Exhibit 99.1
| April 19, 2022 |  |
PACWEST BANCORP ANNOUNCES RESULTS FOR THE FIRST QUARTER 2022
FOR IMMEDIATE RELEASE
FIRST QUARTER 2022 RESULTS
| $120.1M | $1.01 | $162.1M | 20.93% |
| Net Earnings | Diluted
Earnings per Share |
PPNR | ROATE |
FIRST QUARTER 2022 HIGHLIGHTS
| • | Net Earnings of $120.1 Million or $1.01 Per Diluted Share |
| • | PPNR of $162.1 Million, Down 10.8% vs. 4Q21 |
| • | Net Interest Income (TE) of $312.7 Million in 1Q22 vs. $304.5 Million in 4Q21 |
| • | No Provision for Credit Losses in 1Q22 vs. Benefit of $6.0 Million in 4Q21 |
| • | Noninterest Income of $20.8 Million in 1Q22 vs. $57.4 Million in 4Q21; Warrant Income Down $23.4 Million |
| • | Noninterest Expense of $167.4 Million in 1Q22 vs. $176.1 Million in 4Q21 |
| • | Loan Growth of $1.4 Billion or 6.1% from Prior Quarter |
| • | Loan and Lease Production of $2.6 Billion in 1Q22 vs. $3.4 Billion in 4Q21; WAC of 4.31% in 1Q22 vs. 3.89% in 4Q21 |
| • | Civic Loan Production of $559 Million in 1Q22 vs. $480 Million in 4Q21 |
| • | Classified and Special Mention Loans and Leases Fell $34.0 Million and $14.3 Million from 4Q21 |
| • | ACL Ratio of 1.12% and ALLL Ratio of 0.81% at 1Q22 vs. 1.19% and 0.87% at 4Q21, Respectively |
| • | Net Charge-offs of $1.2 Million |
| • | Core Deposits Down $1.1 Billion or 3.2%, Represents 95% of Total Deposits |
| • | Cost of Deposits of 7 bps in 1Q22 vs. 8 bps in 4Q21 |
| • | Capital Ratios Declined Due to Growth in Risk-Weighted Assets – CET1 Ratio of 8.64% and Total Capital Ratio of 12.27% at 1Q22 |
| • | Tangible Book Value Per Share of $18.42 at 1Q22 vs. $21.31 at 4Q21 (Due to AOCI Change Noted Below) |
| • | Available-for-Sale Securities Decreased from $10.7 Billion at 4Q21 to $10.0 Billion at 1Q22; AOCI on the AFS Portfolio Changed from a Net Unrealized Gain of $66.0 Million at 4Q21 to a Net Unrealized Loss of $376.5 Million at 1Q22 |
CEO COMMENTARY
Matt Wagner, President and CEO, commented, “Although external events and the resulting volatility in the capital market negatively impacted the first quarter, we continued to make progress on our strategic priorities of increasing earning assets through loan growth and growing net interest income while continuing to improve asset quality. The increase in average loans and leases of nearly $2.1 billion and decreasing higher-rate wholesale deposits during the first quarter resulted in an $8.3 million increase in net interest income and helped drive a 19 basis point increase in our net interest margin compared to the fourth quarter. Loans grew by $1.4 billion in the first quarter to an all-time high of $24.4 billion. With the 25 basis point increase by the Federal Reserve in market rates occurring late in the quarter, the increase had a minimal impact on first quarter results. Total deposits decreased by $1.8 billion driven by a decrease of $1.5 billion in venture banking due to declines in capital market activity, along with the planned reduction in maturing wholesale deposits of $0.5 billion, offset by deposit growth of $180 million in community banking.”
“Credit quality continues the improvement seen throughout 2021 with a $14.3 million decrease in special mention loans and leases in 1Q22 and a $34.0 million decrease in classified loans and leases in 1Q22, which, combined with changes in our loan portfolio composition, resulted in no provision for credit losses for the quarter.”
“The loan growth particularly over the last three quarters has increased risk-weighted assets resulting in a decrease in capital ratios, which remain well above regulatory thresholds. Capital and balance sheet management remain a focus area as we look to grow our capital levels to keep pace with our growth expectations.”
