Attached files
| file | filename |
|---|---|
| 8-K - 8-K - PACWEST BANCORP | a15-2879_18k.htm |
Exhibit 99.1
PRESS RELEASE
PacWest Bancorp
(Nasdaq: PACW)
|
Contact: |
Matthew P. Wagner |
Victor R. Santoro |
|
|
President and CEO |
Executive Vice President and CFO |
|
|
10250 Constellation Boulevard, Suite 1640 |
10250 Constellation Boulevard, Suite 1640 |
|
|
Los Angeles, CA 90067 |
Los Angeles, CA 90067 |
|
Phone: |
310-728-1020 |
310-728-1021 |
|
Fax: |
310-201-0498 |
310-201-0498 |
|
FOR IMMEDIATE RELEASE |
January 22, 2015 |
PACWEST BANCORP ANNOUNCES RESULTS
FOR THE FOURTH QUARTER AND CALENDAR YEAR 2014
Fourth Quarter of 2014 Highlights
· Net Earnings of $71.0 Million, or $0.69 Per Diluted Share; Adjusted Net Earnings of $68.2 Million, or $0.66 Per Diluted Share
· Core Net Interest Margin at 5.52%
· $307.5 Million of Loan and Lease Growth in the Quarter Driven by $950.4 Million of Production
· Demand Deposits Increased $88.9 Million in the Quarter and are 25% of Total Deposits
· Core Deposits Increased $128.6 Million in the Quarter and are 52% of Total Deposits
Calendar Year 2014 Highlights
· Net Earnings of $168.9 Million, or $1.92 Per Diluted Share; Adjusted Net Earnings of $220.4 Million, or $2.50 Per Diluted Share
· Core Net Interest Margin at 5.60%
· $684.0 Million of Organic Loan and Lease Growth in the Year Driven by $3.0 Billion of Production
· Demand Deposits Increased $612.9 Million
· Organic Core Deposit Growth of $700.3 Million
Los Angeles, California . . . PacWest Bancorp (Nasdaq: PACW) today announced net earnings for the fourth quarter of 2014 of $71.0 million, or $0.69 per diluted share, compared to net earnings for the third quarter of 2014 of $62.3 million, or $0.60 per diluted share. Net earnings for calendar year 2014 are $168.9 million, or $1.92 per diluted share, compared to net earnings of $45.1 million for calendar year 2013, or $1.08 per diluted share. The significant increase in annual net earnings is largely the result of the CapitalSource merger that closed on April 7, 2014.
When certain income and expense items described below are excluded, adjusted net earnings are $68.2 million, or $0.66 per diluted share, for the fourth quarter of 2014 and $67.2 million, or $0.65 per diluted share, for the third quarter of 2014. Adjusted net earnings are $220.4 million, or $2.50 per diluted share, for calendar year 2014 and $77.5 million, or $1.86 per diluted share, for calendar year 2013.
Matt Wagner, President and CEO, commented, “2014 was truly a transformative year for the Company with the completion of the CapitalSource merger on April 7. We more than doubled our asset size and combined a national lending platform with our California-based deposit franchise. Our teams originated $3.0 billion of loans and leases in 2014 and increased core deposits by $700 million, of which $265 million are new accounts from CapitalSource division borrowers. Our 2014 net earnings almost quadrupled to $168.9 million from $45.1 million in 2013, and our adjusted net earnings for 2014 almost tripled to $220.4 million from $77.5 million in 2013. These strong operating results allowed us to distribute more than $114 million of cash dividends to our stockholders in 2014, with last quarter’s regular cash dividend being increased 100% to $0.50 per share.”
Mr. Wagner continued, “Our loan and lease portfolio has been diversified along product and geographical lines, and overall credit quality has improved as demonstrated by a 1.09% nonperforming asset ratio and a 92% coverage ratio on nonaccruals. The Company’s capital position remains quite strong, with tangible capital at 12.2%. We steadily improved tangible book value per share, which increased $4.44 per share during the year and reached $17.17 per share at year end. Overall, the Company and the Bank are well positioned for continued success.”
Vic Santoro, Executive Vice President and CFO, stated “Our fourth quarter results are equally as good as those for the full year. Reported and adjusted net earnings of $71.0 million and $68.2 million resulted in returns on tangible equity of 16.0% and 15.4%. Our core net interest margin remains quite strong at 5.52%, and our NIM, when adjusted for all the effects of purchase accounting, increased to 5.10% in the fourth quarter. We continue to closely control operating expenses as shown by the adjusted efficiency ratio, which declined to 42.3% in the fourth quarter. Our focus in 2015 will continue to be on loan and lease growth, core deposit growth and expense control.”
FINANCIAL HIGHLIGHTS
|
|
|
At or For the Three Months Ended |
|
At or For the Year Ended |
| ||||||||||||||
|
|
|
December 31, |
|
September 30, |
|
|
|
December 31, |
|
|
| ||||||||
|
|
|
2014 |
|
2014 |
|
Change |
|
2014 |
|
2013 |
|
Change |
| ||||||
|
|
|
(Dollars in thousands, except per share data) |
| ||||||||||||||||
|
Financial Highlights: (1) |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
|
Total Assets |
|
$ |
16,234,800 |
|
$ |
15,938,345 |
|
$ |
296,455 |
|
$ |
16,234,800 |
|
$ |
6,533,363 |
|
$ |
9,701,437 |
|
|
Loans and Leases, Net of Deferred Fees |
|
$ |
11,882,432 |
|
$ |
11,574,885 |
|
$ |
307,547 |
|
$ |
11,882,432 |
|
$ |
4,312,352 |
|
$ |
7,570,080 |
|
|
Total Deposits |
|
$ |
11,755,128 |
|
$ |
11,523,437 |
|
$ |
231,691 |
|
$ |
11,755,128 |
|
$ |
5,280,987 |
|
$ |
6,474,141 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
|
Net Earnings |
|
$ |
70,999 |
|
$ |
62,271 |
|
$ |
8,728 |
|
$ |
168,905 |
|
$ |
45,115 |
|
$ |
123,790 |
|
|
Diluted Earnings Per Share |
|
$ |
0.69 |
|
$ |
0.60 |
|
$ |
0.09 |
|
$ |
1.92 |
|
$ |
1.08 |
|
$ |
0.84 |
|
|
Annualized Return on Average Assets |
|
1.77 |
% |
1.57 |
% |
0.20 |
|
1.27 |
% |
0.74 |
% |
0.53 |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
|
Adjusted Net Earnings (2) |
|
$ |
68,200 |
|
$ |
67,235 |
|
$ |
965 |
|
$ |
220,403 |
|
$ |
77,466 |
|
$ |
142,937 |
|
|
Adjusted Diluted Earnings Per Share (2) |
|
$ |
0.66 |
|
$ |
0.65 |
|
$ |
0.01 |
|
$ |
2.50 |
|
$ |
1.86 |
|
$ |
0.64 |
|
|
Annualized Adjusted Return on Average Assets (2) |
|
1.70 |
% |
1.70 |
% |
— |
|
1.65 |
% |
1.27 |
% |
0.38 |
| ||||||
|
Annualized Return on Average Tangible Equity (2) |
|
16.00 |
% |
14.36 |
% |
1.64 |
|
11.88 |
% |
8.25 |
% |
3.63 |
| ||||||
|
Annualized Adjusted Return on Average Tangible Equity (2) |
|
15.37 |
% |
15.50 |
% |
(0.13 |
) |
15.51 |
% |
14.17 |
% |
1.34 |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
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Noninterest-Bearing Deposits as Percentage of Total Deposits |
|
25 |
% |
25 |
% |
— |
|
25 |
% |
44 |
% |
(19 |
) | ||||||
|
Core Deposits as a Percentage of Total Deposits |
|
52 |
% |
52 |
% |
— |
|
52 |
% |
88 |
% |
(36 |
) | ||||||
|
Tangible Common Equity Ratio (2) |
|
12.20 |
% |
12.24 |
% |
(0.04 |
) |
12.20 |
% |
9.24 |
% |
2.96 |
| ||||||
|
Tangible Book Value Per Share (2) |
|
$ |
17.17 |
|
$ |
16.86 |
|
$ |
0.31 |
|
$ |
17.17 |
|
$ |
12.73 |
|
$ |
4.44 |
|
|
Net Interest Margin |
|
5.86 |
% |
5.78 |
% |
0.08 |
|
5.95 |
% |
5.37 |
% |
0.58 |
| ||||||
|
Core Net Interest Margin (2) |
|
5.52 |
% |
5.64 |
% |
(0.12 |
) |
5.60 |
% |
5.29 |
% |
0.31 |
| ||||||
|
Efficiency Ratio |
|
44.5 |
% |
46.6 |
% |
(2.1 |
) |
58.0 |
% |
76.4 |
% |
(18.4 |
) | ||||||
|
Adjusted Efficiency Ratio (2) |
|
42.3 |
% |
43.4 |
% |
(1.1 |
) |
44.7 |
% |
60.6 |
% |
(15.9 |
) | ||||||
|
Annualized Operating Expense as Percentage of Average Assets |
|
2.00 |
% |
2.09 |
% |
(0.09 |
) |
2.20 |
% |
3.13 |
% |
(0.93 |
) | ||||||
(1) Includes the acquisition of First California Financial Group, Inc. on May 31, 2013 and CapitalSource Inc. on April 7, 2014.
(2) Non-GAAP measure
ADJUSTED NET EARNINGS
In evaluating its earnings, the Company removes certain items to arrive at adjusted net earnings and adjusted diluted earnings per share, as detailed below:
|
|
|
Three Months Ended |
|
Year Ended |
| ||||||||||||
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|
|
December 31, |
|
September 30, |
|
December 31, |
|
December 31, |
| ||||||||
|
|
|
2014 |
|
2014 |
|
2013 |
|
2014 |
|
2013 |
| ||||||
|
|
|
(Dollars in thousands) |
| ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
|
Reported net earnings |
|
$ |
70,999 |
|
$ |
62,271 |
|
$ |
3,109 |
|
$ |
168,905 |
|
$ |
45,115 |
| |
|
Less: |
Tax benefit on discontinued operations |
|
(47 |
) |
(3 |
) |
(240 |
) |
(1,114 |
) |
(258 |
) | |||||
|
Add: |
Tax expense on continuing operations |
|
42,226 |
|
42,205 |
|
9,135 |
|
113,853 |
|
30,003 |
| |||||
|
Reported pre-tax earnings |
|
113,178 |
|
104,473 |
|
12,004 |
|
281,644 |
|
74,860 |
| ||||||
|
Add: |
Acquisition, integration, reorganization and severance costs |
|
7,381 |
|
5,193 |
|
16,673 |
|
101,016 |
|
40,812 |
| |||||
|
Less: |
FDIC loss sharing expense, net |
|
(4,360 |
) |
(7,415 |
) |
(10,593 |
) |
(31,730 |
) |
(26,172 |
) | |||||
|
|
Gain on sale of loans and leases |
|
7 |
|
973 |
|
683 |
|
601 |
|
1,791 |
| |||||
|
|
(Loss) gain on securities |
|
— |
|
— |
|
(272 |
) |
4,841 |
|
5,359 |
| |||||
|
|
Covered OREO (expense) income, net |
|
(176 |
) |
(452 |
) |
594 |
|
1,172 |
|
1,833 |
| |||||
|
|
Gain on sale of owned office building |
|
— |
|
— |
|
— |
|
1,570 |
|
— |
| |||||
|
Adjusted pre-tax earnings before accelerated discount accretion |
|
125,088 |
|
116,560 |
|
38,265 |
|
406,206 |
|
132,861 |
| ||||||
|
Less: |
Accelerated discount accretion resulting from payoffs of acquired loans |
|
11,421 |
|
4,501 |
|
1,434 |
|
38,867 |
|
4,393 |
| |||||
|
Adjusted pre-tax earnings |
|
113,667 |
|
112,059 |
|
36,831 |
|
367,339 |
|
128,468 |
| ||||||
|
|
Tax expense (1) |
|
(45,467 |
) |
(44,824 |
) |
(14,622 |
) |
(146,936 |
) |
(51,002 |
) | |||||
|
Adjusted net earnings |
|
$ |
68,200 |
|
$ |
67,235 |
|
$ |
22,209 |
|
$ |
220,403 |
|
$ |
77,466 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
|
Annualized adjusted return on average assets |
|
1.70 |
% |
1.70 |
% |
1.33 |
% |
1.65 |
% |
1.27 |
% | ||||||
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
|
Adjusted diluted earnings per share |
|
$ |
0.66 |
|
$ |
0.65 |
|
$ |
0.49 |
|
$ |
2.50 |
|
$ |
1.86 |
| |
(1) Effective tax rates of 40.0% in 2014 periods and 39.7% in 2013 periods.
INCOME STATEMENT HIGHLIGHTS
Net Interest Income
Net interest income increased $6.2 million to $195.0 million for the fourth quarter of 2014 compared to $188.8 million for the third quarter of 2014 due to higher accelerated discount accretion resulting from early payoffs of acquired loans. Net interest margin (“NIM”) for the fourth quarter of 2014 was 5.86% compared to 5.78% for the third quarter of 2014, and loan yield was 6.76% compared to 6.68% for the third quarter of 2014. The increase in the NIM and loan yield are both due to higher accelerated discount accretion from early payoffs of acquired loans. Accelerated accretion resulting from early payoffs of acquired loans was $11.4 million in the fourth quarter (39 basis points on the loan and lease yield) compared to $4.5 million in the third quarter (16 basis points on the loan and lease yield), an increase of $6.9 million.
