 |
|
|
|
1,083,992 |
|
|
|
970,479 |
|
|
Total assets |
$ |
41,404,592 |
|
|
$ |
40,950,723 |
|
|
$ |
39,249,639 |
|
|
$ |
40,443,344 |
|
|
$ |
35,885,676 |
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES: |
|
|
|
|
|
|
|
|
|
|
Noninterest-bearing deposits |
$ |
12,775,756 |
|
|
$ |
13,338,029 |
|
|
$ |
14,057,051 |
|
|
$ |
14,543,133 |
|
|
$ |
12,881,806 |
|
|
Interest-bearing deposits |
|
21,420,116 |
|
|
|
20,630,123 |
|
|
|
19,167,844 |
|
|
|
20,454,624 |
|
|
|
17,677,939 |
|
|
Total deposits |
|
34,195,872 |
|
|
|
33,968,152 |
|
|
|
33,224,895 |
|
|
|
34,997,757 |
|
|
|
30,559,745 |
|
|
Borrowings |
|
1,864,815 |
|
|
|
1,592,000 |
|
|
|
991,000 |
|
|
|
- |
|
|
|
- |
|
|
Subordinated
debt |
|
863,379 |
|
|
|
863,756 |
|
|
|
863,880 |
|
|
|
863,283 |
|
|
|
862,447 |
|
|
Accrued
interest payable and other |
|
|
|
|
|
|
|
|
|
|
liabilities |
|
604,581 |
|
|
|
548,412 |
|
|
|
519,269 |
|
|
|
582,674 |
|
|
|
545,050 |
|
|
Total liabilities |
|
37,528,647 |
|
|
|
36,972,320 |
|
|
|
35,599,044 |
|
|
|
36,443,714 |
|
|
|
31,967,242 |
|
|
STOCKHOLDERS' EQUITY (1) |
|
3,875,945 |
|
|
|
3,978,403 |
|
|
|
3,650,595 |
|
|
|
3,999,630 |
|
|
|
3,918,434 |
|
|
Total liabilities and stockholders’ |
|
|
|
|
|
|
|
|
|
|
equity |
$ |
41,404,592 |
|
|
$ |
40,950,723 |
|
|
$ |
39,249,639 |
|
|
$ |
40,443,344 |
|
|
$ |
35,885,676 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Book value
per common share |
$ |
28.07 |
|
|
$ |
28.93 |
|
|
$ |
30.52 |
|
|
$ |
33.45 |
|
|
$ |
32.77 |
|
|
Tangible
book value per common share (2) |
$ |
16.11 |
|
|
$ |
16.93 |
|
|
$ |
18.42 |
|
|
$ |
21.31 |
|
|
$ |
22.57 |
|
|
Common
shares outstanding |
|
120,314,023 |
|
|
|
120,288,024 |
|
|
|
119,601,766 |
|
|
|
119,584,854 |
|
|
|
119,579,566 |
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Includes
net unrealized (loss) gain on: |
|
|
|
|
|
|
|
|
|
|
Securities available-for-sale, net |
$ |
(637,346 |
) |
|
$ |
(428,242 |
) |
|
$ |
(376,475 |
) |
|
$ |
65,968 |
|
|
$ |
98,859 |
|
|
Securities held to maturity |
|
(210,868 |
) |
|
|
(216,508 |
) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
Total |
$ |
(848,214 |
) |
|
$ |
(644,750 |
) |
|
$ |
(376,475 |
) |
|
$ |
65,968 |
|
|
$ |
98,859 |
|
|
(2) Non-GAAP
measure. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PACWEST BANCORP AND SUBSIDIARIES |
|
|
|
|
|
|
|
|
|
|
FIVE QUARTER STATEMENT OF EARNINGS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
September
30, |
|
June
30, |
|
March
31, |
|
December
31, |
|
September
30, |
|
|
|
2022 |
|
|
|
2022 |
|
|
|
2022 |
|
|
|
2021 |
|
|
|
2021 |
|
|
|
(In
thousands, except per share data) |
|
Interest income: |
|
|
|
|
