Attached files
| file | filename |
|---|---|
| 8-K - 8-K - PACWEST BANCORP | a16-14987_18k.htm |
Exhibit 99.1
|
PRESS RELEASE |
|
|
|
|
|
PacWest Bancorp |
|
|
(NASDAQ: PACW) |
|
|
Contact: |
Matthew P. Wagner |
Patrick J. Rusnak |
|
|
President and CEO |
Executive Vice President and CFO |
|
Phone: |
310-887-8520 |
714-989-4705 |
|
FOR IMMEDIATE RELEASE |
July 15, 2016 |
PACWEST BANCORP ANNOUNCES RESULTS
FOR THE SECOND QUARTER 2016
Highlights
· Net Earnings of $82.2 Million, or $0.68 Per Diluted Share
· New Loan and Lease Production of $931 Million for the Quarter; $158 Million of Net Loan Growth
· Core Deposits Increased $442 Million during the Quarter and Represented 75% of Total Deposits
· Core Tax Equivalent Net Interest Margin of 5.11%
Los Angeles, California . . . PacWest Bancorp (Nasdaq: PACW) today announced net earnings for the second quarter of 2016 of $82.2 million, or $0.68 per diluted share, compared to net earnings for the first quarter of 2016 of $90.5 million, or $0.74 per diluted share. The decrease in net earnings was due mostly to lower accretion on acquired loans and leases, lower gain on sales of securities and the cost of terminating FDIC loss sharing agreements offset by lower credit loss provision as compared to the first quarter of 2016.
Matt Wagner, President and CEO, commented, “We are very pleased with our strong second quarter results which produced a return on assets of 1.57% and a return on tangible equity of 14.61%. This performance was driven by our above-peer net interest margin, an efficiency ratio of 40.6% and strong asset quality which resulted in minimal charge-offs.”
Patrick Rusnak, Executive Vice President and CFO stated, “Our second quarter core tax equivalent net interest margin (NIM) remained relatively steady at 5.11% and excluding all purchase accounting items increased 7 basis points to 5.00%. The second quarter NIM benefited from an improved average earning asset mix and a 3 basis point decrease in the cost of deposits.”
Mr. Rusnak continued, “We are also pleased with the continued transformation of our deposit portfolio as core deposits were 75% of total deposits compared to 52% a year ago. With $158 million of net loan growth for the second quarter, we continue to expect mid-single digit loan growth for the year.”
Mr. Wagner continued, “We continue to be focused on two important corporate initiatives for 2016. These are the conversion of our core processing systems, the first phase of which was completed during the second quarter, and the submission of our first DFAST stress test to our regulators, after which we expect to more actively evaluate plans to reduce capital levels.”
FINANCIAL HIGHLIGHTS
|
|
|
At or For the Three Months Ended |
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At or For the Six Months Ended |
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June 30, |
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March 31, |
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|
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June 30, |
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|
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2016 |
|
2016 |
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Change |
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2016 |
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2015 |
|
Change |
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(Dollars in thousands, except per share data) |
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Financial Highlights: |
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Net Earnings |
|
$ |
82,168 |
|
$ |
90,456 |
|
$ |
(8,288 |
) |
$ |
172,624 |
|
$ |
158,162 |
|
$ |
14,462 |
|
|
Diluted Earnings Per Share |
|
$ |
0.68 |
|
$ |
0.74 |
|
$ |
(0.06 |
) |
$ |
1.42 |
|
$ |
1.54 |
|
$ |
(0.12 |
) |
|
Return on Average Assets |
|
1.57 |
% |
1.72 |
% |
(0.15 |
) |
1.65 |
% |
1.95 |
% |
(0.30 |
) | ||||||
|
Return on Average Tangible Equity (1) |
|
14.61 |
% |
16.45 |
% |
(1.84 |
) |
15.52 |
% |
17.71 |
% |
(2.19 |
) | ||||||
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|
|
|
|
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|
|
|
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|
|
|
|
| ||||||
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Net Interest Margin (tax equivalent) |
|
5.33 |
% |
5.53 |
% |
(0.20 |
) |
5.43 |
% |
5.92 |
% |
(0.49 |
) | ||||||
|
Core Net Interest Margin (tax equivalent) (1) |
|
5.11 |
% |
5.10 |
% |
0.01 |
|
5.10 |
% |
5.38 |
% |
(0.28 |
) | ||||||
|
Efficiency Ratio |
|
40.6 |
% |
38.5 |
% |
2.1 |
|
39.5 |
% |
37.4 |
% |
2.1 |
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Total Assets |
|
$ |
21,147,139 |
|
$ |
21,031,009 |
|
$ |
116,130 |
|
$ |
21,147,139 |
|
$ |
16,697,020 |
|
$ |
4,450,119 |
|
|
Loans and Leases, Net of Deferred Fees |
|
$ |
14,641,460 |
|
$ |
14,483,517 |
|
$ |
157,943 |
|
$ |
14,641,460 |
|
$ |
12,034,189 |
|
$ |
2,607,271 |
|
|
Noninterest-Bearing Deposits |
|
$ |
6,222,696 |
|
$ |
6,139,963 |
|
$ |
82,733 |
|
$ |
6,222,696 |
|
$ |
3,396,688 |
|
$ |
2,826,008 |
|
|
Core Deposits |
|
$ |
11,411,992 |
|
$ |
10,970,318 |
|
$ |
441,674 |
|
$ |
11,411,992 |
|
$ |
6,584,606 |
|
$ |
4,827,386 |
|
|
Total Deposits |
|
$ |
15,148,009 |
|
$ |
15,441,375 |
|
$ |
(293,366 |
) |
$ |
15,148,009 |
|
$ |
12,581,816 |
|
$ |
2,566,193 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
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Noninterest-Bearing Deposits as Percentage of Total Deposits |
|
41 |
% |
40 |
% |
1 |
|
41 |
% |
26 |
% |
15 |
| ||||||
|
Core Deposits as Percentage of Total Deposits |
|
75 |
% |
71 |
% |
4 |
|
75 |
% |
52 |
% |
23 |
| ||||||
|
Tangible Common Equity Ratio (1) |
|
12.12 |
% |
11.87 |
% |
0.25 |
|
12.12 |
% |
12.10 |
% |
0.02 |
| ||||||
|
Tangible Book Value Per Share (1) |
|
$ |
18.83 |
|
$ |
18.33 |
|
$ |
0.50 |
|
$ |
18.83 |
|
$ |
17.55 |
|
$ |
1.28 |
|
(1) Non-GAAP measure.
INCOME STATEMENT HIGHLIGHTS
Net Interest Income
Net interest income decreased by $10.8 million to $233.8 million in the second quarter of 2016 compared to $244.6 million for the first quarter of 2016 due to lower accretion on acquired loans. The decrease in accretion was related mostly to lower accelerated accretion from the payoff of one purchased credit impaired (“PCI”) loan in the first quarter. Total accretion on acquired loans was $16.2 million in the second quarter of 2016 (45 basis points on the loan and lease yield) compared to $27.9 million in the first quarter of 2016 (77 basis points on the loan and lease yield). The loan and lease yield for the second quarter of 2016 was 6.24% compared to 6.57% for the first quarter of 2016. The decrease in the loan and lease yield was due to the lower accretion on acquired loans and the yield on new production being lower than the current portfolio yield. Excluding accelerated accretion, the core loan and lease yield was 5.97% in the second quarter compared to 6.03% in the first quarter.
The tax equivalent NIM for the second quarter of 2016 was 5.33% compared to 5.53% for the first quarter of 2016. The decrease in the NIM was due to lower accretion on acquired loans. Such accretion contributed 36 basis points to the NIM in the second quarter of 2016 and 62 basis points to the NIM in the first quarter of 2016. Excluding accelerated accretion, the core tax equivalent NIM was 5.11% for the second quarter compared to 5.10% for the first quarter.
The cost of total deposits decreased to 0.20% in the second quarter from 0.23% in the first quarter of 2016 due to the increased average balance of noninterest-bearing deposits combined with a lower average cost and balance of time deposits.
The tax equivalent NIM and loan and lease yield are impacted by volatility in accelerated accretion of acquisition discounts due to the prepayment of acquired loans and leases. The effects of this item are shown in the following table for the periods indicated:
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Three Months Ended |
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Three Months Ended |
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|
|
|
June 30, 2016 |
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March 31, 2016 |
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Loan and |
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Loan and |
| |
|
|
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NIM |
|
Lease Yield |
|
NIM |
|
Lease Yield |
| |
|
Reported |
|
5.33 |
% |
6.24 |
% |
5.53 |
% |
6.57 |
% | |
|
Less: |
Accelerated accretion of acquisition discounts from early payoffs of acquired loans |
|
(0.22 |
)% |
(0.27 |
)% |
(0.43 |
)% |
(0.54 |
)% |
|
Core |
|
5.11 |
% |
5.97 |
% |
5.10 |
% |
6.03 |
% | |
The impact on the tax equivalent net interest income and NIM from all purchase accounting items is set forth in the table below for the periods indicated:
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|
|
Three Months Ended |
|
Three Months Ended |
| |||||||
|
|
|
June 30, 2016 |
|
March 31, 2016 |
| |||||||
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|
|
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Impact on |
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|
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Impact on |
| |||
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|
|
Amount |
|
NIM |
|
Amount |
|
NIM |
| |||
|
|
|
(Dollars in thousands) |
| |||||||||
|
|
|
|
|
|
|
|
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| |||
|
Net interest income/NIM |
|
$ |
238,667 |
|
5.33 |
% |
$ |
249,540 |
|
5.53 |
% | |
|
Less: |
Accelerated accretion of acquisition discounts from early payoffs of acquired loans |
|
(9,780 |
) |
(0.22 |
)% |
(19,465 |
) |
(0.43 |
)% | ||
|
|
Remaining accretion of Non-PCI loan acquisition discounts |
|
(6,407 |
) |
(0.14 |
)% |
(8,403 |
) |
(0.19 |
)% | ||
|
|
Total accretion of loan acquisition discounts |
|
(16,187 |
) |
(0.36 |
)% |
(27,868 |
) |
(0.62 |
)% | ||
|
|
Amortization of TruPS discount |
|
1,393 |
|
0.03 |
% |
1,395 |
|
0.03 |
% | ||
|
|
Accretion of time deposits premium |
|
(172 |
) |
0.00 |
% |
(270 |
) |
(0.01 |
)% | ||
|
|
|
|
(14,966 |
) |
(0.33 |
)% |
(26,743 |
) |
(0.60 |
)% | ||
|
Net interest income/NIM - excluding purchase accounting |
|
$ |
223,701 |
|
5.00 |
% |
$ |
222,797 |
|
4.93 |
% | |
Noninterest Income
Noninterest income decreased by $12.4 million to $22.1 million for the second quarter of 2016 due mostly to a $7.6 million decrease in net gains on sales of securities and a $4.1 million increase in FDIC loss sharing expense. The second quarter of 2016 included minimal sales of securities compared to $335 million of securities sales in the first quarter resulting in the lower net gains. The higher FDIC loss sharing expense was due mainly to the $6.0 million pre-tax charge related to the early termination of our loss share agreements with the FDIC. In addition, dividends and gains on equity investments increased by $1.9 million and other income decreased by $1.2 million. First quarter other income included a loan syndication fee ($0.9 million), a death benefit received on a BOLI policy ($0.6 million) and a loss on the sale of the Pacific Western Equipment Finance (“PWEF”) leasing unit ($0.7 million); there were no similar items in the second quarter.
