CAPITAL POSITION ALLOWS PACWEST TO CLEAR BALANCE SHEET FOR FUTURE
GROWTH SAN DIEGO, Feb. 24 /PRNewswire-FirstCall/ -- PacWest Bancorp
(NASDAQ: PACW) today announced that on Tuesday, February 23, 2010,
its wholly-owned bank subsidiary, Pacific Western Bank, completed
the sale of 61 non-covered adversely classified loans totaling
$323.6 million, which includes $107.6 million of nonaccrual loans,
to an institutional buyer for $200.6 million in cash. The sale was
on a servicing-released basis and without recourse to Pacific
Western Bank. The loans sold represent over one-half of the Bank's
non-covered adversely classified loans. All loans sold were legacy
Pacific Western Bank loans and none were "covered loans" acquired
in the Affinity Bank acquisition. Matt Wagner, Chief Executive
Officer commented, "Removing almost $324 million of problem loans
from our portfolio in a single transaction creates tremendous
opportunity for the Company." Mr. Wagner continued, "We remain
cautious and vigilant with respect to credit, and our existing loan
portfolio is subject to uncertainty and volatility given the
fragile economic environment. Without these problem loans, however,
and given the significant earnings power of our Company, we believe
PacWest is well-positioned to grow, both organically and through
acquisition." Vic Santoro, Executive Vice President and Chief
Financial Officer, stated, "The expected after tax loss from the
disposition of these classified and non-accrual loans is estimated
to be $41 million. Our significant capital base gives us the
flexibility to not only absorb this loss now, but also to remain
above the well-capitalized regulatory capital requirements." Actual
and pro forma unaudited credit-related financial information as of
December 31, 2009 is shown below. The pro forma amounts reflect the
sale of the adversely classified loans as of year-end 2009. The
amounts shown in the columns headed "Loans Sold" represent the
balances of the loans on December 31, 2009; the balances of such
loans on the date sold totaled $323.6 million. The following table
shows our non-covered loan portfolio concentration and credit
quality data as of December 31, 2009 and on a pro forma basis
giving effect to the loan sale. At December 31, 2009
-------------------- Actual Loans Sold Pro Forma ------ ----------
--------- (Dollars in thousands) Commercial $815,527 $(9,948)
$805,579 Real estate - construction 440,286 (143,955) 296,331
Commercial real estate - mortgage 2,425,328 (171,931) 2,253,397
Consumer 32,241 - 32,241 ------ --- ------ Total non-covered loans
3,713,382 (325,834) 3,387,548 Unearned income, net (5,999) (825)
(5,174) ------ ---- ------ Total non-covered loans, net of unearned
income, net $3,707,383 $(325,009) $3,382,374 ========== =========
========== Non-covered nonaccrual loans $240,167 $(110,536)
$129,631 ======== ========= ======== Non-covered nonaccrual loans
to total non-covered loans, net of unearned income 6.48% 3.83% ====
==== The details of the construction loan portfolio as of December
31, 2009 and on a pro forma basis giving effect to the loan sale
follow: At December 31, 2009 -------------------- Actual Loans Sold
Pro Forma ------ ---------- --------- (Dollars in thousands)
Commercial construction: 100% owner occupied $20,086 $(6,756)
$13,330 Industrial/warehouse 67,915 (8,436) 59,479 Office building
37,300 (32,706) 4,594 Retail 49,573 (24,140) 25,433 Land
acquisition 38,905 (6,775) 32,130 Unimproved commercial land 25,709
- 25,709 Other 28,860 (4,459) 24,401 ------ ------ ------ Total
commercial construction 268,348 (83,272) 185,076 Residential
construction: Land acquisition and development $52,458 $(26,950)
$25,508 Nonowner-occupied single family 30,103 (9,925) 20,178
Unimproved residential land 39,003 - 39,003 Multifamily 38,825
(20,690) 18,135 Owner occupied 11,549 (3,118) 8,431 ------ ------
----- Total residential construction 171,938 (60,683) 111,255
------- ------- ------- Total construction $440,286 $(143,955)
$296,331 Our largest non-covered loan portfolio concentration is
the real estate mortgage category, which includes loans secured by
commercial and residential real estate. The loans sold reduce our
non-covered real estate mortgage loan portfolio as indicated in the
following table. At December 31, 2009 -------------------- Actual
Loans Sold Pro Forma ------ ---------- --------- (Dollars in
thousands) Commercial real estate mortgage: Owner-occupied $377,057
$(12,392) $364,665 Retail 479,370 (32,088) 447,282 Office buildings
343,746 - 343,746 Industrial/warehouse 356,227 - 356,227 Hotels and
other hospitality 257,489 (57,986) 199,503 Other 381,167 (14,593)
366,574 ------- ------- ------- Total commercial real estate
mortgage 2,195,056 (117,059) 2,077,997 --------- -------- ---------
Residential real estate mortgage: Multi-family 105,276 (25,216)
80,060 Single family owner-occupied 84,591 (9,667) 74,924 Single
family nonowner-occupied 40,405 (19,989) 20,416 ------ -------
------ Total residential real estate mortgage 230,272 (54,872)
175,400 ------- ------- ------- Total real estate mortgage
$2,425,328 $(171,931) $2,253,397 ========== ========= ==========
ABOUT PACWEST BANCORP PacWest Bancorp is a bank holding company
with $5.3 billion in assets as of December 31, 2009, with one
wholly-owned banking subsidiary, Pacific Western Bank. Through 68
full-service community banking branches, Pacific Western provides
commercial banking services, including real estate, construction
and commercial loans, to small and medium-sized businesses. Pacific
Western's branches are located in Los Angeles, Orange, Riverside,
San Bernardino, San Diego, San Francisco, San Mateo and Ventura
Counties. Through its subsidiary BFI Business Finance and its
division First Community Financial, Pacific Western also provides
working capital financing to growing companies located throughout
the Southwest, primarily in the states of Arizona, California and
Texas. Additional information regarding PacWest Bancorp is
available on the Internet at http://www.pacwestbancorp.com/.
Information regarding Pacific Western Bank is also available on the
Internet at http://www.pacificwesternbank.com/. Contact
information: Matt Wagner, Chief Executive Officer, (310) 728-1020
Vic Santoro, Executive Vice President and CFO, (310) 728-1021
DATASOURCE: PacWest Bancorp CONTACT: Matt Wagner, Chief Executive
Officer, +1-310-728-1020, or Vic Santoro, Executive Vice President
and CFO, +1-310-728-1021, both of PacWest Bancorp Web Site:
http://www.pacificwesternbank.com/ http://www.pacwestbancorp.com/
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