|
|
|
|
|
|
Loans and
leases |
$ |
346,550 |
|
|
$ |
293,286 |
|
|
$ |
267,759 |
|
|
$ |
263,662 |
|
|
$ |
246,722 |
|
|
Investment
securities |
|
53,135 |
|
|
|
52,902 |
|
|
|
53,422 |
|
|
|
48,469 |
|
|
|
40,780 |
|
|
Deposits in
financial institutions |
|
10,359 |
|
|
|
4,330 |
|
|
|
1,723 |
|
|
|
2,674 |
|
|
|
2,580 |
|
|
Total interest income |
|
410,044 |
|
|
|
350,518 |
|
|
|
322,904 |
|
|
|
314,805 |
|
|
|
290,082 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense: |
|
|
|
|
|
|
|
|
|
|
Deposits |
|
61,288 |
|
|
|
15,362 |
|
|
|
6,208 |
|
|
|
6,622 |
|
|
|
6,417 |
|
|
Borrowings |
|
3,081 |
|
|
|
2,441 |
|
|
|
161 |
|
|
|
64 |
|
|
|
101 |
|
|
Subordinated
debt |
|
10,494 |
|
|
|
8,790 |
|
|
|
7,818 |
|
|
|
7,714 |
|
|
|
7,722 |
|
|
Total interest expense |
|
74,863 |
|
|
|
26,593 |
|
|
|
14,187 |
|
|
|
14,400 |
|
|
|
14,240 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income |
|
335,181 |
|
|
|
323,925 |
|
|
|
308,717 |
|
|
|
300,405 |
|
|
|
275,842 |
|
|
Provision
for credit losses |
|
3,000 |
|
|
|
11,500 |
|
|
|
- |
|
|
|
(6,000 |
) |
|
|
(20,000 |
) |
|
Net interest income after provision |
|
|
|
|
|
|
|
|
|
|
for credit losses |
|
332,181 |
|
|
|
312,425 |
|
|
|
308,717 |
|
|
|
306,405 |
|
|
|
295,842 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest income: |
|
|
|
|
|
|
|
|
|
|
Service
charges on deposit accounts |
|
3,608 |
|
|
|
3,634 |
|
|
|
3,571 |
|
|
|
3,476 |
|
|
|
3,407 |
|
|
Other
commissions and fees |
|
10,034 |
|
|
|
10,813 |
|
|
|
11,580 |
|
|
|
10,633 |
|
|
|
11,792 |
|
|
Leased
equipment income |
|
12,835 |
|
|
|
12,335 |
|
|
|
13,094 |
|
|
|
12,602 |
|
|
|
10,943 |
|
|
Gain on sale
of loans and leases |
|
58 |
|
|
|
12 |
|
|
|
60 |
|
|
|
172 |
|
|
|
- |
|
|
Gain (loss)
on sale of securities |
|
86 |
|
|
|
(1,209 |
) |
|
|
104 |
|
|
|
999 |
|
|
|
515 |
|
|
Dividends
and gains (losses) on equity investments |
|
3,228 |
|
|
|
4,097 |
|
|
|
(11,375 |
) |
|
|
(1,570 |
) |
|
|
8,387 |
|
|
Warrant
income |
|
292 |
|
|
|
1,615 |
|
|
|
629 |
|
|
|
23,990 |
|
|
|
13,578 |
|
|
Other
income |
|
8,478 |
|
|
|
3,049 |
|
|
|
3,155 |
|
|
|
7,080 |
|
|
|
2,723 |
|
|
Total noninterest income |
|
38,619 |
|
|
|
34,346 |
|
|
|
20,818 |
|
|
|
57,382 |
|
|
|
51,345 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest expense: |
|
|
|
|
|
|
|
|
|
|
Compensation |
|
105,933 |
|
|
|
102,542 |
|
|
|
92,240 |
|
|
|
99,700 |
|
|
|
98,061 |
|
|
Occupancy |
|
15,574 |
|
|
|
15,268 |
|
|
|
15,200 |
|
|
|
14,656 |
|
|
|
14,928 |
|
|
Data
processing |
|
9,568 |
|
|
|
9,258 |
|
|
|
9,629 |
|
|
|
8,171 |
|
|
|
7,391 |
|
|
Other
professional services |
|
10,674 |
|
|
|
6,726 |
|
|
|
5,954 |
