UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest
event reported) April 16, 2019
PacWest Bancorp
(Exact name of registrant as specified in its charter)
Delaware |
|
001-36408 |
|
33-0885320 |
(State of |
|
(Commission File Number) |
|
(IRS Employer |
Incorporation) |
|
|
|
Identification No.) |
9701 Wilshire Blvd., Suite 700, Beverly Hills, California 90212
(Address of principal executive offices and zip code)
(310) 887-8500
(Registrants telephone number, including area code)
N/A
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230-425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company o
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Item 2.02 Results of Operations and Financial Condition.*
On April 16, 2019, PacWest Bancorp announced its results of operations and financial condition for the three months ended March 31, 2019. The press release announcing the financial results for the three months ended March 31, 2019 is furnished as Exhibit 99.1 and incorporated herein by reference. A presentation regarding the Companys financial results for the three months ended March 31, 2019 is furnished as Exhibit 99.2 and incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits.*
(d) Exhibits.
Exhibit Number |
|
Description |
|
|
|
99.1 |
|
|
99.2 |
|
*The information furnished under Item 2.02 and Item 9.01 of this Current Report on Form 8-K, including the exhibit, shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities under that Section, nor shall it be deemed incorporated by reference in any registration statement or other filings of PacWest Bancorp under the Securities Act of 1933, as amended, except as shall be set forth by specific reference in such filing.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
|
PacWest Bancorp | |
|
| |
|
By: |
/s/ Bart R. Olson |
|
Name: |
Bart R. Olson |
|
Title: |
Executive Vice President |
|
|
Chief Accounting Officer |
Date: April 16, 2019
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 |
April 16, 2019 |
PACWEST BANCORP ANNOUNCES RESULTS
FOR THE FIRST QUARTER 2019
Highlights
· Net Earnings of $112.6 Million, or $0.92 Per Diluted Share
· Tax Equivalent Net Interest Margin of 4.69%
· Loan and Lease Production of $1.2 Billion; $350 Million of Net Loan Growth
· Net Charge-offs Less Than $200 Thousand
· Provision for Credit Losses Decreases 67% to $4.0 Million
· Core Deposits Represent 84% of Total Deposits
Los Angeles, California . . . PacWest Bancorp (Nasdaq: PACW) today announced net earnings for the first quarter of 2019 of $112.6 million, or $0.92 per diluted share, compared to net earnings for the fourth quarter of 2018 of $115.0 million, or $0.93 per diluted share.
Matt Wagner, President and CEO, commented, We continue to see the results of our credit de-risking strategy with continued downward trends in net charge-offs and credit loss provision and continued improvement in our credit quality metrics. Our first quarter of 2019 results produced a return on assets of 1.77% and a return on tangible equity of 20.64%.
Mr. Wagner continued, We had one of our strongest first quarters in terms of loan production and net loan growth and will work to continue that momentum into the rest of 2019 with an emphasis on core deposit generation. We also received approval to open a full-service branch office in Denver, Colorado and will continue to execute our expansion plans in that market.
FINANCIAL HIGHLIGHTS
|
|
At or For the |
|
|
|
At or For the |
|
|
| ||||||||||
|
|
Three Months Ended |
|
|
|
Three Months Ended |
|
|
| ||||||||||
|
|
March 31, |
|
December 31, |
|
Increase |
|
March 31, |
|
Increase |
| ||||||||
Financial Highlights |
|
2019 |
|
2018 |
|
(Decrease) |
|
2019 |
|
2018 |
|
(Decrease) |
| ||||||
|
|
(Dollars in thousands, except per share data) |
| ||||||||||||||||
Net earnings |
|
$ |
112,604 |
|
$ |
115,041 |
|
$ |
(2,437 |
) |
$ |
112,604 |
|
$ |
118,276 |
|
$ |
(5,672 |
) |
Diluted earnings per share |
|
$ |
0.92 |
|
$ |
0.93 |
|
$ |
(0.01 |
) |
$ |
0.92 |
|
$ |
0.93 |
|
$ |
(0.01 |
) |
Return on average assets |
|
1.77 |
% |
1.84 |
% |
(0.07 |
) |
1.77 |
% |
1.99 |
% |
(0.22 |
) | ||||||
Return on average tangible equity (1) |
|
20.64 |
% |
21.23 |
% |
(0.59 |
) |
20.64 |
% |
21.08 |
% |
(0.44 |
) | ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Net interest margin (NIM) (tax equivalent) |
|
4.69 |
% |
4.91 |
% |
(0.22 |
) |
4.69 |
% |
5.11 |
% |
(0.42 |
) | ||||||
Yield on average loans and leases (tax equivalent) |
|
6.16 |
% |
6.27 |
% |
(0.11 |
) |
6.16 |
% |
6.11 |
% |
0.05 |
| ||||||
Cost of average total deposits |
|
0.73 |
% |
0.62 |
% |
0.11 |
|
0.73 |
% |
0.31 |
% |
0.42 |
| ||||||
Efficiency ratio |
|
42.4 |
% |
41.7 |
% |
0.7 |
|
42.4 |
% |
41.7 |
% |
0.7 |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Total assets |
|
$ |
26,324,138 |
|
$ |
25,731,354 |
|
$ |
592,784 |
|
$ |
26,324,138 |
|
$ |
24,149,330 |
|
$ |
2,174,808 |
|
Loans and leases held for investment, net of deferred fees |
|
$ |
18,307,697 |
|
$ |
17,957,713 |
|
$ |
349,984 |
|
$ |
18,307,697 |
|
$ |
16,455,285 |
|
$ |
1,852,412 |
|
Noninterest-bearing demand deposits |
|
$ |
7,712,409 |
|
$ |
7,888,915 |
|
$ |
(176,506 |
) |
$ |
7,712,409 |
|
$ |
8,232,140 |
|
$ |
(519,731 |
) |
Core deposits |
|
$ |
16,127,638 |
|
$ |
16,346,671 |
|
$ |
(219,033 |
) |
$ |
16,127,638 |
|
$ |
15,661,529 |
|
$ |
466,109 |
|
Total deposits |
|
$ |
19,285,927 |
|
$ |
18,870,501 |
|
$ |
415,426 |
|
$ |
19,285,927 |
|
$ |
18,078,788 |
|
$ |
1,207,139 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
As percentage of total deposits: |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Noninterest-bearing demand deposits |
|
40 |
% |
42 |
% |
(2 |
) |
40 |
% |
46 |
% |
(6 |
) | ||||||
Core deposits |
|
84 |
% |
87 |
% |
(3 |
) |
84 |
% |
87 |
% |
(3 |
) | ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Equity to assets ratio |
|
18.20 |
% |
18.75 |
% |
(0.55 |
) |
18.20 |
% |
20.16 |
% |
(1.96 |
) | ||||||
Tangible common equity ratio (1) |
|
9.23 |
% |
9.60 |
% |
(0.37 |
) |
9.23 |
% |
10.43 |
% |
(1.20 |
) | ||||||
Book value per share |
|
$ |
39.86 |
|
$ |
39.17 |
|
$ |
0.69 |
|
$ |
39.86 |
|
$ |
38.47 |
|
$ |
1.39 |
|
Tangible book value per share (1) |
|
$ |
18.22 |
|
$ |
18.02 |
|
$ |
0.20 |
|
$ |
18.22 |
|
$ |
17.75 |
|
$ |
0.47 |
|
(1) Non-GAAP measure.
INCOME STATEMENT HIGHLIGHTS
Net Interest Income
Net interest income decreased by $6.9 million to $254.9 million for the first quarter of 2019 compared to $261.8 million for the fourth quarter of 2018 due to interest expense growth exceeding interest income growth and two less days in the first quarter compared to the fourth quarter. Interest expense increased by $8.7 million due mainly to higher deposit costs, offset partially by two less days in the first quarter of 2019. Interest income increased by $1.8 million due primarily to a higher balance of average loans and leases, offset partially by a lower yield on average loans and leases and two less days in the first quarter of 2019. The tax equivalent yield on average loans and leases was 6.16% for the first quarter of 2019 compared to 6.27% for the fourth quarter of 2018. The decrease in the yield on average loans and leases was due principally to lower discount accretion on acquired loans (seven basis points in the first quarter versus 16 basis points in the fourth quarter).
The tax equivalent NIM was 4.69% for the first quarter of 2019 compared to 4.91% for the fourth quarter of 2018. The decrease in the NIM was due mainly to higher deposit and borrowing costs and a lower yield on average loans and leases.
The cost of average total deposits increased to 0.73% for the first quarter of 2019 from 0.62% for the fourth quarter of 2018. The increase was driven primarily by a shift in our deposit mix with increases in time and money market deposits and lower noninterest-bearing demand deposits along with higher rates paid on deposits in conjunction with the Federal Reserve December rate move.
Provision for Credit Losses
The following table presents details of the provision for credit losses for the periods indicated:
|
|
Three Months Ended |
|
|
| |||||
|
|
March 31, |
|
December 31, |
|
Increase |
| |||
Provision for Credit Losses |
|
2019 |
|
2018 |
|
(Decrease) |
| |||
|
|
(In thousands) |
| |||||||
Addition to allowance for loan and lease losses |
|
$ |
4,000 |
|
$ |
10,500 |
|
$ |
(6,500 |
) |
Addition to reserve for unfunded loan commitments |
|
|
|
1,500 |
|
(1,500 |
) | |||
Total provision for credit losses |
|
$ |
4,000 |
|
$ |
12,000 |
|
$ |
(8,000 |
) |
Noninterest Income
The following table presents details of noninterest income for the periods indicated:
|
|
Three Months Ended |
|
|
| |||||
|
|
March 31, |
|
December 31, |
|
Increase |
| |||
Noninterest Income |
|
2019 |
|
2018 |
|
(Decrease) |
| |||
|
|
(In thousands) |
| |||||||
Service charges on deposit accounts |
|
$ |
3,730 |
|
$ |
4,091 |
|
$ |
(361 |
) |
Other commissions and fees |
|
11,008 |
|
11,114 |
|
(106 |
) | |||
Leased equipment income |
|
9,282 |
|
9,384 |
|
(102 |
) | |||
Gain on sale of securities |
|
2,161 |
|
786 |
|
1,375 |
| |||
Other income: |
|
|
|
|
|
|
| |||
Dividends and gains (losses) on equity investments |
|
296 |
|
(1,331 |
) |
1,627 |
| |||
Warrant income |
|
2,279 |
|
2,187 |
|
92 |
| |||
Other |
|
2,308 |
|
7,295 |
|
(4,987 |
) | |||
Total noninterest income |
|
$ |
31,064 |
|
$ |
33,526 |
|
$ |
(2,462 |
) |
Noninterest income decreased by $2.5 million to $31.1 million for the first quarter of 2019 compared to $33.5 million for the fourth quarter of 2018 due mainly to a $5.0 million decrease in other income, offset partially by an increase of $1.6 million in dividends and gains on equity investments and a $1.4 million increase in gain on sale of securities. Other income decreased due primarily to lower miscellaneous income from borrower settlements and lower BOLI income attributable to a death benefit received in the fourth quarter of 2018. Dividends and gains on equity investments increased mainly due to negative mark-to-market valuation adjustments in the fourth quarter on equity investments arising from exercised warrants. The increase in gain on sale of securities was attributable to a net gain of $2.2 million on sales of $405.8 million of securities in the first quarter of 2019 as part of a partial portfolio repositioning compared to a net gain of $0.8 million on sales of $70.9 million of securities in the fourth quarter of 2018.