Page 1
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 (1) | 2022 | 2021 | (Decrease) | 2022 | 2021 | (Decrease) | ||||||||||||||||||
| (Dollars in thousands, except per share data) | ||||||||||||||||||||||||
| Net earnings | $ | 120,128 | $ | 136,045 | $ | (15,917 | ) | $ | 120,128 | $ | 150,406 | $ | (30,278 | ) | ||||||||||
| Diluted earnings per share | $ | 1.01 | $ | 1.14 | $ | (0.13 | ) | $ | 1.01 | $ | 1.27 | $ | (0.26 | ) | ||||||||||
| Pre-provision, pre-tax net revenue ("PPNR") (2) | $ | 162,109 | $ | 181,677 | $ | (19,568 | ) | $ | 162,109 | $ | 155,962 | $ | 6,147 | |||||||||||
| Return on average assets | 1.22 | % | 1.34 | % | (0.12 | ) | 1.22 | % | 1.94 | % | (0.72 | ) | ||||||||||||
| PPNR return on average assets (2) | 1.65 | % | 1.79 | % | (0.14 | ) | 1.65 | % | 2.01 | % | (0.36 | ) | ||||||||||||
| Return on average tangible equity (2) | 20.93 | % | 22.06 | % | (1.13 | ) | 20.93 | % | 25.67 | % | (4.74 | ) | ||||||||||||
| Yield on average loans and leases (tax equivalent) | 4.66 | % | 4.93 | % | (0.27 | ) | 4.66 | % | 5.20 | % | (0.54 | ) | ||||||||||||
| Cost of average total deposits | 0.07 | % | 0.08 | % | (0.01 | ) | 0.07 | % | 0.11 | % | (0.04 | ) | ||||||||||||
| Net interest margin ("NIM") (tax equivalent) | 3.43 | % | 3.24 | % | 0.19 | 3.43 | % | 3.69 | % | (0.26 | ) | |||||||||||||
| Efficiency ratio | 50.1 | % | 46.2 | % | 3.9 | 50.1 | % | 46.4 | % | 3.7 | ||||||||||||||
| Total assets | $ | 39,249,639 | $ | 40,443,344 | $ | (1,193,705 | ) | $ | 39,249,639 | $ | 32,856,533 | $ | 6,393,106 | |||||||||||
| Loans and leases held for investment, net of deferred fees | $ | 24,352,072 | $ | 22,941,548 | $ | 1,410,524 | $ | 24,352,072 | $ | 18,979,228 | $ | 5,372,844 | ||||||||||||
| Noninterest-bearing demand deposits | $ | 14,057,051 | $ | 14,543,133 | $ | (486,082 | ) | $ | 14,057,051 | $ | 11,017,462 | $ | 3,039,589 | |||||||||||
| Core deposits | $ | 31,676,404 | $ | 32,734,949 | $ | (1,058,545 | ) | $ | 31,676,404 | $ | 25,576,348 | $ | 6,100,056 | |||||||||||
| Total deposits | $ | 33,224,895 | $ | 34,997,757 | $ | (1,772,862 | ) | $ | 33,224,895 | $ | 28,223,291 | $ | 5,001,604 | |||||||||||
| As percentage of total deposits: | ||||||||||||||||||||||||
| Noninterest-bearing demand deposits | 42 | % | 41 | % | 1 | 42 | % | 39 | % | 3 | ||||||||||||||
| Core deposits | 95 | % | 93 | % | 2 | 95 | % | 91 | % | 4 | ||||||||||||||
| Equity to assets ratio | 9.30 | % | 9.89 | % | (0.59 | ) | 9.30 | % | 11.12 | % | (1.82 | ) | ||||||||||||
| Common equity tier 1 capital ratio | 8.64 | % | 8.86 | % | (0.22 | ) | 8.64 | % | 10.39 | % | (1.75 | ) | ||||||||||||
| Total capital ratio | 12.27 | % | 12.69 | % | (0.42 | ) | 12.27 | % | 13.60 | % | (1.33 | ) | ||||||||||||
| Tangible common equity ratio (2) | 5.83 | % | 6.54 | % | (0.71 | ) | 5.83 | % | 7.68 | % | (1.85 | ) | ||||||||||||
| Book value per share | $ | 30.52 | $ | 33.45 | $ | (2.93 | ) | $ | 30.52 | $ | 30.68 | $ | (0.16 | ) | ||||||||||
| Tangible book value per share (2) | $ | 18.42 | $ | 21.31 | $ | (2.89 | ) | $ | 18.42 | $ | 20.39 | $ | (1.97 | ) | ||||||||||
| (1) | The operations of the HOA Business are included from its October 8, 2021 acquisition date and the operations of Civic are included from its February 1, 2021 acquisition date. |
