Exhibit 99.1
PRESS RELEASE
PacWest Bancorp
(NASDAQ: PACW)
Contact: Donald D. Destino
Executive Vice President
Investor Relations and Corporate Development
Phone: 310-887-8521
|
FOR IMMEDIATE RELEASE |
October 18, 2016 |
PACWEST BANCORP ANNOUNCES RESULTS
FOR THE THIRD QUARTER 2016 AND
$400 MILLION STOCK REPURCHASE AUTHORIZATION
Highlights
· Net Earnings of $93.9 Million, or $0.77 Per Diluted Share
· New Loan and Lease Production of $1.1 Billion for the Quarter; $101 Million of Net Loan Growth
· Core Deposit Increase of $599 Million during the Quarter Representing 77% of Total Deposits
· Tax Equivalent Net Interest Margin of 5.26%; Core Tax Equivalent Net Interest Margin of 5.08%
Los Angeles, California . . . PacWest Bancorp (Nasdaq: PACW) today announced net earnings for the third quarter of 2016 of $93.9 million, or $0.77 per diluted share, compared to net earnings for the second quarter of 2016 of $82.2 million, or $0.68 per diluted share. The increase in net earnings was due to the elimination of FDIC loss sharing expense, a lower provision for credit losses and a lower effective tax rate as compared to the second quarter of 2016.
Matt Wagner, President and CEO, commented, “We are very pleased with our strong third quarter results which produced a return on assets of 1.77% and a return on tangible equity of 16.15%. While the current quarter benefited from lower credit costs and a lower effective tax rate, we continue to demonstrate our sustained earning power.”
Patrick Rusnak, Executive Vice President and CFO stated, “Our third quarter core tax equivalent NIM, which excludes accelerated accretion, decreased three basis points to 5.08% and our NIM excluding all purchase accounting items decreased two basis points to 4.98%. We are pleased with how our NIM has held up during this sustained period of low interest rates.”
1
Mr. Rusnak continued, “Third quarter loan growth fell below expectations due largely to dramatically higher prepayments in our healthcare real estate portfolio, which totaled approximately $200 million for the quarter, resulting from both refinancings and property sales. The solid originations from other lending groups, in particular Venture Banking and Construction, give us confidence that future-period loan growth will return to more normalized levels. Although nonaccrual loans increased due to the migration of a single, classified loan to nonaccrual status, total classified loans and leases decreased on a linked quarter basis as several previously classified loans paid off in full.”
Mr. Wagner continued, “Over the past few years we have significantly strengthened our company through execution on a strategy focused on profitable growth and prudent risk management. This performance, our initial DFAST stress test submission and robust capital levels have allowed the Board to authorize a stock repurchase program which provides another tool to actively manage capital levels and facilitate improved shareholder returns.”
FINANCIAL HIGHLIGHTS
|
|
|
At or For the Three Months Ended |
|
At or For the Nine Months Ended |
|
|
|
|
September 30, |
|
June 30, |
|
|
|
September 30, |
|
|
|
|
|
|
2016 |
|
2016 |
|
Change |
|
2016 |
|
2015 |
|
Change |
|
|
|
|
(Dollars in thousands, except per share data) |
|
|
Financial Highlights |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Earnings |
|
$ |
93,895 |
|
$ |
82,168 |
|
$ |
11,727 |
|
$ |
266,519 |
|
$ |
227,778 |
|
$ |
38,741 |
|
|
Diluted Earnings Per Share |
|
$ |
0.77 |
|
$ |
0.68 |
|
$ |
0.09 |
|
$ |
2.19 |
|
$ |
2.21 |
|
$ |
(0.02 |
) |
|
Return on Average Assets |
|
1.77 |
% |
1.57 |
% |
0.20 |
|
1.69 |
% |
1.85 |
% |
(0.16 |
) |
|
Return on Average Tangible Equity (1) |
|
16.15 |
% |
14.61 |
% |
1.54 |
|
15.74 |
% |
16.82 |
% |
(1.08 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Interest Margin (tax equivalent) |
|
5.26 |
% |
5.33 |
% |
(0.07 |
) |
5.37 |
% |
5.76 |
% |
(0.39 |
) |
|
Core Net Interest Margin (tax equivalent) (1) |
|
5.08 |
% |
5.11 |
% |
(0.03 |
) |
5.09 |
% |
5.31 |
% |
(0.22 |
) |
|
Efficiency Ratio |
|
40.1 |
% |
40.6 |
% |
(0.5 |
) |
39.7 |
% |
38.1 |
% |
1.6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Assets |
|
$ |
21,315,291 |
|
$ |
21,147,139 |
|
$ |
168,152 |
|
$ |
21,315,291 |
|
$ |
16,814,105 |
|
$ |
4,501,186 |
|
|
Loans and Leases, Net of Deferred Fees |
|
$ |
14,742,846 |
|
$ |
14,641,460 |
|
$ |
101,386 |
|
$ |
14,742,846 |
|
$ |
12,452,205 |
|
$ |
2,290,641 |
|
|
Noninterest-Bearing Deposits |
|
$ |
6,521,946 |
|
$ |
6,222,696 |
|
$ |
299,250 |
|
$ |
6,521,946 |
|
$ |
3,508,682 |
|
$ |
3,013,264 |
|
|
Core Deposits |
|
$ |
12,010,639 |
|
$ |
11,411,992 |
|
$ |
598,647 |
|
$ |
12,010,639 |
|
$ |
6,815,252 |
|
$ |
5,195,387 |
|
|
Total Deposits |
|
$ |
15,645,668 |
|
$ |
15,148,009 |
|
$ |
497,659 |
|
$ |
15,645,668 |
|
$ |
12,115,763 |
|
$ |
3,529,905 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest-Bearing Deposits as Percentage of Total Deposits |
|
42 |
% |
41 |
% |
1 |
|
42 |
% |
29 |
% |
13 |
|
|
Core Deposits as Percentage of Total Deposits |
|
77 |
% |
75 |
% |
2 |
|
77 |
% |
56 |
% |
21 |
|
|
Tangible Common Equity Ratio (1) |
|
12.19 |
% |
12.12 |
% |
0.07 |
|
12.19 |
% |
12.21 |
% |
(0.02 |
) |
|
Tangible Book Value Per Share (1) |
|
$ |
19.12 |
|
$ |
18.83 |
|
$ |
0.29 |
|
$ |
19.12 |
|
$ |
17.86 |
|
$ |
1.26 |
|
(1) Non-GAAP measure.
2
INCOME STATEMENT HIGHLIGHTS
Net Interest Income
Net interest income increased by $0.9 million to $234.6 million in the third quarter of 2016 compared to $233.8 million in the second quarter of 2016 due to the combination of higher average loan and lease balances, higher nonaccrual interest recoveries and one additional day in the period offset by lower discount accretion on acquired loans and a lower loan and lease yield. Total accretion on acquired loans was $14.2 million in the third quarter of 2016 (39 basis points on the loan and lease yield) compared to $16.2 million in the second quarter of 2016 (45 basis points on the loan and lease yield). The loan and lease yield for the third quarter of 2016 was 6.17% compared to 6.24% for the second quarter of 2016. The decrease in the loan and lease yield was due to the lower accretion on acquired loans and a lower yield on new production relative to the current portfolio yield. Excluding accelerated accretion, the core loan and lease yield was 5.94% in the third quarter compared to 5.97% in the second quarter.
The tax equivalent NIM for the third quarter of 2016 was 5.26% compared to 5.33% for the second quarter of 2016. The decrease in the NIM was mostly due to lower accretion on acquired loans. Such accretion contributed 31 basis points to the NIM in the third quarter of 2016 and 36 basis points to the NIM in the second quarter of 2016. Excluding accelerated accretion, the core tax equivalent NIM was 5.08% for the third quarter compared to 5.11% for the second quarter.
Included in net interest income for the third quarter of 2016 was $3.0 million of interest resulting from the payoff in full of a nonperforming loan. This recovery contributed seven basis points to the third quarter 2016 NIM and eight basis points of loan and lease yield for the third quarter of 2016.
The cost of total deposits decreased to 0.19% in the third quarter from 0.20% in the second quarter due to 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:
|
|
|
Three Months Ended |
|
Three Months Ended |
|
|
|
|
September 30, 2016 |
|
June 30, 2016 |
|
|
|
|
|
|
Loan and |
|
|
|
Loan and |
|
|
|
|
NIM |
|
Lease Yield |
|
NIM |
|
Lease Yield |
|
|
Reported |
|
5.26 |
% |
6.17 |
% |
5.33 |
% |
6.24 |
% |
|
Less: Accelerated accretion of acquisition discounts from early payoffs of acquired loans |
|
(0.18 |
)% |
(0.23 |
)% |
(0.22 |
)% |
(0.27 |
)% |
|
Core |
|
5.08 |
% |
5.94 |
% |
5.11 |
% |
5.97 |
% |
3
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:
|
|
|
Three Months Ended |
|
Three Months Ended |
|
|
|
|
September 30, 2016 |
|
June 30, 2016 |
|
|
|
|
|
|
Impact on |
|
|
|
Impact on |
|
|
|
|
Amount |
|
NIM |
|
Amount |
|
NIM |
|
|
|
|
(Dollars in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income/NIM |
|
$ |
239,473 |
|
5.26 |
% |
$ |
238,667 |
|
5.33 |
% |
|
Less: Accelerated accretion of acquisition discounts from early payoffs of acquired loans |
|
(8,226 |
) |
(0.18 |
)% |
(9,780 |
) |
(0.22 |
)% |
|
Remaining accretion of Non-PCI loan acquisition discounts |
|
(5,997 |
) |
(0.13 |
)% |
(6,407 |
) |
(0.14 |
)% |
|
Total accretion of loan acquisition discounts |
|
(14,223 |
) |
(0.31 |
)% |
(16,187 |
) |
(0.36 |
)% |
|
Amortization of TruPS discount |
|
1,391 |
|
0.03 |
% |
1,393 |
|
0.03 |
% |
|
Accretion of time deposits premium |
|
(121 |
) |
0.00 |
% |
(172 |
) |
0.00 |
% |
|
|
|
(12,953 |
) |
(0.28 |
)% |
(14,966 |
) |
(0.33 |
)% |
|
Net interest income/NIM - excluding purchase accounting |
|
$ |
226,520 |
|
4.98 |
% |
$ |
223,701 |
|
5.00 |
% |
Noninterest Income
Noninterest income increased by $4.8 million to $26.9 million for the third quarter of 2016 compared to $22.1 million for the second quarter of 2016 due mostly to a $6.5 million decrease in FDIC loss sharing expense and a $1.5 million increase in other commissions and fees offset by decreases in dividends and gains on equity investments and foreign currency translation net gains. The lower FDIC loss sharing expense was due to the early termination of all FDIC loss share agreements for which a $6.0 million pre-tax charge was recognized in the second quarter. Other commissions and fees increased due to higher prepayment and other loan-related fees. These items were offset by lower dividends and gains on equity investments of $1.8 million and lower foreign currency translation net gains of $0.5 million.