Noninterest Expense
The following table presents details of noninterest expense for the periods indicated:
|
|
Three Months Ended |
|
|
| |||||
|
|
March 31, |
|
December 31, |
|
Increase |
| |||
Noninterest Expense |
|
2019 |
|
2018 |
|
(Decrease) |
| |||
|
|
(In thousands) |
| |||||||
Compensation |
|
$ |
70,845 |
|
$ |
69,299 |
|
$ |
1,546 |
|
Occupancy |
|
14,320 |
|
13,356 |
|
964 |
| |||
Data processing |
|
6,925 |
|
6,930 |
|
(5 |
) | |||
Other professional services |
|
4,513 |
|
6,198 |
|
(1,685 |
) | |||
Insurance and assessments |
|
4,038 |
|
4,202 |
|
(164 |
) | |||
Intangible asset amortization |
|
4,870 |
|
4,986 |
|
(116 |
) | |||
Leased equipment depreciation |
|
5,651 |
|
5,758 |
|
(107 |
) | |||
Foreclosed assets expense (income), net |
|
29 |
|
(311 |
) |
340 |
| |||
Acquisition, integration and reorganization costs |
|
618 |
|
970 |
|
(352 |
) | |||
Loan expense |
|
2,885 |
|
2,991 |
|
(106 |
) | |||
Other |
|
11,593 |
|
14,856 |
|
(3,263 |
) | |||
Total noninterest expense |
|
$ |
126,287 |
|
$ |
129,235 |
|
$ |
(2,948 |
) |
Noninterest expense decreased by $2.9 million to $126.3 million for the first quarter of 2019 compared to $129.2 million for the fourth quarter of 2018 attributable primarily to a $3.3 million decrease in other expense and a $1.7 million decrease in other professional services, offset partially by a $1.5 million increase in compensation expense. The decrease in other expense was mainly due to the $2.1 million write-off of the Square 1 Bank trademark asset in the fourth quarter of 2018 as a result of our plan to retire the Square 1 Bank name and increased employee expense in the fourth quarter of 2018 due to executive relocation costs. Other professional services expense decreased due to lower legal and consulting expenses. Compensation expense increased due to normal seasonal increases in payroll tax and other employee benefit expenses and higher bonus expense, offset partially by lower stock compensation expense, due to an increase in forfeitures, and lower commissions expense.
Income Taxes
The overall effective income tax rate was 27.7% for the first quarter of 2019 and 25.3% for the fourth quarter of 2018. The fourth quarter 2018 effective tax rate was lower due primarily to a change in the state apportionment method applied by the state of Maryland. The effective tax rate for the full year 2019 is estimated to be in the range of 27-28%.
BALANCE SHEET HIGHLIGHTS
Loans and Leases
The following table presents roll forwards of loans and leases held for investment, net of deferred fees, for the periods indicated:
|
|
Three Months Ended |
| ||||
Roll Forward of Loans and Leases Held |
|
March 31, |
|
December 31, |
| ||
for Investment, Net of Deferred Fees (1) |
|
2019 |
|
2018 |
| ||
|
|
(Dollars in thousands) |
| ||||
Balance, beginning of period |
|
$ |
17,957,713 |
|
$ |
17,230,146 |
|
Additions: |
|
|
|
|
| ||
Production |
|
1,174,838 |
|
1,571,565 |
| ||
Disbursements |
|
1,192,972 |
|
1,186,351 |
| ||
Total production and disbursements |
|
2,367,810 |
|
2,757,916 |
| ||
Reductions: |
|
|
|
|
| ||
Payoffs |
|
(933,300 |
) |
(1,070,691 |
) | ||
Paydowns |
|
(1,038,964 |
) |
(920,633 |
) | ||
Total payoffs and paydowns |
|
(1,972,264 |
) |
(1,991,324 |
) | ||
Sales |
|
(16,936 |
) |
|
| ||
Transfers to foreclosed assets |
|
(37 |
) |
(13,679 |
) | ||
Charge-offs |
|
(3,465 |
) |
(25,346 |
) | ||
Transfers to loans held for sale |
|
(25,124 |
) |
|
| ||
Total reductions |
|
(2,017,826 |
) |
(2,030,349 |
) | ||
Balance, end of period |
|
$ |
18,307,697 |
|
$ |
17,957,713 |
|
|
|
|
|
|
| ||
Weighted average rate on production (2) |
|
5.11 |
% |
5.38 |
% |
(1) Includes direct financing leases but excludes equipment leased to others under operating leases.
(2) The weighted average rate on production presents contractual rates on a tax equivalent basis and excludes amortized fees. Amortized fees added approximately 24 basis points to loan yields in 2019 and 31 basis points to loan yields in 2018.
Loans and leases held for investment, net of deferred fees, increased by $350.0 million, or 8% annualized, in the first quarter of 2019 to $18.3 billion at March 31, 2019. The net loan growth in the first quarter was primarily from the real estate construction loan class and income producing and other residential loan class, which included $285 million of multi-family loan pool purchases.
The following table presents the composition of loans and leases held for investment, net of deferred fees, as of the dates indicated:
|
|
March 31, 2019 |
|
December 31, 2018 |
|
March 31, 2018 |
| |||||||||
|
|
|
|
% of |
|
|
|
% of |
|
|
|
% of |
| |||
Loan and Lease Portfolio (1) |
|
Amount |
|
Total |
|
Amount |
|
Total |
|
Amount |
|
Total |
| |||
|
|
(In thousands) |
| |||||||||||||
Real estate mortgage: |
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Commercial |
|
$ |
4,640,510 |
|
25 |
% |
$ |
4,824,298 |
|
27 |
% |
$ |
5,033,006 |
|
31 |
% |
Income producing and other residential |
|
3,518,948 |
|
19 |
% |
3,093,843 |
|
17 |
% |
2,521,237 |
|
15 |
% | |||
Total real estate mortgage |
|
8,159,458 |
|
44 |
% |
7,918,141 |
|
44 |
% |
7,554,243 |
|
46 |
% | |||
Real estate construction and land: |
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Commercial |
|
943,596 |
|
5 |
% |
912,583 |
|
5 |
% |
789,892 |
|
5 |
% | |||
Residential |
|
1,408,128 |
|
8 |
% |
1,321,073 |
|
8 |
% |
887,110 |
|
5 |
% | |||
Total real estate construction and land |
|
2,351,724 |
|
13 |
% |
2,233,656 |
|
13 |
% |
1,677,002 |
|
10 |
% | |||
Total real estate |
|
10,511,182 |
|
57 |
% |
10,151,797 |
|
57 |
% |
9,231,245 |
|
56 |
% | |||
Commercial: |
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Asset-based |
|
3,422,202 |
|
19 |
% |
3,305,421 |
|
18 |
% |
2,957,890 |
|
18 |
% | |||
Venture capital |
|
2,027,450 |
|
11 |
% |
2,038,748 |
|
11 |
% |
1,920,643 |
|
12 |
% | |||
Other commercial |
|
1,974,702 |
|
11 |
% |
2,060,426 |
|
12 |
% |
1,947,590 |
|
12 |
% | |||
Total commercial |
|
7,424,354 |
|
41 |
% |
7,404,595 |
|
41 |
% |
6,826,123 |
|
42 |
% | |||
Consumer |
|
372,161 |
|
2 |
% |
401,321 |
|
2 |
% |
397,917 |
|
2 |
% | |||
Total loans and leases held for investment, net of deferred fees |
|
$ |
18,307,697 |
|
100 |
% |
$ |
17,957,713 |
|
100 |
% |
$ |
16,455,285 |
|
100 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Total unfunded loan commitments |
|
$ |
7,465,392 |
|
|
|
$ |
7,528,248 |
|
|
|
$ |
6,352,803 |
|
|
|
(1) Excludes loans held for sale carried at lower of cost or fair value at March 31, 2019.
Allowance for Credit Losses
The following tables present roll forwards of the allowance for credit losses for the periods indicated:
|
|
Three Months Ended March 31, 2019 |
| |||||||
|
|
Allowance for |
|
Reserve for |
|
Total |
| |||
Allowance for Credit |
|
Loan and |
|
Unfunded Loan |
|
Allowance for |
| |||
Losses Rollforward |
|
Lease Losses |
|
Commitments |
|
Credit Losses |
| |||
|
|
(In thousands) |
| |||||||
Beginning balance |
|
$ |
132,472 |
|
$ |
36,861 |
|
$ |
169,333 |
|
Charge-offs |
|
(3,465 |
) |
|
|
(3,465 |
) | |||
Recoveries |
|
3,274 |
|
|
|
3,274 |
| |||
Net charge-offs |
|
(191 |
) |
|
|
(191 |
) | |||
Provision |
|
4,000 |
|
|
|
4,000 |
| |||
Ending balance |
|
$ |
136,281 |
|
$ |
36,861 |
|
$ |
173,142 |
|
|
|
Three Months Ended December 31, 2018 |
| |||||||
|
|
Allowance for |
|
Reserve for |
|
Total |
| |||
Allowance for Credit |
|
Loan and |
|
Unfunded Loan |
|
Allowance for |
| |||
Losses Rollforward |
|
Lease Losses |
|
Commitments |
|
Credit Losses |
| |||
|
|
(In thousands) |
| |||||||
Beginning balance |
|
$ |
141,920 |
|
$ |
35,361 |
|
$ |
177,281 |
|
Charge-offs |
|
(25,346 |
) |
|
|
(25,346 |
) | |||
Recoveries |
|
5,398 |
|
|
|
5,398 |
| |||
Net charge-offs |
|
(19,948 |
) |
|
|
(19,948 |
) | |||
Provision |
|
10,500 |
|
1,500 |
|
12,000 |
| |||
Ending balance |
|
$ |
132,472 |
|
$ |
36,861 |
|
$ |
169,333 |
|
The allowance for credit losses as a percentage of loans and leases held for investment increased to 0.95% at March 31, 2019 from 0.94% at December 31, 2018.
Gross charge-offs for the first quarter of 2019 were $3.5 million and were primarily for other commercial loans. Gross charge-offs for the fourth quarter of 2018 were $25.3 million and included $23.4 million for venture capital loans, of which $20.0 million related to two loans, and $1.7 million for other commercial loans. Recoveries for the first quarter of 2019 were $3.3 million and included $2.3 million for venture capital loans and $0.8 million for other commercial loans. Recoveries for the fourth quarter of 2018 were $5.4 million and included $3.1 million for venture capital loans and $1.7 million for other commercial loans.
For the first quarter of 2019 and fourth quarter of 2018, annualized net charge-offs to average loans and leases were 0.00% and 0.46%.
Deposits and Client Investment Funds
The following table presents the composition of our deposit portfolio as of the dates indicated:
|
|
March 31, 2019 |
|
December 31, 2018 |
|
March 31, 2018 |
| |||||||||
|
|
|
|
% of |
|
|
|
% of |
|
|
|
% of |
| |||
Deposit Composition |
|
Amount |
|
Total |
|
Amount |
|
Total |
|
Amount |
|
Total |
| |||
|
|
(Dollars in thousands) |
| |||||||||||||
Noninterest-bearing demand |
|
$ |
7,712,409 |
|
40 |
% |
$ |
7,888,915 |
|
42 |
% |
$ |
8,232,140 |
|
46 |
% |
Interest checking |
|
3,163,228 |
|
16 |
% |
2,842,463 |
|
15 |
% |
2,076,152 |
|
11 |
% | |||
Money market |
|
4,714,078 |
|
25 |
% |
5,043,871 |
|
27 |
% |
4,676,734 |
|
26 |
% | |||
Savings |
|
537,923 |
|
3 |
% |
571,422 |
|
3 |
% |
676,503 |
|
4 |
% | |||
Total core deposits |
|
16,127,638 |
|
84 |
% |
16,346,671 |
|
87 |
% |
15,661,529 |
|
87 |
% | |||
Non-core non-maturity deposits |
|
454,277 |
|
2 |
% |
518,192 |
|
3 |
% |
585,399 |
|
3 |
% | |||
Total non-maturity deposits |
|
16,581,915 |
|
86 |
% |
16,864,863 |
|
90 |
% |
16,246,928 |
|
90 |
% | |||
Time deposits $250,000 and under |
|
2,258,989 |
|
12 |
% |
1,593,453 |
|
8 |
% |
1,482,118 |
|
8 |
% | |||
Time deposits over $250,000 |
|
445,023 |
|
2 |
% |
412,185 |
|
2 |
% |
349,742 |
|
2 |
% | |||
Total time deposits |
|
2,704,012 |
|
14 |
% |
2,005,638 |
|
10 |
% |
1,831,860 |
|
10 |
% | |||
Total deposits |
|
$ |
19,285,927 |
|
100 |
% |
$ |
18,870,501 |
|
100 |
% |
$ |
18,078,788 |
|
100 |
% |
At March 31, 2019, core deposits totaled $16.1 billion, or 84% of total deposits, including $7.7 billion of noninterest-bearing demand deposits, or 40% 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 off-balance sheet client investment funds at March 31, 2019 were $2.2 billion, of which $1.6 billion was managed by S1AM.