The following table presents details of noninterest income for the periods indicated:
|
|
|
Three Months Ended |
| |||||||
|
|
|
June 30, |
|
March 31, |
|
Increase |
| |||
|
Noninterest Income |
|
2016 |
|
2016 |
|
(Decrease) |
| |||
|
|
|
(In thousands) |
| |||||||
|
|
|
|
|
|
|
|
| |||
|
Service charges on deposit accounts |
|
$ |
3,633 |
|
$ |
3,856 |
|
$ |
(223 |
) |
|
Other commissions and fees |
|
11,073 |
|
11,489 |
|
(416 |
) | |||
|
Leased equipment income |
|
8,523 |
|
8,244 |
|
279 |
| |||
|
Gain on sale of loans and leases |
|
388 |
|
245 |
|
143 |
| |||
|
Gain on securities |
|
478 |
|
8,110 |
|
(7,632 |
) | |||
|
FDIC loss sharing expense, net |
|
(6,502 |
) |
(2,415 |
) |
(4,087 |
) | |||
|
Other income: |
|
|
|
|
|
|
| |||
|
Dividends and realized gains on equity investments |
|
2,185 |
|
246 |
|
1,939 |
| |||
|
Foreign currency translation net gains |
|
324 |
|
606 |
|
(282 |
) | |||
|
Income recognized on early repayment of leases |
|
27 |
|
922 |
|
(895 |
) | |||
|
Other |
|
1,992 |
|
3,236 |
|
(1,244 |
) | |||
|
Total noninterest income |
|
$ |
22,121 |
|
$ |
34,539 |
|
$ |
(12,418 |
) |
Noninterest Expense
Noninterest expense decreased by $0.6 million to $110.1 million for the second quarter compared to $110.7 million for the first quarter of 2016. Noninterest expense decreased in most expense categories in the second quarter due partly to the sale of the PWEF leasing unit at the end of the first quarter. Compensation expense increased $1.1 million due mostly to higher stock-based compensation and incentive expense offset by lower payroll tax expense. Foreclosed assets income is lower by $0.6 million due to lower gains on foreclosed asset sales compared to the prior quarter.
The following table presents details of noninterest expense for the periods indicated:
|
|
|
Three Months Ended |
| |||||||
|
|
|
June 30, |
|
March 31, |
|
Increase |
| |||
|
Noninterest Expense |
|
2016 |
|
2016 |
|
(Decrease) |
| |||
|
|
|
(In thousands) |
| |||||||
|
|
|
|
|
|
|
|
| |||
|
Compensation |
|
$ |
62,174 |
|
$ |
61,065 |
|
$ |
1,109 |
|
|
Occupancy |
|
12,193 |
|
12,632 |
|
(439 |
) | |||
|
Data processing |
|
5,644 |
|
5,904 |
|
(260 |
) | |||
|
Other professional services |
|
3,223 |
|
3,572 |
|
(349 |
) | |||
|
Insurance and assessments |
|
4,951 |
|
4,965 |
|
(14 |
) | |||
|
Intangible asset amortization |
|
4,371 |
|
4,746 |
|
(375 |
) | |||
|
Leased equipment depreciation |
|
5,286 |
|
5,024 |
|
262 |
| |||
|
Foreclosed assets (income), net |
|
(3 |
) |
(561 |
) |
558 |
| |||
|
Acquisition, integration and reorganization costs |
|
— |
|
200 |
|
(200 |
) | |||
|
Other expense: |
|
|
|
|
|
|
| |||
|
Loan expense |
|
2,323 |
|
2,155 |
|
168 |
| |||
|
Other |
|
9,919 |
|
10,986 |
|
(1,067 |
) | |||
|
Total noninterest expense |
|
$ |
110,081 |
|
$ |
110,688 |
|
$ |
(607 |
) |
Income Taxes
The overall effective income tax rate was 37.7% in the second quarter of 2016 and 39.0% in the first quarter of 2016. Although the second quarter benefitted from a lower effective tax rate, the expected effective tax rate for the calendar year 2016 remains around 39%.
BALANCE SHEET HIGHLIGHTS
Loans and Leases
Average total loans and leases for the second quarter of 2016 was relatively unchanged from the first quarter while period-end total loans and leases increased by $157.9 million in the second quarter to $14.6 billion at June 30, 2016. The net increase was driven by second quarter originations and purchases of $931.4 million, offset partially by principal repayments of $720.0 million.
The following table presents a roll forward of the loan and lease portfolio for the periods indicated:
|
|
|
Three Months Ended |
| ||||
|
|
|
June 30, |
|
March 31, |
| ||
|
Loan and Lease Roll Forward (1) |
|
2016 |
|
2016 |
| ||
|
|
|
(In thousands) |
| ||||
|
|
|
|
|
|
| ||
|
Beginning balance |
|
$ |
14,483,517 |
|
$ |
14,478,254 |
|
|
New production |
|
931,423 |
|
842,064 |
| ||
|
Existing loans and leases: |
|
|
|
|
| ||
|
Principal repayments, net (2) |
|
(720,003 |
) |
(665,281 |
) | ||
|
Loan and lease sales |
|
(51,597 |
) |
(26,657 |
) | ||
|
Transfers to foreclosed assets |
|
— |
|
(129 |
) | ||
|
Charge-offs |
|
(1,880 |
) |
(5,536 |
) | ||
|
Sale of PWEF |
|
— |
|
(139,198 |
) | ||
|
Ending balance |
|
$ |
14,641,460 |
|
$ |
14,483,517 |
|
|
|
|
|
|
|
| ||
|
Weighted average yields on new production |
|
5.06 |
% |
5.29 |
% | ||
(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), loan participation sales and other changes within the loan portfolio.
The following table presents the composition of our loan and lease portfolio as of the dates indicated:
|
|
|
June 30, |
|
March 31, |
|
December 31, |
|
June 30, |
| ||||
|
Loan and Lease Portfolio |
|
2016 |
|
2016 |
|
2015 |
|
2015 |
| ||||
|
|
|
(In thousands) |
| ||||||||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
Real estate mortgage: |
|
|
|
|
|
|
|
|
| ||||
|
Commercial |
|
$ |
4,519,209 |
|
$ |
4,640,419 |
|
$ |
4,642,088 |
|
$ |
4,596,301 |
|
|
Residential |
|
1,164,784 |
|
1,149,998 |
|
1,211,209 |
|
1,026,239 |
| ||||
|
Total real estate mortgage |
|
5,683,993 |
|
5,790,417 |
|
5,853,297 |
|
5,622,540 |
| ||||
|
Real estate construction and land: |
|
|
|
|
|
|
|
|
| ||||
|
Commercial |
|
417,144 |
|
308,192 |
|
349,436 |
|
230,372 |
| ||||
|
Residential |
|
281,788 |
|
269,965 |
|
184,382 |
|
119,825 |
| ||||
|
Total real estate construction and land |
|
698,932 |
|
578,157 |
|
533,818 |
|
350,197 |
| ||||
|
Total real estate loans |
|
6,382,925 |
|
6,368,574 |
|
6,387,115 |
|
5,972,737 |
| ||||
|
Commercial: |
|
|
|
|
|
|
|
|
| ||||
|
Cash flow |
|
3,048,439 |
|
3,173,424 |
|
3,073,965 |
|
2,857,928 |
| ||||
|
Asset-based |
|
2,683,913 |
|
2,589,598 |
|
2,547,665 |
|
2,212,467 |
| ||||
|
Venture capital |
|
1,666,352 |
|
1,507,788 |
|
1,458,013 |
|
— |
| ||||
|
Equipment finance |
|
646,940 |
|
733,228 |
|
890,349 |
|
904,488 |
| ||||
|
Total commercial |
|
8,045,644 |
|
8,004,038 |
|
7,969,992 |
|
5,974,883 |
| ||||
|
Consumer |
|
212,891 |
|
110,905 |
|
121,147 |
|
86,569 |
| ||||
|
Total loans and leases, net of deferred fees |
|
$ |
14,641,460 |
|
$ |
14,483,517 |
|
$ |
14,478,254 |
|
$ |
12,034,189 |
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Total unfunded loan commitments |
|
$ |
3,888,686 |
|
$ |
3,812,554 |
|
$ |
3,580,655 |
|
$ |
2,111,637 |
|
Loan growth in the second quarter came primarily from the consumer, construction and venture capital portfolios. The construction and venture capital portfolios also accounted for most of the growth in our unfunded commitments during the quarter.
Credit Exposure Affected by Low Oil Prices
At June 30, 2016, we had 19 outstanding loan and lease relationships totaling $116.9 million to borrowers involved in the oil and gas services industry, down from $127.7 million at March 31, 2016. The collateral for this credit exposure includes primarily equipment, such as drilling equipment and transportation vehicles. The reserves related to this credit exposure total approximately 18%. At June 30, 2016, five relationships totaling $48.5 million were on nonaccrual status and were classified, up from three relationships totaling $45.5 million at March 31, 2016. The largest of these relationships had an aggregate outstanding balance of $39.9 million at June 30, 2016.