| (2) | Non-GAAP measure. |
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INCOME STATEMENT HIGHLIGHTS
NET INTEREST INCOME
Net interest income increased by $8.3 million to $308.7 million for the first quarter of 2022 compared to $300.4 million for the fourth quarter of 2021 due mainly to higher income on investment securities and loans and leases primarily resulting from higher average balances as we deployed our excess liquidity. Income on investment securities increased by $5.0 million in the first quarter of 2022 due to a $433 million increase in the average balance of investment securities and a 15 basis point increase in the yield on average investment securities. Income on loans and leases increased by $4.1 million in the first quarter of 2022 due to a $2.1 billion increase in the average balance of loans and leases, offset partially by a 27 basis point decrease in the yield on average loans and leases and two fewer days compared to the fourth quarter of 2021. The tax equivalent yield on average loans and leases was 4.66% for the first quarter of 2022 compared to 4.93% for the fourth quarter of 2021. The decrease in the tax equivalent yield on average loans and leases was due primarily to loan prepayment fees being lower by $5.8 million and amortized loan fees being lower by $4.0 million.
The tax equivalent NIM was 3.43% for the first quarter of 2022 compared to 3.24% for the fourth quarter of 2021. The increase in the NIM was due mainly to the change in the interest-earning assets mix driven by the increase in the balance of average loans and leases and investment securities as a percentage of average interest-earning assets from 84% to 92% and the decrease in the balance of average deposits in financial institutions as a percentage of average interest-earning assets from 16% to 8%, partially offset by a lower yield on average loans and leases. The average balance of loans and leases increased by $2.1 billion, the average balance of investment securities increased by $433 million, and the average balance of deposits in financial institutions decreased by $2.9 billion to $3.1 billion. The increase in the average balances of loans and leases and investment securities was the result of the Company’s effort to deploy our excess liquidity efficiently.
The cost of average total deposits was 0.07% in the first quarter of 2022 compared to 0.08% in the fourth quarter of 2021.
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 | 2022 | 2021 | (Decrease) | |||||||||
| (In thousands) | ||||||||||||
| Reduction in allowance for loan and lease losses | $ | (2,000 | ) | $ | (3,000 | ) | $ | 1,000 | ||||
| Addition to (reduction in) reserve for unfunded loan commitments | 2,000 | (3,000 | ) | 5,000 | ||||||||
| Total provision for credit losses | $ | - | $ | (6,000 | ) | $ | 6,000 | |||||
There was no provision for credit losses for the first quarter of 2022 compared to a benefit of $6.0 million for the fourth quarter of 2021. In the first quarter of 2022, the continued credit quality improvement combined with changes in our loan portfolio composition, offset by the provision needed for growth in loans and unfunded commitments, resulted in no provision for the quarter.