CREDIT QUALITY
The following table presents loan and lease credit quality metrics as of the dates indicated:
|
|
March 31, |
|
December 31, |
|
Increase |
| |||
Credit Quality Metrics |
|
2019 |
|
2018 |
|
(Decrease) |
| |||
|
|
(Dollars in thousands) |
| |||||||
NPAs and Performing TDRs: |
|
|
|
|
|
|
| |||
Nonaccrual loans and leases held for investment (1)(2) |
|
$ |
88,527 |
|
$ |
79,333 |
|
$ |
9,194 |
|
Accruing loans contractually past due 90 days or more |
|
|
|
|
|
|
| |||
Foreclosed assets, net |
|
3,291 |
|
5,299 |
|
(2,008 |
) | |||
Total nonperforming assets (NPAs) |
|
$ |
91,818 |
|
$ |
84,632 |
|
$ |
7,186 |
|
|
|
|
|
|
|
|
| |||
Nonaccrual loans and leases held for investment to loans and leases held for investment |
|
0.48 |
% |
0.44 |
% |
|
| |||
Nonperforming assets to loans and leases held for investment and foreclosed assets |
|
0.50 |
% |
0.47 |
% |
|
| |||
|
|
|
|
|
|
|
| |||
Nonaccrual loans and leases held for investment (1)(2) |
|
$ |
88,527 |
|
$ |
79,333 |
|
$ |
9,194 |
|
Performing TDRs held for investment |
|
17,027 |
|
17,701 |
|
(674 |
) | |||
Total impaired loans and leases |
|
$ |
105,554 |
|
$ |
97,034 |
|
$ |
8,520 |
|
|
|
|
|
|
|
|
| |||
Loan and Lease Credit Risk Ratings: |
|
|
|
|
|
|
| |||
Pass |
|
$ |
17,824,612 |
|
$ |
17,459,205 |
|
$ |
365,407 |
|
Special mention |
|
292,780 |
|
261,398 |
|
31,382 |
| |||
Classified (1) |
|
190,305 |
|
237,110 |
|
(46,805 |
) | |||
Total loans and leases held for investment, net of deferred fees |
|
$ |
18,307,697 |
|
$ |
17,957,713 |
|
$ |
349,984 |
|
|
|
|
|
|
|
|
| |||
Classified loans and leases held for investment to loans and leases held for investment |
|
1.04 |
% |
1.32 |
% |
|
| |||
|
|
|
|
|
|
|
| |||
Allowance for Credit Losses: |
|
|
|
|
|
|
| |||
Allowance for credit losses |
|
$ |
173,142 |
|
$ |
169,333 |
|
$ |
3,809 |
|
Provision for credit losses (for the quarter) |
|
$ |
4,000 |
|
$ |
12,000 |
|
$ |
(8,000 |
) |
Net charge-offs (for the quarter) |
|
$ |
191 |
|
$ |
19,948 |
|
$ |
(19,757 |
) |
Net charge-offs to average loans and leases (for the quarter) |
|
0.00 |
% |
0.46 |
% |
|
| |||
Allowance for credit losses to loans and leases held for investment |
|
0.95 |
% |
0.94 |
% |
|
| |||
Allowance for credit losses to nonaccrual loans and leases held for investment |
|
195.6 |
% |
213.5 |
% |
|
|
(1) Excludes loans held for sale carried at lower of cost or fair value at March 31, 2019.
(2) Nonaccrual loans include guaranteed amounts of $10.2 million at March 31, 2019 and $11.2 million at December 31, 2018.
Nonaccrual, classified, and special mention loans and leases fluctuate from period to period as a result of loan repayments and our ongoing active portfolio monitoring.
During the first quarter of 2019, nonaccrual loans and leases increased $9.2 million from what was a five-year low as of December 31, 2018, while classified loans and leases decreased by $46.8 million driven primarily by the payoff of a $30 million commercial real estate mortgage loan.
The following table presents nonaccrual loans and leases and accruing loans and leases past due between 30 and 89 days by portfolio segment and class as of the dates indicated:
|
|
Nonaccrual Loans and Leases (1) |
|
Accruing and |
| ||||||||||||
|
|
March 31, 2019 |
|
December 31, 2018 |
|
30-89 Days Past Due |
| ||||||||||
|
|
|
|
% of |
|
|
|
% of |
|
March 31, |
|
December 31, |
| ||||
|
|
|
|
Loan |
|
|
|
Loan |
|
2019 |
|
2018 |
| ||||
|
|
Amount |
|
Category |
|
Amount |
|
Category |
|
Amount |
|
Amount |
| ||||
|
|
(Dollars in thousands) |
| ||||||||||||||
Real estate mortgage: |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Commercial |
|
$ |
12,750 |
|
0.3 |
% |
$ |
15,321 |
|
0.3 |
% |
$ |
6,863 |
|
$ |
3,276 |
|
Income producing and other residential |
|
2,444 |
|
0.1 |
% |
2,524 |
|
0.1 |
% |
1,853 |
|
1,557 |
| ||||
Total real estate mortgage |
|
15,194 |
|
0.2 |
% |
17,845 |
|
0.2 |
% |
8,716 |
|
4,833 |
| ||||
Real estate construction and land: |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Commercial |
|
430 |
|
0.0 |
% |
442 |
|
0.0 |
% |
|
|
|
| ||||
Residential |
|
|
|
0.0 |
% |
|
|
0.0 |
% |
8,949 |
|
1,527 |
| ||||
Total real estate construction and land |
|
430 |
|
0.0 |
% |
442 |
|
0.0 |
% |
8,949 |
|
1,527 |
| ||||
Commercial: |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Asset-based |
|
43,406 |
|
1.3 |
% |
32,324 |
|
1.0 |
% |
3,750 |
|
47 |
| ||||
Venture capital |
|
20,437 |
|
1.0 |
% |
20,299 |
|
1.0 |
% |
4,500 |
|
1,028 |
| ||||
Other commercial |
|
8,633 |
|
0.4 |
% |
7,380 |
|
0.4 |
% |
1,694 |
|
2,467 |
| ||||
Total commercial |
|
72,476 |
|
1.0 |
% |
60,003 |
|
0.8 |
% |
9,944 |
|
3,542 |
| ||||
Consumer |
|
427 |
|
0.1 |
% |
1,043 |
|
0.3 |
% |
614 |
|
581 |
| ||||
Total held for investment |
|
$ |
88,527 |
|
0.5 |
% |
$ |
79,333 |
|
0.4 |
% |
$ |
28,223 |
|
$ |
10,483 |
|
(1) Excludes loans held for sale carried at lower of cost or fair value at March 31, 2019.
STOCK REPURCHASE PROGRAM
In February 2019, the Company announced a new stock repurchase program with an authorized repurchase amount not to exceed $225 million and with a program maturity of February 29, 2020. During the first quarter of 2019, we repurchased 3,070,676 shares at an average price of $38.94 and a total cost of $119.6 million, of which $65.4 million was under the new plan, leaving $159.6 million remaining under the plan as of March 31, 2019.
ABOUT PACWEST BANCORP
PacWest Bancorp (PacWest) is a bank holding company with over $26 billion in assets with one wholly-owned banking subsidiary, Pacific Western Bank (the Bank). The Bank has 74 full-service branches located throughout the state of California and one branch in Durham, North Carolina. Our Community Banking group provides lending and comprehensive deposit and treasury management services to small and medium-sized businesses conducted primarily through our California-based branch offices. We offer additional products and services through our National Lending and Venture Banking groups. National Lending provides asset-based, equipment, real estate and security cash flow loans and treasury management services to established middle-market businesses on a national basis. Venture Banking offers a comprehensive suite of financial services focused on entrepreneurial businesses and their venture capital and private equity investors, with offices located in key innovative 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 communication contains certain forward-looking information about PacWest that is intended to be covered by the safe harbor for forward-looking statements provided by the Private Securities Litigation Reform Act of 1995. Such statements include future financial and operating results, expectations, intentions and other statements that are not historical facts. Such statements are based on information available at the time of this communication and are based on current beliefs and expectations of the Companys management and are subject to significant risks, uncertainties and contingencies, many of which are beyond our control. Actual results may differ materially from those set forth in the forward-looking statements due to a variety of factors, including the risk factors described in documents filed by the Company with the Securities and Exchange Commission.