The following table presents details of noninterest income for the periods indicated:
|
|
|
Three Months Ended |
|
|
|
|
September 30, |
|
June 30, |
|
Increase |
|
|
Noninterest Income |
|
2016 |
|
2016 |
|
(Decrease) |
|
|
|
|
(In thousands) |
|
|
|
|
|
|
|
|
|
|
|
Service charges on deposit accounts |
|
$ |
3,488 |
|
$ |
3,633 |
|
$ |
(145 |
) |
|
Other commissions and fees |
|
12,528 |
|
11,073 |
|
1,455 |
|
|
Leased equipment income |
|
8,538 |
|
8,523 |
|
15 |
|
|
Gain on sale of loans and leases |
|
157 |
|
388 |
|
(231 |
) |
|
Gain on securities |
|
382 |
|
478 |
|
(96 |
) |
|
FDIC loss sharing expense, net |
|
— |
|
(6,502 |
) |
6,502 |
|
|
Other income: |
|
|
|
|
|
|
|
|
Dividends and realized gains on equity investments |
|
377 |
|
2,185 |
|
(1,808 |
) |
|
Foreign currency translation net (losses) gains |
|
(224 |
) |
324 |
|
(548 |
) |
|
Other |
|
1,674 |
|
2,019 |
|
(345 |
) |
|
Total noninterest income |
|
$ |
26,920 |
|
$ |
22,121 |
|
$ |
4,799 |
|
4
Noninterest Expense
Noninterest expense increased by $0.6 million to $110.7 million for the third quarter of 2016 compared to $110.1 million for the second quarter of 2016. The expense category with the highest increase was other professional services, which increased $1.2 million primarily due to higher legal expense.
The following table presents details of noninterest expense for the periods indicated:
|
|
|
Three Months Ended |
|
|
|
|
September 30, |
|
June 30, |
|
Increase |
|
|
Noninterest Expense |
|
2016 |
|
2016 |
|
(Decrease) |
|
|
|
|
(In thousands) |
|
|
|
|
|
|
|
|
|
|
|
Compensation |
|
$ |
62,661 |
|
$ |
62,174 |
|
$ |
487 |
|
|
Occupancy |
|
12,010 |
|
12,193 |
|
(183 |
) |
|
Data processing |
|
6,234 |
|
5,644 |
|
590 |
|
|
Other professional services |
|
4,625 |
|
3,401 |
|
1,224 |
|
|
Insurance and assessments |
|
4,324 |
|
4,951 |
|
(627 |
) |
|
Intangible asset amortization |
|
4,224 |
|
4,371 |
|
(147 |
) |
|
Leased equipment depreciation |
|
5,298 |
|
5,286 |
|
12 |
|
|
Foreclosed assets income, net |
|
(248 |
) |
(3 |
) |
(245 |
) |
|
Other expense: |
|
|
|
|
|
|
|
|
Loan expense |
|
1,931 |
|
2,145 |
|
(214 |
) |
|
Other |
|
9,651 |
|
9,919 |
|
(268 |
) |
|
Total noninterest expense |
|
$ |
110,710 |
|
$ |
110,081 |
|
$ |
629 |
|
Income Taxes
The overall effective income tax rate was 34.1% in the third quarter of 2016 and 37.7% in the second quarter of 2016. The effective rate for the third quarter was lower due to certain discrete items associated with completion of the 2015 tax returns. The expected effective tax rate for the full year 2016 is approximately 37.5%.
BALANCE SHEET HIGHLIGHTS
Loans and Leases
Total loans and leases increased by $101.4 million in the third quarter to $14.7 billion at September 30, 2016. The net increase was driven by third quarter originations and purchases of $1.1 billion, offset partially by principal repayments of $932.9 million.
5
The following table presents a roll forward of the loan and lease portfolio for the periods indicated:
|
|
|
Three Months Ended |
|
|
|
|
September 30, |
|
June 30, |
|
|
Loan and Lease Roll Forward (1) |
|
2016 |
|
2016 |
|
|
|
|
(Dollars in thousands) |
|
|
|
|
|
|
|
|
|
Beginning balance |
|
$ |
14,641,460 |
|
$ |
14,483,517 |
|
|
New production |
|
1,071,943 |
|
931,423 |
|
|
Existing loans and leases: |
|
|
|
|
|
|
Principal repayments, net (2) |
|
(932,863 |
) |
(720,003 |
) |
|
Loan and lease sales |
|
(27,239 |
) |
(51,597 |
) |
|
Charge-offs |
|
(10,455 |
) |
(1,880 |
) |
|
Ending balance |
|
$ |
14,742,846 |
|
$ |
14,641,460 |
|
|
|
|
|
|
|
|
|
Weighted average rate on new production |
|
5.11 |
% |
4.82 |
% |
(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:
|
|
|
September 30, |
|
June 30, |
|
March 31, |
|
September 30, |
|
|
Loan and Lease Portfolio |
|
2016 |
|
2016 |
|
2016 |
|
2015 |
|
|
|
|
(In thousands) |
|
|
Real estate mortgage: |
|
|
|
|
|
|
|
|
|
|
Commercial |
|
$ |
4,327,565 |
|
$ |
4,519,209 |
|
$ |
4,640,419 |
|
$ |
4,512,489 |
|
|
Residential |
|
1,242,253 |
|
1,164,784 |
|
1,149,998 |
|
1,177,302 |
|
|
Total real estate mortgage |
|
5,569,818 |
|
5,683,993 |
|
5,790,417 |
|
5,689,791 |
|
|
Real estate construction and land: |
|
|
|
|
|
|
|
|
|
|
Commercial |
|
510,831 |
|
417,144 |
|
308,192 |
|
229,904 |
|
|
Residential |
|
323,104 |
|
281,788 |
|
269,965 |
|
145,262 |
|
|
Total real estate construction and land |
|
833,935 |
|
698,932 |
|
578,157 |
|
375,166 |
|
|
Total real estate loans |
|
6,403,753 |
|
6,382,925 |
|
6,368,574 |
|
6,064,957 |
|
|
Commercial: |
|
|
|
|
|
|
|
|
|
|
Cash flow |
|
3,071,606 |
|
3,048,439 |
|
3,173,424 |
|
2,980,650 |
|
|
Asset-based |
|
2,573,437 |
|
2,683,913 |
|
2,589,598 |
|
2,381,706 |
|
|
Venture capital |
|
1,766,510 |
|
1,666,352 |
|
1,507,788 |
|
— |
|
|
Equipment finance |
|
670,783 |
|
646,940 |
|
733,228 |
|
894,777 |
|
|
Total commercial |
|
8,082,336 |
|
8,045,644 |
|
8,004,038 |
|
6,257,133 |
|
|
Consumer |
|
256,757 |
|
212,891 |
|
110,905 |
|
130,115 |
|
|
Total loans and leases, net of deferred fees |
|
$ |
14,742,846 |
|
$ |
14,641,460 |
|
$ |
14,483,517 |
|
$ |
12,452,205 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total unfunded loan commitments |
|
$ |
4,156,147 |
|
$ |
3,888,686 |
|
$ |
3,812,554 |
|
$ |
2,022,046 |
|
Loan growth in the third quarter came primarily from the construction, venture capital and consumer portfolios. These same portfolios also accounted for most of the growth in our unfunded commitments during the quarter.
6
Deposits and Client Investment Funds
The following table presents the composition of our deposit portfolio as of the dates indicated:
|
|
|
September 30, |
|
June 30, |
|
March 31, |
|
September 30, |
|
|
Deposit Category |
|
2016 |
|
2016 |
|
2016 |
|
2015 |
|
|
|
|
(Dollars in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest-bearing demand deposits |
|
$ |
6,521,946 |
|
$ |
6,222,696 |
|
$ |
6,139,963 |
|
$ |
3,508,682 |
|
|
Interest checking deposits |
|
1,184,350 |
|
1,035,395 |
|
921,189 |
|
693,632 |
|
|
Money market deposits |
|
3,532,050 |
|
3,392,811 |
|
3,144,843 |
|
1,860,983 |
|
|
Savings deposits |
|
772,293 |
|
761,090 |
|
764,323 |
|
751,955 |
|
|
Total core deposits |
|
12,010,639 |
|
11,411,992 |
|
10,970,318 |
|
6,815,252 |
|
|
Brokered non-maturity deposits |
|
1,082,114 |
|
972,820 |
|
985,784 |
|
713,215 |
|
|
Total non-maturity deposits |
|
13,092,753 |
|
12,384,812 |
|
11,956,102 |
|
7,528,467 |
|
|
Time deposits under $100,000 |
|
1,180,428 |
|
1,114,074 |
|
1,357,598 |
|
1,951,938 |
|
|
Time deposits of $100,000 and over |
|
1,372,487 |
|
1,649,123 |
|
2,127,675 |
|
2,635,358 |
|
|
Total time deposits |
|
2,552,915 |
|
2,763,197 |
|
3,485,273 |
|
4,587,296 |
|
|
Total deposits |
|
$ |
15,645,668 |
|
$ |
15,148,009 |
|
$ |
15,441,375 |
|
$ |
12,115,763 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest-bearing demand deposits as percentage of total deposits |
|
42 |
% |
41 |
% |
40 |
% |
29 |
% |
|
Core deposits as percentage of total deposits |
|
77 |
% |
75 |
% |
71 |
% |
56 |
% |
At September 30, 2016, core deposits totaled $12.0 billion, or 77% of total deposits, including $6.5 billion of noninterest-bearing demand deposits, or 42% of total deposits.