|
|
|
5,946 |
|
|
|
5,164 |
|
|
Insurance
and assessments |
|
7,159 |
|
|
|
5,632 |
|
|
|
5,490 |
|
|
|
5,032 |
|
|
|
3,685 |
|
|
Intangible
asset amortization |
|
3,649 |
|
|
|
3,649 |
|
|
|
3,649 |
|
|
|
3,876 |
|
|
|
2,890 |
|
|
Leased
equipment depreciation |
|
8,908 |
|
|
|
8,934 |
|
|
|
9,189 |
|
|
|
9,569 |
|
|
|
8,603 |
|
|
Foreclosed
assets (income) expense, net |
|
(248 |
) |
|
|
(28 |
) |
|
|
(3,353 |
) |
|
|
(260 |
) |
|
|
165 |
|
|
Acquisition,
integration and reorganization costs |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
5,590 |
|
|
|
200 |
|
|
Customer
related expense |
|
12,673 |
|
|
|
11,748 |
|
|
|
12,655 |
|
|
|
6,175 |
|
|
|
4,538 |
|
|
Loan
expense |
|
6,228 |
|
|
|
7,037 |
|
|
|
5,157 |
|
|
|
5,627 |
|
|
|
4,180 |
|
|
Other
expense |
|
15,500 |
|
|
|
12,879 |
|
|
|
11,616 |
|
|
|
12,028 |
|
|
|
9,616 |
|
|
Total noninterest expense |
|
195,618 |
|
|
|
183,645 |
|
|
|
167,426 |
|
|
|
176,110 |
|
|
|
159,421 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings
before income taxes |
|
175,182 |
|
|
|
163,126 |
|
|
|
162,109 |
|
|
|
187,677 |
|
|
|
187,766 |
|
|
Income tax
expense |
|
43,566 |
|
|
|
40,766 |
|
|
|
41,981 |
|
|
|
51,632 |
|
|
|
47,770 |
|
|
Net earnings |
|
131,616 |
|
|
|
122,360 |
|
|
|
120,128 |
|
|
|
136,045 |
|
|
|
139,996 |
|
|
Preferred
stock dividends |
|
9,392 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
Net earnings available to |
|
|
|
|
|
|
|
|
|
|
common stockholders |
$ |
122,224 |
|
|
$ |
122,360 |
|
|
$ |
120,128 |
|
|
$ |
136,045 |
|
|
$ |
139,996 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and
diluted earnings per common share |
$ |
1.02 |
|
|
$ |
1.02 |
|
|
$ |
1.01 |
|
|
$ |
1.14 |
|
|
$ |
1.17 |
|
|
Dividends
declared and paid per common 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 |
|
|
September
30, |
|
June
30, |
|
March
31, |
|
December
31, |
|
September
30, |
|
|
|
2022 |
|
|
|
2022 |
|
|
|
2022 |
|
|
|
2021 |
|
|
|
2021 |
|
|
|
(Dollars in thousands) |
|
Performance Ratios: |
|
|
|
|
|
|
|
|
|
|
Return on average assets (1) |
|
1.28 |
% |
|
|
1.23 |
% |
|
|
1.22 |
% |
|
|
1.34 |
% |
|
|
1.55 |
% |
|
Pre-provision, pre-tax net revenue |
|
|
|
|
|
|
|
|
|
|
("PPNR") return on average |
|
|
|
|
|
|
|
|
|
|
assets (1)(2) |
|
1.73 |
% |
|
|
1.75 |
% |
|
|
1.65 |
% |
|
|
1.79 |
% |
|
|
1.86 |
% |
|
Return on average equity (1) |
|
13.02 |
% |
|
|
13.44 |
% |
|
|
12.66 |
% |
|
|
13.65 |
% |
|
|
14.18 |
% |
|
Return on average tangible common |
|
|
|
|
|
|
|
|
|
|
equity (1)(2) |
|
24.11 |
% |
|
|
24.42 |
% |
|
|
20.93 |
% |
|
|
22.06 |
% |
|
|
21.03 |
% |
|
Efficiency ratio |
|
51.0 |
% |
|
|
49.5 |
% |
|
|
50.1 |