The total cost of deposits increased to 0.34% from 0.30% in the prior quarter due primarily to a lower amount of premium accretion on the time deposits acquired in the CapitalSource merger. The outflow of maturing higher-rate time deposits, and the retention of a portion of these deposits at current rates, resulted in the decline in the weighted average contractual rate of time deposits to 0.75% at December 31 from 0.80% at September 30.
Net interest margin information is presented in the following table for the periods indicated:
|
|
|
Three Months Ended |
| ||||
|
|
|
December 31, |
|
September 30, |
| ||
|
Net Interest Margin |
|
2014 |
|
2014 |
| ||
|
|
|
(In thousands) |
| ||||
|
Average Assets: |
|
|
|
|
| ||
|
Loans and leases |
|
$ |
11,586,573 |
|
$ |
11,285,689 |
|
|
Investment securities |
|
1,591,839 |
|
1,584,811 |
| ||
|
Deposits in financial institutions |
|
26,971 |
|
99,276 |
| ||
|
Average interest-earning assets |
|
13,205,383 |
|
12,969,776 |
| ||
|
Other assets |
|
2,687,378 |
|
2,746,763 |
| ||
|
Average total assets |
|
$ |
15,892,761 |
|
$ |
15,716,539 |
|
|
|
|
|
|
|
| ||
|
Average Liabilities: |
|
|
|
|
| ||
|
Interest-bearing deposits |
|
$ |
8,679,599 |
|
$ |
8,778,642 |
|
|
Borrowings |
|
214,053 |
|
96,711 |
| ||
|
Subordinated debentures |
|
433,859 |
|
434,625 |
| ||
|
Average interest-bearing liabilities |
|
9,327,511 |
|
9,309,978 |
| ||
|
Noninterest-bearing demand deposits |
|
2,900,388 |
|
2,778,260 |
| ||
|
Other liabilities |
|
164,571 |
|
163,182 |
| ||
|
Average total liabilties |
|
12,392,470 |
|
12,251,420 |
| ||
|
Average stockholders’ equity |
|
3,500,291 |
|
3,465,119 |
| ||
|
Average liabilities and stockholders’ equity |
|
$ |
15,892,761 |
|
$ |
15,716,539 |
|
|
|
|
|
|
|
| ||
|
Average time deposits |
|
$ |
5,427,687 |
|
$ |
5,680,732 |
|
|
Average total deposits |
|
$ |
11,579,987 |
|
$ |
11,556,902 |
|
|
Average funding sources |
|
$ |
12,227,899 |
|
$ |
12,088,238 |
|
|
|
|
|
|
|
| ||
|
Yield on: |
|
|
|
|
| ||
|
Average loans and leases |
|
6.76 |
% |
6.68 |
% | ||
|
Average investment securities |
|
3.04 |
% |
3.09 |
% | ||
|
Average interest-earning assets |
|
6.30 |
% |
6.19 |
% | ||
|
|
|
|
|
|
| ||
|
Cost of: |
|
|
|
|
| ||
|
Average total deposits |
|
0.34 |
% |
0.30 |
% | ||
|
Average time deposits |
|
0.60 |
% |
0.51 |
% | ||
|
Average interest-bearing deposits |
|
0.46 |
% |
0.40 |
% | ||
|
Average borrowings |
|
0.27 |
% |
0.30 |
% | ||
|
Average subordinated debentures |
|
4.20 |
% |
4.21 |
% | ||
|
Average interest-bearing liabilities |
|
0.63 |
% |
0.58 |
% | ||
|
Average funding sources |
|
0.48 |
% |
0.44 |
% | ||
|
|
|
|
|
|
| ||
|
Net interest rate spread |
|
5.67 |
% |
5.61 |
% | ||
|
Net interest margin |
|
5.86 |
% |
5.78 |
% | ||
The NIM and loan and lease yield are impacted by volatility caused by accelerated accretion of acquisition discounts resulting from early payoffs of acquired loans. The effects of this item are shown in the following table for the periods indicated:
|
|
|
Three Months Ended |
|
Three Months Ended |
| |||||
|
|
|
December 31, 2014 |
|
September 30, 2014 |
| |||||
|
|
|
|
|
Loan and |
|
|
|
Loan and |
| |
|
|
|
NIM |
|
Lease Yield |
|
NIM |
|
Lease Yield |
| |
|
Reported |
|
5.86 |
% |
6.76 |
% |
5.78 |
% |
6.68 |
% | |
|
Less: |
Accelerated accretion of acquistion discounts resulting from acquired loan payoffs |
|
(0.34 |
)% |
(0.39 |
)% |
(0.14 |
)% |
(0.16 |
)% |
|
Core (non-GAAP measure) |
|
5.52 |
% |
6.37 |
% |
5.64 |
% |
6.52 |
% | |
The impact on the NIM from all purchase accounting items is detailed in the table below for the period indicated:
|
|
|
Three Months Ended |
|
Three Months Ended |
| |||||||
|
|
|
December 31, 2014 |
|
September 30, 2014 |
| |||||||
|
|
|
|
|
Impact on |
|
|
|
Impact on |
| |||
|
|
|
Amount |
|
NIM |
|
Amount |
|
NIM |
| |||
|
|
|
(Dollars in thousands) |
| |||||||||
|
Net interest income/NIM as reported |
|
$ |
194,983 |
|
5.86 |
% |
$ |
188,846 |
|
5.78 |
% | |
|
Less: |
Accelerated accretion of acquisition discounts from early acquired loan payoffs |
|
(11,421 |
) |
(0.34 |
)% |
(4,501 |
) |
(0.14 |
)% | ||
|
|
Remaining accretion of Non-PCI loan acquisition discounts |
|
(13,073 |
) |
(0.39 |
)% |
(15,072 |
) |
(0.46 |
)% | ||
|
|
Amortization of TruPS discount |
|
1,401 |
|
0.04 |
% |
1,402 |
|
0.04 |
% | ||
|
|
Accretion of time deposits premium |
|
(2,469 |
) |
(0.07 |
)% |
(5,081 |
) |
(0.16 |
)% | ||
|
|
|
(25,562 |
) |
(0.76 |
)% |
(23,252 |
) |
(0.72 |
)% | |||
|
Net interest income/NIM excluding purchase accounting |
|
$ |
169,421 |
|
5.10 |
% |
$ |
165,594 |
|
5.06 |
% | |
Noninterest Income
Noninterest income decreased by $3.6 million to $12.7 million for the fourth quarter of 2014 compared to $16.3 million for the third quarter of 2014 due mostly to lower other commissions and fees, lower dividends and gains on equity investments and lower foreign currency translation net gains, offset by lower FDIC loss sharing expense. The decrease in other commissions and fees is due to lower prepayment fees and other loan-related fees. Dividends and gains on equity investments and foreign currency translation net gains tend to fluctuate from period to period based upon dividends received, sales of equity investments and the movement of the U.S. Dollar against various foreign currencies. FDIC loss sharing expense decreased $3.1 million due mostly to lower amortization of the FDIC loss sharing asset as one of the Bank’s loss sharing agreements reached the end of its initial indemnification period during the previous quarter.
The following table presents details of noninterest income for the periods indicated:
|
|
|
Three Months Ended |
| |||||||
|
|
|
December 31, |
|
September 30, |
|
Increase |
| |||
|
Noninterest Income |
|
2014 |
|
2014 |
|
(Decrease) |
| |||
|
|
|
(In thousands) |
| |||||||
|
Service charges on deposit accounts |
|
$ |
2,787 |
|
$ |
2,725 |
|
$ |
62 |
|
|
Other commissions and fees |
|
4,556 |
|
6,371 |
|
(1,815 |
) | |||
|
Leased equipment income |
|
5,382 |
|
5,615 |
|
(233 |
) | |||
|
Gain on sale of loans and leases |
|
7 |
|
973 |
|
(966 |
) | |||
|
FDIC loss sharing expense, net |
|
(4,360 |
) |
(7,415 |
) |
3,055 |
| |||
|
Other income: |
|
|
|
|
|
|
| |||
|
Dividends and realized gains on equity investments |
|
1,924 |
|
3,625 |
|
(1,701 |
) | |||
|
Foreign currency translation net gains |
|
854 |
|
2,253 |
|
(1,399 |
) | |||
|
Income recognized on early repayment of leases |
|
294 |
|
510 |
|
(216 |
) | |||
|
Other |
|
1,259 |
|
1,657 |
|
(398 |
) | |||
|
Total noninterest income |
|
$ |
12,703 |
|
$ |
16,314 |
|
$ |
(3,611 |
) |
The following table presents the details of FDIC loss sharing expense for the periods indicated:
|
|
|
Three Months Ended |
| |||||||
|
|
|
December 31, |
|
September 30, |
|
Increase |
| |||
|
FDIC Loss Sharing Expense, Net |
|
2014 |
|
2014 |
|
(Decrease) |
| |||
|
|
|
(In thousands) |
| |||||||
|
Loss on FDIC loss sharing asset |
|
$ |
(525 |
) |
$ |
(1,735 |
) |
$ |
1,210 |
|
|
FDIC loss sharing asset amortization, net |
|
(3,795 |
) |
(6,074 |
) |
2,279 |
| |||
|
Net reimbursement from FDIC for covered OREOs |
|
63 |
|
491 |
|
(428 |
) | |||
|
Other |
|
(103 |
) |
(97 |
) |
(6 |
) | |||
|
FDIC loss sharing expense, net |
|
$ |
(4,360 |
) |
$ |
(7,415 |
) |
$ |
3,055 |
|
Noninterest Expense
Noninterest expense decreased by $3.3 million to $92.3 million for the fourth quarter of 2014 compared to $95.6 million for the third quarter of 2014. The decrease was due mostly to lower foreclosed assets expense of $2.9 million and lower operating expenses of $2.7 million, offset by higher acquisition, integration, reorganization and severance costs of $2.2 million. The decrease in foreclosed assets expense was mostly due to lower write-downs on existing properties.
Operating expenses decreased to $79.9 million for the fourth quarter of 2014 compared to $82.6 million for the third quarter of 2014 due to decreases in other expenses and other professional services. Other expenses decreased due to lower loan-related expenses related to origination and work-out activities and the prior quarter included an accrual for loan-related litigation. Other professional services decreased due to lower legal and consulting expenses.
The following table presents details of noninterest expense for the periods indicated:
|
|
|
Three Months Ended |
| |||||||
|
|
|
December 31, |
|
September 30, |
|
Increase |
| |||
|
Noninterest Expense |
|
2014 |
|
2014 |
|
(Decrease) |
| |||
|
|
|
(In thousands) |
| |||||||
|
Compensation |
|
$ |
45,930 |
|
$ |
45,861 |
|
$ |
69 |
|
|
Occupancy |
|
10,745 |
|
11,188 |
|
(443 |
) | |||
|
Data processing |
|
4,050 |
|
3,929 |
|
121 |
| |||
|
Other professional services |
|
3,181 |
|
3,687 |
|
(506 |
) | |||
|
Insurance and assessments |
|
3,115 |
|
3,020 |
|
95 |
| |||
|
Intangible asset amortization |
|
1,619 |
|
1,608 |
|
11 |
| |||
|
Other expense: |
|
|
|
|
|
|
| |||
|
Loan expense |
|
2,365 |
|
3,711 |
|
(1,346 |
) | |||
|
Communications |
|
1,141 |
|
1,369 |
|
(228 |
) | |||
|
Other |
|
7,772 |
|
8,275 |
|
(503 |
) | |||
|
Total operating expense |
|
79,918 |
|
82,648 |
|
(2,730 |
) | |||
|
Leased equipment depreciation |
|
3,103 |
|
2,961 |
|
142 |
| |||
|
Foreclosed assets expense, net |
|
1,938 |
|
4,827 |
|
(2,889 |
) | |||
|
Acquisition, integration, reorganization and severance costs |
|
7,381 |
|
5,193 |
|
2,188 |
| |||
|
Total noninterest expense |
|
$ |
92,340 |
|
$ |
95,629 |
|
$ |
(3,289 |
) |
Income Taxes
Our overall effective income tax rate was 37.3% for the fourth quarter of 2014 and 40.4% for the third quarter of 2014.
BALANCE SHEET HIGHLIGHTS
Loans and Leases
Total loans and leases increased $307.5 million in the fourth quarter to $11.9 billion at December 31, 2014. The loan and lease growth in the fourth quarter represents an annualized growth rate of 11%.
The following table presents a roll forward of the loan and lease portfolio for the periods indicated:
|
|
|
Three Months Ended |
| ||||
|
|
|
December 31, |
|
September 30, |
| ||
|
Loan and Lease Roll Forward (1) |
|
2014 |
|
2014 |
| ||
|
|
|
(In thousands) |
| ||||
|
Beginning balance |
|
$ |
11,574,885 |
|
$ |
11,190,105 |
|
|
Loans and leases originated and purchased |
|
950,385 |
|
974,658 |
| ||
|
Existing loans and leases: |
|
|
|
|
| ||
|
Principal repayments, net (2) |
|
(620,799 |
) |
(535,758 |
) | ||
|
Loan and lease sales |
|
(6,388 |
) |
(13,039 |
) | ||
|
Transfers to loans held for sale |
|
— |
|
(33,125 |
) | ||
|
Transfers to foreclosed assets |
|
(9,139 |
) |
— |
| ||
|
Charge-offs |
|
(6,512 |
) |
(7,956 |
) | ||
|
Ending balance |
|
$ |
11,882,432 |
|
$ |
11,574,885 |
|
(1) Includes direct financing leases but excludes equipment leased to others under operating leases.