In addition to deposit products, we also offer alternative non-depository cash investment options for select clients; these alternatives include investments managed by Square 1 Asset Management, Inc. (“S1AM”), our registered investment advisor subsidiary, and third-party sweep products. Total client investment funds at September 30, 2016 were $1.4 billion, of which $1.1 billion was managed by S1AM.
7
PROVISION AND ALLOWANCE FOR CREDIT LOSSES
A provision for credit losses of $8.5 million was recorded in the third quarter of 2016 compared to $13.9 million in the second quarter of 2016. The third quarter provision consisted of $8.0 million for non-purchased credit impaired (“Non-PCI”) loans and leases and $0.5 million for PCI loans. The allowance for Non-PCI credit losses to Non-PCI loans and leases coverage ratio increased to 1.05% at September 30, 2016 from 1.03% at June 30, 2016.
The following tables show roll forwards of the allowance for credit losses for the periods indicated:
|
|
|
Three Months Ended September 30, 2016 |
|
|
|
|
Non-PCI |
|
|
|
|
|
|
|
|
|
|
Allowance for Credit |
|
Loans and |
|
Unfunded |
|
Total |
|
PCI |
|
|
|
|
Losses Rollforward |
|
Leases |
|
Commitments |
|
Non-PCI |
|
Loans |
|
Total |
|
|
|
|
(In thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Beginning balance |
|
$ |
132,000 |
|
$ |
17,944 |
|
$ |
149,944 |
|
$ |
11,289 |
|
$ |
161,233 |
|
|
Charge-offs |
|
(9,924 |
) |
— |
|
(9,924 |
) |
(531 |
) |
(10,455 |
) |
|
Recoveries |
|
6,050 |
|
— |
|
6,050 |
|
— |
|
6,050 |
|
|
Net charge-offs |
|
(3,874 |
) |
— |
|
(3,874 |
) |
(531 |
) |
(4,405 |
) |
|
Provision |
|
8,621 |
|
(621 |
) |
8,000 |
|
471 |
|
8,471 |
|
|
Ending balance |
|
$ |
136,747 |
|
$ |
17,323 |
|
$ |
154,070 |
|
$ |
11,229 |
|
$ |
165,299 |
|
|
|
|
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 |
|
The lower third quarter 2016 provision was due in part to a $4.8 million increase in recoveries of previously charged off loans. The third quarter 2016 Non-PCI charge-offs included $9.7 million of loans and leases that had specific reserves in the allowance for credit losses at June 30, 2016.
8
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 leases and associated purchase accounting discounts:
|
|
|
September 30, 2016 |
|
June 30, 2016 |
|
|
Non-PCI Adjusted |
|
Non-PCI |
|
|
|
|
|
Non-PCI |
|
|
|
|
|
|
Allowance for Credit Losses |
|
Loans and |
|
Allowance/ |
|
Coverage |
|
Loans and |
|
Allowance/ |
|
Coverage |
|
|
to Loans and Leases |
|
Leases |
|
Discount |
|
Ratio |
|
Leases |
|
Discount |
|
Ratio |
|
|
|
|
(Dollars in thousands) |
|
|
Adjustment for - Acquired loans and leases and related allowance: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ending balance |
|
$ |
14,686,206 |
|
$ |
154,070 |
|
1.05 |
% |
$ |
14,566,425 |
|
$ |
149,944 |
|
1.03 |
% |
|
Acquired loans and allowance |
|
(4,612,787 |
) |
(46,039 |
)(1) |
|
|
(5,131,674 |
) |
(37,440 |
)(1) |
|
|
|
Adjusted balance |
|
$ |
10,073,419 |
|
$ |
108,031 |
|
1.07 |
% |
$ |
9,434,751 |
|
$ |
112,504 |
|
1.19 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustment for - Unamortized net discount on acquired loans and leases: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ending balance |
|
$ |
14,686,206 |
|
$ |
154,070 |
|
1.05 |
% |
$ |
14,566,425 |
|
$ |
149,944 |
|
1.03 |
% |
|
Unamortized net discount |
|
53,041 |
|
53,041 |
(2) |
|
|
65,391 |
|
65,391 |
(2) |
|
|
|
Adjusted balance |
|
$ |
14,739,247 |
|
$ |
207,111 |
|
1.41 |
% |
$ |
14,631,816 |
|
$ |
215,335 |
|
1.47 |
% |
(1) Allowance attributed to $4.6 billion and $5.1 billion of acquired Non-PCI loans at September 30, 2016 and June 30, 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 $4.6 billion and $5.1 billion of acquired Non-PCI loans at September 30, 2016 and June 30, 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 $53.0 million at September 30, 2016, is expected to be substantially accreted to income by the end of 2018.
Non-PCI loans and leases at September 30, 2016 included $10.1 billion of originated loans and leases that were not obtained through acquisitions. The related allowance for loan and lease losses totaled $93.2 million, or 0.93% of the outstanding balance.
9
CREDIT QUALITY
The following table presents Non-PCI loan and lease credit quality metrics as of the dates indicated:
|
|
|
September 30, |
|
June 30, |
|
|
Non-PCI Credit Quality Metrics |
|
2016 |
|
2016 |
|
|
|
|
(Dollars in thousands) |
|
|
|
|
|
|
|
|
|
Nonaccrual loans and leases |
|
$ |
171,085 |
|
$ |
127,655 |
|
|
Classified loans and leases |
|
417,541 |
|
441,035 |
|
|
Performing restructured loans |
|
70,348 |
|
71,709 |
|
|
Allowance for credit losses |
|
154,070 |
|
149,944 |
|
|
Net charge-offs (for the quarter) |
|
3,874 |
|
432 |
|
|
Provision for credit losses (for the quarter) |
|
8,000 |
|
12,000 |
|
|
Allowance for credit losses to loans and leases |
|
1.05 |
% |
1.03 |
% |
|
Allowance for credit losses to nonaccrual loans and leases |
|
90.1 |
% |
117.5 |
% |
|
Nonaccrual loans and leases to loans and leases |
|
1.16 |
% |
0.88 |
% |
|
Nonperforming assets to loans and leases and foreclosed assets |
|
1.27 |
% |
0.99 |
% |
|
Classified loans and leases to loans and leases |
|
2.84 |
% |
3.03 |
% |
|
|
|
|
|
|
|
|
The increase in nonaccrual loans and leases during the third quarter of 2016 was largely the result of a classified $50 million healthcare real estate loan secured by a continuing care retirement facility which migrated to nonaccrual status due to continued weak operating performance and cash flow difficulties. This loan is current with respect to principal and interest payments as of the date of this release and the borrower is actively pursuing viable options for additional liquidity. Total classified loans and leases decreased by $23.5 million in the third quarter as resolutions, including repayment in full of four loans totaling $49.9 million, exceeded new downgrades.
Credit Exposure Affected by Low Oil Prices
At September 30, 2016, we had 14 outstanding loan and lease relationships totaling $101.7 million to borrowers involved in the oil and gas services industry, down from $116.9 million at June 30, 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 14% of the related balance. At September 30, 2016, two relationships totaling $40.3 million were on nonaccrual status and were classified, down from five relationships totaling $48.5 million at June 30, 2016. The largest of these relationships had an aggregate outstanding balance of $39.9 million at September 30, 2016. Of the $8.2 million decrease in nonaccrual classified oil and gas loans in the third quarter, $6.7 million was charged off (all were fully reserved at June 30, 2016) and $1.5 million was collected.