% |
|
|
46.2 |
% |
|
|
47.2 |
% |
|
Noninterest expense as a percentage |
|
|
|
|
|
|
|
|
|
|
of average assets (1) |
|
1.90 |
% |
|
|
1.84 |
% |
|
|
1.70 |
% |
|
|
1.73 |
% |
|
|
1.76 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Average Yields/Costs (1): |
|
|
|
|
|
|
|
|
|
|
Yield on: |
|
|
|
|
|
|
|
|
|
|
Average loans and leases (3) |
|
5.12 |
% |
|
|
4.65 |
% |
|
|
4.66 |
% |
|
|
4.93 |
% |
|
|
5.01 |
% |
|
Average investment securities (3) |
|
2.45 |
% |
|
|
2.32 |
% |
|
|
2.17 |
% |
|
|
2.02 |
% |
|
|
2.12 |
% |
|
Average interest-earning assets (3) |
|
4.36 |
% |
|
|
3.85 |
% |
|
|
3.59 |
% |
|
|
3.39 |
% |
|
|
3.50 |
% |
|
Cost of: |
|
|
|
|
|
|
|
|
|
|
Average interest-bearing deposits |
|
1.15 |
% |
|
|
0.31 |
% |
|
|
0.13 |
% |
|
|
0.13 |
% |
|
|
0.14 |
% |
|
Average total deposits |
|
0.70 |
% |
|
|
0.18 |
% |
|
|
0.07 |
% |
|
|
0.08 |
% |
|
|
0.08 |
% |
|
Average interest-bearing liabilities |
|
1.32 |
% |
|
|
0.49 |
% |
|
|
0.27 |
% |
|
|
0.27 |
% |
|
|
0.29 |
% |
|
Net interest spread (3) |
|
3.04 |
% |
|
|
3.36 |
% |
|
|
3.32 |
% |
|
|
3.12 |
% |
|
|
3.21 |
% |
|
Net interest margin (3) |
|
3.57 |
% |
|
|
3.56 |
% |
|
|
3.43 |
% |
|
|
3.24 |
% |
|
|
3.33 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Average Balances: |
|
|
|
|
|
|
|
|
|
|
Assets: |
|
|
|
|
|
|
|
|
|
|
Loans and leases, net of deferred fees |
$ |
27,038,873 |
|
|
$ |
25,449,773 |
|
|
$ |
23,433,019 |
|
|
$ |
21,367,665 |
|
|
$ |
19,670,671 |
|
|
Investment securities |
|
8,803,349 |
|
|
|
9,488,653 |
|
|
|
10,397,709 |
|
|
|
9,964,568 |
|
|
|
8,047,098 |
|
|
Deposits in financial institutions |
|
1,809,809 |
|
|
|
1,984,751 |
|
|
|
3,083,159 |
|
|
|
5,961,104 |
|
|
|
5,657,768 |
|
|
Interest-earning assets |
|
37,652,031 |
|
|
|
36,923,177 |
|
|
|
36,913,887 |
|
|
|
37,293,337 |
|
|
|
33,375,537 |
|
|
Total assets |
|
40,841,272 |
|
|
|
40,031,891 |
|
|
|
39,883,304 |
|
|
|
40,358,147 |
|
|
|
35,871,664 |
|
|
Liabilities: |
|
|
|
|
|
|
|
|
|
|
Noninterest-bearing deposits |
|
13,653,177 |
|
|
|
13,987,398 |
|
|
|
14,463,667 |
|
|
|
14,713,385 |
|
|
|
12,198,313 |
|
|
Interest-bearing deposits |
|
21,214,265 |
|
|
|
19,661,618 |
|
|
|
19,868,395 |
|
|
|
20,050,310 |
|
|
|
18,130,694 |
|
|
Total deposits |
|
34,867,442 |
|
|
|
33,649,016 |
|
|
|
34,332,062 |
|
|
|
34,763,695 |
|
|
|
30,329,007 |
|
|
Borrowings |
|
505,482 |
|
|
|
1,356,616 |
|
|
|
298,444 |
|
|
|
234,391 |
|
|
|
238,335 |
|
|
Subordinated debt |
|
863,719 |
|
|
|
863,653 |
|
|
|
863,572 |
|
|
|
862,777 |
|
|
|
862,272 |
|
|
Interest-bearing liabilities |
|
22,583,466 |
|
|
|
21,881,887 |
|
|
|
21,030,411 |
|
|
|
21,147,478 |
|
|
|
19,231,301 |
|