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Noninterest Income
The following table presents details of noninterest income for the periods indicated:
| Three Months Ended | ||||||||||||
| March 31, | December 31, | Increase | ||||||||||
| Noninterest Income | 2022 | 2021 | (Decrease) | |||||||||
| (In thousands) | ||||||||||||
| Service charges on deposit accounts | $ | 3,571 | $ | 3,476 | $ | 95 | ||||||
| Other commissions and fees | 11,580 | 10,633 | 947 | |||||||||
| Leased equipment income | 13,094 | 12,602 | 492 | |||||||||
| Gain on sale of loans and leases | 60 | 172 | (112 | ) | ||||||||
| Gain on sale of securities | 104 | 999 | (895 | ) | ||||||||
| Dividends and (losses) gains on equity investments | (11,375 | ) | (1,570 | ) | (9,805 | ) | ||||||
| Warrant income | 629 | 23,990 | (23,361 | ) | ||||||||
| Other income | 3,155 | 7,080 | (3,925 | ) | ||||||||
| Total noninterest income | $ | 20,818 | $ | 57,382 | $ | (36,564 | ) | |||||
Noninterest income decreased by $36.6 million to $20.8 million for the first quarter of 2022 compared to $57.4 million for the fourth quarter of 2021 due primarily to decreases of $23.4 million in warrant income, $9.8 million in dividends and gains on equity investments, and $3.9 million in other income. Warrant income decreased to $0.6 million in the first quarter of 2022 from a record quarterly high of $24.0 million in the fourth quarter of 2021 due to decreased capital market activity and volatility resulting from geopolitical tensions and inflationary pressures. The capital market volatility also impacted the fair values of our equity investments in the first quarter of 2022. Dividends and gains on equity investments decreased due primarily to lower gains on sales of equity investments, higher fair value losses on equity investments still held, and lower income distributions and fair value marks on SBIC investments. The net realized and unrealized losses on equity investments were $12.2 million in the first quarter of 2022, with one equity investment accounting for $7.5 million of the total net losses. As of March 31, 2022, we held six equity investments with a carrying value of $8.8 million, two of which were sold in April reducing the balance to $0.1 million. Other income decreased due to an early lease termination of $4.9 million recorded in the fourth quarter of 2021, partially offset by a $1.0 million increase in foreign currency translation gains.
Noninterest Expense
The following table presents details of noninterest expense for the periods indicated:
| Three Months Ended | ||||||||||||
| March 31, | December 31, | Increase | ||||||||||
| Noninterest Expense | 2022 | 2021 | (Decrease) | |||||||||
| (In thousands) | ||||||||||||
| Compensation | $ | 92,240 | $ | 99,700 | $ | (7,460 | ) | |||||
| Occupancy | 15,200 | 14,656 | 544 | |||||||||
| Data processing | 9,629 | 8,171 | 1,458 | |||||||||
| Other professional services | 5,954 | 5,946 | 8 | |||||||||
| Insurance and assessments | 5,490 | 5,032 | 458 | |||||||||
| Intangible asset amortization | 3,649 | 3,876 | (227 | ) | ||||||||
| Leased equipment depreciation | 9,189 | 9,569 | (380 | ) | ||||||||
| Foreclosed assets (income) expense, net | (3,353 | ) | (260 | ) | (3,093 | ) | ||||||
| Acquisition, integration and reorganization costs | - | 5,590 | (5,590 | ) | ||||||||
| Customer related expense | 12,655 | 6,175 | 6,480 | |||||||||
| Loan expense | 5,157 | 5,627 | (470 | ) | ||||||||
| Other | 11,616 | 12,028 | (412 | ) | ||||||||
| Total noninterest expense | $ | 167,426 | $ | 176,110 | $ | (8,684 | ) | |||||
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Noninterest expense decreased by $8.7 million to $167.4 million for the first quarter of 2022 compared to $176.1 million for the fourth quarter of 2021 due primarily to a decrease in compensation expense of $7.5 million, a decrease in acquisition, integration and reorganization costs of $5.6 million, and an increase in foreclosed assets income of $3.1 million, partially offset by an increase in customer related expense of $6.5 million. The decrease in compensation expense was due mainly to lower commissions and bonus expense, partially offset by a seasonal increase in payroll taxes. There were no acquisition, integration and reorganization costs in the first quarter of 2022 compared to $5.6 million in the fourth quarter of 2021 related to the October 8, 2021 HOA Business acquisition. The increase in foreclosed assets income was due to a $3.2 million gain on the sale of our largest foreclosed property. The increase in customer related expense was due to increased third-party expenses related to the HOA Business.
Income Taxes
The effective income tax rate was 25.9% for the first quarter of 2022 compared to 27.5% for the fourth quarter of 2021. The decrease was due primarily to a lower blended state tax rate. The effective tax rate for the full year 2022 is currently estimated to be in the range of 25% to 27%.