(2) Includes principal repayments on existing loans, changes in revolving lines of credit (repayments and draws) and other changes within the loan portfolio.
The following table presents a roll forward of the loan and lease portfolio by segment for the period indicated:
|
|
|
Three Months Ended December 31, 2014 |
| |||||||
|
|
|
Community |
|
National |
|
|
| |||
|
Loan and Lease Roll Forward by Segment |
|
Banking |
|
Lending |
|
Total |
| |||
|
|
|
(In thousands) |
| |||||||
|
Beginning balance |
|
$ |
3,482,125 |
|
$ |
8,092,760 |
|
$ |
11,574,885 |
|
|
Loans and leases originated and purchased |
|
121,817 |
|
828,568 |
|
950,385 |
| |||
|
Existing loans and leases: |
|
|
|
|
|
|
| |||
|
Principal repayments, net |
|
(181,219 |
) |
(439,580 |
) |
(620,799 |
) | |||
|
Loan and lease sales |
|
(6,246 |
) |
(142 |
) |
(6,388 |
) | |||
|
Transfers to foreclosed assets |
|
(9,139 |
) |
— |
|
(9,139 |
) | |||
|
Charge-offs |
|
(6,209 |
) |
(303 |
) |
(6,512 |
) | |||
|
Ending balance |
|
$ |
3,401,129 |
|
$ |
8,481,303 |
|
$ |
11,882,432 |
|
|
|
|
|
|
|
|
|
| |||
|
Weighted average rate on originations |
|
5.09 |
% |
5.76 |
% |
5.67 |
% | |||
The following table presents the composition of our loan and lease portfolio as of the dates indicated:
|
|
|
December 31, |
|
September 30, |
| ||
|
Loan and Lease Portfolio |
|
2014 |
|
2014 |
| ||
|
|
|
(In thousands) |
| ||||
|
Real estate mortgage: |
|
|
|
|
| ||
|
Hospitality |
|
$ |
570,634 |
|
$ |
530,628 |
|
|
SBA |
|
380,890 |
|
357,923 |
| ||
|
Commercial real estate |
|
2,428,794 |
|
2,492,883 |
| ||
|
Healthcare real estate |
|
1,030,851 |
|
1,006,164 |
| ||
|
Multi-family |
|
774,710 |
|
811,234 |
| ||
|
Other |
|
411,123 |
|
514,283 |
| ||
|
Total real estate mortgage |
|
5,597,002 |
|
5,713,115 |
| ||
|
Real estate construction: |
|
|
|
|
| ||
|
Residential |
|
96,749 |
|
72,881 |
| ||
|
Commercial |
|
217,297 |
|
218,389 |
| ||
|
Total real estate construction |
|
314,046 |
|
291,270 |
| ||
|
Commercial: |
|
|
|
|
| ||
|
Collateralized |
|
439,567 |
|
429,011 |
| ||
|
Unsecured |
|
131,939 |
|
127,150 |
| ||
|
Asset-based |
|
1,794,907 |
|
1,594,488 |
| ||
|
Cash flow |
|
2,486,411 |
|
2,341,511 |
| ||
|
Equipment finance |
|
969,489 |
|
928,460 |
| ||
|
SBA |
|
47,304 |
|
41,129 |
| ||
|
Total commercial |
|
5,869,617 |
|
5,461,749 |
| ||
|
Consumer |
|
101,767 |
|
108,751 |
| ||
|
Total loans and leases, net of deferred fees |
|
$ |
11,882,432 |
|
$ |
11,574,885 |
|
Energy-Related Credit Exposure
At December 31, 2014, we had 45 outstanding loan and lease relationships totaling $288.0 million to borrowers broadly involved in the energy industry. The obligors under these loans and leases either conduct mining, quarrying, oil and gas extraction or provide industrial support services to such types of businesses. The collateral for these loans and leases primarily includes equipment, such as drilling and mining equipment and transportation vehicles, used directly and indirectly in these activities. At December 31, 2014, four of these loans totaling $6.8 million were on nonaccrual status. These loans and leases are subject to our normal review procedures and allowance for credit losses methodology.
Deposits
The following table presents the composition of our deposit portfolio as of the dates indicated:
|
|
|
December 31, 2014 |
|
September 30, 2014 |
| ||||||
|
|
|
|
|
% of |
|
|
|
% of |
| ||
|
Deposit Category |
|
Amount |
|
Total |
|
Amount |
|
Total |
| ||
|
|
|
(Dollars in thousands) |
| ||||||||
|
|
|
|
|
|
|
|
|
|
| ||
|
Noninterest-bearing demand deposits |
|
$ |
2,931,352 |
|
25 |
% |
$ |
2,842,488 |
|
25 |
% |
|
Interest checking deposits |
|
732,196 |
|
6 |
% |
683,014 |
|
6 |
% | ||
|
Money market deposits |
|
1,709,068 |
|
15 |
% |
1,721,563 |
|
15 |
% | ||
|
Savings deposits |
|
762,961 |
|
6 |
% |
759,893 |
|
6 |
% | ||
|
Total core deposits |
|
6,135,577 |
|
52 |
% |
6,006,958 |
|
52 |
% | ||
|
Brokered non-maturity deposits |
|
120,613 |
|
1 |
% |
— |
|
— |
| ||
|
Total non-maturity deposits |
|
6,256,190 |
|
53 |
% |
6,006,958 |
|
52 |
% | ||
|
Time deposits under $100,000 |
|
2,467,338 |
|
21 |
% |
2,267,013 |
|
20 |
% | ||
|
Time deposits of $100,000 and over |
|
3,031,600 |
|
26 |
% |
3,249,466 |
|
28 |
% | ||
|
Total time deposits |
|
5,498,938 |
|
47 |
% |
5,516,479 |
|
48 |
% | ||
|
Total deposits |
|
$ |
11,755,128 |
|
100 |
% |
$ |
11,523,437 |
|
100 |
% |
At December 31, 2014, core deposits totaled $6.1 billion, or 52% of total deposits, and noninterest-bearing demand deposits, which totaled $2.9 billion, were 25% of total deposits. Core deposits obtained from CapitalSource Division borrowers totaled $264.8 million at December 31, 2014, of which $246.1 million were noninterest-bearing.
The following table summarizes the maturities of our time deposits as of the date indicated:
|
|
|
December 31, 2014 |
| |||||||||||
|
|
|
Time Deposits |
|
Time Deposits |
|
Total |
|
|
|
Estimated |
| |||
|
|
|
Under |
|
$100,000 |
|
Time |
|
Contractual |
|
Effective |
| |||
|
Time Deposit Maturities |
|
$100,000 |
|
or More |
|
Deposits |
|
Rate |
|
Rate |
| |||
|
|
|
(Dollars in thousands) |
| |||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
| |||
|
Due in three months or less |
|
$ |
618,024 |
|
$ |
767,160 |
|
$ |
1,385,184 |
|
0.70 |
% |
0.61 |
% |
|
Due in over three months through six months |
|
608,290 |
|
700,199 |
|
1,308,489 |
|
0.70 |
% |
0.64 |
% | |||
|
Due in over six months through twelve months |
|
1,007,390 |
|
1,257,397 |
|
2,264,787 |
|
0.75 |
% |
0.71 |
% | |||
|
Due in over 12 months through 24 months |
|
176,125 |
|
248,533 |
|
424,658 |
|
1.01 |
% |
0.88 |
% | |||
|
Due in over 24 months |
|
57,509 |
|
58,311 |
|
115,820 |
|
0.95 |
% |
0.70 |
% | |||
|
Total |
|
$ |
2,467,338 |
|
$ |
3,031,600 |
|
$ |
5,498,938 |
|
0.75 |
% |
0.69 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
| |||
|
At September 30, 2014 |
|
$ |
2,267,013 |
|
$ |
3,249,466 |
|
$ |
5,516,479 |
|
0.80 |
% |
0.69 |
% |
The remaining purchase accounting premium on acquired CapitalSource time deposits was $3.6 million at December 31, 2014 with a weighted average life of 15 months.
PROVISION AND ALLOWANCE FOR CREDIT LOSSES
We made a provision for credit losses of $2.1 million in the fourth quarter of 2014 and $5.1 million in the third quarter of 2014 in accordance with our loan methodology, which takes into consideration new loan and lease fundings, commitments to make loans and leases, and underlying credit quality trends. The fourth quarter provision is comprised of $2.7 million for Non-PCI loans and a negative provision of $0.6 million for PCI loans. The negative provision for PCI loans results from increases in expected cash flows on such loans, which have a net carrying value of $290.9 million at December 31.
The following tables show roll forwards of the allowance for credit losses for the third and fourth quarters:
|
|
|
Three Months Ended September 30, 2014 |
| |||||||||||||
|
|
|
Non-PCI |
|
|
|
|
|
|
|
|
| |||||
|
Allowance for Credit |
|
Loans and |
|
Unfunded |
|
Total |
|
PCI |
|
|
| |||||
|
Losses Rollforward |
|
Leases |
|
Commitments |
|
Non-PCI |
|
Loans |
|
Total |
| |||||
|
|
|
(In thousands) |
| |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Beginning balance |
|
$ |
65,523 |
|
$ |
6,844 |
|
$ |
72,367 |
|
$ |
16,626 |
|
$ |
88,993 |
|
|
Charge-offs |
|
(7,848 |
) |
— |
|
(7,848 |
) |
(108 |
) |
(7,956 |
) | |||||
|
Recoveries |
|
1,725 |
|
— |
|
1,725 |
|
— |
|
1,725 |
| |||||
|
Net charge-offs |
|
(6,123 |
) |
— |
|
(6,123 |
) |
(108 |
) |
(6,231 |
) | |||||
|
Provision (negative provision) |
|
3,684 |
|
(931 |
) |
2,753 |
|
2,297 |
|
5,050 |
| |||||
|
Ending balance |
|
$ |
63,084 |
|
$ |
5,913 |
|
$ |
68,997 |
|
$ |
18,815 |
|
$ |
87,812 |
|
|
|
|
Three Months Ended December 31, 2014 |
| |||||||||||||
|
|
|
Non-PCI |
|
|
|
|
|
|
|
|
| |||||
|
Allowance for Credit |
|
Loans and |
|
Unfunded |
|
Total |
|
PCI |
|
|
| |||||
|
Losses Rollforward |
|
Leases |
|
Commitments |
|
Non-PCI |
|
Loans |
|
Total |
| |||||
|
|
|
(In thousands) |
| |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Beginning balance |
|
$ |
63,084 |
|
$ |
5,913 |
|
$ |
68,997 |
|
$ |
18,815 |
|
$ |
87,812 |
|
|
Charge-offs |
|
(1,647 |
) |
— |
|
(1,647 |
) |
(4,865 |
) |
(6,512 |
) | |||||
|
Recoveries |
|
6,688 |
|
— |
|
6,688 |
|
715 |
|
7,403 |
| |||||
|
Net (charge-offs) recoveries |
|
5,041 |
|
— |
|
5,041 |
|
(4,150 |
) |
891 |
| |||||
|
Provision (negative provision) |
|
2,331 |
|
398 |
|
2,729 |
|
(666 |
) |
2,063 |
| |||||
|
Ending balance |
|
$ |
70,456 |
|
$ |
6,311 |
|
$ |
76,767 |
|
$ |
13,999 |
|
$ |
90,766 |
|
Non-PCI loans and leases include $5.0 billion of originated loans and leases that were not obtained through acquisitions. The allowance related to these loans and leases totals $66.3 million, or 1.31% of the outstanding balance.
All acquired loans are recorded initially at their estimated fair value with such initial fair value including an estimate of credit losses. The two additional credit coverage ratios shown in the table below are presented to give an indication of overall credit risk coverage:
|
|
|
December 31, 2014 |
|
September 30, 2014 |
| ||||||||||||
|
|
|
Non-PCI |
|
|
|
|
|
Non-PCI |
|
|
|
|
| ||||
|
Credit Risk Coverage Ratios |
|
Loans and |
|
Allowance/ |
|
Coverage |
|
Loans and |
|
Allowance/ |
|
Coverage |
| ||||
|
(Excludes PCI Loans) |
|
Leases |
|
Discount |
|
Ratio |
|
Leases |
|
Discount |
|
Ratio |
| ||||
|
|
|
(Dollars in thousands) |
| ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Ending balance |
|
$ |
11,605,056 |
|
$ |
76,767 |
|
0.66 |
% |
$ |
11,239,964 |
|
$ |
68,997 |
|
0.61 |
% |
|
Acquired loans |
|
(6,562,267 |
) |
(4,184 |
)(1) |
|
|
(7,039,518 |
) |
(3,038 |
)(1) |
|
| ||||
|
Adjusted balance |
|
$ |
5,042,789 |
|
$ |
72,583 |
|
1.44 |
% |
$ |
4,200,446 |
|
$ |
65,959 |
|
1.57 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Ending balance |
|
$ |
11,605,056 |
|
$ |
76,767 |
|
0.66 |
% |
$ |
11,239,964 |
|
$ |
68,997 |
|
0.61 |
% |
|
Unamortized net discount |
|
156,428 |
|
156,428 |
(2) |
|
|
179,424 |
|
179,424 |
(2) |
|
| ||||
|
Adjusted balance |
|
$ |
11,761,484 |
|
$ |
233,195 |
|
1.98 |
% |
$ |
11,419,388 |
|
$ |
248,421 |
|
2.18 |
% |
(1) Allowance attributed to $6.6 billion and $7.0 billion of acquired Non-PCI loans at December 31, 2014 and September 30, 2014, based on the allowance calculation that includes an amount for credit deterioration on acquired loans and leases since their acquisition dates.