|
Stockholders' equity |
|
4,011,179 |
|
|
|
3,652,368 |
|
|
|
3,847,481 |
|
|
|
3,954,267 |
|
|
|
3,916,621 |
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
Annualized. |
|
|
|
|
|
|
|
|
|
|
(2) Non-GAAP
measure. |
|
|
|
|
|
|
|
|
|
|
(3) Tax
equivalent. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PACWEST BANCORP AND SUBSIDIARIES |
|
|
|
|
|
|
|
|
|
FIVE QUARTER SELECTED FINANCIAL DATA |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At or For the Three Months Ended |
|
|
September
30, |
|
June
30, |
|
March
31, |
|
December
31, |
|
September
30, |
|
|
|
2022 |
|
|
|
2022 |
|
|
|
2022 |
|
|
|
2021 |
|
|
|
2021 |
|
|
|
(Dollars
in thousands, except per share data) |
|
Credit Quality Metrics for Loans |
|
|
|
|
|
|
|
|
|
|
and
Leases Held for Investment: |
|
|
|
|
|
|
|
|
|
|
Nonaccrual loans and leases |
$ |
89,742 |
|
|
$ |
78,527 |
|
|
$ |
66,538 |
|
|
$ |
61,174 |
|
|
$ |
64,507 |
|
|
Nonperforming assets |
|
92,709 |
|
|
|
78,527 |
|
|
|
66,842 |
|
|
|
74,017 |
|
|
|
77,871 |
|
|
Special mention loans and leases |
|
463,994 |
|
|
|
480,261 |
|
|
|
377,315 |
|
|
|
391,611 |
|
|
|
496,366 |
|
|
Classified loans and leases |
|
96,685 |
|
|
|
104,264 |
|
|
|
82,068 |
|
|
|
116,104 |
|
|
|
141,604 |
|
|
Allowance for loan and lease losses |
|
189,327 |
|
|
|
188,705 |
|
|
|
197,398 |
|
|
|
200,564 |
|
|
|
203,733 |
|
|
Allowance for credit losses |
|
284,398 |
|
|
|
283,776 |
|
|
|
272,469 |
|
|
|
273,635 |
|
|
|
279,804 |
|
|
For the quarter: |
|
|
|
|
|
|
|
|
|
|
Provision for credit losses |
|
3,000 |
|
|
|
10,000 |
|
|
|
- |
|
|
|
(6,000 |
) |
|
|
(20,000 |
) |
|
Net charge-offs (recoveries) |
|
2,378 |
|
|
|
(1,307 |
) |
|
|
1,166 |
|
|
|
169 |
|
|
|
367 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonaccrual loans and leases to loans |
|
|
|
|
|
|
|
|
|
|
and leases |
|
0.32 |
% |
|
|
0.30 |
% |
|
|
0.27 |
% |
|
|
0.27 |
% |
|
|
0.31 |
% |
|
Nonperforming assets to loans and |
|
|
|
|
|
|
|
|
|
|
leases and foreclosed assets |
|
0.34 |
% |
|
|
0.30 |
% |
|
|
0.27 |
% |
|
|
0.32 |
% |
|
|
0.38 |
% |
|
Special mention loans and leases to |
|
|
|
|
|
|
|
|
|
|
loans and leases |
|
1.68 |
% |
|
|
1.81 |
% |
|
|
1.55 |
% |
|
|
1.71 |
% |
|
|
2.42 |
% |
|
Classified loans and leases to loans |
|
|
|
|
|
|
|
|
|
|
and leases |
|
0.35 |
% |
|
|
0.39 |
% |
|
|
0.34 |
% |
|
|
0.51 |
% |
|
|
0.69 |
% |
|
Allowance for loan and lease losses |
|
|
|
|
|
|
|
|
|
|
to loans and leases |
|
0.68 |
% |
|
|
0.71 |
% |
|
|
0.81 |
% |
|
|
0.87 |
% |
|
|
0.99 |
% |
|
Allowance for credit losses to loans |
|
|
|
|
|
|
|
|
|
|
and leases |
|
1.03 |
% |
|
|
1.07 |
% |
|
|
1.12 |
% |
|
|
1.19 |
% |
|
|