10
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 |
|
|
|
|
September 30, 2016 |
|
June 30, 2016 |
|
30-89 Days Past Due |
|
|
|
|
|
|
% of |
|
|
|
% of |
|
September 30, |
|
June 30, |
|
|
|
|
|
|
Loan |
|
|
|
Loan |
|
2016 |
|
2016 |
|
|
|
|
Amount |
|
Category |
|
Amount |
|
Category |
|
Amount |
|
Amount |
|
|
|
|
(Dollars in thousands) |
|
|
Real estate mortgage: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial |
|
$ |
74,606 |
|
1.7 |
% |
$ |
29,183 |
|
0.7 |
% |
$ |
2,146 |
|
$ |
2,126 |
|
|
Residential |
|
5,089 |
|
0.4 |
% |
4,238 |
|
0.4 |
% |
— |
|
171 |
|
|
Total real estate mortgage |
|
79,695 |
|
1.5 |
% |
33,421 |
|
0.6 |
% |
2,146 |
|
2,297 |
|
|
Real estate construction and land: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial |
|
1,245 |
|
0.2 |
% |
— |
|
0.0 |
% |
— |
|
— |
|
|
Residential |
|
366 |
|
0.1 |
% |
368 |
|
0.1 |
% |
— |
|
— |
|
|
Total real estate construction and land |
|
1,611 |
|
0.2 |
% |
368 |
|
0.1 |
% |
— |
|
— |
|
|
Commercial: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flow |
|
27,831 |
|
0.9 |
% |
38,146 |
|
1.3 |
% |
21 |
|
389 |
|
|
Asset-based |
|
4,044 |
|
0.2 |
% |
1,986 |
|
0.1 |
% |
6,644 |
|
— |
|
|
Venture capital |
|
10,782 |
|
0.6 |
% |
1,088 |
|
0.1 |
% |
— |
|
3,548 |
|
|
Equipment finance (1) |
|
46,916 |
|
7.0 |
% |
52,432 |
|
8.1 |
% |
— |
|
— |
|
|
Total commercial |
|
89,573 |
|
1.1 |
% |
93,652 |
|
1.2 |
% |
6,665 |
|
3,937 |
|
|
Consumer |
|
206 |
|
0.1 |
% |
214 |
|
0.1 |
% |
— |
|
— |
|
|
Total Non-PCI loans and leases |
|
$ |
171,085 |
|
1.2 |
% |
$ |
127,655 |
|
0.9 |
% |
$ |
8,811 |
|
$ |
6,234 |
|
(1) Includes nonaccrual leases and loans to companies involved in the oil and gas industries of $40.3 million and $48.5 million at September 30, 2016 and June 30, 2016, respectively.
The following table presents nonperforming assets as of the dates indicated:
|
|
|
September 30, |
|
June 30, |
|
|
Nonperforming Assets |
|
2016 |
|
2016 |
|
|
|
|
(Dollars in thousands) |
|
|
|
|
|
|
|
|
|
Nonaccrual Non-PCI loans and leases |
|
$ |
171,085 |
|
$ |
127,655 |
|
|
Nonaccrual PCI loans |
|
3,478 |
|
2,025 |
|
|
Total nonaccrual loans and leases |
|
174,563 |
|
129,680 |
|
|
Foreclosed assets, net |
|
15,113 |
|
16,181 |
|
|
Total nonperforming assets |
|
$ |
189,676 |
|
$ |
145,861 |
|
|
|
|
|
|
|
|
|
Nonaccrual loans and leases to loans and leases |
|
1.18 |
% |
0.88 |
% |
|
Nonperforming assets to loans and leases and foreclosed assets |
|
1.28 |
% |
0.99 |
% |
11
SALE OF BRANCHES
On October 3, 2016, the Company announced that Pacific Western Bank had entered into a definitive agreement to sell two branches to First Foundation Bank (the “Transaction”). The branches are located in Laguna Hills and Seal Beach, California (the “Branches”). As of September 30, 2016, the deposits of the Branches totaled approximately $200 million, principally comprised of time deposits. No loans are being sold in connection with the Transaction. The Transaction is expected to be completed during the fourth quarter of 2016 subject to regulatory approval and customary closing conditions.
STOCK REPURCHASE PROGRAM
On October 17, 2016, PacWest’s Board of Directors authorized a stock repurchase program (the “Stock Repurchase Program”), pursuant to which the Company may, from time to time, purchase shares of its common stock for an aggregate purchase price not to exceed $400 million. The common stock repurchases may be effected through open market purchases or in privately negotiated transactions, and may utilize any derivative or similar instrument to effect share repurchase transactions (including without limitation, accelerated share repurchase contracts, equity forward transactions, equity option transactions, equity swap transactions, cap transactions, collar transactions, floor transactions or other similar transactions or any combination of the foregoing transactions).
The Stock Repurchase Program expires on December 31, 2017. The amount and exact timing of any repurchases will depend upon market conditions and other factors. There are no assurances the Company will repurchase any shares during the period and the Stock Repurchase Program may be suspended or discontinued at any time.
ABOUT PACWEST BANCORP
PacWest Bancorp (“PacWest”) is a bank holding company with over $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.
12
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 profitability, loan and lease portfolio growth, capital management, including reducing excess capital, effective tax rates, and branch sale. 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;
· compression of spreads on newly originated loans and leases;
· the impact of asset/liability repricing risk and liquidity risk on net interest margin and the value of investments;
· higher than anticipated increases in operating expenses;
· increased costs to manage and sell foreclosed assets;
· 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;
· 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;
· changes in tax laws or regulations affecting our business;
· tax planning or disallowance of tax benefits by tax authorities;
· changes in tax filing jurisdictions or entity classifications;
· our ability to obtain regulatory approvals and meet other closing conditions to the branch sale on the expected terms and schedule; 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.
13
PACWEST BANCORP AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
|
|
|
September 30, |
|
June 30, |
|
December 31, |
|
|
|
|
2016 |
|
2016 |
|
2015 |
|
|
|
|
(Dollars in thousands, except per share data) |
|
|
ASSETS: |
|
|
|
|
|
|
|
|
Cash and due from banks |
|
$ |
286,371 |
|
$ |
226,471 |
|
$ |
161,020 |
|
|
Interest-earning deposits in financial institutions |
|
253,994 |
|
218,882 |
|
235,466 |
|
|
Total cash and cash equivalents |
|
540,365 |
|
445,353 |
|
396,486 |
|
|
|
|
|
|
|
|
|
|
|
Securities available-for-sale, at estimated fair value |
|
3,341,335 |
|
3,347,546 |
|
3,559,437 |
|
|
Federal Home Loan Bank stock, at cost |
|
19,386 |
|
24,214 |
|
19,710 |
|
|
Total investment securities |
|
3,360,721 |
|
3,371,760 |
|
3,579,147 |
|
|
|
|
|
|
|
|
|
|
|
Non-PCI loans and leases |
|
14,686,206 |
|
14,566,425 |
|
14,339,070 |
|
|
PCI loans |
|
120,221 |
|
136,901 |
|
189,095 |
|
|
Total gross loans and leases |
|
14,806,427 |
|
14,703,326 |
|
14,528,165 |
|
|
Deferred fees, net |
|
(63,581 |
) |
(61,866 |
) |
(49,911 |
) |
|
Total loans and leases, net of deferred fees |
|
14,742,846 |
|
14,641,460 |
|
14,478,254 |
|
|
Allowance for loan and lease losses |
|
(147,976 |
) |
(143,289 |
) |
(115,111 |
) |
|
Total loans and leases, net |
|
14,594,870 |
|
14,498,171 |
|
14,363,143 |
|
|
|
|
|
|
|
|
|
|
|
Equipment leased to others under operating leases |
|
198,931 |
|
204,062 |
|
197,452 |
|
|
Premises and equipment, net |
|
38,977 |
|
38,718 |
|
39,197 |
|
|
Foreclosed assets, net |
|
15,113 |
|
16,181 |
|
22,120 |
|
|
Deferred tax asset, net |
|
27,073 |
|
24,413 |
|
126,389 |
|
|
Goodwill |
|
2,173,949 |
|
2,175,791 |
|
2,176,291 |
|
|
Core deposit and customer relationship intangibles, net |
|
39,542 |
|
43,766 |
|
53,220 |
|
|
Other assets |
|
325,750 |
|
328,924 |
|
335,045 |
|
|
Total assets |
|
$ |
21,315,291 |
|
$ |
21,147,139 |
|
$ |
21,288,490 |
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES: |
|
|
|
|
|
|
|
|
Noninterest-bearing deposits |
|
$ |
6,521,946 |
|
$ |
6,222,696 |
|
$ |
6,171,455 |
|
|
Interest-bearing deposits |
|
9,123,722 |
|
8,925,313 |
|
9,494,727 |
|
|
Total deposits |
|
15,645,668 |
|
15,148,009 |
|
15,666,182 |
|
|
Borrowings |
|
541,011 |
|
918,208 |
|
621,914 |
|
|
Subordinated debentures |
|
441,112 |
|
439,322 |
|
436,000 |
|
|
Accrued interest payable and other liabilities |
|
144,905 |
|
128,296 |
|
166,703 |
|
|
Total liabilities |
|
16,772,696 |
|
16,633,835 |
|
16,890,799 |
|
|
STOCKHOLDERS’ EQUITY (1) |
|
4,542,595 |
|
4,513,304 |
|
4,397,691 |
|
|
Total liabilities and stockholders’ equity |
|
$ |
21,315,291 |
|
$ |
21,147,139 |
|
$ |
21,288,490 |
|
|
|
|
|
|
|
|
|
|
|
Book value per share |
|
$ |
37.29 |
|
$ |
37.05 |
|
$ |
36.22 |
|
|
Tangible book value per share (2) |
|
$ |
19.12 |
|
$ |
18.83 |
|
$ |
17.86 |
|
|
Shares outstanding |
|
121,817,524 |
|
121,819,849 |
|
121,413,727 |
|
|
(1) Includes net unrealized gain on securities available-for-sale, net |
|
$ |
72,073 |
|
$ |
81,744 |
|
$ |
27,828 |
|
|
(2) Non-GAAP measure. |
|
|
|
|
|
|
|
14
PACWEST BANCORP AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF EARNINGS
|
|
|
Three Months Ended |
|
Nine Months Ended |
|
|
|
|
September 30, |
|
June 30, |
|
September 30, |
|
September 30, |
|
|
|
|
2016 |
|
2016 |
|
2015 |
|
2016 |
|
2015 |
|
|
|
|
(Dollars in thousands, except per share data) |
|
|
Interest income: |
|
|
|
|
|
|
|
|
|
|
|
|
Loans and leases |
|
$ |
225,370 |
|
$ |
224,326 |
|
$ |