Deposits and Client Investment Funds
The following table presents the composition of our deposit portfolio as of the dates indicated:
|
|
|
June 30, |
|
March 31, |
|
December 31, |
|
June 30, |
| ||||
|
Deposit Category |
|
2016 |
|
2016 |
|
2015 |
|
2015 |
| ||||
|
|
|
(Dollars in thousands) |
| ||||||||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
Noninterest-bearing demand deposits |
|
$ |
6,222,696 |
|
$ |
6,139,963 |
|
6,171,455 |
|
$ |
3,396,688 |
| |
|
Interest checking deposits |
|
1,035,395 |
|
921,189 |
|
874,349 |
|
722,231 |
| ||||
|
Money market deposits |
|
3,392,811 |
|
3,144,843 |
|
2,782,974 |
|
1,722,633 |
| ||||
|
Savings deposits |
|
761,090 |
|
764,323 |
|
742,795 |
|
743,054 |
| ||||
|
Total core deposits |
|
11,411,992 |
|
10,970,318 |
|
10,571,573 |
|
6,584,606 |
| ||||
|
Brokered non-maturity deposits |
|
972,820 |
|
985,784 |
|
942,253 |
|
651,925 |
| ||||
|
Total non-maturity deposits |
|
12,384,812 |
|
11,956,102 |
|
11,513,826 |
|
7,236,531 |
| ||||
|
Time deposits under $100,000 |
|
1,114,074 |
|
1,357,598 |
|
1,656,227 |
|
2,328,109 |
| ||||
|
Time deposits of $100,000 and over |
|
1,649,123 |
|
2,127,675 |
|
2,496,129 |
|
3,017,176 |
| ||||
|
Total time deposits |
|
2,763,197 |
|
3,485,273 |
|
4,152,356 |
|
5,345,285 |
| ||||
|
Total deposits |
|
$ |
15,148,009 |
|
$ |
15,441,375 |
|
$ |
15,666,182 |
|
$ |
12,581,816 |
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Noninterest-bearing demand deposits as percentage of total deposits |
|
41 |
% |
40 |
% |
39 |
% |
26 |
% | ||||
|
Core deposits as percentage of total deposits |
|
75 |
% |
71 |
% |
67 |
% |
52 |
% | ||||
At June 30, 2016, core deposits totaled $11.4 billion, or 75% of total deposits, including $6.2 billion of noninterest-bearing demand deposits, or 41% of total deposits.
In addition to deposit products, we also offer alternative non-depository cash investment options for select clients, including investments managed by Square 1 Asset Management, Inc. (“S1AM”) our registered investment advisor subsidiary and third-party sweep products. Total client investment funds at June 30, 2016 were $1.5 billion, of which $1.2 billion was managed by S1AM.
PROVISION AND ALLOWANCE FOR CREDIT LOSSES
A provision for credit losses of $13.9 million was recorded in the second quarter of 2016 compared to $20.1 million in the first quarter of 2016. The second quarter provision consisted of $12.0 million for Non-PCI loans and leases and $1.9 million for PCI loans and leases. The allowance for Non-PCI credit losses to Non-PCI loans and leases coverage ratio increased to 1.03% at June 30, 2016 from 0.96% at March 31, 2016.
The following tables show roll forwards of the allowance for credit losses for the periods indicated:
|
|
|
Three Months Ended June 30, 2016 |
| |||||||||||||
|
|
|
Non-PCI |
|
|
|
|
|
|
|
|
| |||||
|
Allowance for Credit |
|
Loans and |
|
Unfunded |
|
Total |
|
PCI |
|
|
| |||||
|
Losses Rollforward |
|
Leases |
|
Commitments |
|
Non-PCI |
|
Loans |
|
Total |
| |||||
|
|
|
(In thousands) |
| |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Beginning balance |
|
$ |
120,807 |
|
$ |
17,569 |
|
$ |
138,376 |
|
$ |
9,554 |
|
$ |
147,930 |
|
|
Charge-offs |
|
(1,712 |
) |
— |
|
(1,712 |
) |
(168 |
) |
(1,880 |
) | |||||
|
Recoveries |
|
1,280 |
|
— |
|
1,280 |
|
— |
|
1,280 |
| |||||
|
Net charge-offs |
|
(432 |
) |
— |
|
(432 |
) |
(168 |
) |
(600 |
) | |||||
|
Provision |
|
11,625 |
|
375 |
|
12,000 |
|
1,903 |
|
13,903 |
| |||||
|
Ending balance |
|
$ |
132,000 |
|
$ |
17,944 |
|
$ |
149,944 |
|
$ |
11,289 |
|
$ |
161,233 |
|
|
|
|
Three Months Ended March 31, 2016 |
| |||||||||||||
|
|
|
Non-PCI |
|
|
|
|
|
|
|
|
| |||||
|
Allowance for Credit |
|
Loans and |
|
Unfunded |
|
Total |
|
PCI |
|
|
| |||||
|
Losses Rollforward |
|
Leases |
|
Commitments |
|
Non-PCI |
|
Loans |
|
Total |
| |||||
|
|
|
(In thousands) |
| |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Beginning balance |
|
$ |
105,534 |
|
$ |
16,734 |
|
$ |
122,268 |
|
$ |
9,577 |
|
$ |
131,845 |
|
|
Charge-offs |
|
(5,373 |
) |
— |
|
(5,373 |
) |
(163 |
) |
(5,536 |
) | |||||
|
Recoveries |
|
1,481 |
|
— |
|
1,481 |
|
— |
|
1,481 |
| |||||
|
Net charge-offs |
|
(3,892 |
) |
— |
|
(3,892 |
) |
(163 |
) |
(4,055 |
) | |||||
|
Provision |
|
19,165 |
|
835 |
|
20,000 |
|
140 |
|
20,140 |
| |||||
|
Ending balance |
|
$ |
120,807 |
|
$ |
17,569 |
|
$ |
138,376 |
|
$ |
9,554 |
|
$ |
147,930 |
|
All acquired loans are recorded initially at their estimated fair value including an estimate of credit losses. The table below presents two alternative views of credit risk coverage ratios for Non-PCI loans reflecting adjustments for acquired loans and associated purchase accounting discounts:
|
|
|
June 30, 2016 |
|
March 31, 2016 |
| ||||||||||||
|
|
|
Non-PCI |
|
|
|
|
|
Non-PCI |
|
|
|
|
| ||||
|
Credit Risk |
|
Loans and |
|
Allowance/ |
|
Coverage |
|
Loans and |
|
Allowance/ |
|
Coverage |
| ||||
|
Coverage Ratios |
|
Leases |
|
Discount |
|
Ratio |
|
Leases |
|
Discount |
|
Ratio |
| ||||
|
|
|
(Dollars in thousands) |
| ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Ending balance |
|
$ |
14,566,425 |
|
$ |
149,944 |
|
1.03 |
% |
$ |
14,365,915 |
|
$ |
138,376 |
|
0.96 |
% |
|
Acquired loans |
|
(5,131,674 |
) |
(37,440 |
)(1) |
|
|
(5,468,875 |
) |
(34,231 |
)(1) |
|
| ||||
|
Adjusted balance |
|
$ |
9,434,751 |
|
$ |
112,504 |
|
1.19 |
% |
$ |
8,897,040 |
|
$ |
104,145 |
|
1.17 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Ending balance |
|
$ |
14,566,425 |
|
$ |
149,944 |
|
1.03 |
% |
$ |
14,365,915 |
|
$ |
138,376 |
|
0.96 |
% |
|
Unamortized net discount |
|
65,391 |
|
65,391 |
(2) |
|
|
78,761 |
|
78,761 |
(2) |
|
| ||||
|
Adjusted balance |
|
$ |
14,631,816 |
|
$ |
215,335 |
|
1.47 |
% |
$ |
14,444,676 |
|
$ |
217,137 |
|
1.50 |
% |
(1) Allowance attributed to $5.1 billion and $5.5 billion of acquired Non-PCI loans at June 30, 2016 and March 31, 2016, 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 $5.1 billion and $5.5 billion of acquired Non-PCI loans at June 30, 2016 and March 31, 2016, and is assigned specifically to those loans only. Such discount represents the acquisition date fair value adjustment based on market, liquidity, interest rate risk and credit risk and is being accreted to interest income over the remaining life of the respective loans using the interest method. Use of the interest method results in steadily declining amounts being taken into income in each reporting period. The remaining discount of $65.4 million at June 30, 2016, is expected to be substantially accreted to income by the end of 2018.
Non-PCI loans and leases at June 30, 2016 included $9.4 billion of originated loans and leases that were not obtained through acquisitions. The related allowance for loan and lease losses totaled $97.7 million, or 1.04% of the outstanding balance.
CREDIT QUALITY
The following table presents Non-PCI loan and lease credit quality metrics as of the dates indicated:
|
|
|
June 30, |
|
March 31, |
| ||
|
Non-PCI Credit Quality Metrics |
|
2016 |
|
2016 |
| ||
|
|
|
(Dollars in thousands) |
| ||||
|
|
|
|
|
|
| ||
|
Nonaccrual loans and leases |
|
$ |
127,655 |
|
$ |
130,418 |
|
|
Classified loans and leases |
|
441,035 |
|
384,698 |
| ||
|
Performing restructured loans |
|
71,709 |
|
66,829 |
| ||
|
Allowance for credit losses |
|
149,944 |
|
138,376 |
| ||
|
Net charge-offs (for the quarter) |
|
432 |
|
3,892 |
| ||
|
Provision for credit losses (for the quarter) |
|
12,000 |
|
20,000 |
| ||
|
Allowance for credit losses to loans and leases |
|
1.03 |
% |
0.96 |
% | ||
|
Allowance for credit losses to nonaccrual loans and leases |
|
117.5 |
% |
106.1 |
% | ||
|
Nonaccrual loans and leases to loans and leases |
|
0.88 |
% |
0.91 |
% | ||
|
Nonperforming assets to loans and leases and foreclosed assets |
|
0.99 |
% |
1.05 |
% | ||
|
Classified loans and leases to loans and leases |
|
3.03 |
% |
2.68 |
% | ||
Classified loans and leases increased largely as a result of a $50 million healthcare real estate loan being classified due to declining operating performance.