(2) Unamortized net discount relates to $6.6 billion and $7.0 billion of acquired Non-PCI loans at December 31, 2014 and September 30, 2014, and is assigned specifically to those loans only. Such discount represents the acquisition date fair value adjustment based on market, liquidity, and interest rate risk in addition to credit risk and is being accreted to interest income over the remaining life of the respective loans.
The decrease in coverage ratios results from the combination of newly originated loans being provided for at a rate lower than the current coverage ratio and normal and accelerated accretion of unamortized discount.
CREDIT QUALITY
The following table presents our Non-PCI loan and lease credit quality metrics as of the dates indicated:
|
|
|
December 31, |
|
September 30, |
| ||
|
Non-PCI Credit Quality Metrics |
|
2014 |
|
2014 |
| ||
|
|
|
(Dollars in thousands) |
| ||||
|
|
|
|
|
|
| ||
|
Allowance for credit losses |
|
$ |
76,767 |
|
$ |
68,997 |
|
|
Nonaccrual loans and leases (1) |
|
83,621 |
|
88,948 |
| ||
|
Classified loans and leases (2) |
|
242,611 |
|
260,986 |
| ||
|
Performing restructured loans |
|
35,244 |
|
34,308 |
| ||
|
Net charge-offs (recoveries) (for the quarter) |
|
(5,041 |
) |
6,123 |
| ||
|
Provision for credit losses (for the quarter) |
|
2,729 |
|
2,753 |
| ||
|
Allowance for credit losses to loans and leases |
|
0.66 |
% |
0.61 |
% | ||
|
Allowance for credit losses to nonaccrual loans and leases |
|
91.8 |
% |
77.6 |
% | ||
|
Nonperforming assets to loans and leases and foreclosed assets |
|
1.09 |
% |
1.15 |
% | ||
|
Classified loans and leases to loans and leases |
|
2.09 |
% |
2.32 |
% | ||
(1) At December 31, 2014 and September 30, 2014, includes $22,899 and $24,465, respectively, of acquired loans and leases with no allowance due to fair value accounting.
(2) Classified loans and leases are those with a credit risk rating of substandard or doubtful.
The following table presents our Non-PCI nonaccrual loans and leases and accruing loans and leases past due between 30 and 89 days by portfolio segment and class as of the dates indicated:
|
|
|
Nonaccrual Loans and Leases |
|
Accruing and |
| ||||||||||||
|
|
|
December 31, 2014 |
|
September 30, 2014 |
|
30-89 Days Past Due |
| ||||||||||
|
|
|
|
|
% of |
|
|
|
% of |
|
December 31, |
|
September 30, |
| ||||
|
|
|
|
|
Loan |
|
|
|
Loan |
|
2014 |
|
2014 |
| ||||
|
|
|
Balance |
|
Category |
|
Balance |
|
Category |
|
Balance |
|
Balance |
| ||||
|
|
|
(Dollars in thousands) |
| ||||||||||||||
|
Real estate mortgage: |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Hospitality |
|
$ |
6,366 |
|
1 |
% |
$ |
6,451 |
|
1 |
% |
$ |
— |
|
$ |
— |
|
|
SBA |
|
11,141 |
|
3 |
% |
7,483 |
|
2 |
% |
3,339 |
|
529 |
| ||||
|
Other |
|
20,105 |
|
— |
|
26,575 |
|
1 |
% |
4,769 |
|
4,014 |
| ||||
|
Total real estate mortgage |
|
37,612 |
|
1 |
% |
40,509 |
|
1 |
% |
8,108 |
|
4,543 |
| ||||
|
Real estate construction: |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Residential |
|
381 |
|
— |
|
925 |
|
1 |
% |
— |
|
— |
| ||||
|
Commercial |
|
1,178 |
|
1 |
% |
2,703 |
|
1 |
% |
— |
|
1,190 |
| ||||
|
Total real estate construction |
|
1,559 |
|
1 |
% |
3,628 |
|
1 |
% |
— |
|
1,190 |
| ||||
|
Commercial: |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Collateralized |
|
5,450 |
|
1 |
% |
5,165 |
|
1 |
% |
93 |
|
— |
| ||||
|
Unsecured |
|
639 |
|
— |
|
226 |
|
— |
|
69 |
|
1 |
| ||||
|
Asset-based |
|
4,574 |
|
— |
|
5,003 |
|
— |
|
— |
|
— |
| ||||
|
Cash flow |
|
15,964 |
|
1 |
% |
15,958 |
|
1 |
% |
— |
|
— |
| ||||
|
Equipment finance |
|
11,131 |
|
1 |
% |
12,885 |
|
1 |
% |
2,339 |
|
— |
| ||||
|
SBA |
|
3,207 |
|
7 |
% |
2,039 |
|
5 |
% |
26 |
|
— |
| ||||
|
Total commercial |
|
40,965 |
|
1 |
% |
41,276 |
|
1 |
% |
2,527 |
|
1 |
| ||||
|
Consumer |
|
3,485 |
|
3 |
% |
3,535 |
|
3 |
% |
50 |
|
165 |
| ||||
|
Total Non-PCI loans and leases |
|
$ |
83,621 |
(1) |
1 |
% |
$ |
88,948 |
(1) |
1 |
% |
$ |
10,685 |
|
$ |
5,899 |
|
(1) Includes leases to companies involved in the energy industry of $6.8 million and $8.5 million at December 31 and September 30, 2014, respectively. There were no energy-related leases accruing and 30-89 days past due.
The following table presents our nonperforming assets as of the dates indicated:
|
|
|
December 31, |
|
September 30, |
| ||
|
Nonperforming Assets |
|
2014 |
|
2014 |
| ||
|
|
|
(Dollars in thousands) |
| ||||
|
|
|
|
|
|
| ||
|
Nonaccrual Non-PCI loans and leases |
|
$ |
83,621 |
|
$ |
88,948 |
|
|
Nonaccrual PCI Loans (1) |
|
25,264 |
|
27,670 |
| ||
|
Total nonaccrual loans and leases |
|
108,885 |
|
116,618 |
| ||
|
Foreclosed assets, net |
|
43,721 |
|
40,524 |
| ||
|
Total nonperforming assets |
|
$ |
152,606 |
|
$ |
157,142 |
|
|
|
|
|
|
|
| ||
|
Nonperforming assets to loans and leases and foreclosed assets |
|
1.28 |
% |
1.35 |
% | ||
(1) Represents legacy CapitalSource borrowing relationships placed on nonaccrual status as of the acquisition date.
PCI loans, regardless of the underlying payment status of the borrower, are generally considered accruing and performing when reasonably estimable cash flows support the carrying amount of the loans. As of December 31, 2014, there are $25.3 million of PCI loans on nonaccrual status and included in the table above as the timing and amount of future cash flows is not reasonably estimable.
ABOUT PACWEST BANCORP
PacWest Bancorp is a bank holding company with over $16 billion in assets with one wholly-owned banking subsidiary, Pacific Western Bank (“Pacific Western”). Through 80 full-service branches located throughout the state of California, Pacific Western provides commercial banking services, including real estate, construction, and commercial loans, to small and medium-sized businesses. Its CapitalSource and Community Banking divisions, and its subsidiary CapitalSource Business Finance Group (formerly known as BFI Business Finance), deliver the full spectrum of financing solutions nationwide across numerous industries and property types. For more information about PacWest Bancorp, visit www.pacwestbancorp.com, or to learn more about Pacific Western Bank, visit www.pacificwesternbank.com.
FORWARD LOOKING STATEMENTS
This release contains certain “forward-looking statements” about the Company and its subsidiaries within the meaning of the Private Securities Litigation Reform Act of 1995, including certain plans, strategies, goals, and projections and including statements about our expectations regarding our loan and lease portfolio growth and production, deposit growth, and operating expenses. All statements contained in this release that are not clearly historical in nature are forward-looking, and the words “anticipate,” “assume,” “intend,” “believe,” “forecast,” “expect,” “estimate,” “plan,” “continue,” “will,” “should,” “look forward” and similar expressions are generally intended to identify forward-looking statements. All forward-looking statements (including statements regarding future financial and operating results and future transactions and their results) involve risks, uncertainties and contingencies, many of which are beyond our control, which may cause actual results, performance, or achievements to differ materially from anticipated results, performance or achievements. Actual results could differ materially from those contained or implied by such forward-looking statements for a variety of factors, including without limitation:
· changes in economic or competitive market conditions could negatively impact investment or lending opportunities or product pricing and services;
· legislative or regulatory requirements or changes adversely affected the Company’s business, including an increase to capital requirements;
· loan repayments higher than expected;
· reduced demand for our services due to strategic or regulatory reasons;
· our inability to grow deposits and access wholesale funding sources;
· higher than anticipated increases in operating expenses;
· increased litigation;
· higher asset workout or loan servicing expenses;
· higher compensation costs and professional fees to retain and/or incent employees; and
· other risk factors described in documents filed by PacWest with the U.S. Securities and Exchange Commission (“SEC”).