BALANCE SHEET HIGHLIGHTS
Deposits and Client Investment Funds
The following table presents the composition of our deposit portfolio as of the dates indicated:
| March 31, 2022 | December 31, 2021 | March 31, 2021 | ||||||||||||||||||||||
| % of | % of | % of | ||||||||||||||||||||||
| Deposit Composition | Balance | Total | Balance | Total | Balance | Total | ||||||||||||||||||
| (Dollars in thousands) | ||||||||||||||||||||||||
| Noninterest-bearing demand | $ | 14,057,051 | 42 | % | $ | 14,543,133 | 41 | % | $ | 11,017,462 | 39 | % | ||||||||||||
| Interest checking | 6,673,696 | 20 | % | 7,319,898 | 21 | % | 6,862,398 | 25 | % | |||||||||||||||
| Money market | 10,301,996 | 31 | % | 10,241,265 | 29 | % | 7,112,610 | 25 | % | |||||||||||||||
| Savings | 643,661 | 2 | % | 630,653 | 2 | % | 583,878 | 2 | % | |||||||||||||||
| Total core deposits | 31,676,404 | 95 | % | 32,734,949 | 93 | % | 25,576,348 | 91 | % | |||||||||||||||
| Non-core non-maturity deposits | 322,732 | 1 | % | 889,976 | 3 | % | 1,162,590 | 4 | % | |||||||||||||||
| Total non-maturity deposits | 31,999,136 | 96 | % | 33,624,925 | 96 | % | 26,738,938 | 95 | % | |||||||||||||||
| Time deposits $250,000 and under | 878,383 | 3 | % | 885,938 | 3 | % | 940,340 | 3 | % | |||||||||||||||
| Time deposits over $250,000 | 347,376 | 1 | % | 486,894 | 1 | % | 544,013 | 2 | % | |||||||||||||||
| Total time deposits | 1,225,759 | 4 | % | 1,372,832 | 4 | % | 1,484,353 | 5 | % | |||||||||||||||
| Total deposits | $ | 33,224,895 | 100 | % | $ | 34,997,757 | 100 | % | $ | 28,223,291 | 100 | % | ||||||||||||
At March 31, 2022, core deposits totaled $31.7 billion or 95% of total deposits, including $14.1 billion of noninterest-bearing demand deposits or 42% of total deposits. Core deposits decreased by $1.1 billion or 3.2% in the first quarter of 2022 driven primarily by a decrease in balances from our venture banking clients, offset partially by an increase in community banking deposits. Total deposits decreased by $1.8 billion or 5.1% in the first quarter of 2022 due to the $1.5 billion decrease in venture banking deposits and a $0.6 billion decrease in non-core non-maturity deposits, of which $0.5 billion was scheduled for maturity during the quarter, offset partially by an increase of $180 million in community banking deposits. Total venture banking deposits decreased from $15.5 billion as of December 31, 2021 to $14.0 billion as of March 31, 2022.
In addition to deposit products, we also offer alternative, non-depository cash investment options for select clients. These alternative options include investments managed by Pacific Western Asset Management Inc. (“PWAM”), our registered investment advisor subsidiary, and third-party sweep products. Total off-balance sheet client investment funds increased from $1.4 billion as of December 31, 2021 to $1.7 billion as of March 31, 2022, of which $1.0 billion was managed by PWAM. The increase was primarily attributable to our venture banking clients.
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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 | ||||||||
| March 31, | December 31, | |||||||
| Roll Forward of Loans and Leases Held for Investment, Net of Deferred Fees | 2022 | 2021 | ||||||
| (Dollars in thousands) | ||||||||
| Balance, beginning of period | $ | 22,941,548 | $ | 20,511,020 | ||||
| Additions: | ||||||||
| Production | 2,574,860 | 3,372,815 | ||||||
| Disbursements | 1,589,152 | 1,917,195 | ||||||
| Total production and disbursements | 4,164,012 | 5,290,010 | ||||||
| Reductions: | ||||||||
| Payoffs | (1,448,680 | ) | (2,000,293 | ) | ||||
| Paydowns | (1,264,571 | ) | (845,443 | ) | ||||
| Total payoffs and paydowns | (2,713,251 | ) | (2,845,736 | ) | ||||
| Sales | (36,698 | ) | (15,837 | ) | ||||
| Transfers to foreclosed assets | (305 | ) | - | |||||
| Charge-offs | (3,234 | ) | (4,395 | ) | ||||
| Total reductions | (2,753,488 | ) | (2,865,968 | ) | ||||
| Loans acquired through acquisitions | - | 6,486 | ||||||
| Net increase (decrease) | 1,410,524 | 2,430,528 | ||||||
| Balance, end of period | $ | 24,352,072 | $ | 22,941,548 | ||||
| Weighted average rate on production (1) | 4.31 | % | 3.89 | % | ||||
| (1) | 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 2022. |
Loans and leases held for investment, net of deferred fees, increased by $1.4 billion or 6.1% in the first quarter of 2022 to $24.4 billion at March 31, 2022. The overall increase in the loans and leases balance for the first quarter of 2022 was due primarily to increases in the income producing and other residential, asset-based, and residential real estate construction portfolios, offset partially by reductions in the venture capital and other commercial portfolios.