The following table presents 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:
|
|
|
Non-PCI Nonaccrual Loans and Leases |
|
Non-PCI Accruing and |
| ||||||||||||
|
|
|
June 30, 2016 |
|
March 31, 2016 |
|
30-89 Days Past Due |
| ||||||||||
|
|
|
|
|
% of |
|
|
|
% of |
|
June 30, |
|
March 31, |
| ||||
|
|
|
|
|
Loan |
|
|
|
Loan |
|
2016 |
|
2016 |
| ||||
|
|
|
Amount |
|
Category |
|
Amount |
|
Category |
|
Amount |
|
Amount |
| ||||
|
|
|
(Dollars in thousands) |
| ||||||||||||||
|
Real estate mortgage: |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Commercial |
|
$ |
29,183 |
|
1 |
% |
$ |
30,357 |
|
1 |
% |
$ |
2,126 |
|
$ |
4,968 |
|
|
Residential |
|
4,238 |
|
— |
% |
5,807 |
|
1 |
% |
171 |
|
730 |
| ||||
|
Total real estate mortgage |
|
33,421 |
|
1 |
% |
36,164 |
|
1 |
% |
2,297 |
|
5,698 |
| ||||
|
Real estate construction and land: |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Commercial |
|
— |
|
— |
% |
— |
|
— |
% |
— |
|
— |
| ||||
|
Residential |
|
368 |
|
— |
% |
370 |
|
— |
% |
— |
|
— |
| ||||
|
Total real estate construction and land |
|
368 |
|
— |
% |
370 |
|
— |
% |
— |
|
— |
| ||||
|
Commercial: |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Cash flow |
|
38,146 |
|
1 |
% |
39,665 |
|
1 |
% |
389 |
|
639 |
| ||||
|
Asset-based |
|
1,986 |
|
— |
% |
2,046 |
|
— |
% |
— |
|
— |
| ||||
|
Venture capital |
|
1,088 |
|
— |
% |
— |
|
— |
% |
3,548 |
|
9,554 |
| ||||
|
Equipment finance (1) |
|
52,432 |
|
8 |
% |
51,247 |
|
7 |
% |
— |
|
1,870 |
| ||||
|
Total commercial |
|
93,652 |
|
1 |
% |
92,958 |
|
1 |
% |
3,937 |
|
12,063 |
| ||||
|
Consumer |
|
214 |
|
— |
% |
926 |
|
1 |
% |
— |
|
30 |
| ||||
|
Total Non-PCI loans and leases |
|
$ |
127,655 |
|
1 |
% |
$ |
130,418 |
|
1 |
% |
$ |
6,234 |
|
$ |
17,791 |
|
(1) Includes nonaccrual leases and loans to companies involved in the oil and gas industries of $48.5 million and $45.5 million at June 30, 2016 and March 31, 2016, respectively.
The following table presents nonperforming assets as of the dates indicated:
|
|
|
June 30, |
|
March 31, |
| ||
|
Nonperforming Assets |
|
2016 |
|
2016 |
| ||
|
|
|
(Dollars in thousands) |
| ||||
|
|
|
|
|
|
| ||
|
Nonaccrual Non-PCI loans and leases |
|
$ |
127,655 |
|
$ |
130,418 |
|
|
Nonaccrual PCI Loans (1) |
|
2,025 |
|
3,241 |
| ||
|
Total nonaccrual loans and leases |
|
129,680 |
|
133,659 |
| ||
|
Non-PCI accruing loan contractually past due 90 days or more |
|
— |
|
2,538 |
| ||
|
Foreclosed assets, net |
|
16,181 |
|
18,310 |
| ||
|
Total nonperforming assets |
|
$ |
145,861 |
|
$ |
154,507 |
|
|
|
|
|
|
|
| ||
|
Nonaccrual loans and leases to loans and leases |
|
0.88 |
% |
0.92 |
% | ||
|
Nonperforming assets to loans and leases and foreclosed assets |
|
0.99 |
% |
1.06 |
% | ||
(1) Represents legacy CapitalSource borrowing relationships placed on nonaccrual status as of the acquisition date.
ABOUT PACWEST BANCORP
PacWest Bancorp (“PacWest”) is a bank holding company with $21 billion in assets with one wholly-owned banking subsidiary, Pacific Western Bank (“Pacific Western”). The Bank has 79 full-service branches located throughout the state of California and one branch in Durham, North Carolina. Pacific Western provides commercial banking services, including real estate, construction, and commercial loans, and comprehensive deposit and treasury management services to small and medium-sized businesses. Pacific Western offers additional products and services under the brands of its business groups, CapitalSource and Square 1 Bank. CapitalSource provides cash flow, asset-based, equipment and real estate loans and treasury management services to established middle market businesses on a national basis. Square 1 Bank offers a comprehensive suite of financial services focused on entrepreneurial businesses and their venture capital and private equity investors, with offices located in key innovation hubs across the United States. 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, allowance for loan and lease losses, capital management, including reducing excess capital, and effective tax rates. 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;
· loan repayments higher than expected;
· higher than anticipated delinquencies, charge-offs, and loan and lease losses;
· reduced demand for our services due to strategic or regulatory reasons;
· our inability to grow deposits or access wholesale funding sources;
· legislative or regulatory requirements or changes could negatively impact our business including an increase to capital requirements;
· the need to retain capital for strategic or regulatory reasons;
· changes in economic or competitive market conditions;
· the financial performance of the Company;
· stock price fluctuations;
· credit quality deterioration or pronounced and sustained reduction in market values or other economic factors which adversely affect our borrowers’ ability to repay loans and leases and/or require an increased provision for loan and lease losses;
· results of our DFAST submissions;
· changes in tax laws or regulations affecting our business;
· our inability to generate sufficient earnings;
· tax planning or disallowance of tax benefits by tax authorities;
· changes in tax filing jurisdictions or entity classifications; 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
|
|
|
June 30, |
|
March 31, |
|
December 31, |
| |||
|
|
|
2016 |
|
2016 |
|
2015 |
| |||
|
|
|
(Dollars in thousands, except per share data) |
| |||||||
|
ASSETS: |
|
|
|
|
|
|
| |||
|
Cash and due from banks |
|
$ |
226,471 |
|
$ |
161,977 |
|
$ |
161,020 |
|
|
Interest-earning deposits in financial institutions |
|
218,882 |
|
357,541 |
|
235,466 |
| |||
|
Total cash and cash equivalents |
|
445,353 |
|
519,518 |
|
396,486 |
| |||
|
|
|
|
|
|
|
|
| |||
|
Securities available-for-sale, at estimated fair value |
|
3,347,546 |
|
3,240,586 |
|
3,559,437 |
| |||
|
Federal Home Loan Bank stock, at cost |
|
24,214 |
|
17,250 |
|
19,710 |
| |||
|
Total investment securities |
|
3,371,760 |
|
3,257,836 |
|
3,579,147 |
| |||
|
|
|
|
|
|
|
|
| |||
|
Non-PCI loans and leases |
|
14,566,425 |
|
14,365,915 |
|
14,339,070 |
| |||
|
PCI loans |
|
136,901 |
|
176,607 |
|
189,095 |
| |||
|
Total gross loans and leases |
|
14,703,326 |
|
14,542,522 |
|
14,528,165 |
| |||
|
Deferred fees, net |
|
(61,866 |
) |
(59,005 |
) |
(49,911 |
) | |||
|
Total loans and leases, net of deferred fees |
|
14,641,460 |
|
14,483,517 |
|
14,478,254 |
| |||
|
Allowance for loan and lease losses |
|
(143,289 |
) |
(130,361 |
) |
(115,111 |
) | |||
|
Total loans and leases, net |
|
14,498,171 |
|
14,353,156 |
|
14,363,143 |
| |||
|
|
|
|
|
|
|
|
| |||
|
Equipment leased to others under operating leases |
|
204,062 |
|
205,163 |
|
197,452 |
| |||
|
Premises and equipment, net |
|
38,718 |
|
39,713 |
|
39,197 |
| |||
|
Foreclosed assets, net |
|
16,181 |
|
18,310 |
|
22,120 |
| |||
|
Deferred tax asset, net |
|
24,413 |
|
91,126 |
|
126,389 |
| |||
|
Goodwill |
|
2,175,791 |
|
2,175,791 |
|
2,176,291 |
| |||
|
Core deposit and customer relationship intangibles, net |
|
43,766 |
|
48,137 |
|
53,220 |