1.36 |
% |
|
Allowance for credit losses to |
|
|
|
|
|
|
|
|
|
|
nonaccrual loans and leases |
|
316.91 |
% |
|
|
361.37 |
% |
|
|
409.49 |
% |
|
|
447.31 |
% |
|
|
433.76 |
% |
|
Net charge-offs (recoveries) |
|
|
|
|
|
|
|
|
|
|
to average loans and leases |
|
0.03 |
% |
|
|
(0.02 |
)% |
|
|
0.02 |
% |
|
|
0.00 |
% |
|
|
0.01 |
% |
|
Trailing 12 months net charge-offs |
|
|
|
|
|
|
|
|
|
|
(recoveries) to average loans and |
|
|
|
|
|
|
|
|
|
|
leases |
|
0.01 |
% |
|
|
0.00 |
% |
|
|
(0.02 |
)% |
|
|
(0.01 |
)% |
|
|
0.09 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
PacWest Bancorp Consolidated: |
|
|
|
|
|
|
|
|
|
|
Common equity tier 1 capital ratio (1) |
|
8.55 |
% |
|
|
8.24 |
% |
|
|
8.64 |
% |
|
|
8.86 |
% |
|
|
10.15 |
% |
|
Tier 1 capital ratio (1) |
|
10.46 |
% |
|
|
10.15 |
% |
|
|
9.07 |
% |
|
|
9.32 |
% |
|
|
10.65 |
% |
|
Total capital ratio (1) |
|
13.43 |
% |
|
|
13.12 |
% |
|
|
12.27 |
% |
|
|
12.69 |
% |
|
|
14.36 |
% |
|
Tier 1 leverage capital ratio (1) |
|
8.63 |
% |
|
|
8.52 |
% |
|
|
7.11 |
% |
|
|
6.84 |
% |
|
|
8.05 |
% |
|
Risk-weighted assets (1) |
$ |
33,055,996 |
|
|
$ |
33,009,455 |
|
|
$ |
30,297,312 |
|
|
$ |
28,508,808 |
|
|
$ |
26,057,583 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity to assets ratio |
|
9.36 |
% |
|
|
9.72 |
% |
|
|
9.30 |
% |
|
|
9.89 |
% |
|
|
10.92 |
% |
|
Tangible common equity ratio (2) |
|
4.85 |
% |
|
|
5.15 |
% |
|
|
5.83 |
% |
|
|
6.54 |
% |
|
|
7.79 |
% |
|
Book value per common share |
$ |
28.07 |
|
|
$ |
28.93 |
|
|
$ |
30.52 |
|
|
$ |
33.45 |
|
|
$ |
32.77 |
|
|
Tangible book value per common share (2) |
$ |
16.11 |
|
|
$ |
16.93 |
|
|
$ |
18.42 |
|
|
$ |
21.31 |
|
|
$ |
22.57 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Pacific Western Bank: |
|
|
|
|
|
|
|
|
|
|
Common equity tier 1 capital ratio (1) |
|
10.17 |
% |
|
|
9.78 |
% |
|
|
9.32 |
% |
|
|
9.56 |
% |
|
|
11.12 |
% |
|
Tier 1 capital ratio (1) |
|
10.17 |
% |
|
|
9.78 |
% |
|
|
9.32 |
% |
|
|
9.56 |
% |
|
|
11.12 |
% |
|
Total capital ratio (1) |
|
12.16 |
% |
|
|
11.77 |
% |
|
|
11.45 |
% |
|
|
11.80 |
% |
|
|
13.59 |
% |
|
Tier 1 leverage capital ratio (1) |
|
8.39 |
% |
|
|
8.21 |
% |
|
|
7.31 |
% |
|
|
7.00 |
% |
|
|
8.40 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
(1) Capital information for September 30, 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 common equity, (4) tangible common equity ratio, and (5)
tangible book value per common 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 common equity, tangible common equity ratio, and tangible
book value per common 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 common
share.