193,539 |
|
$ |
686,071 |
|
$ |
599,417 |
|
|
Investment securities |
|
22,187 |
|
22,420 |
|
13,955 |
|
67,154 |
|
40,720 |
|
|
Deposits in financial institutions |
|
298 |
|
308 |
|
178 |
|
914 |
|
304 |
|
|
Total interest income |
|
247,855 |
|
247,054 |
|
207,672 |
|
754,139 |
|
640,441 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense: |
|
|
|
|
|
|
|
|
|
|
|
|
Deposits |
|
7,247 |
|
7,823 |
|
10,400 |
|
24,143 |
|
32,112 |
|
|
Borrowings |
|
695 |
|
352 |
|
72 |
|
1,628 |
|
395 |
|
|
Subordinated debentures |
|
5,278 |
|
5,122 |
|
4,680 |
|
15,382 |
|
13,787 |
|
|
Total interest expense |
|
13,220 |
|
13,297 |
|
15,152 |
|
41,153 |
|
46,294 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income |
|
234,635 |
|
233,757 |
|
192,520 |
|
712,986 |
|
594,147 |
|
|
Provision for credit losses |
|
8,471 |
|
13,903 |
|
8,746 |
|
42,514 |
|
31,709 |
|
|
Net interest income after provision for credit losses |
|
226,164 |
|
219,854 |
|
183,774 |
|
670,472 |
|
562,438 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest income: |
|
|
|
|
|
|
|
|
|
|
|
|
Service charges on deposit accounts |
|
3,488 |
|
3,633 |
|
2,601 |
|
10,977 |
|
7,787 |
|
|
Other commissions and fees |
|
12,528 |
|
11,073 |
|
6,376 |
|
35,090 |
|
18,895 |
|
|
Leased equipment income |
|
8,538 |
|
8,523 |
|
5,475 |
|
25,305 |
|
16,232 |
|
|
Gain on sale of loans and leases |
|
157 |
|
388 |
|
27 |
|
790 |
|
190 |
|
|
Gain on securities |
|
382 |
|
478 |
|
655 |
|
8,970 |
|
3,744 |
|
|
FDIC loss sharing expense, net |
|
— |
|
(6,502 |
) |
(4,449 |
) |
(8,917 |
) |
(13,955 |
) |
|
Other income |
|
1,827 |
|
4,528 |
|
5,073 |
|
11,365 |
|
23,359 |
|
|
Total noninterest income |
|
26,920 |
|
22,121 |
|
15,758 |
|
83,580 |
|
56,252 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest expense: |
|
|
|
|
|
|
|
|
|
|
|
|
Compensation |
|
62,661 |
|
62,174 |
|
48,152 |
|
185,900 |
|
144,922 |
|
|
Occupancy |
|
12,010 |
|
12,193 |
|
10,762 |
|
36,835 |
|
31,950 |
|
|
Data processing |
|
6,234 |
|
5,644 |
|
4,322 |
|
17,782 |
|
13,032 |
|
|
Other professional services |
|
4,625 |
|
3,401 |
|
3,396 |
|
11,598 |
|
9,949 |
|
|
Insurance and assessments |
|
4,324 |
|
4,951 |
|
3,805 |
|
14,240 |
|
11,546 |
|
|
Intangible asset amortization |
|
4,224 |
|
4,371 |
|
1,497 |
|
13,341 |
|
4,500 |
|
|
Leased equipment depreciation |
|
5,298 |
|
5,286 |
|
3,162 |
|
15,608 |
|
9,368 |
|
|
Foreclosed assets (income) expense, net |
|
(248 |
) |
(3 |
) |
4,521 |
|
(812 |
) |
2,517 |
|
|
Acquisition, integration and reorganization costs |
|
— |
|
— |
|
747 |
|
200 |
|
3,647 |
|
|
Other expense |
|
11,582 |
|
12,064 |
|
9,775 |
|
36,787 |
|
28,344 |
|
|
Total noninterest expense |
|
110,710 |
|
110,081 |
|
90,139 |
|
331,479 |
|
259,775 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings before income taxes |
|
142,374 |
|
131,894 |
|
109,393 |
|
422,573 |
|
358,915 |
|
|
Income tax expense |
|
(48,479 |
) |
(49,726 |
) |
(39,777 |
) |
(156,054 |
) |
(131,137 |
) |
|
Net earnings |
|
$ |
93,895 |
|
$ |
82,168 |
|
$ |
69,616 |
|
$ |
266,519 |
|
$ |
227,778 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted earnings per share |
|
$ |
0.77 |
|
$ |
0.68 |
|
$ |
0.68 |
|
$ |
2.19 |
|
$ |
2.21 |
|
15
PACWEST BANCORP AND SUBSIDIARIES
NET EARNINGS PER SHARE CALCULATIONS
|
|
|
Three Months Ended |
|
Nine Months Ended |
|
|
|
|
September 30, |
|
June 30, |
|
September 30, |
|
September 30, |
|
|
|
|
2016 |
|
2016 |
|
2015 |
|
2016 |
|
2015 |
|
|
|
|
(Dollars in thousands, except per share data) |
|
|
Basic Earnings Per Share: |
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings |
|
$ |
93,895 |
|
$ |
82,168 |
|
$ |
69,616 |
|
$ |
266,519 |
|
$ |
227,778 |
|
|
Less: earnings allocated to unvested restricted stock (1) |
|
(1,048 |
) |
(863 |
) |
(649 |
) |
(2,983 |
) |
(2,213 |
) |
|
Net earnings allocated to common shares |
|
$ |
92,847 |
|
$ |
81,305 |
|
$ |
68,967 |
|
$ |
263,536 |
|
$ |
225,565 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average basic shares and unvested restricted stock outstanding |
|
121,818 |
|
121,799 |
|
103,048 |
|
121,739 |
|
103,038 |
|
|
Less: weighted-average unvested restricted stock outstanding |
|
(1,401 |
) |
(1,481 |
) |
(985 |
) |
(1,425 |
) |
(1,055 |
) |
|
Weighted-average basic shares outstanding |
|
120,417 |
|
120,318 |
|
102,063 |
|
120,314 |
|
101,983 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per share |
|
$ |
0.77 |
|
$ |
0.68 |
|
$ |
0.68 |
|
$ |
2.19 |
|
$ |
2.21 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted Earnings Per Share: |
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings allocated to common shares |
|
$ |
92,847 |
|
$ |
81,305 |
|
$ |
68,967 |
|
$ |
263,536 |
|
$ |
225,565 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average basic shares outstanding |
|
120,417 |
|
120,318 |
|
102,063 |
|
120,314 |
|
101,983 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per share |
|
$ |
0.77 |
|
$ |
0.68 |
|
$ |
0.68 |
|
$ |
2.19 |
|
$ |
2.21 |
|
(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.
16
PACWEST BANCORP AND SUBSIDIARIES
AVERAGE BALANCE SHEET AND YIELD ANALYSIS
|
|
|
Three Months Ended |
|
|
|
|
September 30, 2016 |
|
June 30, 2016 |
|
September 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 |
|
$ |
117,781 |
|
$ |
5,868 |
|
19.82 |
% |
$ |
147,270 |
|
$ |
8,484 |
|
23.17 |
% |
$ |
193,094 |
|
$ |
7,505 |
|
15.42 |
% |
|
Non-PCI loans and leases |
|
14,417,170 |
|
219,502 |
|
6.06 |
% |
14,321,320 |
|
215,842 |
|
6.06 |
% |
11,919,787 |
|
186,034 |
|
6.19 |
% |
|
Total loans and leases |
|
14,534,951 |
|
225,370 |
|
6.17 |
% |
14,468,590 |
|
224,326 |
|
6.24 |
% |
12,112,881 |
|
193,539 |
|
6.34 |
% |
|
Investment securities (1) |
|
3,338,209 |
|
27,025 |
|
3.22 |
% |
3,288,819 |
|
27,330 |
|
3.34 |
% |
1,806,628 |
|
16,709 |
|
3.67 |
% |
|
Deposits in financial institutions |
|
238,425 |
|
298 |
|
0.50 |
% |
245,666 |
|
308 |
|
0.50 |
% |
278,973 |
|
178 |
|
0.25 |
% |
|
Total interest-earning assets |
|
18,111,585 |
|
252,693 |
|
5.55 |
% |
18,003,075 |
|
251,964 |
|
5.63 |
% |
14,198,482 |
|
210,426 |
|
5.88 |
% |
|
Other assets |
|
2,960,468 |
|
|
|
|
|
2,996,867 |
|
|
|
|
|
2,491,695 |
|
|
|
|
|
|
Total assets |
|
$ |
21,072,053 |
|
|
|
|
|
$ |
20,999,942 |
|
|
|
|
|
$ |
16,690,177 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Stockholders’ Equity: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest checking |
|
$ |
1,161,931 |
|
604 |
|
0.21 |
% |
$ |
1,024,763 |
|
501 |
|
0.20 |
% |
$ |
787,271 |
|
300 |
|
0.15 |
% |
|
Money market |
|
4,514,525 |
|
3,303 |
|
0.29 |
% |
4,321,533 |
|
2,886 |
|
0.27 |
% |
2,417,280 |
|
1,218 |
|
0.20 |
% |
|
Savings |
|
764,415 |
|
341 |
|
0.18 |
% |
766,309 |
|
412 |
|
0.22 |
% |
746,362 |
|
449 |
|
0.24 |
% |
|
Time |
|
2,666,434 |
|
2,999 |
|
0.45 |
% |
3,086,492 |
|
4,024 |
|
0.52 |
% |
5,042,768 |
|
8,433 |
|
0.66 |
% |
|
Total interest-bearing deposits |
|
9,107,305 |
|
7,247 |
|
0.32 |
% |
9,199,097 |
|
7,823 |
|
0.34 |
% |
8,993,681 |
|
10,400 |
|
0.46 |
% |
|
Borrowings |
|
583,982 |
|
695 |
|
0.47 |
% |
300,428 |
|
352 |
|
0.47 |
% |
70,171 |
|
72 |
|
0.41 |
% |
|
Subordinated debentures |
|
439,970 |
|
5,278 |
|
4.77 |
% |
439,081 |
|
5,122 |
|
4.69 |
% |
434,420 |
|
4,680 |
|
4.27 |
% |
|
Total interest-bearing liabilities |
|
10,131,257 |
|
13,220 |
|
0.52 |
% |
9,938,606 |
|
13,297 |
|
0.54 |
% |
9,498,272 |
|
15,152 |
|
0.63 |
% |
|
Noninterest-bearing demand deposits |
|
6,274,294 |
|
|
|
|
|
6,437,720 |
|
|
|
|
|
3,486,780 |
|
|
|
|
|
|
Other liabilities |
|
135,801 |
|
|
|
|
|
140,023 |
|
|
|
|
|
132,360 |
|
|
|
|
|
|
Total liabilities |
|
16,541,352 |
|
|
|
|
|
16,516,349 |
|
|
|
|
|
13,117,412 |
|
|
|
|
|
|
Stockholders’ equity |
|
4,530,701 |
|
|
|
|
|
4,483,593 |
|
|
|
|
|
3,572,765 |
|
|
|
|
|
|
Total liabilities and stockholders’ equity |
|
$ |
21,072,053 |
|
|
|
|
|
$ |
20,999,942 |
|
|
|
|
|
$ |
16,690,177 |
|
|
|
|
|
|
Net interest income (2) |
|
|
|
$ |
239,473 |
|
|
|
|
|
$ |
238,667 |
|
|
|
|
|
$ |
195,274 |
|
|
|
|
Net interest spread (2) |
|
|
|
|
|
5.03 |
% |
|
|
|
|
5.09 |
% |
|
|
|
|
5.25 |
% |
|
Net interest margin (2) |
|
|
|
|
|
5.26 |
% |
|
|
|
|
5.33 |
% |
|
|
|
|
5.46 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total deposits (3) |
|
$ |
15,381,599 |
|
$ |
7,247 |
|
0.19 |
% |
$ |
15,636,817 |
|
$ |
7,823 |
|
0.20 |
% |
$ |
12,480,461 |
|
$ |
10,400 |
|
0.33 |
% |
|
Funding sources (4) |
|
$ |
16,405,551 |
|
$ |
13,220 |
|
0.32 |
% |
$ |
16,376,326 |
|
$ |
13,297 |
|
0.33 |
% |
$ |
12,985,052 |
|
$ |
15,152 |
|
0.46 |
% |
(1) Includes tax equivalent adjustments of $4.8 million, $4.9 million, and $2.8 million for the three months ended September 30, 2016, June 30, 2016, and September 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 total 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 total 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.