| |||
|
Other assets |
|
328,924 |
|
322,259 |
|
335,045 |
| |||
|
Total assets |
|
$ |
21,147,139 |
|
$ |
21,031,009 |
|
$ |
21,288,490 |
|
|
|
|
|
|
|
|
|
| |||
|
LIABILITIES: |
|
|
|
|
|
|
| |||
|
Noninterest-bearing deposits |
|
$ |
6,222,696 |
|
$ |
6,139,963 |
|
$ |
6,171,455 |
|
|
Interest-bearing deposits |
|
8,925,313 |
|
9,301,412 |
|
9,494,727 |
| |||
|
Total deposits |
|
15,148,009 |
|
15,441,375 |
|
15,666,182 |
| |||
|
Borrowings |
|
918,208 |
|
551,401 |
|
621,914 |
| |||
|
Subordinated debentures |
|
439,322 |
|
438,723 |
|
436,000 |
| |||
|
Accrued interest payable and other liabilities |
|
128,296 |
|
142,918 |
|
166,703 |
| |||
|
Total liabilities |
|
16,633,835 |
|
16,574,417 |
|
16,890,799 |
| |||
|
STOCKHOLDERS’ EQUITY (1) |
|
4,513,304 |
|
4,456,592 |
|
4,397,691 |
| |||
|
Total liabilities and stockholders’ equity |
|
$ |
21,147,139 |
|
$ |
21,031,009 |
|
$ |
21,288,490 |
|
|
|
|
|
|
|
|
|
| |||
|
Book value per share |
|
$ |
37.05 |
|
$ |
36.60 |
|
$ |
36.22 |
|
|
Tangible book value per share (2) |
|
$ |
18.83 |
|
$ |
18.33 |
|
$ |
17.86 |
|
|
Shares outstanding |
|
121,819,849 |
|
121,771,252 |
|
121,413,727 |
| |||
|
(1) Includes net unrealized gain on securities available-for-sale, net |
|
$ |
81,744 |
|
$ |
48,479 |
|
$ |
27,828 |
|
|
(2) Non-GAAP measure. |
|
|
|
|
|
|
| |||
PACWEST BANCORP AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF EARNINGS
|
|
|
Three Months Ended |
|
Six Months Ended |
| |||||||||||
|
|
|
June 30, |
|
March 31, |
|
June 30, |
|
June 30, |
| |||||||
|
|
|
2016 |
|
2016 |
|
2015 |
|
2016 |
|
2015 |
| |||||
|
|
|
(Dollars in thousands, except per share data) |
| |||||||||||||
|
Interest income: |
|
|
|
|
|
|
|
|
|
|
| |||||
|
Loans and leases |
|
$ |
224,326 |
|
$ |
236,375 |
|
$ |
203,781 |
|
$ |
460,701 |
|
405,878 |
| |
|
Investment securities |
|
22,420 |
|
22,547 |
|
14,570 |
|
44,967 |
|
26,765 |
| |||||
|
Deposits in financial institutions |
|
308 |
|
308 |
|
104 |
|
616 |
|
126 |
| |||||
|
Total interest income |
|
247,054 |
|
259,230 |
|
218,455 |
|
506,284 |
|
432,769 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Interest expense: |
|
|
|
|
|
|
|
|
|
|
| |||||
|
Deposits |
|
7,823 |
|
9,073 |
|
11,233 |
|
16,896 |
|
21,712 |
| |||||
|
Borrowings |
|
352 |
|
581 |
|
88 |
|
933 |
|
323 |
| |||||
|
Subordinated debentures |
|
5,122 |
|
4,982 |
|
4,582 |
|
10,104 |
|
9,107 |
| |||||
|
Total interest expense |
|
13,297 |
|
14,636 |
|
15,903 |
|
27,933 |
|
31,142 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Net interest income |
|
233,757 |
|
244,594 |
|
202,552 |
|
478,351 |
|
401,627 |
| |||||
|
Provision for credit losses |
|
13,903 |
|
20,140 |
|
6,529 |
|
34,043 |
|
22,963 |
| |||||
|
Net interest income after provision for credit losses |
|
219,854 |
|
224,454 |
|
196,023 |
|
444,308 |
|
378,664 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Noninterest income: |
|
|
|
|
|
|
|
|
|
|
| |||||
|
Service charges on deposit accounts |
|
3,633 |
|
3,856 |
|
2,612 |
|
7,489 |
|
5,186 |
| |||||
|
Other commissions and fees |
|
11,073 |
|
11,489 |
|
7,123 |
|
22,562 |
|
12,519 |
| |||||
|
Leased equipment income |
|
8,523 |
|
8,244 |
|
5,375 |
|
16,767 |
|
10,757 |
| |||||
|
Gain on sale of loans and leases |
|
388 |
|
245 |
|
163 |
|
633 |
|
163 |
| |||||
|
Gain (loss) on securities |
|
478 |
|
8,110 |
|
(186 |
) |
8,588 |
|
3,089 |
| |||||
|
FDIC loss sharing expense, net |
|
(6,502 |
) |
(2,415 |
) |
(5,107 |
) |
(8,917 |
) |
(9,506 |
) | |||||
|
Other income |
|
4,528 |
|
5,010 |
|
9,643 |
|
9,538 |
|
18,286 |
| |||||
|
Total noninterest income |
|
22,121 |
|
34,539 |
|
19,623 |
|
56,660 |
|
40,494 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Noninterest expense: |
|
|
|
|
|
|
|
|
|
|
| |||||
|
Compensation |
|
62,174 |
|
61,065 |
|
49,033 |
|
123,239 |
|
96,770 |
| |||||
|
Occupancy |
|
12,193 |
|
12,632 |
|
10,588 |
|
24,825 |
|
21,188 |
| |||||
|
Data processing |
|
5,644 |
|
5,904 |
|
4,402 |
|
11,548 |
|
8,710 |
| |||||
|
Other professional services |
|
3,223 |
|
3,572 |
|
3,332 |
|
6,795 |
|
6,553 |
| |||||
|
Insurance and assessments |
|
4,951 |
|
4,965 |
|
4,716 |
|
9,916 |
|
7,741 |
| |||||
|
Intangible asset amortization |
|
4,371 |
|
4,746 |
|
1,502 |
|
9,117 |
|
3,003 |
| |||||
|
Leased equipment depreciation |
|
5,286 |
|
5,024 |
|
3,103 |
|
10,310 |
|
6,206 |
| |||||
|
Foreclosed assets (income), net |
|
(3 |
) |
(561 |
) |
(2,340 |
) |
(564 |
) |
(2,004 |
) | |||||
|
Acquisition, integration and reorganization costs |
|
— |
|
200 |
|
900 |
|
200 |
|
2,900 |
| |||||
|
Other expense |
|
12,242 |
|
13,141 |
|
10,040 |
|
25,383 |
|
18,569 |
| |||||
|
Total noninterest expense |
|
110,081 |
|
110,688 |
|
85,276 |
|
220,769 |
|
169,636 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Earnings before income taxes |
|
131,894 |
|
148,305 |
|
130,370 |
|
280,199 |
|
249,522 |
| |||||
|
Income tax expense |
|
(49,726 |
) |
(57,849 |
) |
(45,287 |
) |
(107,575 |
) |
(91,360 |
) | |||||
|
Net earnings |
|
$ |
82,168 |
|
$ |
90,456 |
|
$ |
85,083 |
|
$ |
172,624 |
|
$ |
158,162 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Basic and diluted earnings per share |
|
$ |
0.68 |
|
$ |
0.74 |
|
$ |
0.83 |
|
$ |
1.42 |
|
$ |
1.54 |
|
PACWEST BANCORP AND SUBSIDIARIES
NET EARNINGS PER SHARE CALCULATIONS
|
|
|
Three Months Ended |
|
Six Months Ended |
| |||||||||||
|
|
|
June 30, |
|
March 31, |
|
June 30, |
|
June 30, |
| |||||||
|
|
|
2016 |
|
2016 |
|
2015 |
|
2016 |
|
2015 |
| |||||
|
|
|
(Dollars in thousands, except per share data) |
| |||||||||||||
|
Basic Earnings Per Share: |
|
|
|
|
|
|
|
|
|
|
| |||||
|
Net earnings |
|
$ |
82,168 |
|
$ |
90,456 |
|
$ |
85,083 |
|
$ |
172,624 |
|
$ |
158,162 |
|
|
Less: earnings allocated to unvested restricted stock (1) |
|
(863 |
) |
(1,067 |
) |
(807 |
) |
(1,933 |
) |
(1,570 |
) | |||||
|
Net earnings allocated to common shares |
|
$ |
81,305 |
|
$ |
89,389 |
|
$ |
84,276 |
|
$ |
170,691 |
|
$ |
156,592 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Weighted-average basic shares and unvested restricted stock outstanding |
|
121,799 |
|
121,598 |
|
103,030 |
|
121,698 |
|
103,033 |
| |||||
|
Less: weighted-average unvested restricted stock outstanding |
|
(1,481 |
) |
(1,392 |
) |
(1,060 |
) |
(1,436 |
) |
(1,091 |
) | |||||
|
Weighted-average basic shares outstanding |
|
120,318 |
|
120,206 |
|
101,970 |
|
120,262 |
|
101,942 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Basic earnings per share |
|
$ |
0.68 |
|
$ |
0.74 |
|
$ |
0.83 |
|
$ |
1.42 |
|
$ |
1.54 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Diluted Earnings Per Share: |
|
|
|
|
|
|
|
|
|
|
| |||||
|
Net earnings allocated to common shares |
|
$ |
81,305 |
|
$ |
89,389 |
|
$ |
84,276 |
|
$ |
170,691 |
|
$ |
156,592 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Weighted-average basic shares outstanding |
|
120,318 |
|
120,206 |
|
101,970 |
|
120,262 |
|
101,942 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Diluted earnings per share |
|
$ |
0.68 |
|
$ |
0.74 |
|
$ |
0.83 |
|
$ |
1.42 |
|
$ |
1.54 |
|
(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.