All forward-looking statements included in this release are based on information available at the time of the release. We are under no obligation to (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
|
|
|
December 31, |
|
September 30, |
|
December 31, |
| |||
|
|
|
2014 |
|
2014 |
|
2013 |
| |||
|
|
|
(Dollars in thousands, except per share data) |
| |||||||
|
ASSETS: |
|
|
|
|
|
|
| |||
|
Cash and due from banks |
|
$ |
164,757 |
|
$ |
145,463 |
|
$ |
96,424 |
|
|
Interest-earning deposits in financial institutions |
|
148,469 |
|
115,399 |
|
50,998 |
| |||
|
Total cash and cash equivalents |
|
313,226 |
|
260,862 |
|
147,422 |
| |||
|
|
|
|
|
|
|
|
| |||
|
Securities available-for-sale, at estimated fair value |
|
1,567,177 |
|
1,539,681 |
|
1,494,745 |
| |||
|
Federal Home Loan Bank stock, at cost |
|
40,609 |
|
45,602 |
|
27,939 |
| |||
|
Total investment securities |
|
1,607,786 |
|
1,585,283 |
|
1,522,684 |
| |||
|
|
|
|
|
|
|
|
| |||
|
Non-PCI loans and leases |
|
11,613,832 |
|
11,239,964 |
|
3,930,539 |
| |||
|
PCI loans |
|
290,852 |
|
351,431 |
|
382,796 |
| |||
|
Total gross loans and leases |
|
11,904,684 |
|
11,591,395 |
|
4,313,335 |
| |||
|
Deferred fees and costs |
|
(22,252 |
) |
(16,510 |
) |
(983 |
) | |||
|
Total loans and leases, net of deferred fees |
|
11,882,432 |
|
11,574,885 |
|
4,312,352 |
| |||
|
Allowance for loan and lease losses |
|
(84,455 |
) |
(81,899 |
) |
(82,034 |
) | |||
|
Total loans and leases, net |
|
11,797,977 |
|
11,492,986 |
|
4,230,318 |
| |||
|
|
|
|
|
|
|
|
| |||
|
Equipment leased to others under operating leases |
|
122,506 |
|
125,119 |
|
— |
| |||
|
Premises and equipment, net |
|
36,551 |
|
38,368 |
|
32,435 |
| |||
|
Foreclosed assets, net |
|
43,721 |
|
40,524 |
|
55,891 |
| |||
|
FDIC loss sharing asset |
|
18,734 |
|
22,977 |
|
45,524 |
| |||
|
Deferred tax asset, net |
|
284,411 |
|
331,176 |
|
79,636 |
| |||
|
Goodwill |
|
1,720,479 |
|
1,722,129 |
|
208,743 |
| |||
|
Core deposit and customer relationship intangibles, net |
|
17,204 |
|
18,822 |
|
17,248 |
| |||
|
Other assets |
|
272,205 |
|
300,099 |
|
193,462 |
| |||
|
Total assets |
|
$ |
16,234,800 |
|
$ |
15,938,345 |
|
$ |
6,533,363 |
|
|
|
|
|
|
|
|
|
| |||
|
LIABILITIES: |
|
|
|
|
|
|
| |||
|
Noninterest-bearing deposits |
|
$ |
2,931,352 |
|
$ |
2,842,488 |
|
$ |
2,318,446 |
|
|
Interest-bearing deposits |
|
8,823,776 |
|
8,680,949 |
|
2,962,541 |
| |||
|
Total deposits |
|
11,755,128 |
|
11,523,437 |
|
5,280,987 |
| |||
|
Borrowings |
|
383,402 |
|
363,672 |
|
113,726 |
| |||
|
Subordinated debentures |
|
433,583 |
|
433,545 |
|
132,645 |
| |||
|
Accrued interest payable and other liabilities |
|
156,262 |
|
139,445 |
|
196,912 |
| |||
|
Total liabilities |
|
12,728,375 |
|
12,460,099 |
|
5,724,270 |
| |||
|
|
|
|
|
|
|
|
| |||
|
STOCKHOLDERS’ EQUITY (1) |
|
3,506,425 |
|
3,478,246 |
|
809,093 |
| |||
|
Total liabilities and shareholders’ equity |
|
$ |
16,234,800 |
|
$ |
15,938,345 |
|
$ |
6,533,363 |
|
|
(1) Includes net unrealized gain (loss) on securities available-for-sale, net |
|
$ |
26,380 |
|
$ |
20,821 |
|
$ |
(3,347 |
) |
|
|
|
|
|
|
|
|
| |||
|
Book value per share |
|
$ |
34.04 |
|
$ |
33.76 |
|
$ |
17.66 |
|
|
Tangible book value per share |
|
$ |
17.17 |
|
$ |
16.86 |
|
$ |
12.73 |
|
|
|
|
|
|
|
|
|
| |||
|
Shares outstanding (includes unvested restricted shares of 1,108,505 at December 31, 2014, 1,115,550 at September 30, 2014 and 1,216,524 at December 31, 2013) |
|
103,022,017 |
|
103,027,830 |
|
45,822,834 |
| |||
PACWEST BANCORP AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF EARNINGS
|
|
|
Three Months Ended |
|
Year Ended |
| |||||||||||
|
|
|
December 31, |
|
September 30, |
|
December 31, |
|
December 31, |
| |||||||
|
|
|
2014 |
|
2014 |
|
2013 |
|
2014 |
|
2013 |
| |||||
|
|
|
(Dollars in thousands, except per share data) |
| |||||||||||||
|
Interest income: |
|
|
|
|
|
|
|
|
|
|
| |||||
|
Loans and leases |
|
$ |
197,472 |
|
$ |
189,961 |
|
$ |
73,352 |
|
$ |
657,097 |
|
$ |
272,726 |
|
|
Investment securities |
|
12,205 |
|
12,331 |
|
10,422 |
|
47,345 |
|
36,923 |
| |||||
|
Deposits in financial institutions |
|
19 |
|
64 |
|
82 |
|
333 |
|
265 |
| |||||
|
Total interest income |
|
209,696 |
|
202,356 |
|
83,856 |
|
704,775 |
|
309,914 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Interest expense: |
|
|
|
|
|
|
|
|
|
|
| |||||
|
Deposits |
|
9,972 |
|
8,822 |
|
1,450 |
|
27,332 |
|
7,868 |
| |||||
|
Borrowings |
|
144 |
|
74 |
|
86 |
|
496 |
|
537 |
| |||||
|
Subordinated debentures |
|
4,597 |
|
4,614 |
|
1,062 |
|
14,570 |
|
3,796 |
| |||||
|
Total interest expense |
|
14,713 |
|
13,510 |
|
2,598 |
|
42,398 |
|
12,201 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Net interest income |
|
194,983 |
|
188,846 |
|
81,258 |
|
662,377 |
|
297,713 |
| |||||
|
Provision (negative provision) for credit losses |
|
2,063 |
|
5,050 |
|
(1,338 |
) |
11,499 |
|
(4,210 |
) | |||||
|
Net interest income after provision for credit losses |
|
192,920 |
|
183,796 |
|
82,596 |
|
650,878 |
|
301,923 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Noninterest income: |
|
|
|
|
|
|
|
|
|
|
| |||||
|
Service charges on deposit accounts |
|
2,787 |
|
2,725 |
|
3,197 |
|
11,233 |
|
11,765 |
| |||||
|
Other commissions and fees |
|
4,556 |
|
6,371 |
|
2,125 |
|
18,602 |
|
8,416 |
| |||||
|
Leased equipment income |
|
5,382 |
|
5,615 |
|
— |
|
16,669 |
|
— |
| |||||
|
Gain on sale of loans and leases |
|
7 |
|
973 |
|
683 |
|
601 |
|
1,791 |
| |||||
|
(Loss) gain on securities |
|
— |
|
— |
|
(272 |
) |
4,841 |
|
5,359 |
| |||||
|
FDIC loss sharing expense, net |
|
(4,360 |
) |
(7,415 |
) |
(10,593 |
) |
(31,730 |
) |
(26,172 |
) | |||||
|
Other income |
|
4,331 |
|
8,045 |
|
934 |
|
21,971 |
|
3,085 |
| |||||
|
Total noninterest income |
|
12,703 |
|
16,314 |
|
(3,926 |
) |
42,187 |
|
4,244 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Noninterest expense: |
|
|
|
|
|
|
|
|
|
|
| |||||
|
Compensation |
|
45,930 |
|
45,861 |
|
27,697 |
|
165,499 |
|
107,067 |
| |||||
|
Occupancy |
|
10,745 |
|
11,188 |
|
7,553 |
|
40,606 |
|
29,459 |
| |||||
|
Data processing |
|
4,050 |
|
3,929 |
|
2,216 |
|
14,618 |
|
9,494 |
| |||||
|
Other professional services |
|
3,181 |
|
3,687 |
|
1,770 |
|
11,234 |
|
6,754 |
| |||||
|
Insurance and assessments |
|
3,115 |
|
3,020 |
|
1,572 |
|
10,907 |
|
5,596 |
| |||||
|
Intangible asset amortization |
|
1,619 |
|
1,608 |
|
1,430 |
|
6,268 |
|
5,402 |
| |||||
|
Other expenses |
|
11,278 |
|
13,355 |
|
7,746 |
|
44,036 |
|
27,606 |
| |||||
|
Total operating expense |
|
79,918 |
|
82,648 |
|
49,984 |
|
293,168 |
|
191,378 |
| |||||
|
Leased equipment depreciation |
|
3,103 |
|
2,961 |
|
— |
|
9,159 |
|
— |
| |||||
|
Foreclosed assets expense (income), net |
|
1,938 |
|
4,827 |
|
(569 |
) |
5,401 |
|
(1,503 |
) | |||||
|
Acquisition, integration, reorganization and severance costs |
|
7,381 |
|
5,193 |
|
16,673 |
|
101,016 |
|
40,812 |
| |||||
|
Total noninterest expense |
|
92,340 |
|
95,629 |
|
66,088 |
|
408,744 |
|
230,687 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Earnings from continuing operations before taxes |
|
113,283 |
|
104,481 |
|
12,582 |
|
284,321 |
|
75,480 |
| |||||
|
Income tax expense |
|
(42,226 |
) |
(42,205 |
) |
(9,135 |
) |
(113,853 |
) |
(30,003 |
) | |||||
|
Net earnings from continuing operations |
|
71,057 |
|
62,276 |
|
3,447 |
|
170,468 |
|
45,477 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Loss from discontinued operations before taxes |
|
(105 |
) |
(8 |
) |
(578 |
) |
(2,677 |
) |
(620 |
) | |||||
|
Income tax benefit |
|
47 |
|
3 |
|
240 |
|
1,114 |
|
258 |
| |||||
|
Net loss from discontinued operations |
|
(58 |
) |
(5 |
) |
(338 |
) |
(1,563 |
) |
(362 |
) | |||||
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Net earnings |
|
$ |
70,999 |
|
$ |
62,271 |
|
$ |
3,109 |
|
$ |
168,905 |
|
$ |
45,115 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Basic and diluted earnings per share: |
|
|
|
|
|
|
|
|
|
|
| |||||
|
Net earnings from continuing operations |
|
$ |
0.69 |
|
$ |
0.60 |
|
$ |
0.07 |
|
$ |
1.94 |
|
$ |
1.09 |
|
|
Net earnings |
|
$ |
0.69 |
|
$ |
0.60 |
|
$ |
0.06 |
|
$ |
1.92 |
|
$ |
1.08 |
|
PACWEST BANCORP AND SUBSIDIARIES
AVERAGE BALANCE SHEET AND YIELD ANALYSIS
|
|
|
Three Months Ended |
| ||||||||||||||||||||||
|
|
|
December 31, 2014 |
|
September 30, 2014 |
|
December 31, 2013 |
| ||||||||||||||||||
|
|
|
|
|
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: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
|
PCI loans |
|
$ |
311,061 |
|
$ |
11,247 |
|
14.34 |
% |
$ |
363,049 |
|
$ |
13,490 |
|
14.74 |
% |
$ |
384,727 |
|
$ |
12,754 |
|
13.15 |
% |
|
Non-PCI loans and leases |
|
11,275,512 |
|
186,225 |
|
6.55 |
% |
10,922,640 |
|
176,471 |
|
6.41 |
% |
3,916,650 |
|
60,598 |
|
6.14 |
% | ||||||
|
Total loans and leases |
|
11,586,573 |
|
197,472 |
|
6.76 |
% |
11,285,689 |
|
189,961 |
|
6.68 |
% |
4,301,377 |
|
73,352 |
|
6.77 |
% | ||||||
|
Investment securities (1) |
|
1,591,839 |
|
12,205 |
|
3.04 |
% |
1,584,811 |
|
12,331 |
|
3.09 |
% |
1,531,335 |
|
10,422 |
|
2.70 |
% | ||||||
|
Deposits in financial institutions |
|
26,971 |
|
19 |
|
0.28 |
% |
99,276 |
|
64 |
|
0.26 |
% |
129,716 |
|
82 |
|
0.25 |
% | ||||||
|
Total interest-earning assets |
|
13,205,383 |
|
209,696 |
|
6.30 |
% |
12,969,776 |
|
202,356 |
|
6.19 |
% |
5,962,428 |
|
83,856 |
|
5.58 |
% | ||||||
|
Other assets |
|
2,687,378 |
|
|
|
|
|
2,746,763 |
|
|
|
|
|
670,302 |
|
|
|
|
| ||||||
|
Total assets |
|
$ |
15,892,761 |
|
|
|
|
|
$ |
15,716,539 |
|
|
|
|
|
$ |
6,632,730 |
|
|
|
|
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
|
Liabilities and Stockholders’ Equity: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
|
Interest checking |
|
$ |
702,498 |
|
194 |
|
0.11 |
% |
$ |
605,288 |
|
86 |
|
0.06 |
% |
$ |
627,256 |
|
83 |
|
0.05 |
% | |||
|
Money market |
|
1,788,341 |
|
932 |
|
0.21 |
% |
1,733,445 |
|
908 |
|
0.21 |
% |
1,512,369 |
|
654 |
|
0.17 |
% | ||||||
|
Savings |
|
761,073 |
|
572 |
|
0.30 |
% |
759,177 |
|
575 |
|
0.30 |
% |
220,331 |
|
14 |
|
0.03 |
% | ||||||
|
Time |
|
5,427,687 |
|
8,274 |
|
0.60 |
% |
5,680,732 |
|
7,253 |
|
0.51 |
% |
694,924 |
|
699 |
|
0.40 |
% | ||||||
|
Total interest-bearing deposits |
|
8,679,599 |
|
9,972 |
|
0.46 |
% |
8,778,642 |
|
8,822 |
|
0.40 |
% |
3,054,880 |
|
1,450 |
|
0.19 |
% | ||||||
|
Borrowings |
|
214,053 |
|
144 |
|
0.27 |
% |
96,711 |
|
74 |
|
0.30 |
% |
9,861 |
|
86 |
|
3.46 |
% | ||||||
|
Subordinated debentures |
|
433,859 |
|
4,597 |
|
4.20 |
% |
434,625 |
|
4,614 |
|
4.21 |
% |
132,560 |
|
1,062 |
|
3.18 |
% | ||||||
|
Total interest-bearing liabilities |
|
9,327,511 |
|
14,713 |
|
0.63 |
% |
9,309,978 |
|
13,510 |
|
0.58 |
% |
3,197,301 |
|
2,598 |
|
0.32 |
% | ||||||
|
Noninterest-bearing demand deposits |
|
2,900,388 |
|
|
|
|
|
2,778,260 |
|
|
|
|
|
2,397,642 |
|
|
|
|
| ||||||
|
Other liabilities |
|
164,571 |
|
|
|
|
|
163,182 |
|
|
|
|
|
218,852 |
|
|
|
|
| ||||||
|
Total liabilities |
|
12,392,470 |
|
|
|
|
|
12,251,420 |
|
|
|
|
|
5,813,795 |
|
|
|
|
| ||||||
|
Stockholders’ equity |
|
3,500,291 |
|
|
|
|
|
3,465,119 |
|
|
|
|
|
818,935 |
|
|
|
|
| ||||||
|
Total liabilities and stockholders’ equity |
|
$ |
15,892,761 |
|
|
|
|
|
$ |
15,716,539 |
|
|
|
|
|
$ |
6,632,730 |
|
|
|
|
| |||
|
Net interest income |
|
|
|
$ |
194,983 |
|
|
|
|
|
$ |
188,846 |
|
|
|
|
|
$ |
81,258 |
|
|
| |||
|
Net interest spread |
|
|
|
|
|
5.67 |
% |
|
|
|
|
5.61 |
% |
|
|
|
|
5.26 |
% | ||||||
|
Net interest margin |
|
|
|
|
|
5.86 |
% |
|
|
|
|
5.78 |
% |
|
|
|
|
5.41 |
% | ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
|
Total deposits (2) |
|
$ |
11,579,987 |
|
$ |
9,972 |
|
0.34 |
% |
$ |
11,556,902 |
|
$ |
8,822 |
|
0.30 |
% |
$ |
5,452,522 |
|
$ |
1,450 |
|
0.11 |
% |
|
Funding sources (3) |
|
$ |
12,227,899 |
|
$ |
14,713 |
|
0.48 |
% |
$ |
12,088,238 |
|
$ |
13,510 |
|
0.44 |
% |
$ |
5,594,943 |
|
$ |
2,598 |
|
0.18 |
% |
(1) The tax equivalent yield on investment securities was 3.45%, 3.47%, and 3.14% for the three months ended December 31, 2014, September 30, 2014, and December 31, 2013.