Civic loan production was $559 million in the first quarter of 2022 compared to $480 million in the fourth quarter of 2021. The Civic loan portfolio as of March 31, 2022 totaled $1.7 billion.
PPP loans declined by $86.3 million in the first quarter of 2022, as the program continues to wind down. Net fees for PPP loans were $2.5 million in the first quarter of 2022, down from $3.6 million in the fourth quarter of 2021. Remaining PPP loans totaled $70.4 million as of March 31, 2022, with $1.7 million of net fees to amortize over the remaining life of the loans.
The weighted average rate on the $2.6 billion of production for the first quarter of 2022 increased to 4.31% from 3.89% in the fourth quarter of 2021 due primarily to the loan mix (lower levels of single-family loan pool purchases and higher level of Civic fundings). In the first quarter of 2022, we purchased $587 million of single-family loan pools compared to $1.1 billion in the fourth quarter of 2021. The single-family loan pool purchase portfolio as of March 31, 2022 totaled $2.9 billion.
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The following table presents the composition of loans and leases held for investment by loan portfolio segment and class, net of deferred fees, as of the dates indicated:
| March 31, 2022 | December 31, 2021 | March 31, 2021 | ||||||||||||||||||||||
| % of | % of | % of | ||||||||||||||||||||||
| Loan and Lease Portfolio | Balance | Total | Balance | Total | Balance | Total | ||||||||||||||||||
| (Dollars in thousands) | ||||||||||||||||||||||||
| Real estate mortgage: | ||||||||||||||||||||||||
| Commercial | $ | 3,669,741 | 15 | % | $ | 3,762,299 | 17 | % | $ | 3,941,610 | 21 | % | ||||||||||||
| Residential | 8,369,550 | 35 | % | 7,416,421 | 32 | % | 4,045,603 | 21 | % | |||||||||||||||
| Total real estate mortgage | 12,039,291 | 50 | % | 11,178,720 | 49 | % | 7,987,213 | 42 | % | |||||||||||||||
| Real estate construction and land: | ||||||||||||||||||||||||
| Commercial | 802,022 | 3 | % | 832,591 | 4 | % | 990,035 | 5 | % | |||||||||||||||
| Residential | 2,891,467 | 12 | % | 2,604,536 | 11 | % | 2,575,788 | 14 | % | |||||||||||||||
| Total real estate construction and land | 3,693,489 | 15 | % | 3,437,127 | 15 | % | 3,565,823 | 19 | % | |||||||||||||||
| Total real estate | 15,732,780 | 65 | % | 14,615,847 | 64 | % | 11,553,036 | 61 | % | |||||||||||||||
| Commercial: | ||||||||||||||||||||||||
| Asset-based | 4,739,220 | 19 | % | 4,075,477 | 18 | % | 3,383,403 | 18 | % | |||||||||||||||
| Venture capital | 2,077,339 | 9 | % | 2,320,593 | 10 | % | 1,495,798 | 8 | % | |||||||||||||||
| Other commercial | 1,298,136 | 5 | % | 1,471,981 | 6 | % | 2,206,639 | 11 | % | |||||||||||||||
| Total commercial | 8,114,695 | 33 | % | 7,868,051 | 34 | % | 7,085,840 | 37 | % | |||||||||||||||
| Consumer | 504,597 | 2 | % | 457,650 | 2 | % | 340,352 | 2 | % | |||||||||||||||
| Total loans and leases held for investment, net of deferred fees | $ | 24,352,072 | 100 | % | $ | 22,941,548 | 100 | % | $ | 18,979,228 | 100 | % | ||||||||||||
| Total unfunded loan commitments | $ | 9,899,345 | $ | 9,006,350 | $ | 8,127,999 | ||||||||||||||||||
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, 2022 | ||||||||||||