17
PACWEST BANCORP AND SUBSIDIARIES
FIVE QUARTER BALANCE SHEET
|
|
|
September 30, |
|
June 30, |
|
March 31, |
|
December 31, |
|
September 30, |
|
|
|
|
2016 |
|
2016 |
|
2016 |
|
2015 |
|
2015 |
|
|
|
|
(Dollars in thousands, except per share data) |
|
|
ASSETS: |
|
|
|
|
|
|
|
|
|
|
|
|
Cash and due from banks |
|
$ |
286,371 |
|
$ |
226,471 |
|
$ |
161,977 |
|
$ |
161,020 |
|
$ |
154,652 |
|
|
Interest-earning deposits in financial institutions |
|
253,994 |
|
218,882 |
|
357,541 |
|
235,466 |
|
81,642 |
|
|
Total cash and cash equivalents |
|
540,365 |
|
445,353 |
|
519,518 |
|
396,486 |
|
236,294 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Securities available-for-sale |
|
3,341,335 |
|
3,347,546 |
|
3,240,586 |
|
3,559,437 |
|
1,809,364 |
|
|
Federal Home Loan Bank stock |
|
19,386 |
|
24,214 |
|
17,250 |
|
19,710 |
|
17,250 |
|
|
Total investment securities |
|
3,360,721 |
|
3,371,760 |
|
3,257,836 |
|
3,579,147 |
|
1,826,614 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-PCI loans and leases |
|
14,686,206 |
|
14,566,425 |
|
14,365,915 |
|
14,339,070 |
|
12,300,057 |
|
|
PCI loans |
|
120,221 |
|
136,901 |
|
176,607 |
|
189,095 |
|
193,340 |
|
|
Total gross loans and leases |
|
14,806,427 |
|
14,703,326 |
|
14,542,522 |
|
14,528,165 |
|
12,493,397 |
|
|
Deferred fees, net |
|
(63,581 |
) |
(61,866 |
) |
(59,005 |
) |
(49,911 |
) |
(41,192 |
) |
|
Total loans and leases, net of deferred fees |
|
14,742,846 |
|
14,641,460 |
|
14,483,517 |
|
14,478,254 |
|
12,452,205 |
|
|
Allowance for loan and lease losses |
|
(147,976 |
) |
(143,289 |
) |
(130,361 |
) |
(115,111 |
) |
(103,271 |
) |
|
Total loans and leases, net |
|
14,594,870 |
|
14,498,171 |
|
14,353,156 |
|
14,363,143 |
|
12,348,934 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equipment leased to others under operating leases |
|
198,931 |
|
204,062 |
|
205,163 |
|
197,452 |
|
161,508 |
|
|
Premises and equipment, net |
|
38,977 |
|
38,718 |
|
39,713 |
|
39,197 |
|
36,475 |
|
|
Foreclosed assets, net |
|
15,113 |
|
16,181 |
|
18,310 |
|
22,120 |
|
33,216 |
|
|
Deferred tax asset, net |
|
27,073 |
|
24,413 |
|
91,126 |
|
126,389 |
|
169,760 |
|
|
Goodwill |
|
2,173,949 |
|
2,175,791 |
|
2,175,791 |
|
2,176,291 |
|
1,728,380 |
|
|
Core deposit and customer relationship intangibles, net |
|
39,542 |
|
43,766 |
|
48,137 |
|
53,220 |
|
12,704 |
|
|
Other assets |
|
325,750 |
|
328,924 |
|
322,259 |
|
335,045 |
|
260,220 |
|
|
Total assets |
|
$ |
21,315,291 |
|
$ |
21,147,139 |
|
$ |
21,031,009 |
|
$ |
21,288,490 |
|
$ |
16,814,105 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES: |
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest-bearing deposits |
|
$ |
6,521,946 |
|
$ |
6,222,696 |
|
$ |
6,139,963 |
|
$ |
6,171,455 |
|
$ |
3,508,682 |
|
|
Interest-bearing deposits |
|
9,123,722 |
|
8,925,313 |
|
9,301,412 |
|
9,494,727 |
|
8,607,081 |
|
|
Total deposits |
|
15,645,668 |
|
15,148,009 |
|
15,441,375 |
|
15,666,182 |
|
12,115,763 |
|
|
Borrowings |
|
541,011 |
|
918,208 |
|
551,401 |
|
621,914 |
|
552,497 |
|
|
Subordinated debentures |
|
441,112 |
|
439,322 |
|
438,723 |
|
436,000 |
|
435,417 |
|
|
Accrued interest payable and other liabilities |
|
144,905 |
|
128,296 |
|
142,918 |
|
166,703 |
|
128,724 |
|
|
Total liabilities |
|
16,772,696 |
|
16,633,835 |
|
16,574,417 |
|
16,890,799 |
|
13,232,401 |
|
|
STOCKHOLDERS’ EQUITY (1) |
|
4,542,595 |
|
4,513,304 |
|
4,456,592 |
|
4,397,691 |
|
3,581,704 |
|
|
Total liabilities and stockholders’ equity |
|
$ |
21,315,291 |
|
$ |
21,147,139 |
|
$ |
21,031,009 |
|
$ |
21,288,490 |
|
$ |
16,814,105 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Book value per share |
|
$ |
37.29 |
|
$ |
37.05 |
|
$ |
36.60 |
|
$ |
36.22 |
|
$ |
34.76 |
|
|
Tangible book value per share (2) |
|
$ |
19.12 |
|
$ |
18.83 |
|
$ |
18.33 |
|
$ |
17.86 |
|
$ |
17.86 |
|
|
Shares outstanding |
|
121,817,524 |
|
121,819,849 |
|
121,771,252 |
|
121,413,727 |
|
103,053,694 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Includes net unrealized gain on securities available-for-sale, net |
|
$ |
72,073 |
|
$ |
81,744 |
|
$ |
48,479 |
|
$ |
27,828 |
|
$ |
24,459 |
|
|
(2) Non-GAAP measure. |
|
|
|
|
|
|
|
|
|
|
|
18
PACWEST BANCORP AND SUBSIDIARIES
FIVE QUARTER STATEMENT OF EARNINGS
|
|
|
Three Months Ended |
|
|
|
|
September 30, |
|
June 30, |
|
March 31, |
|
December 31, |
|
September 30, |
|
|
|
|
2016 |
|
2016 |
|
2016 |
|
2015 |
|
2015 |
|
|
|
|
(Dollars in thousands, except per share data) |
|
|
Interest income: |
|
|
|
|
|
|
|
|
|
|
|
|
Loans and leases |
|
$ |
225,370 |
|
$ |
224,326 |
|
$ |
236,375 |
|
$ |
219,677 |
|
$ |
193,539 |
|
|
Investment securities |
|
22,187 |
|
22,420 |
|
22,547 |
|
23,648 |
|
13,955 |
|
|
Deposits in financial institutions |
|
298 |
|
308 |
|
308 |
|
172 |
|
178 |
|
|
Total interest income |
|
247,855 |
|
247,054 |
|
259,230 |
|
243,497 |
|
207,672 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense: |
|
|
|
|
|
|
|
|
|
|
|
|
Deposits |
|
7,247 |
|
7,823 |
|
9,073 |
|
9,391 |
|
10,400 |
|
|
Borrowings |
|
695 |
|
352 |
|
581 |
|
159 |
|
72 |
|
|
Subordinated debentures |
|
5,278 |
|
5,122 |
|
4,982 |
|
4,748 |
|
4,680 |
|
|
Total interest expense |
|
13,220 |
|
13,297 |
|
14,636 |
|
14,298 |
|
15,152 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income |
|
234,635 |
|
233,757 |
|
244,594 |
|
229,199 |
|
192,520 |
|
|
Provision for credit losses |