(2) Total deposits is the sum of interest-bearing deposits and noninterest-bearing demand deposits. The cost of total deposits is calculated as annualized interest expense on deposits divided by average total deposits.
(3) Funding sources is the sum of interest-bearing liabilities and noninterest-bearing demand deposits. The cost of funding sources is calculated as annualized total interest expense divided by average funding sources.
PACWEST BANCORP AND SUBSIDIARIES
FIVE QUARTER BALANCE SHEET
|
|
|
December 31, |
|
September 30, |
|
June 30, |
|
March 31, |
|
December 31, |
| |||||
|
|
|
2014 |
|
2014 |
|
2014 |
|
2014 |
|
2013 |
| |||||
|
|
|
(Dollars in thousands, except per share data) |
| |||||||||||||
|
ASSETS: |
|
|
|
|
|
|
|
|
|
|
| |||||
|
Cash and due from banks |
|
$ |
164,757 |
|
$ |
145,463 |
|
$ |
243,583 |
|
$ |
113,508 |
|
$ |
96,424 |
|
|
Interest-earning deposits in financial institutions |
|
148,469 |
|
115,399 |
|
119,782 |
|
228,579 |
|
50,998 |
| |||||
|
Total cash and cash equivalents |
|
313,226 |
|
260,862 |
|
363,365 |
|
342,087 |
|
147,422 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Securities available-for-sale |
|
1,567,177 |
|
1,539,681 |
|
1,552,115 |
|
1,477,473 |
|
1,494,745 |
| |||||
|
Federal Home Loan Bank stock, at cost |
|
40,609 |
|
45,602 |
|
49,983 |
|
25,000 |
|
27,939 |
| |||||
|
Total investment securities |
|
1,607,786 |
|
1,585,283 |
|
1,602,098 |
|
1,502,473 |
|
1,522,684 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Non-PCI loans and leases |
|
11,613,832 |
|
11,239,964 |
|
10,802,053 |
|
3,828,569 |
|
3,930,539 |
| |||||
|
PCI loans |
|
290,852 |
|
351,431 |
|
398,471 |
|
332,516 |
|
382,796 |
| |||||
|
Total gross loans and leases |
|
11,904,684 |
|
11,591,395 |
|
11,200,524 |
|
4,161,085 |
|
4,313,335 |
| |||||
|
Deferred fees and costs |
|
(22,252 |
) |
(16,510 |
) |
(10,419 |
) |
(18 |
) |
(983 |
) | |||||
|
Total loans and leases, net of deferred fees |
|
11,882,432 |
|
11,574,885 |
|
11,190,105 |
|
4,161,067 |
|
4,312,352 |
| |||||
|
Allowance for loan and lease losses |
|
(84,455 |
) |
(81,899 |
) |
(82,149 |
) |
(81,180 |
) |
(82,034 |
) | |||||
|
Total loans and leases, net |
|
11,797,977 |
|
11,492,986 |
|
11,107,956 |
|
4,079,887 |
|
4,230,318 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Equipment leased to others under operating leases |
|
122,506 |
|
125,119 |
|
127,289 |
|
— |
|
— |
| |||||
|
Premises and equipment, net |
|
36,551 |
|
38,368 |
|
40,440 |
|
29,908 |
|
32,435 |
| |||||
|
Foreclosed assets, net |
|
43,721 |
|
40,524 |
|
53,821 |
|
50,895 |
|
55,891 |
| |||||
|
FDIC loss sharing asset |
|
18,734 |
|
22,977 |
|
28,834 |
|
34,628 |
|
45,524 |
| |||||
|
Deferred tax asset, net |
|
284,411 |
|
331,176 |
|
342,105 |
|
72,683 |
|
79,636 |
| |||||
|
Goodwill |
|
1,720,479 |
|
1,722,129 |
|
1,725,153 |
|
208,743 |
|
208,743 |
| |||||
|
Core deposit and customer relationship intangibles, net |
|
17,204 |
|
18,822 |
|
20,431 |
|
15,884 |
|
17,248 |
| |||||
|
Other assets |
|
272,205 |
|
300,099 |
|
273,374 |
|
180,665 |
|
193,462 |
| |||||
|
Total assets |
|
$ |
16,234,800 |
|
$ |
15,938,345 |
|
$ |
15,684,866 |
|
$ |
6,517,853 |
|
$ |
6,533,363 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
LIABILITIES: |
|
|
|
|
|
|
|
|
|
|
| |||||
|
Noninterest-bearing deposits |
|
$ |
2,931,352 |
|
$ |
2,842,488 |
|
$ |
2,701,434 |
|
$ |
2,391,609 |
|
$ |
2,318,446 |
|
|
Interest-bearing deposits |
|
8,823,776 |
|
8,680,949 |
|
8,966,363 |
|
2,977,799 |
|
2,962,541 |
| |||||
|
Total deposits |
|
11,755,128 |
|
11,523,437 |
|
11,667,797 |
|
5,369,408 |
|
5,280,987 |
| |||||
|
Borrowings |
|
383,402 |
|
363,672 |
|
4,596 |
|
5,748 |
|
113,726 |
| |||||
|
Subordinated debentures |
|
433,583 |
|
433,545 |
|
434,878 |
|
132,790 |
|
132,645 |
| |||||
|
Accrued interest payable and other liabilities |
|
156,262 |
|
139,445 |
|
139,663 |
|
176,205 |
|
196,912 |
| |||||
|
Total liabilities |
|
12,728,375 |
|
12,460,099 |
|
12,246,934 |
|
5,684,151 |
|
5,724,270 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
STOCKHOLDERS’ EQUITY (1) |
|
3,506,425 |
|
3,478,246 |
|
3,437,932 |
|
833,702 |
|
809,093 |
| |||||
|
Total liabilities and shareholders’ equity |
|
$ |
16,234,800 |
|
$ |
15,938,345 |
|
$ |
15,684,866 |
|
$ |
6,517,853 |
|
$ |
6,533,363 |
|
|
(1) Includes net unrealized gain (loss) on securities available-for-sale, net |
|
$ |
26,380 |
|
$ |
20,821 |
|
$ |
20,121 |
|
$ |
6,825 |
|
$ |
(3,347 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Book value per share |
|
$ |
34.04 |
|
$ |
33.76 |
|
$ |
33.37 |
|
$ |
18.21 |
|
$ |
17.66 |
|
|
Tangible book value per share |
|
$ |
17.17 |
|
$ |
16.86 |
|
$ |
16.43 |
|
$ |
13.31 |
|
$ |
12.73 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Shares outstanding (includes unvested restricted shares) |
|
103,022,017 |
|
103,027,830 |
|
103,033,449 |
|
45,777,580 |
|
45,822,834 |
| |||||
PACWEST BANCORP AND SUBSIDIARIES
FIVE QUARTER STATEMENT OF EARNINGS
|
|
|
Three Months Ended |
| |||||||||||||
|
|
|
December 31, |
|
September 30, |
|
June 30, |
|
March 31, |
|
December 31, |
| |||||
|
|
|
2014 |
|
2014 |
|
2014 |
|
2014 |
|
2013 |
| |||||
|
|
|
(Dollars in thousands, except per share data) |
| |||||||||||||
|
Interest income: |
|
|
|
|
|
|
|
|
|
|
| |||||
|
Loans and leases |
|
$ |
197,472 |
|
$ |
189,961 |
|
$ |
192,201 |
|
$ |
77,463 |
|
$ |
73,352 |
|
|
Investment securities |
|
12,205 |
|
12,331 |
|
11,986 |
|
10,823 |
|
10,422 |
| |||||
|
Deposits in financial institutions |
|
19 |
|
64 |
|
176 |
|
74 |
|
82 |
| |||||
|
Total interest income |
|
209,696 |
|
202,356 |
|
204,363 |
|
88,360 |
|
83,856 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Interest expense: |
|
|
|
|
|
|
|
|
|
|
| |||||
|
Deposits |
|
9,972 |
|
8,822 |
|
7,313 |
|
1,225 |
|
1,450 |
| |||||
|
Borrowings |
|
144 |
|
74 |
|
199 |
|
79 |
|
86 |
| |||||
|
Subordinated debentures |
|
4,597 |
|
4,614 |
|
4,318 |
|
1,041 |
|
1,062 |
| |||||
|
Total interest expense |
|
14,713 |
|
13,510 |
|
11,830 |
|
2,345 |
|
2,598 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Net interest income |
|
194,983 |
|
188,846 |
|
192,533 |
|
86,015 |
|
81,258 |
| |||||
|
Provision (negative provision) for credit losses |
|
2,063 |
|
5,050 |
|
5,030 |
|
(644 |
) |
(1,338 |
) | |||||
|
Net interest income after provision for credit losses |
|
192,920 |
|
183,796 |
|
187,503 |
|
86,659 |
|
82,596 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Noninterest income: |
|
|
|
|
|
|
|
|
|
|
| |||||
|
Service charges on deposit accounts |
|
2,787 |
|
2,725 |
|
2,719 |
|
3,002 |
|
3,197 |
| |||||
|
Other commissions and fees |
|
4,556 |
|
6,371 |
|
5,743 |
|
1,932 |
|
2,125 |
| |||||
|
Leased equipment income |
|
5,382 |
|
5,615 |
|
5,672 |
|
— |
|
— |
| |||||
|
Gain (loss) on sale of loans and leases |
|
7 |
|
973 |
|
(485 |
) |
106 |
|
683 |
| |||||
|
Gain (loss) on securities |
|
— |
|
— |
|
89 |
|
4,752 |
|
(272 |
) | |||||
|
FDIC loss sharing expense, net |
|
(4,360 |
) |
(7,415 |
) |
(8,525 |
) |
(11,430 |
) |
(10,593 |
) | |||||
|
Other income |
|
4,331 |
|
8,045 |
|
3,266 |
|
6,329 |
|
934 |
| |||||
|
Total noninterest income |
|
12,703 |
|
16,314 |
|
8,479 |
|
4,691 |
|
(3,926 |
) | |||||
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Noninterest expense: |
|
|
|
|
|
|
|
|
|
|
| |||||
|
Compensation |
|
45,930 |
|
45,861 |
|
45,081 |
|
28,627 |
|
27,697 |
| |||||
|
Occupancy |
|
10,745 |
|
11,188 |
|
11,078 |
|
7,595 |
|
7,553 |
| |||||
|
Data processing |
|
4,050 |
|
3,929 |
|
4,099 |
|
2,540 |
|
2,216 |
| |||||
|
Other professional services |
|
3,181 |
|
3,687 |
|
2,843 |
|
1,523 |
|
1,770 |
| |||||
|
Insurance and assessments |
|
3,115 |
|
3,020 |
|
3,179 |
|
1,593 |
|
1,572 |
| |||||
|
Intangible asset amortization |
|
1,619 |
|
1,608 |
|
1,677 |
|
1,364 |
|
1,430 |
| |||||
|
Other expenses |
|
11,278 |
|
13,355 |
|
12,115 |
|
7,288 |
|
7,746 |
| |||||
|
Total operating expense |
|
79,918 |
|
82,648 |
|
80,072 |
|
50,530 |
|
49,984 |
| |||||
|
Leased equipment depreciation |
|
3,103 |
|
2,961 |
|
3,095 |
|
— |
|
— |
| |||||
|
Foreclosed assets expense (income), net |
|
1,938 |
|
4,827 |
|
497 |
|
(1,861 |
) |
(569 |
) | |||||
|
Acquisition, integration, reorganization and severance costs |
|
7,381 |
|
5,193 |
|
86,242 |
|
2,200 |
|
16,673 |
| |||||
|
Total noninterest expense |
|
92,340 |
|
95,629 |
|
169,906 |
|
50,869 |
|
66,088 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Earnings from continuing operations before taxes |
|
113,283 |
|
104,481 |
|
26,076 |
|
40,481 |
|
12,582 |
| |||||
|
Income tax expense |
|
(42,226 |
) |
(42,205 |
) |
(14,846 |
) |
(14,576 |
) |
(9,135 |
) | |||||
|
Net earnings from continuing operations |
|
71,057 |
|
62,276 |
|
11,230 |
|
25,905 |
|
3,447 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Loss from discontinued operations before taxes |
|
(105 |
) |
(8 |
) |
(1,151 |
) |
(1,413 |
) |
(578 |
) | |||||
|
Income tax benefit |
|
47 |
|
3 |
|
476 |
|
588 |
|
240 |
| |||||
|
Net loss from discontinued operations |
|
(58 |
) |
(5 |
) |
(675 |
) |
(825 |
) |
(338 |
) | |||||
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Net earnings |
|
$ |
70,999 |
|
$ |
62,271 |
|
$ |
10,555 |
|
$ |
25,080 |