We are under no obligation (and expressly disclaim any such obligation) to update or alter our forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
PACWEST BANCORP AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
|
|
March 31, |
|
December 31, |
| ||
|
|
2019 |
|
2018 |
| ||
|
|
(Dollars in thousands, except per share data) |
| ||||
ASSETS: |
|
|
|
|
| ||
Cash and due from banks |
|
$ |
224,758 |
|
$ |
175,830 |
|
Interest-earning deposits in financial institutions |
|
332,124 |
|
209,937 |
| ||
Total cash and cash equivalents |
|
556,882 |
|
385,767 |
| ||
|
|
|
|
|
| ||
Securities available-for-sale, at estimated fair value |
|
3,994,708 |
|
4,009,431 |
| ||
Federal Home Loan Bank stock, at cost |
|
29,430 |
|
32,103 |
| ||
Total investment securities |
|
4,024,138 |
|
4,041,534 |
| ||
|
|
|
|
|
| ||
Loans held for sale |
|
25,124 |
|
|
| ||
|
|
|
|
|
| ||
Gross loans and leases held for investment |
|
18,371,295 |
|
18,026,365 |
| ||
Deferred fees, net |
|
(63,598 |
) |
(68,652 |
) | ||
Total loans and leases held for investment, net of deferred fees |
|
18,307,697 |
|
17,957,713 |
| ||
Allowance for loan and lease losses |
|
(136,281 |
) |
(132,472 |
) | ||
Total loans and leases held for investment, net |
|
18,171,416 |
|
17,825,241 |
| ||
|
|
|
|
|
| ||
Equipment leased to others under operating leases |
|
293,853 |
|
292,677 |
| ||
Premises and equipment, net |
|
37,783 |
|
34,661 |
| ||
Foreclosed assets, net |
|
3,291 |
|
5,299 |
| ||
Deferred tax asset, net |
|
|
|
17,489 |
| ||
Goodwill |
|
2,548,670 |
|
2,548,670 |
| ||
Core deposit and customer relationship intangibles, net |
|
52,250 |
|
57,120 |
| ||
Other assets |
|
610,731 |
|
522,896 |
| ||
Total assets |
|
$ |
26,324,138 |
|
$ |
25,731,354 |
|
|
|
|
|
|
| ||
LIABILITIES: |
|
|
|
|
| ||
Noninterest-bearing deposits |
|
$ |
7,712,409 |
|
$ |
7,888,915 |
|
Interest-bearing deposits |
|
11,573,518 |
|
10,981,586 |
| ||
Total deposits |
|
19,285,927 |
|
18,870,501 |
| ||
Borrowings |
|
1,481,087 |
|
1,371,114 |
| ||
Subordinated debentures |
|
454,458 |
|
453,846 |
| ||
Accrued interest payable and other liabilities |
|
311,684 |
|
210,305 |
| ||
Total liabilities |
|
21,533,156 |
|
20,905,766 |
| ||
STOCKHOLDERS EQUITY (1) |
|
4,790,982 |
|
4,825,588 |
| ||
Total liabilities and stockholders equity |
|
$ |
26,324,138 |
|
$ |
25,731,354 |
|
|
|
|
|
|
| ||
Book value per share |
|
$ |
39.86 |
|
$ |
39.17 |
|
Tangible book value per share (2) |
|
$ |
18.22 |
|
$ |
18.02 |
|
Shares outstanding |
|
120,201,149 |
|
123,189,833 |
|
| |||||||
(1) Includes net unrealized gain (loss) on securities available-for-sale, net |
|
$ |
37,258 |
|
$ |
(6,075 |
) |
(2) Non-GAAP measure. |
|
|
|
|
|
PACWEST BANCORP AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF EARNINGS
|
|
Three Months Ended |
| |||||||
|
|
March 31, |
|
December 31, |
|
March 31, |
| |||
|
|
2019 |
|
2018 |
|
2018 |
| |||
|
|
(Dollars in thousands, except per share data) |
| |||||||
Interest income: |
|
|
|
|
|
|
| |||
Loans and leases |
|
$ |
274,229 |
|
$ |
272,522 |
|
$ |
251,085 |
|
Investment securities |
|
29,680 |
|
29,690 |
|
26,138 |
| |||
Deposits in financial institutions |
|
650 |
|
527 |
|
552 |
| |||
Total interest income |
|
304,559 |
|
302,739 |
|
277,775 |
| |||
|
|
|
|
|
|
|
| |||
Interest expense: |
|
|
|
|
|
|
| |||
Deposits |
|
34,235 |
|
28,834 |
|
13,818 |
| |||
Borrowings |
|
7,710 |
|
4,602 |
|
920 |
| |||
Subordinated debentures |
|
7,738 |
|
7,538 |
|
6,537 |
| |||
Total interest expense |
|
49,683 |
|
40,974 |
|
21,275 |
| |||
|
|
|
|
|
|
|
| |||
Net interest income |
|
254,876 |
|
261,765 |
|
256,500 |
| |||
Provision for credit losses |
|
4,000 |
|
12,000 |
|
4,000 |
| |||
Net interest income after provision for credit losses |
|
250,876 |
|
249,765 |
|
252,500 |
| |||
|
|
|
|
|
|
|
| |||
Noninterest income: |
|
|
|
|
|
|
| |||
Service charges on deposit accounts |
|
3,730 |
|
4,091 |
|
4,174 |
| |||
Other commissions and fees |
|
11,008 |
|
11,114 |
|
10,265 |
| |||
Leased equipment income |
|
9,282 |
|
9,384 |
|
9,587 |
| |||
Gain on sale of loans and leases |
|
|
|
|
|
4,569 |
| |||
Gain on sale of securities |
|
2,161 |
|
786 |
|
6,311 |
| |||
Other income |
|
4,883 |
|
8,151 |
|
3,653 |
| |||
Total noninterest income |
|
31,064 |
|
33,526 |
|
38,559 |
| |||
|
|
|
|
|
|
|
| |||
Noninterest expense: |
|
|
|
|
|
|
| |||
Compensation |
|
70,845 |
|
69,299 |
|
71,023 |
| |||
Occupancy |
|
14,320 |
|
13,356 |
|
13,223 |
| |||
Data processing |
|
6,925 |
|
6,930 |
|
6,659 |
| |||
Other professional services |
|
4,513 |
|
6,198 |
|
4,439 |
| |||
Insurance and assessments |
|
4,038 |
|
4,202 |
|
5,727 |
| |||
Intangible asset amortization |
|
4,870 |
|
4,986 |
|
6,346 |
| |||
Leased equipment depreciation |
|
5,651 |
|
5,758 |
|
5,375 |
| |||
Foreclosed assets expense (income), net |
|
29 |
|
(311 |
) |
(122 |
) | |||
Acquisition, integration and reorganization costs |
|
618 |
|
970 |
|
|
| |||
Loan expense |
|
2,885 |
|
2,991 |
|
2,271 |
| |||
Other expense |
|
11,593 |
|
14,856 |
|
12,454 |
| |||
Total noninterest expense |
|
126,287 |
|
129,235 |
|
127,395 |
| |||
|
|
|
|
|
|
|
| |||
Earnings before income taxes |
|
155,653 |
|
154,056 |
|
163,664 |
| |||
Income tax expense |
|
43,049 |
|
39,015 |
|
45,388 |
| |||
Net earnings |
|
$ |
112,604 |
|
$ |
115,041 |
|
$ |
118,276 |
|
|
|
|
|
|
|
|
| |||
Basic and diluted earnings per share |
|
$ |
0.92 |
|
$ |
0.93 |
|
$ |
0.93 |
|
Dividends declared and paid per share |
|
$ |
0.60 |
|
$ |
0.60 |
|
$ |
0.50 |
|
PACWEST BANCORP AND SUBSIDIARIES
NET EARNINGS PER SHARE CALCULATIONS
|
|
Three Months Ended |
| |||||||
|
|
March 31, |
|
December 31, |
|
March 31, |
| |||
|
|
2019 |
|
2018 |
|
2018 |
| |||
|
|
(In thousands, except per share data) |
| |||||||
Basic Earnings Per Share: |
|
|
|
|
|
|
| |||
Net earnings |
|
$ |
112,604 |
|
$ |
115,041 |
|
$ |
118,276 |
|
Less: earnings allocated to unvested restricted stock (1) |
|
(1,163 |
) |
(1,219 |
) |
(1,115 |
) | |||
Net earnings allocated to common shares |
|
$ |
111,441 |
|
$ |
113,822 |
|
$ |
117,161 |
|
|
|
|
|
|
|
|
| |||
Weighted-average basic shares and unvested restricted stock outstanding |
|
122,227 |
|
123,238 |
|
127,487 |
| |||
Less: weighted-average unvested restricted stock outstanding |
|
(1,352 |
) |
(1,426 |
) |
(1,413 |
) | |||
Weighted-average basic shares outstanding |
|
120,875 |
|
121,812 |
|
126,074 |
| |||
|
|
|
|
|
|
|
| |||
Basic earnings per share |
|
$ |
0.92 |
|
$ |
0.93 |
|
$ |
0.93 |
|
|
|
|
|
|
|
|
| |||
Diluted Earnings Per Share: |
|
|
|
|
|
|
| |||
Net earnings allocated to common shares |
|
$ |
111,441 |
|
$ |
113,822 |
|
$ |
117,161 |
|
|
|
|
|
|
|
|
| |||
Weighted-average basic shares outstanding |
|
120,875 |
|
121,812 |
|
126,074 |
| |||
|
|
|
|
|
|
|
| |||
Diluted earnings per share |
|
$ |
0.92 |
|
$ |
0.93 |
|
$ |
0.93 |
|
(1) Represents cash dividends paid to holders of unvested stock, net of forfeitures, plus undistributed earnings amounts available to holders of unvested restricted stock, if any.
PACWEST BANCORP AND SUBSIDIARIES
AVERAGE BALANCE SHEET AND YIELD ANALYSIS
|
|
Three Months Ended |
| ||||||||||||||||||||||
|
|
March 31, 2019 |
|
December 31, 2018 |
|
March 31, 2018 |
| ||||||||||||||||||
|
|
|
|
Interest |
|
Average |
|
|
|
Interest |
|
Average |
|
|
|
Interest |
|
Average |
| ||||||
|
|
Average |
|
Income/ |
|
Yield/ |
|
Average |
|
Income/ |
|
Yield/ |
|
Average |
|
Income/ |
|
Yield/ |
| ||||||
|
|
Balance |
|
Expense |
|
Cost |
|
Balance |
|
Expense |
|
Cost |
|
Balance |
|
Expense |
|
Cost |
| ||||||
|
|
(Dollars in thousands) |
| ||||||||||||||||||||||
Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Loans and leases (1)(2) |
|
$ |
18,064,230 |
|
$ |
274,513 |
|
6.16 |
% |
$ |
17,275,343 |
|
$ |
272,824 |
|
6.27 |
% |
$ |
16,682,124 |
|
$ |
251,260 |
|
6.11 |
% |
Investment securities (3) |
|
3,968,531 |
|
30,572 |
|
3.12 |
% |
3,899,520 |
|
30,992 |
|
3.15 |
% |
3,682,138 |
|
27,935 |
|
3.08 |
% | ||||||
Deposits in financial institutions |
|
111,950 |
|
650 |
|
2.35 |
% |
94,500 |
|
527 |
|
2.21 |
% |
150,674 |
|
552 |
|
1.49 |
% | ||||||
Total interest-earning assets (1) |
|
22,144,711 |
|
305,735 |
|
5.60 |
% |
21,269,363 |
|
304,343 |
|
5.68 |
% |
20,514,936 |
|
279,747 |
|
5.53 |
% | ||||||
Other assets |
|
3,631,238 |
|
|
|
|
|
3,515,099 |
|
|
|
|
|
3,556,212 |
|
|
|
|
| ||||||
Total assets |
|
$ |
25,775,949 |
|
|
|
|
|
$ |
24,784,462 |
|
|
|
|
|
$ |
24,071,148 |
|
|
|
|
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Liabilities and Stockholders Equity: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Interest checking |
|
$ |
3,041,822 |
|
9,321 |
|
1.24 |
% |
$ |
2,785,702 |
|
7,932 |
|
1.13 |
% |
$ |
2,311,988 |
|
3,050 |
|
0.54 |
% | |||
Money market |
|
5,274,987 |
|
14,908 |
|
1.15 |
% |
5,107,468 |
|
13,621 |
|
1.06 |
% |
5,038,119 |
|
6,812 |
|
0.55 |
% | ||||||
Savings |
|
553,032 |
|
242 |
|
0.18 |
% |
597,259 |
|
273 |
|
0.18 |
% |
685,173 |
|
258 |
|
0.15 |
% | ||||||
Time |
|
2,286,932 |
|
9,764 |
|
1.73 |
% |
1,932,332 |
|
7,008 |
|
1.44 |
% |
1,923,963 |
|
3,698 |
|
0.78 |
% | ||||||
Total interest-bearing deposits |
|
11,156,773 |
|
34,235 |
|
1.24 |
% |
10,422,761 |
|
28,834 |
|
1.10 |
% |
9,959,243 |
|
13,818 |
|
0.56 |
% | ||||||
Borrowings |
|
1,218,319 |
|
7,710 |
|
2.57 |
% |
764,039 |
|
4,602 |
|
2.39 |
% |
239,293 |
|
920 |
|
1.56 |
% | ||||||
Subordinated debentures |
|
454,203 |
|
7,738 |
|
6.91 |
% |
452,998 |
|
7,538 |
|
6.60 |
% |
461,648 |
|
6,537 |
|
5.74 |
% | ||||||
Total interest-bearing liabilities |
|
12,829,295 |
|
49,683 |
|
1.57 |
% |
11,639,798 |
|
40,974 |
|
1.40 |
% |
10,660,184 |
|
21,275 |
|
0.81 |
% | ||||||
Noninterest-bearing demand deposits |
|
7,783,652 |
|
|
|
|
|
8,163,699 |
|
|
|
|
|
8,311,104 |
|
|
|
|
| ||||||
Other liabilities |
|
347,037 |
|
|
|
|
|
222,564 |
|
|
|
|
|
198,653 |
|
|
|
|
| ||||||
Total liabilities |
|
20,959,984 |
|
|
|
|
|
20,026,061 |
|
|
|
|
|
19,169,941 |
|
|
|
|
| ||||||
Stockholders equity |
|
4,815,965 |
|
|
|
|
|
4,758,401 |
|
|
|
|
|
4,901,207 |
|
|
|
|
| ||||||
Total liabilities and stockholders equity |
|
$ |
25,775,949 |
|
|
|
|
|
$ |
24,784,462 |
|
|
|
|
|
$ |
24,071,148 |
|
|
|
|
| |||
Net interest income (1) |
|
|
|
$ |
256,052 |
|
|
|
|
|
$ |
263,369 |
|
|
|
|
|
$ |
258,472 |
|
|
| |||
Net interest spread (1) |
|
|
|
|
|
4.03 |
% |
|
|
|
|
4.28 |
% |
|
|
|
|
4.72 |
% | ||||||
Net interest margin (1) |
|
|
|
|
|
4.69 |
% |
|
|
|
|
4.91 |
% |
|
|
|
|
5.11 |
% | ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Total deposits (4) |
|
$ |
18,940,425 |
|
$ |
34,235 |
|
0.73 |
% |
$ |
18,586,460 |
|
$ |
28,834 |
|
0.62 |
% |
$ |
18,270,347 |
|
$ |
13,818 |
|
0.31 |
% |
(1) Tax equivalent.