| Allowance for | Reserve for | Total | ||||||||||
| Loan and | Unfunded Loan | Allowance for | ||||||||||
| Allowance for Credit Losses Rollforward | Lease Losses | Commitments | Credit Losses | |||||||||
| (In thousands) | ||||||||||||
| Beginning balance | $ | 200,564 | $ | 73,071 | $ | 273,635 | ||||||
| Charge-offs | (3,234 | ) | - | (3,234 | ) | |||||||
| Recoveries | 2,068 | - | 2,068 | |||||||||
| Net charge-offs | (1,166 | ) | - | (1,166 | ) | |||||||
| Provision | (2,000 | ) | 2,000 | - | ||||||||
| Ending balance | $ | 197,398 | $ | 75,071 | $ | 272,469 | ||||||
| Three Months Ended December 31, 2021 | ||||||||||||
| Allowance for | Reserve for | Total | ||||||||||
| Loan and | Unfunded Loan | Allowance for | ||||||||||
| Allowance for Credit Losses Rollforward | Lease Losses | Commitments | Credit Losses | |||||||||
| (In thousands) | ||||||||||||
| Beginning balance | $ | 203,733 | $ | 76,071 | $ | 279,804 | ||||||
| Charge-offs | (4,395 | ) | - | (4,395 | ) | |||||||
| Recoveries | 4,226 | - | 4,226 | |||||||||
| Net charge-offs | (169 | ) | - | (169 | ) | |||||||
| Provision | (3,000 | ) | (3,000 | ) | (6,000 | ) | ||||||
| Ending balance | $ | 200,564 | $ | 73,071 | $ | 273,635 | ||||||
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The following table presents allowance for credit losses information as of and for the dates and periods indicated:
| March 31, | December 31, | Increase | ||||||||||
| Allowance for Credit Losses | 2022 | 2021 | (Decrease) | |||||||||
| (Dollars in thousands) | ||||||||||||
| Allowance for loan and lease losses | $ | 197,398 | $ | 200,564 | $ | (3,166 | ) | |||||
| Reserve for unfunded loan commitments | 75,071 | 73,071 | 2,000 | |||||||||
| Allowance for credit losses | $ | 272,469 | $ | 273,635 | $ | (1,166 | ) | |||||
| Provision for credit losses (for the quarter) | $ | - | $ | (6,000 | ) | $ | 6,000 | |||||
| Net charge-offs (recoveries) (for the quarter) | $ | 1,166 | $ | 169 | $ | 997 | ||||||
| Net charge-offs (recoveries) to average loans and leases (for the quarter) | 0.02 | % | 0.00 | % | ||||||||
| Allowance for loan and lease losses to loans and leases held for investment | 0.81 | % | 0.87 | % | ||||||||
| Allowance for loan and lease losses to loans and leases held for investment, excluding PPP loans | 0.81 | % | 0.88 | % | ||||||||
| Allowance for credit losses to loans and leases held for investment | 1.12 | % | 1.19 | % | ||||||||
| Allowance for credit losses to loans and leases held for investment, excluding PPP loans | 1.12 | % | 1.20 | % | ||||||||
The allowance for credit losses decreased by $1.2 million in the first quarter of 2022 to $272.5 million at March 31, 2022. The decrease in the allowance for credit losses during the first quarter of 2022 was attributable to $1.2 million in net charge-offs. The allowance for credit losses ratio, excluding PPP loans, of 1.12% remains robust and moderately higher than the pre-pandemic level of 0.97% as of the January 1, 2020 CECL adoption date.
Net charge-offs were $1.2 million for the first quarter of 2022 as gross charge-offs of $3.2 million were reduced by recoveries of $2.0 million.
Net charge-offs were $0.2 million for the fourth quarter of 2021 as gross charge-offs of $4.4 million were reduced by recoveries of $4.2 million.