|
$ |
3,109 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Basic and diluted earnings per share: |
|
|
|
|
|
|
|
|
|
|
| |||||
|
Net earnings from continuing operations |
|
$ |
0.69 |
|
$ |
0.60 |
|
$ |
0.11 |
|
$ |
0.57 |
|
$ |
0.07 |
|
|
Net earnings |
|
$ |
0.69 |
|
$ |
0.60 |
|
$ |
0.10 |
|
$ |
0.55 |
|
$ |
0.06 |
|
PACWEST BANCORP AND SUBSIDIARIES
FIVE QUARTER SELECTED FINANCIAL DATA
|
|
|
At or For the Three Months Ended |
| |||||||||||||
|
|
|
December 31, |
|
September 30, |
|
June 30, |
|
March 31, |
|
December 31, |
| |||||
|
|
|
2014 |
|
2014 |
|
2014 |
|
2014 |
|
2013 |
| |||||
|
|
|
(Dollars in thousands) |
| |||||||||||||
|
Performance Ratios - GAAP: |
|
|
|
|
|
|
|
|
|
|
| |||||
|
Annualized return on average assets |
|
1.77 |
% |
1.57 |
% |
0.28 |
% |
1.56 |
% |
0.19 |
% | |||||
|
Annualized return on average equity |
|
8.05 |
% |
7.13 |
% |
1.31 |
% |
12.40 |
% |
1.51 |
% | |||||
|
Yield on loans and leases |
|
6.76 |
% |
6.68 |
% |
7.34 |
% |
7.42 |
% |
6.77 |
% | |||||
|
Yield on interest-earning assets |
|
6.30 |
% |
6.19 |
% |
6.62 |
% |
6.11 |
% |
5.58 |
% | |||||
|
Cost of total deposits |
|
0.34 |
% |
0.30 |
% |
0.26 |
% |
0.09 |
% |
0.11 |
% | |||||
|
Cost of time deposits |
|
0.60 |
% |
0.51 |
% |
0.42 |
% |
0.31 |
% |
0.40 |
% | |||||
|
Cost of interest-bearing liabilities |
|
0.63 |
% |
0.58 |
% |
0.52 |
% |
0.30 |
% |
0.32 |
% | |||||
|
Cost of funding sources |
|
0.48 |
% |
0.44 |
% |
0.41 |
% |
0.17 |
% |
0.18 |
% | |||||
|
Net interest rate spread |
|
5.67 |
% |
5.61 |
% |
6.10 |
% |
5.81 |
% |
5.26 |
% | |||||
|
Net interest margin |
|
5.86 |
% |
5.78 |
% |
6.24 |
% |
5.95 |
% |
5.41 |
% | |||||
|
Annualized operating expense as a percentage of average assets |
|
2.00 |
% |
2.09 |
% |
2.14 |
% |
3.15 |
% |
2.99 |
% | |||||
|
Annualized noninterest expense as a percentage of average assets |
|
2.31 |
% |
2.41 |
% |
4.53 |
% |
3.17 |
% |
3.95 |
% | |||||
|
Efficiency ratio |
|
44.5 |
% |
46.6 |
% |
84.5 |
% |
56.1 |
% |
85.5 |
% | |||||
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Performance Ratios - Non-GAAP: |
|
|
|
|
|
|
|
|
|
|
| |||||
|
Annualized adjusted return on average assets |
|
1.70 |
% |
1.70 |
% |
1.67 |
% |
1.38 |
% |
1.33 |
% | |||||
|
Annualized adjusted return on average equity |
|
7.73 |
% |
7.70 |
% |
7.79 |
% |
10.98 |
% |
10.76 |
% | |||||
|
Annualized return on average tangible equity |
|
16.00 |
% |
14.36 |
% |
2.65 |
% |
17.10 |
% |
2.11 |
% | |||||
|
Annualized adjusted return on average tangible equity |
|
15.37 |
% |
15.50 |
% |
15.79 |
% |
15.13 |
% |
15.05 |
% | |||||
|
Core net interest margin |
|
5.52 |
% |
5.64 |
% |
5.74 |
% |
5.42 |
% |
5.31 |
% | |||||
|
Adjusted efficiency ratio |
|
42.3 |
% |
43.4 |
% |
43.1 |
% |
57.1 |
% |
58.1 |
% | |||||
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Average Balances: |
|
|
|
|
|
|
|
|
|
|
| |||||
|
Average loans and leases |
|
$ |
11,586,573 |
|
$ |
11,285,689 |
|
$ |
10,500,521 |
|
$ |
4,231,319 |
|
$ |
4,301,377 |
|
|
Average interest-earning assets |
|
13,205,383 |
|
12,969,776 |
|
12,383,464 |
|
5,862,695 |
|
5,962,428 |
| |||||
|
Average total assets |
|
15,892,761 |
|
15,716,539 |
|
15,037,101 |
|
6,513,376 |
|
6,632,730 |
| |||||
|
Average noninterest-bearing deposits |
|
2,900,388 |
|
2,778,260 |
|
2,546,540 |
|
2,374,325 |
|
2,397,642 |
| |||||
|
Average interest-bearing deposits |
|
8,679,599 |
|
8,778,642 |
|
8,629,482 |
|
2,968,994 |
|
3,054,880 |
| |||||
|
Average total deposits |
|
11,579,987 |
|
11,556,902 |
|
11,176,022 |
|
5,343,319 |
|
5,452,522 |
| |||||
|
Average borrowings and subordinated debentures |
|
647,912 |
|
531,336 |
|
449,865 |
|
150,872 |
|
142,421 |
| |||||
|
Average interest-bearing liabilities |
|
9,327,511 |
|
9,309,978 |
|
9,079,347 |
|
3,119,866 |
|
3,197,301 |
| |||||
|
Average funding sources |
|
12,227,899 |
|
12,088,238 |
|
11,625,887 |
|
5,494,191 |
|
5,594,943 |
| |||||
|
Average stockholders’ equity |
|
3,500,291 |
|
3,465,119 |
|
3,233,018 |
|
820,248 |
|
818,935 |
| |||||
PACWEST BANCORP AND SUBSIDIARIES
FIVE QUARTER SELECTED FINANCIAL DATA
|
|
|
At or For the Three Months Ended |
| ||||||||
|
|
|
December 31, |
|
September 30, |
|
June 30, |
|
March 31, |
|
December 31, |
|
|
|
|
2014 |
|
2014 |
|
2014 |
|
2014 |
|
2013 |
|
|
|
|
(Dollars in thousands) |
| ||||||||
|
Non-PCI Credit Quality: |
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for credit losses to loans and leases |
|
0.66 |
% |
0.61 |
% |
0.67 |
% |
1.75 |
% |
1.73 |
% |
|
Allowance for credit losses to nonaccrual loans and leases |
|
92 |
% |
78 |
% |
75 |
% |
115 |
% |
145 |
% |
|
Nonaccrual loans and leases to loans and leases |
|
0.72 |
% |
0.79 |
% |
0.90 |
% |
1.52 |
% |
1.19 |
% |
|
Nonperforming assets to loans and leases and foreclosed assets |
|
1.09 |
% |
1.15 |
% |
1.39 |
% |
2.81 |
% |
2.58 |
% |
|
Nonperforming assets to total assets |
|
0.78 |
% |
0.81 |
% |
0.96 |
% |
1.67 |
% |
1.57 |
% |
|
Trailing twelve month net charge-offs to average loans and leases |
|
0.02 |
% |
0.09 |
% |
0.05 |
% |
0.13 |
% |
0.12 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PacWest Bancorp Consolidated Capital Ratios: |
|
|
|
|
|
|
|
|
|
|
|
|
Tier 1 leverage capital ratio |
|
12.34 |
% |
12.17 |
% |
12.40 |
% |
11.73 |
% |
11.22 |
% |
|
Tier 1 risk-based capital ratio |
|
13.16 |
% |
13.24 |
% |
13.15 |
% |
16.16 |
% |
15.12 |
% |
|
Total risk-based capital ratio |
|
16.07 |
% |
16.24 |
% |
16.25 |
% |
17.42 |
% |
16.38 |
% |
|
Tangible common equity ratio (non-GAAP measure) |
|
12.20 |
% |
12.24 |
% |
12.14 |
% |
9.68 |
% |
9.24 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pacific Western Bank Capital Ratios: |
|
|
|
|
|
|
|
|
|
|
|
|
Tier 1 leverage capital ratio |
|
11.70 |
% |
11.74 |
% |
11.71 |
% |
10.88 |
% |
10.79 |
% |
|
Tier 1 risk-based capital ratio |
|
12.46 |
% |
12.74 |
% |
12.58 |
% |
15.00 |
% |
14.54 |
% |
|
Total risk-based capital ratio |
|
13.16 |
% |
13.44 |
% |
13.32 |
% |
16.25 |
% |
15.80 |
% |
|
Tangible common equity ratio (non-GAAP measure) |
|
11.51 |
% |
11.60 |
% |
11.40 |
% |
10.92 |
% |
10.88 |
% |
PACWEST BANCORP AND SUBSIDIARIES
NET EARNINGS PER SHARE CALCULATIONS
|
|
|
Three Months Ended |
|
Year Ended |
| |||||||||||
|
|
|
December 31, |
|
September 30, |
|
December 31, |
|
December 31, |
| |||||||
|
|
|
2014 |
|
2014 |
|
2013 |
|
2014 |
|
2013 |
| |||||
|
|
|
(Dollars in thousands, except per share data) |
| |||||||||||||
|
Basic Earnings Per Share: |
|
|
|
|
|
|
|
|
|
|
| |||||
|
Net earnings from continuing operations |
|
$ |
71,057 |
|
$ |
62,276 |
|
$ |
3,447 |
|
$ |
170,468 |
|
$ |
45,477 |
|
|
Less: earnings allocated to unvested restricted stock (1) |
|
(810 |
) |
(685 |
) |
(280 |
) |
(1,959 |
) |
(1,096 |
) | |||||
|
Net earnings from continuing operations allocated to common shares |
|
70,247 |
|
61,591 |
|
3,167 |
|
168,509 |
|
44,381 |
| |||||
|
Net earnings from discontinued operations allocated to common shares |
|
(57 |
) |
(5 |
) |
(338 |
) |
(1,545 |
) |
(348 |
) | |||||
|
Net earnings allocated to common shares |
|
$ |
70,190 |
|
$ |
61,586 |
|
$ |
2,829 |
|
$ |
166,964 |
|
$ |
44,033 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Weighted-average basic shares and unvested restricted stock outstanding |
|
103,045 |
|
103,029 |
|
46,069 |
|
87,871 |
|
42,506 |
| |||||
|
Less: weighted-average unvested restricted stock outstanding |
|
(1,132 |
) |
(1,117 |
) |
(1,743 |
) |
(1,018 |
) |
(1,683 |
) | |||||
|
Weighted-average basic shares outstanding |
|
101,913 |
|
101,912 |
|
44,326 |
|
86,853 |
|
40,823 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Basic earnings per share: |
|
|
|
|
|
|
|
|
|
|
| |||||
|
Net earnings from continuing operations |
|
$ |
0.69 |
|
$ |
0.60 |
|
$ |
0.07 |
|
$ |
1.94 |
|
$ |
1.09 |
|
|
Net earnings from discontinued operations |
|
— |
|
— |
|
(0.01 |
) |
(0.02 |
) |
(0.01 |
) | |||||
|
Net earnings |
|
$ |
0.69 |
|
$ |
0.60 |
|
$ |
0.06 |
|
$ |
1.92 |
|
$ |
1.08 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Diluted Earnings Per Share: |
|
|
|
|
|
|
|
|
|
|
| |||||
|
Net earnings from continuing operations allocated to common shares |
|
$ |
70,247 |
|
$ |
61,591 |
|
$ |
3,167 |
|
$ |
168,509 |
|
$ |
44,381 |
|
|
Net earnings from discontinued operations allocated to common shares |
|
(57 |
) |
(5 |
) |
(338 |
) |
(1,545 |
) |
(348 |
) | |||||
|
Net earnings allocated to common shares |
|
$ |
70,190 |
|
$ |
61,586 |
|
$ |
2,829 |
|
$ |
166,964 |
|
$ |
44,033 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Weighted-average basic shares outstanding |
|
101,913 |
|
101,912 |
|
44,326 |
|
86,853 |
|
40,823 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Diluted earnings per share: |
|
|
|
|
|
|
|
|
|
|
| |||||
|
Net earnings from continuing operations |
|
$ |
0.69 |
|
$ |
0.60 |
|
$ |
0.07 |
|
$ |
1.94 |
|
$ |
1.09 |
|
|
Net earnings from discontinued operations |
|
— |
|
— |
|
(0.01 |
) |
(0.02 |
) |
(0.01 |
) | |||||
|
Net earnings |
|
$ |
0.69 |
|
$ |
0.60 |
|
$ |
0.06 |
|
$ |
1.92 |
|
$ |
1.08 |
|
(1) Represents cash dividends paid to holders of unvested stock, net of estimated forfeitures, plus undistributed earnings amounts available to holders of unvested restricted stock, if any.