PACWEST BANCORP AND SUBSIDIARIES
AVERAGE BALANCE SHEET AND YIELD ANALYSIS
|
|
|
Three Months Ended |
| ||||||||||||||||||||||
|
|
|
June 30, 2016 |
|
March 31, 2016 |
|
June 30, 2015 |
| ||||||||||||||||||
|
|
|
|
|
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 |
|
$ |
147,270 |
|
$ |
8,484 |
|
23.17 |
% |
$ |
167,626 |
|
$ |
20,072 |
|
48.16 |
% |
$ |
228,217 |
|
$ |
7,894 |
|
13.87 |
% |
|
Non-PCI loans and leases |
|
14,321,320 |
|
215,842 |
|
6.06 |
% |
14,303,539 |
|
216,303 |
|
6.08 |
% |
11,879,799 |
|
195,887 |
|
6.61 |
% | ||||||
|
Total loans and leases |
|
14,468,590 |
|
224,326 |
|
6.24 |
% |
14,471,165 |
|
236,375 |
|
6.57 |
% |
12,108,016 |
|
203,781 |
|
6.75 |
% | ||||||
|
Investment securities (1) |
|
3,288,819 |
|
27,330 |
|
3.34 |
% |
3,460,293 |
|
27,493 |
|
3.20 |
% |
1,672,590 |
|
16,739 |
|
4.01 |
% | ||||||
|
Deposits in financial institutions |
|
245,666 |
|
308 |
|
0.50 |
% |
230,293 |
|
308 |
|
0.54 |
% |
161,683 |
|
104 |
|
0.26 |
% | ||||||
|
Total interest-earning assets |
|
18,003,075 |
|
251,964 |
|
5.63 |
% |
18,161,751 |
|
264,176 |
|
5.85 |
% |
13,942,289 |
|
220,624 |
|
6.35 |
% | ||||||
|
Other assets |
|
2,996,867 |
|
|
|
|
|
3,036,843 |
|
|
|
|
|
2,521,022 |
|
|
|
|
| ||||||
|
Total assets |
|
$ |
20,999,942 |
|
|
|
|
|
$ |
21,198,594 |
|
|
|
|
|
$ |
16,463,311 |
|
|
|
|
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
|
Liabilities and Stockholders’ Equity: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
|
Interest checking |
|
$ |
1,024,763 |
|
501 |
|
0.20 |
% |
$ |
926,256 |
|
383 |
|
0.17 |
% |
$ |
741,966 |
|
202 |
|
0.11 |
% | |||
|
Money market |
|
4,321,533 |
|
2,886 |
|
0.27 |
% |
3,848,753 |
|
2,415 |
|
0.25 |
% |
2,065,190 |
|
1,088 |
|
0.21 |
% | ||||||
|
Savings |
|
766,309 |
|
412 |
|
0.22 |
% |
753,371 |
|
444 |
|
0.24 |
% |
740,878 |
|
555 |
|
0.30 |
% | ||||||
|
Time |
|
3,086,492 |
|
4,024 |
|
0.52 |
% |
3,860,272 |
|
5,831 |
|
0.61 |
% |
5,559,903 |
|
9,388 |
|
0.68 |
% | ||||||
|
Total interest-bearing deposits |
|
9,199,097 |
|
7,823 |
|
0.34 |
% |
9,388,652 |
|
9,073 |
|
0.39 |
% |
9,107,937 |
|
11,233 |
|
0.49 |
% | ||||||
|
Borrowings |
|
300,428 |
|
352 |
|
0.47 |
% |
494,725 |
|
581 |
|
0.47 |
% |
81,164 |
|
88 |
|
0.43 |
% | ||||||
|
Subordinated debentures |
|
439,081 |
|
5,122 |
|
4.69 |
% |
436,535 |
|
4,982 |
|
4.59 |
% |
432,656 |
|
4,582 |
|
4.25 |
% | ||||||
|
Total interest-bearing liabilities |
|
9,938,606 |
|
13,297 |
|
0.54 |
% |
10,319,912 |
|
14,636 |
|
0.57 |
% |
9,621,757 |
|
15,903 |
|
0.66 |
% | ||||||
|
Noninterest-bearing demand deposits |
|
6,437,720 |
|
|
|
|
|
6,273,249 |
|
|
|
|
|
3,157,129 |
|
|
|
|
| ||||||
|
Other liabilities |
|
140,023 |
|
|
|
|
|
166,831 |
|
|
|
|
|
135,677 |
|
|
|
|
| ||||||
|
Total liabilities |
|
16,516,349 |
|
|
|
|
|
16,759,992 |
|
|
|
|
|
12,914,563 |
|
|
|
|
| ||||||
|
Stockholders’ equity |
|
4,483,593 |
|
|
|
|
|
4,438,602 |
|
|
|
|
|
3,548,748 |
|
|
|
|
| ||||||
|
Total liabilities and stockholders’ equity |
|
$ |
20,999,942 |
|
|
|
|
|
$ |
21,198,594 |
|
|
|
|
|
$ |
16,463,311 |
|
|
|
|
| |||
|
Net interest income (2) |
|
|
|
$ |
238,667 |
|
|
|
|
|
$ |
249,540 |
|
|
|
|
|
$ |
204,721 |
|
|
| |||
|
Net interest spread (2) |
|
|
|
|
|
5.09 |
% |
|
|
|
|
5.28 |
% |
|
|
|
|
5.69 |
% | ||||||
|
Net interest margin (2) |
|
|
|
|
|
5.33 |
% |
|
|
|
|
5.53 |
% |
|
|
|
|
5.89 |
% | ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
|
Total deposits (3) |
|
$ |
15,636,817 |
|
$ |
7,823 |
|
0.20 |
% |
$ |
15,661,901 |
|
$ |
9,073 |
|
0.23 |
% |
$ |
12,265,066 |
|
$ |
11,233 |
|
0.37 |
% |
|
Funding sources (4) |
|
$ |
16,376,326 |
|
$ |
13,297 |
|
0.33 |
% |
$ |
16,593,161 |
|
$ |
14,636 |
|
0.35 |
% |
$ |
12,778,886 |
|
$ |
15,903 |
|
0.50 |
% |
(1) Includes tax equivalent adjustments of $4.9 million, $4.9 million, and $2.2 million for the three months ended June 30, 2016, March 31, 2016, and June 30, 2015 related to tax exempt income on municipal securities. The federal statutory tax rate utilized was 35% for the periods.
(2) Tax equivalent.
(3) 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.
(4) 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
|
|
|
June 30, |
|
March 31, |
|
December 31, |
|
September 30, |
|
June 30, |
| |||||
|
|
|
2016 |
|
2016 |
|
2015 |
|
2015 |
|
2015 |
| |||||
|
|
|
(Dollars in thousands, except per share data) |
| |||||||||||||
|
ASSETS: |
|
|
|
|
|
|
|
|
|
|
| |||||
|
Cash and due from banks |
|
$ |
226,471 |
|
$ |
161,977 |
|
$ |
161,020 |
|
$ |
154,652 |
|
$ |
207,598 |
|
|
Interest-earning deposits in financial institutions |
|
218,882 |
|
357,541 |
|
235,466 |
|
81,642 |
|
433,033 |
| |||||
|
Total cash and cash equivalents |
|
445,353 |
|
519,518 |
|
396,486 |
|
236,294 |
|
640,631 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Securities available-for-sale |
|
3,347,546 |
|
3,240,586 |
|
3,559,437 |
|
1,809,364 |
|
1,698,158 |
| |||||
|
Federal Home Loan Bank stock |
|
24,214 |
|
17,250 |
|
19,710 |
|
17,250 |
|
17,250 |
| |||||
|
Total investment securities |
|
3,371,760 |
|
3,257,836 |
|
3,579,147 |
|
1,826,614 |
|
1,715,408 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Non-PCI loans and leases |
|
14,566,425 |
|
14,365,915 |
|
14,339,070 |
|
12,300,057 |
|
11,846,314 |
| |||||
|
PCI loans |
|
136,901 |
|
176,607 |
|
189,095 |
|
193,340 |
|
222,691 |
| |||||
|
Total gross loans and leases |
|
14,703,326 |
|
14,542,522 |
|
14,528,165 |
|
12,493,397 |
|
12,069,005 |
| |||||
|
Deferred fees, net |
|
(61,866 |
) |
(59,005 |
) |
(49,911 |
) |
(41,192 |
) |
(34,816 |
) | |||||
|
Total loans and leases, net of deferred fees |
|
14,641,460 |
|
14,483,517 |
|
14,478,254 |
|
12,452,205 |
|
12,034,189 |
| |||||
|
Allowance for loan and lease losses |
|
(143,289 |
) |
(130,361 |
) |
(115,111 |
) |
(103,271 |
) |
(99,375 |
) | |||||
|
Total loans and leases, net |
|
14,498,171 |
|
14,353,156 |
|
14,363,143 |
|
12,348,934 |
|
11,934,814 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Equipment leased to others under operating leases |
|
204,062 |
|
205,163 |
|
197,452 |
|
161,508 |
|
117,182 |
| |||||
|
Premises and equipment, net |
|
38,718 |
|
39,713 |
|
39,197 |
|
36,475 |
|
35,984 |
| |||||
|
Foreclosed assets, net |
|
16,181 |
|
18,310 |
|
22,120 |
|
33,216 |
|
31,668 |
| |||||
|
Deferred tax asset, net |
|
24,413 |
|
91,126 |
|
126,389 |
|
169,760 |
|
211,556 |
| |||||
|
Goodwill |
|
2,175,791 |
|
2,175,791 |
|
2,176,291 |
|
1,728,380 |
|
1,728,380 |
| |||||
|
Core deposit and customer relationship intangibles, net |
|
43,766 |
|
48,137 |
|
53,220 |
|
12,704 |
|
14,201 |
| |||||
|
Other assets |
|
328,924 |
|
322,259 |
|
335,045 |
|
260,220 |
|
267,196 |
| |||||
|
Total assets |
|
$ |
21,147,139 |
|
$ |
21,031,009 |
|
$ |
21,288,490 |
|
$ |
16,814,105 |
|
$ |
16,697,020 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
LIABILITIES: |
|
|
|
|
|
|
|
|
|
|
| |||||
|
Noninterest-bearing deposits |
|
$ |
6,222,696 |
|
$ |
6,139,963 |
|
$ |
6,171,455 |
|
$ |
3,508,682 |
|
$ |
3,396,688 |
|
|
Interest-bearing deposits |
|
8,925,313 |
|
9,301,412 |
|
9,494,727 |
|
8,607,081 |
|
9,185,128 |
| |||||
|
Total deposits |
|
15,148,009 |
|
15,441,375 |
|
15,666,182 |
|
12,115,763 |
|
12,581,816 |
| |||||
|
Borrowings |
|
918,208 |
|
551,401 |
|
621,914 |
|
552,497 |
|
2,751 |
| |||||
|
Subordinated debentures |
|
439,322 |
|
438,723 |
|
436,000 |
|
435,417 |
|
433,944 |
| |||||
|
Accrued interest payable and other liabilities |
|
128,296 |
|
142,918 |
|
166,703 |
|
128,724 |
|