(2) Includes discount accretion on acquired loans of $3.0 million, $6.9 million, and $7.6 million for the three months ended March 31, 2019, December 31, 2018, and March 31, 2018, respectively.
(3) Includes tax-equivalent adjustments of $0.9 million, $1.3 million, and $1.8 million for the three months ended March 31, 2019, December 31, 2018, and March 31, 2018 related to tax-exempt income on investment securities. The federal statutory tax rate utilized was 21%.
(4) Total deposits is the sum of total interest-bearing deposits and noninterest-bearing demand deposits. The cost of total deposits is calculated as annualized interest expense on total deposits divided by average total deposits.
PACWEST BANCORP AND SUBSIDIARIES
FIVE QUARTER BALANCE SHEET
|
|
March 31, |
|
December 31, |
|
September 30, |
|
June 30, |
|
March 31, |
| |||||
|
|
2019 |
|
2018 |
|
2018 |
|
2018 |
|
2018 |
| |||||
|
|
(Dollars in thousands, except per share data) |
| |||||||||||||
ASSETS: |
|
|
|
|
|
|
|
|
|
|
| |||||
Cash and due from banks |
|
$ |
224,758 |
|
$ |
175,830 |
|
$ |
196,502 |
|
$ |
245,998 |
|
$ |
235,061 |
|
Interest-earning deposits in financial institutions |
|
332,124 |
|
209,937 |
|
185,284 |
|
205,567 |
|
312,735 |
| |||||
Total cash and cash equivalents |
|
556,882 |
|
385,767 |
|
381,786 |
|
451,565 |
|
547,796 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Securities available-for-sale |
|
3,994,708 |
|
4,009,431 |
|
3,820,333 |
|
3,857,788 |
|
3,801,986 |
| |||||
Federal Home Loan Bank stock |
|
29,430 |
|
32,103 |
|
31,077 |
|
26,271 |
|
17,250 |
| |||||
Total investment securities |
|
4,024,138 |
|
4,041,534 |
|
3,851,410 |
|
3,884,059 |
|
3,819,236 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Loans held for sale |
|
25,124 |
|
|
|
|
|
|
|
|
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Gross loans and leases held for investment |
|
18,371,295 |
|
18,026,365 |
|
17,295,589 |
|
16,947,502 |
|
16,516,627 |
| |||||
Deferred fees, net |
|
(63,598 |
) |
(68,652 |
) |
(65,443 |
) |
(62,310 |
) |
(61,342 |
) | |||||
Total loans and leases held for investment, net of deferred fees |
|
18,307,697 |
|
17,957,713 |
|
17,230,146 |
|
16,885,192 |
|
16,455,285 |
| |||||
Allowance for loan and lease losses |
|
(136,281 |
) |
(132,472 |
) |
(141,920 |
) |
(132,139 |
) |
(134,275 |
) | |||||
Total loans and leases held for investment, net |
|
18,171,416 |
|
17,825,241 |
|
17,088,226 |
|
16,753,053 |
|
16,321,010 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Equipment leased to others under operating leases |
|
293,853 |
|
292,677 |
|
275,707 |
|
266,576 |
|
280,648 |
| |||||
Premises and equipment, net |
|
37,783 |
|
34,661 |
|
34,012 |
|
34,513 |
|
33,686 |
| |||||
Foreclosed assets, net |
|
3,291 |
|
5,299 |
|
4,407 |
|
2,231 |
|
1,236 |
| |||||
Deferred tax asset, net |
|
|
|
17,489 |
|
41,280 |
|
25,551 |
|
12,584 |
| |||||
Goodwill |
|
2,548,670 |
|
2,548,670 |
|
2,548,670 |
|
2,548,670 |
|
2,548,670 |
| |||||
Core deposit and customer relationship intangibles, net |
|
52,250 |
|
57,120 |
|
62,106 |
|
67,693 |
|
73,280 |
| |||||
Other assets |
|
610,731 |
|
522,896 |
|
494,522 |
|
495,646 |
|
511,184 |
| |||||
Total assets |
|
$ |
26,324,138 |
|
$ |
25,731,354 |
|
$ |
24,782,126 |
|
$ |
24,529,557 |
|
$ |
24,149,330 |
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
LIABILITIES: |
|
|
|
|
|
|
|
|
|
|
| |||||
Noninterest-bearing deposits |
|
$ |
7,712,409 |
|
$ |
7,888,915 |
|
$ |
7,834,480 |
|
$ |
8,126,153 |
|
$ |
8,232,140 |
|
Interest-bearing deposits |
|
11,573,518 |
|
10,981,586 |
|
10,045,063 |
|
9,803,039 |
|
9,846,648 |
| |||||
Total deposits |
|
19,285,927 |
|
18,870,501 |
|
17,879,543 |
|
17,929,192 |
|
18,078,788 |
| |||||
Borrowings |
|
1,481,087 |
|
1,371,114 |
|
1,513,166 |
|
1,187,226 |
|
575,284 |
| |||||
Subordinated debentures |
|
454,458 |
|
453,846 |
|
452,944 |
|
451,878 |
|
452,223 |
| |||||
Accrued interest payable and other liabilities |
|
311,684 |
|
210,305 |
|
194,788 |
|
183,302 |
|
175,545 |
| |||||
Total liabilities |
|
21,533,156 |
|
20,905,766 |
|
20,040,441 |
|
19,751,598 |
|
19,281,840 |
| |||||
STOCKHOLDERS EQUITY (1) |
|
4,790,982 |
|
4,825,588 |
|
4,741,685 |
|
4,777,959 |
|
4,867,490 |
| |||||
Total liabilities and stockholders equity |
|
$ |
26,324,138 |
|
$ |
25,731,354 |
|
$ |
24,782,126 |
|
$ |
24,529,557 |
|
$ |
24,149,330 |
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Book value per share |
|
$ |
39.86 |
|
$ |
39.17 |
|
$ |
38.46 |
|
$ |
38.36 |
|
$ |
38.47 |
|
Tangible book value per share (2) |
|
$ |
18.22 |
|
$ |
18.02 |
|
$ |
17.28 |
|
$ |
17.35 |
|
$ |
17.75 |
|
Shares outstanding |
|
120,201,149 |
|
123,189,833 |
|
123,283,450 |
|
124,567,950 |
|
126,537,871 |
|
(1) Includes net unrealized gain (loss) on securities available-for-sale, net |
|
$ |
37,258 |
|
$ |
(6,075 |
) |
$ |
(43,854 |
) |
$ |
(22,340 |
) |
$ |
(11,936 |
) |
(2) Non-GAAP measure. |
|
|
|
|
|
|
|
|
|
|
|
PACWEST BANCORP AND SUBSIDIARIES
FIVE QUARTER STATEMENT OF EARNINGS
|
|
Three Months Ended |
| |||||||||||||
|
|
March 31, |
|
December 31, |
|
September 30, |
|
June 30, |
|
March 31, |
| |||||
|
|
2019 |
|
2018 |
|
2018 |
|
2018 |
|
2018 |
| |||||
|
|
(Dollars in thousands, except per share data) |
| |||||||||||||
Interest income: |
|
|
|
|
|
|
|
|
|
|
| |||||
Loans and leases |
|
$ |
274,229 |
|
$ |
272,522 |
|
$ |
264,062 |
|
$ |
260,300 |
|
$ |
251,085 |
|
Investment securities |
|
29,680 |
|
29,690 |
|
28,061 |
|
27,730 |
|
26,138 |
| |||||
Deposits in financial institutions |
|
650 |
|
527 |
|
519 |
|
484 |
|
552 |
| |||||
Total interest income |
|
304,559 |
|
302,739 |
|
292,642 |
|
288,514 |
|
277,775 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Interest expense: |
|
|
|
|
|
|
|
|
|
|
| |||||
Deposits |
|
34,235 |
|
28,834 |
|
21,121 |
|
16,367 |
|
13,818 |
| |||||
Borrowings |
|
7,710 |
|
4,602 |
|
3,814 |
|
2,649 |
|
920 |
| |||||
Subordinated debentures |
|
7,738 |
|
7,538 |
|
7,390 |
|
7,166 |
|
6,537 |
| |||||
Total interest expense |
|
49,683 |
|
40,974 |
|
32,325 |
|
26,182 |
|
21,275 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Net interest income |
|
254,876 |
|
261,765 |
|
260,317 |
|
262,332 |
|
256,500 |
| |||||
Provision for credit losses |
|
4,000 |
|
12,000 |
|
11,500 |
|
17,500 |
|
4,000 |
| |||||
Net interest income after provision for credit losses |
|
250,876 |
|
249,765 |
|
248,817 |
|
244,832 |
|
252,500 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Noninterest income: |
|
|
|
|
|
|
|
|
|
|
| |||||
Service charges on deposit accounts |
|
3,730 |
|
4,091 |
|
3,979 |
|
4,265 |
|
4,174 |
| |||||
Other commissions and fees |
|
11,008 |
|
11,114 |
|
12,397 |
|
11,767 |
|
10,265 |
| |||||
Leased equipment income |
|
9,282 |
|
9,384 |
|
9,120 |
|
9,790 |
|
9,587 |
| |||||
Gain on sale of loans and leases |
|
|
|
|
|
|
|
106 |
|
4,569 |
| |||||
Gain on sale of securities |
|
2,161 |
|
786 |
|
826 |
|
253 |
|
6,311 |
| |||||
Other income |
|
4,883 |
|
8,151 |
|
10,590 |
|
13,457 |
|
3,653 |
| |||||
Total noninterest income |
|
31,064 |
|
33,526 |
|
36,912 |
|
39,638 |
|
38,559 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Noninterest expense: |
|
|
|
|
|
|
|
|
|
|
| |||||
Compensation |
|
70,845 |
|
69,299 |
|
72,333 |
|
69,913 |
|
71,023 |
| |||||
Occupancy |
|
14,320 |
|
13,356 |
|
13,069 |
|
13,575 |
|
13,223 |
| |||||
Data processing |
|
6,925 |
|
6,930 |
|
6,740 |
|
6,896 |
|
6,659 |
| |||||
Other professional services |
|
4,513 |
|
6,198 |
|
6,058 |
|
5,257 |
|
4,439 |
| |||||
Insurance and assessments |
|
4,038 |
|
4,202 |
|
5,446 |
|
5,330 |
|
5,727 |
| |||||
Intangible asset amortization |
|
4,870 |
|
4,986 |
|
5,587 |
|
5,587 |
|
6,346 |
| |||||
Leased equipment depreciation |
|
5,651 |
|
5,758 |
|
5,001 |
|
5,237 |
|
5,375 |
| |||||
Foreclosed assets expense (income), net |
|
29 |
|
(311 |
) |
(257 |
) |
(61 |
) |
(122 |
) | |||||
Acquisition, integration and reorganization costs |
|
618 |
|
970 |
|
800 |
|
|
|
|
| |||||
Loan expense |