|
8,471 |
|
13,903 |
|
20,140 |
|
13,772 |
|
8,746 |
|
|
Net interest income after provision for credit losses |
|
226,164 |
|
219,854 |
|
224,454 |
|
215,427 |
|
183,774 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest income: |
|
|
|
|
|
|
|
|
|
|
|
|
Service charges on deposit accounts |
|
3,488 |
|
3,633 |
|
3,856 |
|
3,901 |
|
2,601 |
|
|
Other commissions and fees |
|
12,528 |
|
11,073 |
|
11,489 |
|
12,691 |
|
6,376 |
|
|
Leased equipment income |
|
8,538 |
|
8,523 |
|
8,244 |
|
7,791 |
|
5,475 |
|
|
Gain on sale of loans and leases |
|
157 |
|
388 |
|
245 |
|
183 |
|
27 |
|
|
Gain on securities |
|
382 |
|
478 |
|
8,110 |
|
— |
|
655 |
|
|
FDIC loss sharing expense, net |
|
— |
|
(6,502 |
) |
(2,415 |
) |
(4,291 |
) |
(4,449 |
) |
|
Other income |
|
1,827 |
|
4,528 |
|
5,010 |
|
7,783 |
|
5,073 |
|
|
Total noninterest income |
|
26,920 |
|
22,121 |
|
34,539 |
|
28,058 |
|
15,758 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest expense: |
|
|
|
|
|
|
|
|
|
|
|
|
Compensation |
|
62,661 |
|
62,174 |
|
61,065 |
|
58,992 |
|
48,152 |
|
|
Occupancy |
|
12,010 |
|
12,193 |
|
12,632 |
|
12,194 |
|
10,762 |
|
|
Data processing |
|
6,234 |
|
5,644 |
|
5,904 |
|
5,585 |
|
4,322 |
|
|
Other professional services |
|
4,625 |
|
3,401 |
|
3,572 |
|
3,811 |
|
3,396 |
|
|
Insurance and assessments |
|
4,324 |
|
4,951 |
|
4,965 |
|
5,450 |
|
3,805 |
|
|
Intangible asset amortization |
|
4,224 |
|
4,371 |
|
4,746 |
|
4,910 |
|
1,497 |
|
|
Leased equipment depreciation |
|
5,298 |
|
5,286 |
|
5,024 |
|
4,235 |
|
3,162 |
|
|
Foreclosed assets (income) expense, net |
|
(248 |
) |
(3 |
) |
(561 |
) |
(3,185 |
) |
4,521 |
|
|
Acquisition, integration and reorganization costs |
|
— |
|
— |
|
200 |
|
17,600 |
|
747 |
|
|
Other expense |
|
11,582 |
|
12,064 |
|
13,141 |
|
12,672 |
|
9,775 |
|
|
Total noninterest expense |
|
110,710 |
|
110,081 |
|
110,688 |
|
122,264 |
|
90,139 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings before income taxes |
|
142,374 |
|
131,894 |
|
148,305 |
|
121,221 |
|
109,393 |
|
|
Income tax expense |
|
(48,479 |
) |
(49,726 |
) |
(57,849 |
) |
(49,380 |
) |
(39,777 |
) |
|
Net earnings |
|
$ |
93,895 |
|
$ |
82,168 |
|
$ |
90,456 |
|
$ |
71,841 |
|
$ |
69,616 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted earnings per share |
|
$ |
0.77 |
|
$ |
0.68 |
|
$ |
0.74 |
|
$ |
0.60 |
|
$ |
0.68 |
|
19
PACWEST BANCORP AND SUBSIDIARIES
FIVE QUARTER SELECTED FINANCIAL DATA
|
|
|
At or For the Three Months Ended |
|
|
|
|
September 30, |
|
June 30, |
|
March 31, |
|
December 31, |
|
September 30, |
|
|
|
|
2016 |
|
2016 |
|
2016 |
|
2015 |
|
2015 |
|
|
|
|
(Dollars in thousands) |
|
|
Performance Ratios: |
|
|
|
|
|
|
|
|
|
|
|
|
Return on average assets (1) |
|
1.77 |
% |
1.57 |
% |
1.72 |
% |
1.37 |
% |
1.65 |
% |
|
Return on average equity (1) |
|
8.24 |
% |
7.37 |
% |
8.20 |
% |
6.56 |
% |
7.73 |
% |
|
Return on average tangible equity (1)(2) |
|
16.15 |
% |
14.61 |
% |
16.45 |
% |
13.14 |
% |
15.09 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Yield on average loans and leases (1) |
|
6.17 |
% |
6.24 |
% |
6.57 |
% |
6.21 |
% |
6.34 |
% |
|
Yield on average interest-earning assets (1)(3) |
|
5.55 |
% |
5.63 |
% |
5.85 |
% |
5.54 |
% |
5.88 |
% |
|
Cost of average total deposits (1) |
|
0.19 |
% |
0.20 |
% |
0.23 |
% |
0.24 |
% |
0.33 |
% |
|
Cost of average time deposits (1) |
|
0.45 |
% |
0.52 |
% |
0.61 |
% |
0.63 |
% |
0.66 |
% |
|
Cost of average interest-bearing liabilities (1) |
|
0.52 |
% |
0.54 |
% |
0.57 |
% |
0.55 |
% |
0.63 |
% |
|
Cost of average funding sources (1) |
|
0.32 |
% |
0.33 |
% |
0.35 |
% |
0.35 |
% |
0.46 |
% |
|
Net interest rate spread (1)(3) |
|
5.03 |
% |
5.09 |
% |
5.28 |
% |
4.99 |
% |
5.25 |
% |
|
Net interest margin (1)(3) |
|
5.26 |
% |
5.33 |
% |
5.53 |
% |
5.22 |
% |
5.46 |
% |
|
Core net interest margin (1)(2)(3) |
|
5.08 |
% |
5.11 |
% |
5.10 |
% |
5.10 |
% |
5.19 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Efficiency ratio |
|
40.1 |
% |
40.6 |
% |
38.5 |
% |
39.3 |
% |
39.6 |
% |
|
Noninterest expense as a percentage of average assets (1) |
|
2.09 |
% |
2.11 |
% |
2.10 |
% |
2.33 |
% |
2.14 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average Balances: |
|
|
|
|
|
|
|
|
|
|
|
|
Loans and leases |
|
$ |
14,534,951 |
|
$ |
14,468,590 |
|
$ |
14,471,165 |
|
$ |
14,031,102 |
|
$ |
12,112,881 |
|
|
Interest-earning assets |
|
18,111,585 |
|
18,003,075 |
|
18,161,751 |
|
17,777,534 |
|
14,198,482 |
|
|
Total assets |
|
21,072,053 |
|
20,999,942 |
|
21,198,594 |
|
20,825,248 |
|
16,690,177 |
|
|
Noninterest-bearing deposits |
|
6,274,294 |
|
6,437,720 |
|
6,273,249 |
|
6,043,900 |
|
3,486,780 |
|
|
Interest-bearing deposits |
|
9,107,305 |
|
9,199,097 |
|
9,388,652 |
|
9,633,393 |
|
8,993,681 |
|
|
Total deposits |
|
15,381,599 |
|
15,636,817 |
|
15,661,901 |
|
15,677,293 |
|
12,480,461 |
|
|
Borrowings and subordinated debentures |
|
1,023,952 |
|
739,509 |
|
931,260 |
|
641,529 |
|
504,591 |
|
|
Interest-bearing liabilities |
|
10,131,257 |
|
9,938,606 |
|
10,319,912 |
|
10,274,922 |
|
9,498,272 |
|
|
Funding sources |
|
16,405,551 |
|
16,376,326 |
|
16,593,161 |
|
16,318,822 |
|
12,985,052 |
|
|
Stockholders’ equity |
|
4,530,701 |
|
4,483,593 |
|
4,438,602 |
|
4,346,162 |
|
3,572,765 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Annualized.
(2) Non-GAAP measure.
(3) Tax equivalent.