127,019 |
| |||||
|
Total liabilities |
|
16,633,835 |
|
16,574,417 |
|
16,890,799 |
|
13,232,401 |
|
13,145,530 |
| |||||
|
STOCKHOLDERS’ EQUITY (1) |
|
4,513,304 |
|
4,456,592 |
|
4,397,691 |
|
3,581,704 |
|
3,551,490 |
| |||||
|
Total liabilities and stockholders’ equity |
|
$ |
21,147,139 |
|
$ |
21,031,009 |
|
$ |
21,288,490 |
|
$ |
16,814,105 |
|
$ |
16,697,020 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Book value per share |
|
$ |
37.05 |
|
$ |
36.60 |
|
$ |
36.22 |
|
$ |
34.76 |
|
$ |
34.46 |
|
|
Tangible book value per share (2) |
|
$ |
18.83 |
|
$ |
18.33 |
|
$ |
17.86 |
|
$ |
17.86 |
|
$ |
17.55 |
|
|
Shares outstanding |
|
121,819,849 |
|
121,771,252 |
|
121,413,727 |
|
103,053,694 |
|
103,051,989 |
| |||||
|
(1) Includes net unrealized gain on securities available-for-sale, net |
|
$ |
81,744 |
|
$ |
48,479 |
|
$ |
27,828 |
|
$ |
24,459 |
|
$ |
16,255 |
|
|
(2) Non-GAAP measure. |
|
|
|
|
|
|
|
|
|
|
| |||||
PACWEST BANCORP AND SUBSIDIARIES
FIVE QUARTER STATEMENT OF EARNINGS
|
|
|
Three Months Ended |
| |||||||||||||
|
|
|
June 30, |
|
March 31, |
|
December 31, |
|
September 30, |
|
June 30, |
| |||||
|
|
|
2016 |
|
2016 |
|
2015 |
|
2015 |
|
2015 |
| |||||
|
|
|
(Dollars in thousands, except per share data) |
| |||||||||||||
|
Interest income: |
|
|
|
|
|
|
|
|
|
|
| |||||
|
Loans and leases |
|
$ |
224,326 |
|
$ |
236,375 |
|
$ |
219,677 |
|
$ |
193,539 |
|
$ |
203,781 |
|
|
Investment securities |
|
22,420 |
|
22,547 |
|
23,648 |
|
13,955 |
|
14,570 |
| |||||
|
Deposits in financial institutions |
|
308 |
|
308 |
|
172 |
|
178 |
|
104 |
| |||||
|
Total interest income |
|
247,054 |
|
259,230 |
|
243,497 |
|
207,672 |
|
218,455 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Interest expense: |
|
|
|
|
|
|
|
|
|
|
| |||||
|
Deposits |
|
7,823 |
|
9,073 |
|
9,391 |
|
10,400 |
|
11,233 |
| |||||
|
Borrowings |
|
352 |
|
581 |
|
159 |
|
72 |
|
88 |
| |||||
|
Subordinated debentures |
|
5,122 |
|
4,982 |
|
4,748 |
|
4,680 |
|
4,582 |
| |||||
|
Total interest expense |
|
13,297 |
|
14,636 |
|
14,298 |
|
15,152 |
|
15,903 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Net interest income |
|
233,757 |
|
244,594 |
|
229,199 |
|
192,520 |
|
202,552 |
| |||||
|
Provision for credit losses |
|
13,903 |
|
20,140 |
|
13,772 |
|
8,746 |
|
6,529 |
| |||||
|
Net interest income after provision for credit losses |
|
219,854 |
|
224,454 |
|
215,427 |
|
183,774 |
|
196,023 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Noninterest income: |
|
|
|
|
|
|
|
|
|
|
| |||||
|
Service charges on deposit accounts |
|
3,633 |
|
3,856 |
|
3,901 |
|
2,601 |
|
2,612 |
| |||||
|
Other commissions and fees |
|
11,073 |
|
11,489 |
|
12,691 |
|
6,376 |
|
7,123 |
| |||||
|
Leased equipment income |
|
8,523 |
|
8,244 |
|
7,791 |
|
5,475 |
|
5,375 |
| |||||
|
Gain on sale of loans and leases |
|
388 |
|
245 |
|
183 |
|
27 |
|
163 |
| |||||
|
Gain (loss) on securities |
|
478 |
|
8,110 |
|
— |
|
655 |
|
(186 |
) | |||||
|
FDIC loss sharing expense, net |
|
(6,502 |
) |
(2,415 |
) |
(4,291 |
) |
(4,449 |
) |
(5,107 |
) | |||||
|
Other income |
|
4,528 |
|
5,010 |
|
7,783 |
|
5,073 |
|
9,643 |
| |||||
|
Total noninterest income |
|
22,121 |
|
34,539 |
|
28,058 |
|
15,758 |
|
19,623 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Noninterest expense: |
|
|
|
|
|
|
|
|
|
|
| |||||
|
Compensation |
|
62,174 |
|
61,065 |
|
58,992 |
|
48,152 |
|
49,033 |
| |||||
|
Occupancy |
|
12,193 |
|
12,632 |
|
12,194 |
|
10,762 |
|
10,588 |
| |||||
|
Data processing |
|
5,644 |
|
5,904 |
|
5,585 |
|
4,322 |
|
4,402 |
| |||||
|
Other professional services |
|
3,223 |
|
3,572 |
|
3,811 |
|
3,396 |
|
3,332 |
| |||||
|
Insurance and assessments |
|
4,951 |
|
4,965 |
|
5,450 |
|
3,805 |
|
4,716 |
| |||||
|
Intangible asset amortization |
|
4,371 |
|
4,746 |
|
4,910 |
|
1,497 |
|
1,502 |
| |||||
|
Leased equipment depreciation |
|
5,286 |
|
5,024 |
|
4,235 |
|
3,162 |
|
3,103 |
| |||||
|
Foreclosed assets (income), net |
|
(3 |
) |
(561 |
) |
(3,185 |
) |
4,521 |
|
(2,340 |
) | |||||
|
Acquisition, integration and reorganization costs |
|
— |
|
200 |
|
17,600 |
|
747 |
|
900 |
| |||||
|
Other expense |
|
12,242 |
|
13,141 |
|
12,672 |
|
9,775 |
|
10,040 |
| |||||
|
Total noninterest expense |
|
110,081 |
|
110,688 |
|
122,264 |
|
90,139 |
|
85,276 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Earnings before income taxes |
|
131,894 |
|
148,305 |
|
121,221 |
|
109,393 |
|
130,370 |
| |||||
|
Income tax expense |
|
(49,726 |
) |
(57,849 |
) |
(49,380 |
) |
(39,777 |
) |
(45,287 |
) | |||||
|
Net earnings |
|
$ |
82,168 |
|
$ |
90,456 |
|
$ |
71,841 |
|
$ |
69,616 |
|
$ |
85,083 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Basic and diluted earnings per share |
|
$ |
0.68 |
|
$ |
0.74 |
|
$ |
0.60 |
|
$ |
0.68 |
|
$ |
0.83 |
|
PACWEST BANCORP AND SUBSIDIARIES
FIVE QUARTER SELECTED FINANCIAL DATA
|
|
|
At or For the Three Months Ended |
| |||||||||||||
|
|
|
June 30, |
|
March 31, |
|
December 31, |
|
September 30, |
|
June 30, |
| |||||
|
|
|
2016 |
|
2016 |
|
2015 |
|
2015 |
|
2015 |
| |||||
|
|
|
(Dollars in thousands) |
| |||||||||||||
|
Performance Ratios: |
|
|
|
|
|
|
|
|
|
|
| |||||
|
Return on average assets (1) |
|
1.57 |
% |
1.72 |
% |
1.37 |
% |
1.65 |
% |
2.07 |
% | |||||
|
Return on average equity (1) |
|
7.37 |
% |
8.20 |
% |
6.56 |
% |
7.73 |
% |
9.62 |
% | |||||
|
Return on average tangible equity (1)(2) |
|
14.61 |
% |
16.45 |
% |
13.14 |
% |
15.09 |
% |
18.90 |
% | |||||
|
Yield on average loans and leases |
|
6.24 |
% |
6.57 |
% |
6.21 |
% |
6.34 |
% |
6.75 |
% | |||||
|
Yield on average interest-earning assets (3) |
|
5.63 |
% |
5.85 |
% |
5.54 |
% |
5.88 |
% |
6.35 |
% | |||||
|
Cost of average total deposits |
|
0.20 |
% |
0.23 |
% |
0.24 |
% |
0.33 |
% |
0.37 |
% | |||||
|
Cost of average time deposits |
|
0.52 |
% |
0.61 |
% |
0.63 |
% |
0.66 |
% |
0.68 |
% | |||||
|
Cost of average interest-bearing liabilities |
|
0.54 |
% |
0.57 |
% |
0.55 |
% |
0.63 |
% |
0.66 |
% | |||||
|
Cost of average funding sources |
|
0.33 |
% |
0.35 |
% |
0.35 |
% |
0.46 |
% |
0.50 |
% | |||||
|
Net interest rate spread (3) |
|
5.09 |
% |
5.28 |
% |
4.99 |
% |
5.25 |
% |
5.69 |
% | |||||
|
Net interest margin (3) |
|
5.33 |
% |
5.53 |
% |
5.22 |
% |
5.46 |
% |
5.89 |
% | |||||
|
Efficiency ratio |
|
40.6 |
% |
38.5 |
% |
39.3 |
% |
39.6 |
% |
38.0 |
% | |||||
|
Core net interest margin (2)(3) |
|
5.11 |
% |
5.10 |
% |
5.10 |
% |
5.19 |
% |
5.33 |
% | |||||
|
Noninterest expense as a percentage of average assets (1) |
|
2.11 |
% |
2.10 |
% |
2.33 |
% |
2.14 |
% |
2.08 |
% | |||||
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Average Balances: |
|
|
|
|
|
|
|
|
|
|
| |||||
|
Loans and leases |
|
$ |
14,468,590 |
|
$ |
14,471,165 |
|
$ |
14,031,102 |
|
$ |
12,112,881 |
|
$ |
12,108,016 |
|
|
Interest-earning assets |
|
18,003,075 |
|
18,161,751 |
|
17,777,534 |
|
14,198,482 |
|
13,942,289 |
| |||||
|
Total assets |
|
20,999,942 |
|
21,198,594 |
|
20,825,248 |
|
16,690,177 |
|
16,463,311 |
| |||||
|
Noninterest-bearing deposits |
|
6,437,720 |
|
6,273,249 |
|
6,043,900 |
|
3,486,780 |
|
3,157,129 |
| |||||
|
Interest-bearing deposits |
|
9,199,097 |
|
9,388,652 |
|
9,633,393 |
|
8,993,681 |
|
9,107,937 |
| |||||
|
Total deposits |
|
15,636,817 |
|
15,661,901 |
|
15,677,293 |
|
12,480,461 |
|
12,265,066 |
| |||||
|
Borrowings and subordinated debentures |
|
739,509 |
|
931,260 |
|
641,529 |
|
504,591 |
|
513,820 |
| |||||
|
Interest-bearing liabilities |
|