GAAP TO NON-GAAP RECONCILIATION
This press release contains certain non-GAAP financial disclosures for adjusted net earnings, adjusted return on average assets, adjusted return on average equity, return on average tangible equity, adjusted return on average tangible equity, tangible common equity amounts and ratios, tangible book value per share, adjusted efficiency ratio, core net interest margin, and operating expense as a percentage of average assets. The Company uses certain 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:
· Adjusted net earnings - as analysts and investors view this measure as an indicator of the Company’s ability to both generate earnings and absorb credit losses, we disclose this amount in addition to net earnings.
· Adjusted return on average assets, adjusted return on average equity, return on average tangible equity, adjusted return on average tangible equity, tangible common equity amounts and ratios, and tangible book value per share - given that the use of these measures is prevalent among banking regulators, investors and analysts, we disclose them in addition to return on average assets, return on average equity, equity-to-assets ratio, and book value per share, respectively.
· Adjusted efficiency ratio - we disclose this measure in addition to efficiency ratio as it shows the trend in recurring overhead-related noninterest expense relative to recurring net revenues.
Please refer to the tables on the following pages for a presentation of performance ratios in accordance with GAAP and a reconciliation of the non-GAAP financial measures to the GAAP financial measures.
PACWEST BANCORP AND SUBSIDIARIES
GAAP TO NON-GAAP RECONCILIATION
(Unaudited)
|
|
|
Three Months Ended |
|
Year Ended |
| ||||||||||||
|
Adjusted Net Earnings |
|
December 31, |
|
September 30, |
|
December 31, |
|
December 31, |
| ||||||||
|
and Related Ratios |
|
2014 |
|
2014 |
|
2013 |
|
2014 |
|
2013 |
| ||||||
|
|
|
(Dollars in thousands) |
| ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
|
Reported net earnings |
|
$ |
70,999 |
|
$ |
62,271 |
|
$ |
3,109 |
|
$ |
168,905 |
|
$ |
45,115 |
| |
|
Less: |
Tax benefit on discontinued operations |
|
(47 |
) |
(3 |
) |
(240 |
) |
(1,114 |
) |
(258 |
) | |||||
|
Add: |
Tax expense on continuing operations |
|
42,226 |
|
42,205 |
|
9,135 |
|
113,853 |
|
30,003 |
| |||||
|
Reported pre-tax earnings |
|
113,178 |
|
104,473 |
|
12,004 |
|
281,644 |
|
74,860 |
| ||||||
|
Add: |
Acquisition, integration, reorganization and severance costs |
|
7,381 |
|
5,193 |
|
16,673 |
|
101,016 |
|
40,812 |
| |||||
|
Less: |
FDIC loss sharing expense, net |
|
(4,360 |
) |
(7,415 |
) |
(10,593 |
) |
(31,730 |
) |
(26,172 |
) | |||||
|
|
Gain on sale of loans and leases |
|
7 |
|
973 |
|
683 |
|
601 |
|
1,791 |
| |||||
|
|
(Loss) gain on securities |
|
— |
|
— |
|
(272 |
) |
4,841 |
|
5,359 |
| |||||
|
|
Covered OREO (expense) income, net |
|
(176 |
) |
(452 |
) |
594 |
|
1,172 |
|
1,833 |
| |||||
|
|
Gain on sale of owned office building |
|
— |
|
— |
|
— |
|
1,570 |
|
— |
| |||||
|
Adjusted pre-tax earnings before accelerated discount accretion |
|
125,088 |
|
116,560 |
|
38,265 |
|
406,206 |
|
132,861 |
| ||||||
|
Less: |
Accelerated discount accretion resulting from payoffs of acquired loans |
|
11,421 |
|
4,501 |
|
1,434 |
|
38,867 |
|
4,393 |
| |||||
|
Adjusted pre-tax earnings |
|
113,667 |
|
112,059 |
|
36,831 |
|
367,339 |
|
128,468 |
| ||||||
|
|
Tax expense (1) |
|
(45,467 |
) |
(44,824 |
) |
(14,622 |
) |
(146,936 |
) |
(51,002 |
) | |||||
|
Adjusted net earnings |
|
$ |
68,200 |
|
$ |
67,235 |
|
$ |
22,209 |
|
$ |
220,403 |
|
$ |
77,466 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
|
Average assets |
|
$ |
15,892,761 |
|
$ |
15,716,539 |
|
$ |
6,632,730 |
|
$ |
13,322,388 |
|
$ |
6,116,853 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
|
Average stockholders’ equity |
|
$ |
3,500,291 |
|
$ |
3,465,119 |
|
$ |
818,935 |
|
$ |
2,763,726 |
|
$ |
718,920 |
| |
|
Less: |
Average intangible assets |
|
1,739,977 |
|
1,744,542 |
|
233,628 |
|
1,342,286 |
|
172,096 |
| |||||
|
Average tangible common equity |
|
$ |
1,760,314 |
|
$ |
1,720,577 |
|
$ |
585,307 |
|
$ |
1,421,440 |
|
$ |
546,824 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
|
Annualized return on average assets (2) |
|
1.77 |
% |
1.57 |
% |
0.19 |
% |
1.27 |
% |
0.74 |
% | ||||||
|
Annualized adjusted return on average assets (3) |
|
1.70 |
% |
1.70 |
% |
1.33 |
% |
1.65 |
% |
1.27 |
% | ||||||
|
Annualized return on average equity (4) |
|
8.05 |
% |
7.13 |
% |
1.51 |
% |
6.11 |
% |
6.28 |
% | ||||||
|
Annualized adjusted return on average equity (5) |
|
7.73 |
% |
7.70 |
% |
10.76 |
% |
7.97 |
% |
10.78 |
% | ||||||
|
Annualized return on average tangible equity (6) |
|
16.00 |
% |
14.36 |
% |
2.11 |
% |
11.88 |
% |
8.25 |
% | ||||||
|
Annualized adjusted return on average tangible equity (7) |
|
15.37 |
% |
15.50 |
% |
15.05 |
% |
15.51 |
% |
14.17 |
% | ||||||
(1) Effective tax rates of 40.0% in 2014 periods and 39.7% in 2013 periods.
(2) Annualized net earnings divided by average assets
(3) Annualized adjusted net earnings divided by average assets
(4) Annualized net earnings divided by average stockholders’ equity
(5) Annualized adjusted net earnings divided by average stockholders’ equity
(6) Annualized net earnings divided by average tangible common equity
(7) Annualized adjusted net earnings divided by average tangible common equity
PACWEST BANCORP AND SUBSIDIARIES
GAAP TO NON-GAAP RECONCILIATION
(Unaudited)
|
|
|
Three Months Ended |
|
Year Ended |
| ||||||||||||
|
|
|
December 31, |
|
September 30, |
|
December 31, |
|
December 31, |
| ||||||||
|
Adjusted Efficiency Ratio |
|
2014 |
|
2014 |
|
2013 |
|
2014 |
|
2013 |
| ||||||
|
|
|
(Dollars in thousands) |
| ||||||||||||||
|
|
|
|
| ||||||||||||||
|
Noninterest expense |
|
$ |
92,340 |
|
$ |
95,629 |
|
$ |
66,088 |
|
$ |
408,744 |
|
$ |
230,687 |
| |
|
Less: |
Acquisition, integration, reorganization and severance costs |
|
7,381 |
|
5,193 |
|
16,673 |
|
101,016 |
|
40,812 |
| |||||
|
|
Covered OREO expense (income), net |
|
176 |
|
452 |
|
(594 |
) |
(1,172 |
) |
(1,833 |
) | |||||
|
Adjusted noninterest expense |
|
$ |
84,783 |
|
$ |
89,984 |
|
$ |
50,009 |
|
$ |
308,900 |
|
$ |
191,708 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
|
Net interest income |
|
$ |
194,983 |
|
$ |
188,846 |
|
$ |
81,258 |
|
$ |
662,377 |
|
$ |
297,713 |
| |
|
Noninterest income |
|
12,703 |
|
16,314 |
|
(3,926 |
) |
42,187 |
|
4,244 |
| ||||||
|
Net revenues |
|
207,686 |
|
205,160 |
|
77,332 |
|
704,564 |
|
301,957 |
| ||||||
|
Less: |
FDIC loss sharing expense, net |
|
(4,360 |
) |
(7,415 |
) |
(10,593 |
) |
(31,730 |
) |
(26,172 |
) | |||||
|
|
Gain on sale of loans and leases |
|
7 |
|
973 |
|
683 |
|
601 |
|
1,791 |
| |||||
|
|
(Loss) gain on securities |
|
— |
|
— |
|
(272 |
) |
4,841 |
|
5,359 |
| |||||
|
|
Gain on sale of owned office building |
|
— |
|
— |
|
— |
|
1,570 |
|
— |
| |||||
|
|
Accelerated discount accretion resulting from payoffs of acquired loans |
|
11,421 |
|
4,501 |
|
1,434 |
|
38,867 |
|
4,393 |
| |||||
|
Adjusted net revenues |
|
$ |
200,618 |
|
$ |
207,101 |
|
$ |
86,080 |
|
$ |
690,415 |
|
$ |
316,586 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
|
Base efficiency ratio (1) |
|
44.5 |
% |
46.6 |
% |
85.5 |
% |
58.0 |
% |
76.4 |
% | ||||||
|
Adjusted efficiency ratio (2) |
|
42.3 |
% |
43.4 |
% |
58.1 |
% |
44.7 |
% |
60.6 |
% | ||||||
(1) Noninterest expense divided by net revenues
(2) Adjusted noninterest expense divided by adjusted net revenues
PACWEST BANCORP AND SUBSIDIARIES
GAAP TO NON-GAAP RECONCILIATION
(Unaudited)
|
|
|
December 31, |
|
September 30, |
|
June 30, |
|
March 31, |
|
December 31, |
| |||||
|
Tangible Common Equity Ratio |
|
2014 |
|
2014 |
|
2014 |
|
2014 |
|
2013 |
| |||||
|
|
|
(Dollars in thousands) |
| |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
PacWest Bancorp Consolidated: |
|
|
|
|
|
|
|
|
|
|
| |||||
|
Stockholders’ equity |
|
$ |
3,506,425 |
|
$ |
3,478,246 |
|
$ |
3,437,932 |
|
$ |
833,702 |
|
$ |
809,093 |
|
|
Less: Intangible assets |
|
1,737,683 |
|
1,740,951 |
|
1,745,584 |
|
224,627 |
|
225,991 |
| |||||
|
Tangible common equity |
|
$ |
1,768,742 |
|
$ |
1,737,295 |
|
$ |
1,692,348 |
|
$ |
609,075 |
|
$ |
583,102 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Total assets |
|
$ |
16,234,800 |
|
$ |
15,938,345 |
|
$ |
15,684,866 |
|
$ |
6,517,853 |
|
$ |
6,533,363 |
|
|
Less: Intangible assets |
|
1,737,683 |
|
1,740,951 |
|
1,745,584 |
|
224,627 |
|
225,991 |
| |||||
|
Tangible assets |
|
$ |
14,497,117 |
|
$ |
14,197,394 |
|
$ |
13,939,282 |
|
$ |
6,293,226 |
|
$ |
6,307,372 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Equity to assets ratio |
|
21.60 |
% |
21.82 |
% |
21.92 |
% |
12.79 |
% |
12.38 |
% | |||||
|
Tangible common equity ratio (1) |
|
12.20 |
% |
12.24 |
% |
12.14 |
% |
9.68 |
% |
9.24 |
% | |||||
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Book value per share |
|
$ |
34.04 |
|
$ |
33.76 |
|
$ |
33.37 |
|
$ |
18.21 |
|
$ |
17.66 |
|
|
Tangible book value per share (2) |
|
$ |
17.17 |
|
$ |
16.86 |
|
$ |
16.43 |
|
$ |
13.31 |
|
$ |
12.73 |
|
|
Shares outstanding |
|
103,022,017 |
|
103,027,830 |
|
103,033,449 |
|
45,777,580 |
|
45,822,834 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Pacific Western Bank: |
|
|
|
|
|
|
|
|
|
|
| |||||
|
Stockholders’ equity |
|
$ |
3,379,074 |
|
$ |
3,357,138 |
|
$ |
3,298,908 |
|
$ |
910,644 |
|
$ |
911,200 |
|
|
Less: Intangible assets |
|
1,737,682 |
|
1,740,951 |
|
1,745,584 |
|
224,627 |
|
225,991 |
| |||||
|
Tangible common equity |
|
$ |
1,641,392 |
|
$ |
1,616,187 |
|
$ |
1,553,324 |
|
$ |
686,017 |
|
$ |
685,209 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Total assets |
|
$ |
15,995,914 |
|
$ |
15,675,486 |
|
$ |
15,376,440 |
|
$ |
6,507,288 |
|
$ |
6,523,742 |
|
|
Less: Intangible assets |
|
1,737,682 |
|
1,740,951 |
|
1,745,584 |
|
224,627 |
|
225,991 |
| |||||
|
Tangible assets |
|
$ |
14,258,232 |
|
$ |
13,934,535 |
|
$ |
13,630,856 |
|
$ |
6,282,661 |
|
$ |
6,297,751 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Equity to assets ratio |
|
21.12 |
% |
21.42 |
% |
21.45 |
% |
13.99 |
% |
13.97 |
% | |||||
|
Tangible common equity ratio |
|
11.51 |
% |
11.60 |
% |
11.40 |
% |
10.92 |
% |
10.88 |
% | |||||
(1) Tangible common equity divided by tangible assets
(2) Tangible common equity divided by shares outstanding