|
2,885 |
|
2,991 |
|
2,249 |
|
3,058 |
|
2,271 |
| |||||
Other expense |
|
11,593 |
|
14,856 |
|
11,127 |
|
11,657 |
|
12,454 |
| |||||
Total noninterest expense |
|
126,287 |
|
129,235 |
|
128,153 |
|
126,449 |
|
127,395 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Earnings before income taxes |
|
155,653 |
|
154,056 |
|
157,576 |
|
158,021 |
|
163,664 |
| |||||
Income tax expense |
|
43,049 |
|
39,015 |
|
41,289 |
|
42,286 |
|
45,388 |
| |||||
Net earnings |
|
$ |
112,604 |
|
$ |
115,041 |
|
$ |
116,287 |
|
$ |
115,735 |
|
$ |
118,276 |
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Basic and diluted earnings per share |
|
$ |
0.92 |
|
$ |
0.93 |
|
$ |
0.94 |
|
$ |
0.92 |
|
$ |
0.93 |
|
Dividends declared and paid per share |
|
$ |
0.60 |
|
$ |
0.60 |
|
$ |
0.60 |
|
$ |
0.60 |
|
$ |
0.50 |
|
PACWEST BANCORP AND SUBSIDIARIES
FIVE QUARTER SELECTED FINANCIAL DATA
|
|
At or For the Three Months Ended |
| |||||||||||||
|
|
March 31, |
|
December 31, |
|
September 30, |
|
June 30, |
|
March 31, |
| |||||
|
|
2019 |
|
2018 |
|
2018 |
|
2018 |
|
2018 |
| |||||
|
|
(Dollars in thousands) |
| |||||||||||||
Performance Ratios: |
|
|
|
|
|
|
|
|
|
|
| |||||
Return on average assets (1) |
|
1.77 |
% |
1.84 |
% |
1.89 |
% |
1.93 |
% |
1.99 |
% | |||||
Return on average equity (1) |
|
9.48 |
% |
9.59 |
% |
9.72 |
% |
9.61 |
% |
9.79 |
% | |||||
Return on average tangible equity (1)(2) |
|
20.64 |
% |
21.23 |
% |
21.61 |
% |
20.98 |
% |
21.08 |
% | |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Yield on average loans and leases (1)(3) |
|
6.16 |
% |
6.27 |
% |
6.20 |
% |
6.30 |
% |
6.11 |
% | |||||
Yield on average interest-earning assets (1)(3) |
|
5.60 |
% |
5.68 |
% |
5.60 |
% |
5.70 |
% |
5.53 |
% | |||||
Cost of average interest-bearing deposits (1) |
|
1.24 |
% |
1.10 |
% |
0.83 |
% |
0.68 |
% |
0.56 |
% | |||||
Cost of average total deposits (1) |
|
0.73 |
% |
0.62 |
% |
0.46 |
% |
0.37 |
% |
0.31 |
% | |||||
Cost of average interest-bearing liabilities (1) |
|
1.57 |
% |
1.40 |
% |
1.14 |
% |
0.98 |
% |
0.81 |
% | |||||
Net interest spread (1)(3) |
|
4.03 |
% |
4.28 |
% |
4.46 |
% |
4.72 |
% |
4.72 |
% | |||||
Net interest margin (1)(3) |
|
4.69 |
% |
4.91 |
% |
4.99 |
% |
5.18 |
% |
5.11 |
% | |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Efficiency ratio |
|
42.4 |
% |
41.7 |
% |
40.9 |
% |
39.8 |
% |
41.7 |
% | |||||
Noninterest expense as a percentage of average assets (1) |
|
1.99 |
% |
2.07 |
% |
2.09 |
% |
2.11 |
% |
2.15 |
% | |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Average Balances: |
|
|
|
|
|
|
|
|
|
|
| |||||
Loans and leases, net of deferred fees |
|
$ |
18,064,230 |
|
$ |
17,275,343 |
|
$ |
16,913,792 |
|
$ |
16,576,361 |
|
$ |
16,682,124 |
|
Interest-earning assets |
|
22,144,711 |
|
21,269,363 |
|
20,866,478 |
|
20,492,121 |
|
20,514,936 |
| |||||
Total assets |
|
25,775,949 |
|
24,784,462 |
|
24,357,771 |
|
23,999,637 |
|
24,071,148 |
| |||||
Noninterest-bearing deposits |
|
7,783,652 |
|
8,163,699 |
|
8,120,306 |
|
8,253,413 |
|
8,311,104 |
| |||||
Interest-bearing deposits |
|
11,156,773 |
|
10,422,761 |
|
10,111,927 |
|
9,703,611 |
|
9,959,243 |
| |||||
Total deposits |
|
18,940,425 |
|
18,586,460 |
|
18,232,233 |
|
17,957,024 |
|
18,270,347 |
| |||||
Borrowings |
|
1,218,319 |
|
764,039 |
|
720,449 |
|
549,665 |
|
239,293 |
| |||||
Subordinated debentures |
|
454,203 |
|
452,998 |
|
452,312 |
|
451,973 |
|
461,648 |
| |||||
Interest-bearing liabilities |
|
12,829,295 |
|
11,639,798 |
|
11,284,688 |
|
10,705,249 |
|
10,660,184 |
| |||||
Stockholders equity |
|
4,815,965 |
|
4,758,401 |
|
4,748,819 |
|
4,832,480 |
|
4,901,207 |
| |||||
(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 |
| |||||||||||||
|
|
March 31, |
|
December 31, |
|
September 30, |
|
June 30, |
|
March 31, |
| |||||
|
|
2019 |
|
2018 |
|
2018 |
|
2018 |
|
2018 |
| |||||
|
|
(Dollars in thousands) |
| |||||||||||||
Credit Quality Ratios: |
|
|
|
|
|
|
|
|
|
|
| |||||
Nonaccrual loans and leases held for investment to loans and leases held for investment |
|
0.48 |
% |
0.44 |
% |
0.66 |
% |
0.67 |
% |
0.63 |
% | |||||
Nonperforming assets to loans and leases held for investment and foreclosed assets |
|
0.50 |
% |
0.47 |
% |
0.68 |
% |
0.69 |
% |
0.64 |
% | |||||
Classified loans and leases held for investment to loans and leases held for investment |
|
1.04 |
% |
1.32 |
% |
1.51 |
% |
1.40 |
% |
1.26 |
% | |||||
Trailing 12 months net charge-offs to average loans and leases held for investment |
|
0.22 |
% |
0.26 |
% |
0.28 |
% |
0.28 |
% |
0.31 |
% | |||||
Allowance for credit losses to loans and leases held for investment |
|
0.95 |
% |
0.94 |
% |
1.03 |
% |
0.99 |
% |
1.02 |
% | |||||
Allowance for credit losses to nonaccrual loans and leases held for investment |
|
195.6 |
% |
213.5 |
% |
156.9 |
% |
147.3 |
% |
161.1 |
% | |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
PacWest Bancorp Consolidated |
|
|
|
|
|
|
|
|
|
|
| |||||
Capital: |
|
|
|
|
|
|
|
|
|
|
| |||||
Tier 1 leverage ratio (1) |
|
9.38 |
% |
10.13 |
% |
10.10 |
% |
10.33 |
% |
10.66 |
% | |||||
Common equity tier 1 capital ratio (1) |
|
9.48 |
% |
10.01 |
% |
10.18 |
% |
10.59 |
% |
11.16 |
% | |||||
Tier 1 capital ratio (1) |
|
9.48 |
% |
10.01 |
% |
10.18 |
% |
10.59 |
% |
11.16 |
% | |||||
Total capital ratio (1) |
|
12.15 |
% |
12.72 |
% |
13.03 |
% |
13.48 |
% |
14.11 |
% | |||||
Risk-weighted assets (1) |
|
$ |
22,939,074 |
|
$ |
22,525,096 |
|
$ |
21,650,542 |
|
$ |
20,929,325 |
|
$ |
20,523,487 |
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Equity to assets ratio |
|
18.20 |
% |
18.75 |
% |
19.13 |
% |
19.48 |
% |
20.16 |
% | |||||
Tangible common equity ratio (2) |
|
9.23 |
% |
9.60 |
% |
9.61 |
% |
9.86 |
% |
10.43 |
% | |||||
Book value per share |
|
$ |
39.86 |
|
$ |
39.17 |
|
$ |
38.46 |
|
$ |
38.36 |
|
$ |
38.47 |
|
Tangible book value per share (2) |
|
$ |
18.22 |
|
$ |
18.02 |
|
$ |
17.28 |
|
$ |
17.35 |
|
$ |
17.75 |
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Pacific Western Bank Capital: |
|
|
|
|
|
|
|
|
|
|
| |||||
Tier 1 leverage ratio (1) |
|
10.57 |
% |
10.80 |
% |
10.78 |
% |
11.11 |
% |
11.33 |
% | |||||
Common equity tier 1 capital ratio (1) |
|
10.69 |
% |
10.68 |
% |
10.87 |
% |
11.40 |
% |
11.86 |
% | |||||
Tier 1 capital ratio (1) |
|
10.69 |
% |
10.68 |
% |
10.87 |
% |
11.40 |
% |
11.86 |
% | |||||
Total capital ratio (1) |
|
11.45 |
% |
11.44 |
% |
11.69 |
% |
12.21 |
% |
12.67 |
% |
(1) Capital information for March 31, 2019 is preliminary.
(2) Non-GAAP measure.
GAAP TO NON-GAAP RECONCILIATIONS
This press release contains certain non-GAAP financial disclosures for: (1) return on average tangible equity, (2) tangible common equity ratio, and (3) tangible book value per share. The Company uses these non-GAAP financial measures to provide meaningful supplemental information regarding the Companys 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: (1) return on average equity, (2) equity to assets ratio, and (3) book value per share.
The tables below present the reconciliations of these GAAP financial measures to the related non-GAAP financial measures:
|
|
Three Months Ended |
| |||||||
|
|
March 31, |
|
December 31, |
|
March 31, |
| |||
Return on Average Tangible Equity |
|
2019 |
|
2018 |
|
2018 |
| |||
|
|
(Dollars in thousands) |
| |||||||
Net earnings |
|
$ |
112,604 |
|
$ |
115,041 |
|
$ |
118,276 |
|
|
|
|
|
|
|
|
| |||
Average stockholders equity |
|
$ |
4,815,965 |
|
$ |
4,758,401 |
|
$ |
4,901,207 |
|
Less: Average intangible assets |
|
2,603,842 |
|
2,608,497 |
|
2,625,593 |
| |||
Average tangible common equity |
|
$ |
2,212,123 |
|
$ |
2,149,904 |
|
$ |
2,275,614 |
|
|
|
|
|
|
|
|
| |||
Return on average equity (1) |
|
9.48 |
% |
9.59 |
% |
9.79 |
% | |||
Return on average tangible equity (2) |
|
20.64 |
% |
21.23 |
% |
21.08 |
% |
(1) Annualized net earnings divided by average stockholders equity.
(2) Annualized net earnings divided by average tangible common equity.