9,938,606 |
|
10,319,912 |
|
10,274,922 |
|
9,498,272 |
|
9,621,757 |
| |||||
|
Funding sources |
|
16,376,326 |
|
16,593,161 |
|
16,318,822 |
|
12,985,052 |
|
12,778,886 |
| |||||
|
Stockholders’ equity |
|
4,483,593 |
|
4,438,602 |
|
4,346,162 |
|
3,572,765 |
|
3,548,748 |
| |||||
(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 |
| |||||||||||||
|
|
|
June 30, |
|
March 31, |
|
December 31, |
|
September 30, |
|
June 30, |
| |||||
|
|
|
2016 |
|
2016 |
|
2015 |
|
2015 |
|
2015 |
| |||||
|
|
|
(Dollars in thousands) |
| |||||||||||||
|
Non-PCI Credit Quality: |
|
|
|
|
|
|
|
|
|
|
| |||||
|
Allowance for credit losses to loans and leases |
|
1.03 |
% |
0.96 |
% |
0.85 |
% |
0.82 |
% |
0.78 |
% | |||||
|
Allowance for credit losses to nonaccrual loans and leases |
|
118 |
% |
106 |
% |
95 |
% |
94 |
% |
71 |
% | |||||
|
Nonaccrual loans and leases to loans and leases |
|
0.88 |
% |
0.91 |
% |
0.90 |
% |
0.87 |
% |
1.11 |
% | |||||
|
Nonperforming assets to loans and leases and foreclosed assets |
|
0.99 |
% |
1.05 |
% |
1.06 |
% |
1.14 |
% |
1.37 |
% | |||||
|
Nonperforming assets to total assets |
|
0.68 |
% |
0.72 |
% |
0.71 |
% |
0.84 |
% |
0.98 |
% | |||||
|
Trailing twelve month net charge-offs to average loans and leases |
|
0.04 |
% |
0.03 |
% |
0.06 |
% |
0.04 |
% |
0.06 |
% | |||||
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
PacWest Bancorp Consolidated Capital: |
|
|
|
|
|
|
|
|
|
|
| |||||
|
Tier 1 leverage ratio (1) |
|
11.92 |
% |
11.51 |
% |
11.67 |
% |
12.04 |
% |
11.96 |
% | |||||
|
Common equity tier 1 capital ratio (1) |
|
12.75 |
% |
12.63 |
% |
12.58 |
% |
12.74 |
% |
12.87 |
% | |||||
|
Tier 1 capital ratio (1) |
|
12.75 |
% |
12.63 |
% |
12.60 |
% |
12.74 |
% |
12.87 |
% | |||||
|
Total capital ratio (1) |
|
16.11 |
% |
15.96 |
% |
15.65 |
% |
16.32 |
% |
16.53 |
% | |||||
|
Tangible common equity ratio (2) |
|
12.12 |
% |
11.87 |
% |
11.38 |
% |
12.21 |
% |
12.10 |
% | |||||
|
Risk-weighted assets (1) |
|
$ |
17,491,865 |
|
$ |
17,226,658 |
|
$ |
17,170,292 |
|
$ |
14,038,839 |
|
$ |
13,569,369 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Pacific Western Bank Capital: |
|
|
|
|
|
|
|
|
|
|
| |||||
|
Tier 1 leverage ratio (1) |
|
11.38 |
% |
11.10 |
% |
11.40 |
% |
11.56 |
% |
11.65 |
% | |||||
|
Common equity tier 1 capital ratio (1) |
|
12.15 |
% |
12.18 |
% |
12.03 |
% |
12.25 |
% |
12.55 |
% | |||||
|
Tier 1 capital ratio (1) |
|
12.15 |
% |
12.18 |
% |
12.03 |
% |
12.25 |
% |
12.55 |
% | |||||
|
Total capital ratio (1) |
|
13.08 |
% |
13.05 |
% |
12.80 |
% |
13.05 |
% |
13.35 |
% | |||||
|
Tangible common equity ratio (2) |
|
11.51 |
% |
11.27 |
% |
10.80 |
% |
11.53 |
% |
11.46 |
% | |||||
(1) Capital information for June 30, 2016 is preliminary.
(2) Non-GAAP measure.
GAAP TO NON-GAAP RECONCILIATION
This press release contains certain non-GAAP financial disclosures for return on average tangible equity, tangible common equity amounts and ratios, tangible book value per share, core net interest margin, and core loan and lease yield. 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. We provide non-GAAP measures for 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.
Please refer to the following tables for a presentation of performance ratios in accordance with GAAP and a reconciliation of the GAAP financial measures to the non-GAAP financial measures.
PACWEST BANCORP AND SUBSIDIARIES
GAAP TO NON-GAAP RECONCILIATION
|
|
|
Three Months Ended |
|
Six Months Ended |
| |||||||||||
|
|
|
June 30, |
|
March 31, |
|
June 30, |
|
June 30, |
| |||||||
|
Return on Average Tangible Equity |
|
2016 |
|
2016 |
|
2015 |
|
2016 |
|
2015 |
| |||||
|
|
|
(Dollars in thousands) |
| |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Net earnings |
|
$ |
82,168 |
|
$ |
90,456 |
|
$ |
85,083 |
|
$ |
172,624 |
|
$ |
158,162 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Average stockholders’ equity |
|
$ |
4,483,593 |
|
$ |
4,438,602 |
|
$ |
3,548,748 |
|
$ |
4,461,097 |
|
$ |
3,541,088 |
|
|
Less: Average intangible assets |
|
2,222,007 |
|
2,227,520 |
|
1,743,340 |
|
2,224,764 |
|
1,740,407 |
| |||||
|
Average tangible common equity |
|
$ |
2,261,586 |
|
$ |
2,211,082 |
|
$ |
1,805,408 |
|
$ |
2,236,333 |
|
$ |
1,800,681 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Return on average equity (1) |
|
7.37 |
% |
8.20 |
% |
9.62 |
% |
7.78 |
% |
9.01 |
% | |||||
|
Return on average tangible equity (2) |
|
14.61 |
% |
16.45 |
% |
18.90 |
% |
15.52 |
% |
17.71 |
% | |||||
(1) Annualized net earnings divided by average stockholders’ equity.
(2) Annualized net earnings divided by average tangible common equity.
PACWEST BANCORP AND SUBSIDIARIES
GAAP TO NON-GAAP RECONCILIATION
|
|
|
June 30, |
|
March 31, |
|
December 31, |
|
September 30, |
|
June 30, |
| |||||
|
Tangible Common Equity Ratio |
|
2016 |
|
2016 |
|
2015 |
|
2015 |
|
2015 |
| |||||
|
|
|
(Dollars in thousands) |
| |||||||||||||
|
PacWest Bancorp Consolidated: |
|
|
|
|
|
|
|
|
|
|
| |||||
|
Stockholders’ equity |
|
$ |
4,513,304 |
|
$ |
4,456,592 |
|
$ |
4,397,691 |
|
$ |
3,581,704 |
|
$ |
3,551,490 |
|
|
Less: Intangible assets |
|
2,219,557 |
|
2,223,928 |
|
2,229,511 |
|
1,741,084 |
|
1,742,581 |
| |||||
|
Tangible common equity |
|
$ |
2,293,747 |
|
$ |
2,232,664 |
|
$ |
2,168,180 |
|
$ |
1,840,620 |
|
$ |
1,808,909 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Total assets |
|
$ |
21,147,139 |
|
$ |
21,031,009 |
|
$ |
21,288,490 |
|
$ |
16,814,105 |
|
$ |
16,697,020 |
|
|
Less: Intangible assets |
|
2,219,557 |
|
2,223,928 |
|
2,229,511 |
|
1,741,084 |
|
1,742,581 |
| |||||
|
Tangible assets |
|
$ |
18,927,582 |
|
$ |
18,807,081 |
|
$ |
19,058,979 |
|
$ |
15,073,021 |
|
$ |
14,954,439 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Equity to assets ratio |
|
21.34 |
% |
21.19 |
% |
20.66 |
% |
21.30 |
% |
21.27 |
% | |||||
|
Tangible common equity ratio (1) |
|
12.12 |
% |
11.87 |
% |
11.38 |
% |
12.21 |
% |
12.10 |
% | |||||
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Book value per share |
|
$ |
37.05 |
|
$ |
36.60 |
|
$ |
36.22 |
|
$ |
34.76 |
|
$ |
34.46 |
|
|
Tangible book value per share (2) |
|
$ |
18.83 |
|
$ |
18.33 |
|
$ |
17.86 |
|
$ |
17.86 |
|
$ |
17.55 |
|
|
Shares outstanding |
|
121,819,849 |
|
121,771,252 |
|
121,413,727 |
|
103,053,694 |
|
103,051,989 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Pacific Western Bank: |
|
|
|
|
|
|
|
|
|
|
| |||||
|
Stockholders’ equity |
|
$ |
4,390,928 |
|
$ |
4,331,841 |
|
$ |
4,276,279 |
|
$ |
3,466,817 |
|
$ |
3,440,715 |
|
|
Less: Intangible assets |
|
2,219,557 |
|
2,223,928 |
|
2,229,511 |
|
1,741,084 |
|
1,742,581 |
| |||||
|
Tangible common equity |
|
$ |
2,171,371 |
|
$ |
2,107,913 |
|
$ |
2,046,768 |
|
$ |
1,725,733 |
|
$ |
1,698,134 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Total assets |
|
$ |
21,084,950 |
|
$ |
20,928,105 |
|
$ |
21,180,689 |
|
$ |
16,707,072 |
|
$ |
16,555,610 |
|
|
Less: Intangible assets |
|
2,219,557 |
|
2,223,928 |
|
2,229,511 |
|
1,741,084 |
|
1,742,581 |
| |||||
|
Tangible assets |
|
$ |
18,865,393 |
|
$ |
18,704,177 |
|
$ |
18,951,178 |
|
$ |
14,965,988 |
|
$ |
14,813,029 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Equity to assets ratio |
|
20.82 |
% |
20.70 |
% |
20.19 |
% |
20.75 |
% |
20.78 |
% | |||||
|
Tangible common equity ratio |
|
11.51 |
% |
11.27 |
% |
10.80 |
% |
11.53 |
% |
11.46 |
% | |||||
(1) Tangible common equity divided by tangible assets.
(2) Tangible common equity divided by shares outstanding.