20
PACWEST BANCORP AND SUBSIDIARIES
FIVE QUARTER SELECTED FINANCIAL DATA
|
|
|
At or For the Three Months Ended |
|
|
|
|
September 30, |
|
June 30, |
|
March 31, |
|
December 31, |
|
September 30, |
|
|
|
|
2016 |
|
2016 |
|
2016 |
|
2015 |
|
2015 |
|
|
|
|
(Dollars in thousands) |
|
|
Non-PCI Credit Quality: |
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for credit losses to loans and leases |
|
1.05 |
% |
1.03 |
% |
0.96 |
% |
0.85 |
% |
0.82 |
% |
|
Allowance for credit losses to nonaccrual loans and leases |
|
90 |
% |
118 |
% |
106 |
% |
95 |
% |
94 |
% |
|
Nonaccrual loans and leases to loans and leases |
|
1.16 |
% |
0.88 |
% |
0.91 |
% |
0.90 |
% |
0.87 |
% |
|
Nonperforming assets to loans and leases and foreclosed assets |
|
1.27 |
% |
0.99 |
% |
1.05 |
% |
1.06 |
% |
1.14 |
% |
|
Nonperforming assets to total assets |
|
0.87 |
% |
0.68 |
% |
0.72 |
% |
0.71 |
% |
0.84 |
% |
|
Trailing twelve month net charge-offs to average loans and leases |
|
0.04 |
% |
0.04 |
% |
0.03 |
% |
0.06 |
% |
0.04 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PacWest Bancorp Consolidated Capital: |
|
|
|
|
|
|
|
|
|
|
|
|
Tier 1 leverage ratio (1) |
|
12.13 |
% |
11.92 |
% |
11.51 |
% |
11.67 |
% |
12.04 |
% |
|
Common equity tier 1 capital ratio (1) |
|
12.83 |
% |
12.72 |
% |
12.63 |
% |
12.58 |
% |
12.74 |
% |
|
Tier 1 capital ratio (1) |
|
12.83 |
% |
12.72 |
% |
12.63 |
% |
12.60 |
% |
12.74 |
% |
|
Total capital ratio (1) |
|
16.18 |
% |
16.08 |
% |
15.96 |
% |
15.65 |
% |
16.32 |
% |
|
Risk-weighted assets (1) |
|
$ |
17,713,506 |
|
$ |
17,520,609 |
|
$ |
17,226,658 |
|
$ |
17,170,292 |
|
$ |
14,038,839 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity to assets ratio |
|
21.31 |
% |
21.34 |
% |
21.19 |
% |
20.66 |
% |
21.30 |
% |
|
Tangible common equity ratio (2) |
|
12.19 |
% |
12.12 |
% |
11.87 |
% |
11.38 |
% |
12.21 |
% |
|
Book value per share |
|
$ |
37.29 |
|
$ |
37.05 |
|
$ |
36.60 |
|
$ |
36.22 |
|
$ |
34.76 |
|
|
Tangible book value per share (2) |
|
$ |
19.12 |
|
$ |
18.83 |
|
$ |
18.33 |
|
$ |
17.86 |
|
$ |
17.86 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pacific Western Bank Capital: |
|
|
|
|
|
|
|
|
|
|
|
|
Tier 1 leverage ratio (1) |
|
11.54 |
% |
11.38 |
% |
11.10 |
% |
11.40 |
% |
11.56 |
% |
|
Common equity tier 1 capital ratio (1) |
|
12.21 |
% |
12.13 |
% |
12.18 |
% |
12.03 |
% |
12.25 |
% |
|
Tier 1 capital ratio (1) |
|
12.21 |
% |
12.13 |
% |
12.18 |
% |
12.03 |
% |
12.25 |
% |
|
Total capital ratio (1) |
|
13.15 |
% |
13.06 |
% |
13.05 |
% |
12.80 |
% |
13.05 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity to assets ratio |
|
20.77 |
% |
20.82 |
% |
20.70 |
% |
20.19 |
% |
20.75 |
% |
|
Tangible common equity ratio (2) |
|
11.56 |
% |
11.51 |
% |
11.27 |
% |
10.80 |
% |
11.53 |
% |
(1) Capital information for September 30, 2016 is preliminary.
(2) Non-GAAP measure.
21
GAAP TO NON-GAAP RECONCILIATIONS
This press release contains certain non-GAAP financial disclosures for return on average tangible equity, tangible common equity ratio, tangible book value per share, core net interest margin, core loan and lease yield, and adjusted allowance for credit losses to loans and leases. The Company uses these non-GAAP financial measures to provide meaningful supplemental information regarding the Company’s operational performance and to enhance investors’ overall understanding of such financial performance. In particular, the use of return on average tangible equity, tangible common equity ratio, and tangible book value per share is prevalent among banking regulators, investors and analysts. Accordingly, we disclose the non-GAAP measures in addition to the related GAAP measures of return on average equity, equity to assets ratio, book value per share, net interest margin, loan and lease yield, and allowance for credit losses to loans and leases, respectively.
The reconciliations for the following GAAP financial measures to the non-GAAP financial measures are presented earlier in this press release: (1) net interest margin to core net interest margin, (2) loan and lease yield to core loan and lease yield, and (3) allowance for credit losses to loans and leases to adjusted allowance for credit losses to loans and leases.
The reconciliations for the following GAAP financial measures to the non-GAAP financial measures are presented below: (1) return on average equity to return on average tangible equity, (2) equity to assets ratio to tangible common equity ratio, and (3) book value per share to tangible book value per share.
PACWEST BANCORP AND SUBSIDIARIES
GAAP TO NON-GAAP RECONCILIATION
|
|
|
Three Months Ended |
|
Nine Months Ended |
|
|
|
|
September 30, |
|
June 30, |
|
September 30, |
|
September 30, |
|
|
Return on Average Tangible Equity |
|
2016 |
|
2016 |
|
2015 |
|
2016 |
|
2015 |
|
|
|
|
(Dollars in thousands) |
|
|
Net earnings |
|
$ |
93,895 |
|
$ |
82,168 |
|
$ |
69,616 |
|
$ |
266,519 |
|
$ |
227,778 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average stockholders’ equity |
|
$ |
4,530,701 |
|
$ |
4,483,593 |
|
$ |
3,572,765 |
|
$ |
4,484,468 |
|
$ |
3,551,763 |
|
|
Less: Average intangible assets |
|
2,217,564 |
|
2,222,007 |
|
1,741,902 |
|
2,222,346 |
|
1,740,911 |
|
|
Average tangible common equity |
|
$ |
2,313,137 |
|
$ |
2,261,586 |
|
$ |
1,830,863 |
|
$ |
2,262,122 |
|
$ |
1,810,852 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on average equity (1) |
|
8.24 |
% |
7.37 |
% |
7.73 |
% |
7.94 |
% |
8.57 |
% |
|
Return on average tangible equity (2) |
|
16.15 |
% |
14.61 |
% |
15.09 |
% |
15.74 |
% |
16.82 |
% |
(1) Annualized net earnings divided by average stockholders’ equity.
(2) Annualized net earnings divided by average tangible common equity.
22
PACWEST BANCORP AND SUBSIDIARIES
GAAP TO NON-GAAP RECONCILIATION
|
Tangible Common Equity Ratio/ |
|
September 30, |
|
June 30, |
|
March 31, |
|
December 31, |
|
September 30, |
|
|
Tangible Book Value Per Share |
|
2016 |
|
2016 |
|
2016 |
|
2015 |
|
2015 |
|
|
|
|
(Dollars in thousands) |
|
|
PacWest Bancorp Consolidated: |
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders’ equity |
|
$ |
4,542,595 |
|
$ |
4,513,304 |
|
$ |
4,456,592 |
|
$ |
4,397,691 |
|
$ |
3,581,704 |
|
|
Less: Intangible assets |
|
2,213,491 |
|
2,219,557 |
|
2,223,928 |
|
2,229,511 |
|
1,741,084 |
|
|
Tangible common equity |
|
$ |
2,329,104 |
|
$ |
2,293,747 |
|
$ |
2,232,664 |
|
$ |
2,168,180 |
|
$ |
1,840,620 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets |
|
$ |
21,315,291 |
|
$ |
21,147,139 |
|
$ |
21,031,009 |
|
$ |
21,288,490 |
|
$ |
16,814,105 |
|
|
Less: Intangible assets |
|
2,213,491 |
|
2,219,557 |
|
2,223,928 |
|
2,229,511 |
|
1,741,084 |
|
|
Tangible assets |
|
$ |
19,101,800 |
|
$ |
18,927,582 |
|
$ |
18,807,081 |
|
$ |
19,058,979 |
|
$ |
15,073,021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity to assets ratio |
|
21.31 |
% |
21.34 |
% |
21.19 |
% |
20.66 |
% |
21.30 |
% |
|
Tangible common equity ratio (1) |
|
12.19 |
% |
12.12 |
% |
11.87 |
% |
11.38 |
% |
12.21 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Book value per share |
|
$ |
37.29 |
|
$ |
37.05 |
|
$ |
36.60 |
|
$ |
36.22 |
|
$ |
34.76 |
|
|
Tangible book value per share (2) |
|
$ |
19.12 |
|
$ |
18.83 |
|
$ |
18.33 |
|
$ |
17.86 |
|
$ |
17.86 |
|
|
Shares outstanding |
|
121,817,524 |
|
121,819,849 |
|
121,771,252 |
|
121,413,727 |
|
103,053,694 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pacific Western Bank: |
|
|
|
|
|
|
|
|
|
|
|
|
Stockholder’s equity |
|
$ |
4,416,623 |
|
$ |
4,390,928 |
|
$ |
4,331,841 |
|
$ |
4,276,279 |
|
$ |
3,466,817 |
|
|
Less: Intangible assets |
|
2,213,491 |
|
2,219,557 |
|
2,223,928 |
|
2,229,511 |
|
1,741,084 |
|
|
Tangible common equity |
|
$ |
2,203,132 |
|
$ |
2,171,371 |
|
$ |
2,107,913 |
|
$ |
2,046,768 |
|
$ |
1,725,733 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets |
|
$ |
21,266,705 |
|
$ |
21,084,950 |
|
$ |
20,928,105 |
|
$ |
21,180,689 |
|
$ |
16,707,072 |
|
|
Less: Intangible assets |
|
2,213,491 |
|
2,219,557 |
|
2,223,928 |
|
2,229,511 |
|
1,741,084 |
|
|
Tangible assets |
|
$ |
19,053,214 |
|
$ |
18,865,393 |
|
$ |
18,704,177 |
|
$ |
18,951,178 |
|
$ |
14,965,988 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity to assets ratio |
|
20.77 |
% |
20.82 |
% |
20.70 |
% |
20.19 |
% |
20.75 |
% |
|
Tangible common equity ratio |
|
11.56 |
% |
11.51 |
% |
11.27 |
% |
10.80 |
% |
11.53 |
% |
(1) Tangible common equity divided by tangible assets.
(2) Tangible common equity divided by shares outstanding.
23