The tables below present the reconciliations of
these GAAP financial measures to the related non-GAAP financial
measures:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Nine Months
Ended |
|
PPNR
and PPNR Return |
September
30, |
|
June
30, |
|
September
30, |
|
September 30, |
|
on Average Assets |
|
2022 |
|
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
|
|
(Dollars
in thousands) |
|
Net
earnings |
$ |
131,616 |
|
|
$ |
122,360 |
|
|
$ |
139,996 |
|
|
$ |
374,104 |
|
|
$ |
470,914 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest
income |
$ |
335,181 |
|
|
$ |
323,925 |
|
|
$ |
275,842 |
|
|
$ |
967,823 |
|
|
$ |
803,419 |
|
|
Noninterest
income |
|
38,619 |
|
|
|
34,346 |
|
|
|
51,345 |
|
|
|
93,783 |
|
|
|
136,545 |
|
|
Noninterest
expense |
|
(195,618 |
) |
|
|
(183,645 |
) |
|
|
(159,421 |
) |
|
|
(546,689 |
) |
|
|
(461,307 |
) |
|
Pre-provision, pre-tax net |
|
|
|
|
|
|
|
|
|
|
revenue ("PPNR") |
$ |
178,182 |
|
|
$ |
174,626 |
|
|
$ |
167,766 |
|
|
$ |
514,917 |
|
|
$ |
478,657 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Average
assets |
$ |
40,841,272 |
|
|
$ |
40,031,891 |
|
|
$ |
35,871,664 |
|
|
$ |
40,255,665 |
|
|
$ |
33,887,541 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on
average assets (1) |
|
1.28 |
% |
|
|
1.23 |
% |
|
|
1.55 |
% |
|
|
1.24 |
% |
|
|
1.86 |
% |
|
PPNR return
on average assets (2) |
|
1.73 |
% |
|
|
1.75 |
% |
|
|
1.86 |
% |
|
|
1.71 |
% |
|
|
1.89 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
(1) Annualized net earnings divided by average assets. |
|
|
|
|
|
|
|
|
|
(2) Annualized PPNR divided by average assets. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Nine Months
Ended |
|
Return on Average |
September
30, |
|
June
30, |
|
September
30, |
|
September 30, |
|
Tangible Common Equity |
|
2022 |
|
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
|
|
(Dollars
in thousands) |
|
Net
earnings |
$ |
131,616 |
|
|
$ |
122,360 |
|
|
$ |
139,996 |
|
|
$ |
374,104 |
|
|
$ |
470,914 |
|
|
Less:
Preferred stock dividends |
|
(9,392 |
) |
|
|
- |
|
|
|
- |
|
|
|
(9,392 |
) |
|
|
- |
|
|
Net earnings available to |
|
|
|
|
|
|
|
|
|
|
common stockholders |
|
122,224 |
|
|
|
122,360 |
|
|
|
139,996 |
|
|
|
364,712 |
|
|
|
470,914 |
|
|
Add:
Intangible asset amortization |
|
3,649 |
|
|
|
3,649 |
|
|
|
2,890 |
|
|
|
10,947 |
|
|
|
8,858 |
|
|
Adjusted net earnings |
$ |
125,873 |
|
|
$ |
126,009 |
|
|
$ |
142,886 |
|
|
$ |
375,659 |
|
|
$ |
479,772 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Average
stockholders' equity |
$ |
4,011,179 |
|
|
$ |
3,652,368 |
|
|
$ |
3,916,621 |
|
|
$ |
3,837,609 |
|
|
$ |
3,758,733 |
|
|
Less:
Average intangible assets |
|
1,441,689 |
|
|
|
1,445,333 |
|
|
|
1,221,253 |
|
|
|
1,445,332 |
|
|
|
1,212,851 |
|
|
Less:
Average preferred stock |
|
498,516 |
|
|
|
137,100 |
|
|
|
- |
|
|
|
213,698 |
|
|
|
- |
|
|
Average tangible common equity |
$ |
2,070,974 |
|
|
$ |
2,069,935 |
|
|
$ |
2,695,368 |
|
|
$ |
2,178,579 |
|
|
$ |