Tangible Common Equity Ratio/ |
|
March 31, |
|
December 31, |
|
September 30, |
|
June 30, |
|
March 31, |
| |||||
Tangible Book Value Per Share |
|
2019 |
|
2018 |
|
2018 |
|
2018 |
|
2018 |
| |||||
|
|
(Dollars in thousands, except per share data) |
| |||||||||||||
Stockholders equity |
|
$ |
4,790,982 |
|
$ |
4,825,588 |
|
$ |
4,741,685 |
|
$ |
4,777,959 |
|
$ |
4,867,490 |
|
Less: Intangible assets |
|
2,600,920 |
|
2,605,790 |
|
2,610,776 |
|
2,616,363 |
|
2,621,950 |
| |||||
Tangible common equity |
|
$ |
2,190,062 |
|
$ |
2,219,798 |
|
$ |
2,130,909 |
|
$ |
2,161,596 |
|
$ |
2,245,540 |
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Total assets |
|
$ |
26,324,138 |
|
$ |
25,731,354 |
|
$ |
24,782,126 |
|
$ |
24,529,557 |
|
$ |
24,149,330 |
|
Less: Intangible assets |
|
2,600,920 |
|
2,605,790 |
|
2,610,776 |
|
2,616,363 |
|
2,621,950 |
| |||||
Tangible assets |
|
$ |
23,723,218 |
|
$ |
23,125,564 |
|
$ |
22,171,350 |
|
$ |
21,913,194 |
|
$ |
21,527,380 |
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Equity to assets ratio |
|
18.20 |
% |
18.75 |
% |
19.13 |
% |
19.48 |
% |
20.16 |
% | |||||
Tangible common equity ratio (1) |
|
9.23 |
% |
9.60 |
% |
9.61 |
% |
9.86 |
% |
10.43 |
% | |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Book value per share |
|
$ |
39.86 |
|
$ |
39.17 |
|
$ |
38.46 |
|
$ |
38.36 |
|
$ |
38.47 |
|
Tangible book value per share (2) |
|
$ |
18.22 |
|
$ |
18.02 |
|
$ |
17.28 |
|
$ |
17.35 |
|
$ |
17.75 |
|
Shares outstanding |
|
120,201,149 |
|
123,189,833 |
|
123,283,450 |
|
124,567,950 |
|
126,537,871 |
|
(1) Tangible common equity divided by tangible assets.
(2) Tangible common equity divided by shares outstanding.
This communication contains certain forward-looking information about PacWest that is intended to be covered by the safe harbor for forward-looking statements provided by the Private Securities Litigation Reform Act of 1995. Such statements include future financial and operating results, expectations, intentions and other statements that are not historical facts. Such statements are based on information available at the time of the communication and are based on current beliefs and expectations of the Companys management and are subject to significant risks, uncertainties and contingencies, many of which are beyond our control. Actual results may differ materially from those set forth or implied in the forward-looking statements due to a variety of factors, including the risk factors described in documents filed by the Company with the U.S. Securities and Exchange Commission. We are under no obligation (and expressly disclaim any such obligation) to update or alter our forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. Forward-Looking Statements
First Quarter Highlights 4 Loans and Leases 9 Credit Quality 13 Deposits 17 Investment Securities 19 Controlled Expenses 20 Non-GAAP Measurements 21 Presentation Index
First Quarter Highlights Net income of $112.6 million Earnings per share of $0.92 ROAA of 1.77% ROATE of 20.64% Robust Earnings High Performing Net interest margin of 4.69% Loan yield of 6.16% Cost of deposits of 73 bps Efficiency ratio of 42.4% Noninterest expense to average assets of 1.99% Loan Growth & Credit Quality Loan production of $1.2 billion Annualized loan growth of 8% Classified loans to total loans of 1.04% Net charge-offs of $0.2 million Provision of $4.0 million; down 67% from 4Q18 Strong Deposit Base & Capital Core deposits at 84% of total deposits Noninterest-bearing demand deposits at 40% of total deposits Tangible common equity ratio of 9.23% CET1 ratio of 9.48%
Quarter-Over-Quarter Financial Highlights See Non-GAAP Measurements slide on page 21. ? ($ in millions, except per share amounts) 1Q19 4Q18 Q / Q Total Assets 26,324 $ 25,731 $ 2% Loans and Leases Held for Investment, net of deferred fees 18,308 $ 17,958 $ 2% Total Deposits 19,286 $ 18,871 $ 2% Core Deposits 16,128 $ 16,347 $ -1% Net Earnings 112.6 $ 115.0 $ -2% Earnings Per Share 0.92 $ 0.93 $ -1% Return on Average Assets ("ROAA") 1.77% 1.84% -0.07 Return on Average Tangible Equity ("ROATE") (1) 20.64% 21.23% -0.59 Tangible Common Equity Ratio (1) 9.23% 9.60% -0.37 Tangible Book Value Per Share (1) 18.22 $ 18.02 $ 1% Tax Equivalent Net Interest Margin 4.69% 4.91% -0.22 Efficiency Ratio 42.4% 41.7% 0.7
Year-Over-Year Financial Highlights See Non-GAAP Measurements slide on page 21. ? ($ in millions, except per share amounts) 1Q19 1Q18 Y / Y Total Assets 26,324 $ 24,149 $ 9% Loans and Leases Held for Investment, net of deferred fees 18,308 $ 16,455 $ 11% Total Deposits 19,286 $ 18,079 $ 7% Core Deposits 16,128 $ 15,662 $ 3% Net Earnings 112.6 $ 118.3 $ -5% Earnings Per Share 0.92 $ 0.93 $ -1% Return on Average Assets ("ROAA") 1.77% 1.99% -0.22 Return on Average Tangible Equity ("ROATE") (1) 20.64% 21.08% -0.44 Tangible Common Equity Ratio (1) 9.23% 10.43% -1.20 Tangible Book Value Per Share (1) 18.22 $ 17.75 $ 3% Tax Equivalent Net Interest Margin 4.69% 5.11% -0.42 Efficiency Ratio 42.4% 41.7% 0.7
Solid Earnings Track Record CUB acquisition ($ in millions, except Diluted EPS) 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 Net Earnings 78.7 $ 93.6 $ 101.5 $ 84.0 $ 118.3 $ 115.7 $ 116.3 $ 115.0 $ 112.6 $ Diluted EPS 0.65 $ 0.77 $ 0.84 $ 0.66 $ 0.93 $ 0.92 $ 0.94 $ 0.93 $ 0.92 $ $0.50 $0.60 $0.70 $0.80 $0.90 $1.00 $0 $20 $40 $60 $80 $100 $120 $140 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 Diluted EPS Millions Net Earnings Diluted EPS
Source: S&P Global Market Intelligence. Peer data through 4Q18. Peer group is banks in the KBW Regional Bank Index KRX Solid Capital Position 1Q19 (Preliminary) 11.67% 11.75% 12.02% 10.50% 10.43% 9.86% 9.61% 9.60% 9.23% 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 TCE / TA PACW KRX 11.87% 11.90% 12.02% 10.66% 10.66% 10.33% 10.10% 10.13% 9.38% 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 T1 Leverage PACW KRX 15.56% 15.42% 15.74% 13.75% 14.11% 13.48% 13.03% 12.73% 12.15% 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 Total Capital PACW KRX 12.31% 12.28% 12.52% 10.91% 11.16% 10.59% 10.18% 10.02% 9.48% 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 CET1 PACW KRX
Diversified Loan and Lease Portfolio Net of deferred fees and costs Commercial mortgage Income producing and other residential Commercial construction Residential construction Asset - based Venture capital Other commercial Consumer As of March 31, 2019 ($ in millions) $ Mix $ Mix Real Estate Mortgage: Commercial 4,641 $ 25% 5,033 $ 31% Income producing and other residential 3,519 19% 2,521 15% Total Real Estate Mortgage 8,160 44% 7,554 46% RE Construction & Land: Commercial 944 5% 790 5% Residential 1,408 8% 887 5% Total RE Construction & Land 2,352 13% 1,677 10% Total Real Estate 10,512 57% 9,231 56% Commercial: Asset-based 3,422 19% 2,958 18% Venture capital 2,027 11% 1,921 12% Other commercial 1,975 11% 1,947 12% Total Commercial 7,424 41% 6,826 42% Consumer 372 2% 398 2% Total Loans HFI (1) 18,308 $ 100% 16,455 $ 100% Unfunded commitments 7,465 $ 6,353 $ 3/31/2019 3/31/2018
Diversified Loan and Lease Portfolio Of which land represents $174 million and $167 million as of 3/31/19 and 3/31/18. ($ in millions) $ Mix $ Mix Real Estate: Income Producing Residential 3,406 $ 32% 2,267 $ 25% Other Commercial 3,084 30% 3,250 35% Construction & Land (1) 2,352 22% 1,677 18% Hospitality 588 6% 552 6% SBA 554 5% 485 6% Healthcare 415 4% 688 7% Other Residential 113 1% 254 3% Total Real Estate 10,512 $ 100% 9,231 $ 100% 3/31/2019 3/31/2018 ($ in millions) $ Mix $ Mix Asset-Based: Lender Finance & Timeshare 1,861 $ 54% 1,638 $ 55% Equipment Finance 749 22% 646 22% Premium Finance 390 11% 290 10% Other 422 13% 384 13% Total Asset-Based 3,422 $ 100% 2,958 $ 100% 3/31/2019 3/31/2018 Other Commercial, $3,084mm, 30% Hospitality, $588mm, 6% SBA, $554mm, 5% Income Producing Residential, $3,406mm, 32% Healthcare, $415mm, 4% Other Residential, $113mm, 1% Construction & Land, $2,352mm, 22% Real Estate ($10.5B) Lender Finance & Timeshare, $1,861mm, 54% Equipment Finance, $749mm, 22% Premium Finance, $390mm, 11% Other, $422mm, 13% Asset - Based ($3.4B)
Diversified Loan and Lease Portfolio ($ in millions) $ Mix $ Mix Venture Capital: Equity Fund Loans 871 $ 43% 409 $ 21% Expansion Stage 859 42% 1,077 56% Early Stage 207 10% 263 14% Late Stage 90 5% 172 9% Total Venture Capital 2,027 $ 100% 1,921 $ 100% 3/31/2019 3/31/2018 ($ in millions) $ Mix $ Mix Other Commercial: Secured Business Loans 744 $ 38% 705 $ 35% Security Monitoring 633 32% 575 29% Unsecured Business Loans 221 11% 249 13% Municipal 116 6% 70 4% Cash Flow 112 6% 186 10% SBA 82 4% 92 5% HOA Loans 67 3% 70 4% Total Other Commercial 1,975 $ 100% 1,947 $ 100% 3/31/2019 3/31/2018 Secured Business Loans, $744mm, 38% Municipal, $116mm, 6% Cash Flow, $112mm, 6% SBA, $82mm, 4% Security Monitoring, $633mm, 32% HOA Loans, $67mm, 3% Unsecured Business Loans, $221mm, 11% Other Commercial ($2.0B) Expansion Stage, $859mm, 42% Equity Fund Loans, $871mm, 43% Early Stage, $207mm, 10% Late Stage, $90mm, 5% Venture Capital ($2.0B)
Loan and Lease Production of $1.2 Billion in 1Q19 The weighted average rate on production presents contractual rates and does not include amortized fees. Amortized fees added approximately 24 basis points to loan yields in 2019 and 31 basis points in 2018. Net of deferred fees and costs Quarterly change equals Net Difference plus transfers to OREO, charge-offs and loan sales. ($ in millions) Production/ Disbursements Payoffs/ Paydowns Net Difference Rate on Production (1) ($ in millions) Loans Beginning Balance (2) Loans Ending Balance (2) Quarterly Change (3) 1Q19 2,368 $ 1,972 $ 396 $ 5.11% 1Q19 17,958 $ 18,308 $ 350 $ 4Q18 2,758 1,991 767 5.38% 4Q18 17,230 17,958 728 3Q18 2,283 1,928 355 5.17% 3Q18 16,885 17,230 345 2Q18 2,461 1,983 478 5.04% 2Q18 16,455 16,885 429 1Q18 1,492 1,867 (375) 5.37% 1Q18 16,973 16,455 (517) $745 $1,257 $1,316 $1,572 $1,175 $747 $1,204 $967 $1,186 $1,193 $931 $1,154 $1,133 $1,071 $933 $936 $829 $795 $921 $1,039 $1,492 $2,461 $2,283 $2,758 $2,368 $1,867 $1,983 $1,928 $1,991 $1,972 4.0% 4.5% 5.0% 5.5% 6.0% $0 $500 $1,000 $1,500 $2,000 $2,500 $3,000 1Q18 2Q18 3Q18 4Q18 1Q19 Avg. Rate on Production Millions Production Disbursements Payoffs Paydowns Avg Production/Disbursements Avg Payoffs/Paydowns Rate on Production
Classified loans and leases are those with a credit risk rating of substandard or doubtful. Allowance for credit losses includes allowance for loan and lease losses and reserve for unfunded loan commitments. Quarterly Credit Quality Trends ($ in thousands) 1Q18 2Q18 3Q18 4Q18 1Q19 Nonaccrual Loans and Leases HFI $ 103,725 113,745 112,972 79,333 88,527 As a % of Loans and Leases HFI % 0.63% 0.67% 0.66% 0.44% 0.48% Nonperforming Assets $ 105,461 115,976 117,379 84,632 91,818 As a % of Loans and Leases & Foreclosed Assets % 0.64% 0.69% 0.68% 0.47% 0.50% Classified Loans and Leases HFI (1) $ 208,042 236,292 260,459 237,110 190,305 As a % of Loans and Leases HFI % 1.26% 1.40% 1.51% 1.32% 1.04% Credit Loss Provision $ 4,000 17,500 11,500 12,000 4,000 As a % of Average Loans and Leases (annualized) % 0.10% 0.42% 0.27% 0.28% 0.09% Trailing Twelve Months Net Charge-offs $ 49,723 45,912 46,568 43,758 38,994 As a % of Average Loans and Leases % 0.31% 0.28% 0.28% 0.26% 0.22% Allowance for Credit Losses (ACL) (2) $ 167,136 167,500 177,281 169,333 173,142 As a % of Loans and Leases HFI % 1.02% 0.99% 1.03% 0.94% 0.95% ACL / Nonaccrual Loans and Leases HFI % 161.13% 147.26% 156.92% 213.45% 195.58%
Key Credit Trends Loans HFI 0.63% 0.67% 0.66% 0.44% 0.48% 1Q18 2Q18 3Q18 4Q18 1Q19 Nonaccrual Loans and Leases / Loans and Leases 1.02% 0.99% 1.03% 0.94% 0.95% 1Q18 2Q18 3Q18 4Q18 1Q19 ACL / Loans and Leases 1.26% 1.40% 1.51% 1.32% 1.04% 1Q18 2Q18 3Q18 4Q18 1Q19 Classified Loans and Leases/ Loans and Leases 0.31% 0.28% 0.28% 0.26% 0.22% 1Q18 2Q18 3Q18 4Q18 1Q19 Trailing Twelve Months Net Charge - offs / Average Loans and Leases
Amounts and ratios related to 2019 and 2018 periods are for total loans and leases. Amounts and ratios for 2017 and 2016 are for Non-PCI loans and leases. Classified loans and leases are those with a credit risk rating of substandard or doubtful. Allowance for credit losses includes allowance for loan and lease losses and reserve for unfunded loan commitments. Credit Quality Trends(1) ($ in thousands) 2016 2017 2018 1Q19 Nonaccrual Loans and Leases HFI $ 170,599 155,784 79,333 88,527 As a % of Loans and Leases HFI % 1.11% 0.92% 0.44% 0.48% Nonperforming Assets $ 183,575 157,113 84,632 91,818 As a % of Loans and Leases & Foreclosed Assets % 1.20% 0.93% 0.47% 0.50% Classified Loans and Leases HFI (2) $ 409,645 278,405 237,110 190,305 As a % of Loans and Leases HFI % 2.67% 1.65% 1.32% 1.04% Credit Loss Provision $ 61,000 59,000 45,000 4,000 As a % of Average Loans and Leases (annualized) % 0.42% 0.37% 0.26% 0.09% Net Charge-offs for the Period $ 21,990 62,957 43,758 191 As a % of Average Loans and Leases (annualized) % 0.15% 0.40% 0.26% 0.00% Allowance for Credit Losses (ACL) (3) $ 161,278 161,647 169,333 173,142 As a % of Loans and Leases HFI % 1.05% 0.96% 0.94% 0.95% ACL / Nonaccrual Loans and Leases HFI % 94.54% 103.76% 213.45% 195.58%
Nonaccrual & Delinquent Loan and Lease Detail % of Loan % of Loan 3/31/2019 12/31/2018 ($ in thousands) Balance Category Balance Category Balance Balance Real estate mortgage: Commercial 12,750 $ 0.3% 15,321 $ 0.3% 6,863 $ 3,276 $ Income producing and other residential 2,444 0.1% 2,524 0.1% 1,853 1,557 Total real estate mortgage 15,194 0.2% 17,845 0.2% 8,716 4,833 Real estate construction and land: Commercial 430 0.0% 442 0.0% - - Residential - 0.0% - 0.0% 8,949 1,527 Total R.E. construction and land 430 0.0% 442 0.0% 8,949 1,527 Commercial: Asset-based 43,406 1.3% 32,324 1.0% 3,750 47 Venture capital 20,437 1.0% 20,299 1.0% 4,500 1,028 Other commercial 8,633 0.4% 7,380 0.4% 1,694 2,467 Total commercial 72,476 1.0% 60,003 0.8% 9,944 3,542 Consumer 427 0.1% 1,043 0.3% 614 581 Total 88,527 $ 0.5% 79,333 $ 0.4% 28,223 $ 10,483 $ 3/31/2019 Nonaccrual Loans and Leases 12/31/2018 Accruing and 30 -89 Days Past Due
Does not include $2.2 billion and $2.1 billion of client investment funds held at March 31, 2019 and March 31, 2018, respectively. Deposit Detail Core: 84% Core: 87% ($ in millions) Deposit Category Average $ Quarter-End $ Mix Average $ Quarter-End $ Mix Noninterest-bearing demand deposits 7,784 $ 7,713 $ 40% 8,311 $ 8,232 $ 46% Interest checking deposits 2,973 3,163 16% 2,149 2,076 11% Money market deposits 4,878 4,714 25% 4,553 4,677 26% Savings deposits 553 538 3% 685 677 4% Total core deposits 16,188 16,128 84% 15,698 15,662 87% Non-core non-maturity deposits 465 454 2% 648 585 3% Total non-maturity deposits 16,653 16,582 86% 16,346 16,247 90% Time deposits $250,000 and under 1,859 2,259 12% 1,575 1,482 8% Time deposits over $250,000 428 445 2% 349 350 2% Total time deposits 2,287 2,704 14% 1,924 1,832 10% Total deposits (1) 18,940 $ 19,286 $ 100% 18,270 $ 18,079 $ 100% At or For the Quarter Ended March 31, 2019 At or For the Quarter Ended March 31, 2018 Noninterest - bearing demand deposits Interest checking deposits Money market deposits Savings deposits Non - core non - maturity deposits Time deposits $250,000 and under Time deposits over $250,000 March 31, 2019 Noninterest - bearing demand deposits Interest checking deposits Money market deposits Savings deposits Non - core non - maturity deposits Time deposits $250,000 and under Time deposits over $250,000 March 31, 2018
Deposit Portfolio Includes brokered deposits of $1.3 billion with a weighted average maturity of 4 months and a weighted average cost of 2.31%. ($ in millions) Time Deposits Time Deposits Total Time Maturities $250,000 and Under Over $250,000 Deposits Due in three months or less 918 $ 103 $ 1,021 $ Due in over three months through six months 850 177 1,027 Due in over six months through twelve months 387 151 538 Due in over 12 months through 24 months 79 12 91 Due in over 24 months 25 2 27 Total 2,259 $ (1) 445 $ 2,704 $ March 31, 2019 $18.1 $17.9 $17.9 $18.9 $19.3 0.56% 0.68% 0.83% 1.10% 1.24% 0.31% 0.37% 0.46% 0.62% 0.73% 0.00% 0.50% 1.00% 1.50% 2.00% 0.0 5.0 10.0 15.0 20.0 25.0 1Q18 2Q18 3Q18 4Q18 1Q19 Cost Balance ($ in Billions) Core Deposits Non-Core Deposits Cost of Average Interest-Bearing Deposits Cost of Average Total Deposits
S&P Ratings % Total Issue Type % Total AAA 10% G.O. Limited 7% AA 80% G.O. Unlimited 42% A 3% Revenue 51% BBB 1% Not Rated (3) 6% 100% 100% 3.12% overall portfolio tax equivalent yield (2) Municipal Securities Composition Diversified Investment Portfolio (1) Fair value at 3/31/19 (2) Yield is for 1Q19 (3) Not rated category comprised primarily of not rated revenue bonds backed by an underlying agency security or CRA-related revenue bonds. Asset - backed Securities , $185mm , 5% Agency Residential MBS , $343mm , 8% U.S. Treasuries , $291mm , 7% Agency Residential CMOs , $718mm , 18% Agency Commercial MBS , $1,079mm , 27% Private CMOs , $123mm , 3% Municipal Securities , $1,185mm , 30% Other , $71mm , 2% $4.0 Billion Total Investment Portfolio (1) 6.5 6.4 6.3 5.8 5.6 5.7 5.6 5.3 5.2 5.0 4 5 6 7 1Q18 2Q18 3Q18 4Q18 1Q19 Years Average Life and Effective Duration Average Life Effective Duration
Source: S&P Global Market Intelligence. Peer data through 4Q18. Peer group is banks in the KBW Regional Bank Index KRX Efficiency Ratio Trend 41.4% 40.3% 40.4% 41.0% 41.7% 39.8% 40.9% 41.7% 42.4% 58.0% 56.9% 56.0% 55.9% 56.6% 54.8% 53.7% 54.7% 35.0% 40.0% 45.0% 50.0% 55.0% 60.0% 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 PACW Efficiency Ratio Median Efficiency Ratio Banks in KRX Index
The Company uses certain non-GAAP financial measures to provide meaningful supplemental information regarding the Companys operational performance and to enhance investors overall understanding of such financial performance. These non-GAAP financial measures should not be considered a substitute for financial measures presented in accordance with GAAP and may be different from non-GAAP financial measures used by other companies. The table below presents reconciliations of certain GAAP to non-GAAP financial measures: Non-GAAP Measurements ($ in thousands, except per share amounts) March 31, 2019 December 31, 2018 September 30, 2018 June 30, 2018 March 31, 2018 Tangible Common Equity Ratio & Tangible Book Value Per Share Stockholders' equity 4,790,982 $ 4,825,588 $ 4,741,685 $ 4,777,959 $ 4,867,490 $ Less: Intangible assets 2,600,920 2,605,790 2,610,776 2,616,363 2,621,950 Tangible common equity 2,190,062 $ 2,219,798 $ 2,130,909 $ 2,161,596 $ 2,245,540 $ Total assets 26,324,138 $ 25,731,354 $ 24,782,126 $ 24,529,557 $ 24,149,330 $ Less: Intangible assets 2,600,920 2,605,790 2,610,776 2,616,363 2,621,950 Tangible assets 23,723,218 $ 23,125,564 $ 22,171,350 $ 21,913,194 $ 21,527,380 $ Tangible common equity ratio (1) 9.23% 9.60% 9.61% 9.86% 10.43% Tangible book value per share (2) 18.20 $ 18.02 $ 17.28 $ 17.35 $ 17.75 $ Shares outstanding 120,201,149 123,189,833 123,283,450 124,567,950 126,537,871 Return on Average Tangible Equity Net earnings 112,604 $ 115,041 $ 116,287 $ 115,735 $ 118,276 $ Average stockholders' equity 4,815,965 $ 4,758,401 $ 4,748,819 $ 4,832,480 $ 4,901,207 $ Less: Average intangible assets 2,603,842 2,608,497 2,614,055 2,619,351 2,625,593 Average tangible common equity 2,212,123 $ 2,149,904 $ 2,134,764 $ 2,213,129 $ 2,275,614 $ Return on average tangible equity (3) 20.64% 21.23% 21.61% 20.98% 21.08% (1) Tangible common equity divided by tangible assets (2) Tangible common equity divided by shares outstanding (3) Annualized net earnings divided by average tangible common equity.
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