2,545,882 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on
average equity (1) |
|
13.02 |
% |
|
|
13.44 |
% |
|
|
14.18 |
% |
|
|
13.03 |
% |
|
|
16.75 |
% |
|
Return on
average tangible |
|
|
|
|
|
|
|
|
|
|
common equity (2) |
|
24.11 |
% |
|
|
24.42 |
% |
|
|
21.03 |
% |
|
|
23.05 |
% |
|
|
25.20 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
(1) Annualized net earnings divided by average stockholders'
equity. |
|
|
|
|
|
|
|
(2) Annualized adjusted net earnings divided by average tangible
common equity. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tangible Common Equity Ratio/ |
|
|
|
|
|
|
|
|
|
|
Tangible Book Value Per |
September
30, |
|
June
30, |
|
March
31, |
|
December
31, |
|
September
30, |
|
Common Share |
|
2022 |
|
|
|
2022 |
|
|
|
2022 |
|
|
|
2021 |
|
|
|
2021 |
|
|
|
(Dollars in thousands, except per share
data) |
|
Stockholders' equity |
$ |
3,875,945 |
|
|
$ |
3,978,403 |
|
|
$ |
3,650,595 |
|
|
$ |
3,999,630 |
|
|
$ |
3,918,434 |
|
|
Less:
Preferred stock |
|
498,516 |
|
|
|
498,516 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
Total common equity |
|
3,377,429 |
|
|
|
3,479,887 |
|
|
|
3,650,595 |
|
|
|
3,999,630 |
|
|
|
3,918,434 |
|
|
Less:
Intangible assets |
|
1,439,746 |
|
|
|
1,443,395 |
|
|
|
1,447,044 |
|
|
|
1,450,693 |
|
|
|
1,219,651 |
|
|
Tangible common equity |
$ |
1,937,683 |
|
|
$ |
2,036,492 |
|
|
$ |
2,203,551 |
|
|
$ |
2,548,937 |
|
|
$ |
2,698,783 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
assets |
$ |
41,404,592 |
|
|
$ |
40,950,723 |
|
|
$ |
39,249,639 |
|
|
$ |
40,443,344 |
|
|
$ |
35,885,676 |
|
|
Less:
Intangible assets |
|
1,439,746 |
|
|
|
1,443,395 |
|
|
|
1,447,044 |
|
|
|
1,450,693 |
|
|
|
1,219,651 |
|
|
Tangible assets |
$ |
39,964,846 |
|
|
$ |
39,507,328 |
|
|
$ |
37,802,595 |
|
|
$ |
38,992,651 |
|
|
$ |
34,666,025 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity to
assets ratio |
|
9.36 |
% |
|
|
9.72 |
% |
|
|
9.30 |
% |
|
|
9.89 |
% |
|
|
10.92 |
% |
|
Tangible
common equity ratio (1) |
|
4.85 |
% |
|
|
5.15 |
% |
|
|
5.83 |
% |
|
|
6.54 |
% |
|
|
7.79 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Book value
per common share (2) |
$ |
28.07 |
|
|
$ |
28.93 |
|
|
$ |
30.52 |
|
|
$ |
33.45 |
|
|
$ |
32.77 |
|
|
Tangible
book value per common share (3) |
$ |
16.11 |
|
|
$ |
16.93 |
|
|
$ |
18.42 |
|
|
$ |
21.31 |
|
|
$ |
22.57 |
|
|
Common
shares outstanding |
|
120,314,023 |
|
|
|
120,288,024 |
|
|
|
119,601,766 |
|
|
|
119,584,854 |
|
|
|
119,579,566 |
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Tangible common equity divided by tangible assets. |
|
|
|
|
|
|
|
|
|
(2) Total common equity divided by common shares outstanding. |
|
|
|
|
|
|
|
(3) Tangible common equity divided by common shares
outstanding. |
|
|
|
|
|
|
|
CONTACTS
Bart
R. Olson
EVP and CFO
714.989.4149 |
William J. Black
EVP Strategy and Corporate Development
919.597.7466 |
|
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PacWest Bancorp (NASDAQ:PACW)
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