Page 8
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 | 2022 | 2021 | (Decrease) | |||||||||
| (Dollars in thousands) | ||||||||||||
| NPAs and Performing TDRs: | ||||||||||||
| Nonaccrual loans and leases held for investment (1) | $ | 66,538 | $ | 61,174 | $ | 5,364 | ||||||
| Accruing loans contractually past due 90 days or more | - | - | - | |||||||||
| Foreclosed assets, net | 304 | 12,843 | (12,539 | ) | ||||||||
| Total nonperforming assets ("NPAs") | $ | 66,842 | $ | 74,017 | $ | (7,175 | ) | |||||
| Performing TDRs held for investment | $ | 16,781 | $ | 24,430 | $ | (7,649 | ) | |||||
| Nonaccrual loans and leases held for investment to loans and leases held for investment | 0.27 | % | 0.27 | % | ||||||||
| Nonperforming assets to loans and leases held for investment and foreclosed assets | 0.27 | % | 0.32 | % | ||||||||
| Allowance for credit losses to nonaccrual loans and leases held for investment | 409.5 | % | 447.3 | % | ||||||||
| Loan and Lease Credit Risk Ratings: | ||||||||||||
| Pass | $ | 23,892,689 | $ | 22,433,833 | $ | 1,458,856 | ||||||
| Special mention | 377,315 | 391,611 | (14,296 | ) | ||||||||
| Classified | 82,068 | 116,104 | (34,036 | ) | ||||||||
| Total loans and leases held for investment, net of deferred fees | $ | 24,352,072 | $ | 22,941,548 | $ | 1,410,524 | ||||||
| Classified loans and leases held for investment to loans and leases held for investment | 0.34 | % | 0.51 | % | ||||||||
| (1) | Nonaccrual loans include SBA guaranteed amounts of $13.4 million at March 31, 2022 and $22.1 million at December 31, 2021. |
Since downgrading certain loans at the onset of the pandemic in the first quarter of 2020 given all the uncertainty at the time, special mention loans and leases have decreased by $521.3 million or 58% from their peak in the first quarter of 2020, while classified loans and leases have decreased by $211.2 million or 72% from their peak in the second quarter of 2020, and each have continued to decline in the first quarter of 2022. Classified loans and leases are now below pre-pandemic levels, while special mention loans and leases are also approaching pre-pandemic levels. Nonaccrual loans and leases increased by $5.4 million to $66.5 million in the first quarter of 2022 due primarily to an increase in nonaccrual short-term, single-family residential renovation loans. With this product, it is common for the borrower to let the loan become delinquent once they enter escrow to sell the renovated home as the loan will be paid off through the closing of escrow.
In the first quarter of 2022, we sold our largest foreclosed asset with a book value of $12.6 million, which resulted in a gain on sale of $3.2 million.
Page 9
The following table presents nonaccrual loans and leases and accruing loans and leases past due between 30 and 89 days by loan portfolio segment and class as of the dates indicated:
| March 31, 2022 | December 31, 2021 | Increase (Decrease) | ||||||||||||||||||||||
| Accruing | Accruing | Accruing | ||||||||||||||||||||||
| and 30-89 | and 30-89 | and 30-89 | ||||||||||||||||||||||
| Days Past | Days Past | Days Past | ||||||||||||||||||||||
| Nonaccrual | Due | Nonaccrual | Due | Nonaccrual | Due | |||||||||||||||||||
| (In thousands) | ||||||||||||||||||||||||
| Real estate mortgage: | ||||||||||||||||||||||||
| Commercial | $ | 32,071 | $ | 2,090 | $ | 27,540 | $ | 2,165 | $ | 4,531 | $ | (75 | ) | |||||||||||
| Income producing and other residential | 17,463 | 31,103 | 12,292 | 39,929 | 5,171 | (8,826 | ) | |||||||||||||||||
| Total real estate mortgage | 49,534 | 33,193 | 39,832 | 42,094 | 9,702 | (8,901 | ) | |||||||||||||||||
| Real estate construction and land: | ||||||||||||||||||||||||
| Commercial | - | - | - | - | - | - | ||||||||||||||||||
| Residential | 6,215 | 21,413 | 4,715 | 5,031 | 1,500 | 16,382 | ||||||||||||||||||
| Total real estate construction and land | 6,215 | 21,413 | 4,715 | 5,031 | 1,500 | 16,382 | ||||||||||||||||||
| Commercial: | ||||||||||||||||||||||||
| Asset-based | 1,323 | - | 1,464 | - | (141 | ) | - | |||||||||||||||||
| Venture capital | 3,659 | - | 2,799 | - | 860 | - | ||||||||||||||||||
| Other commercial | 5,420 | 47 | 11,950 | 630 | (6,530 | ) | (583 | ) | ||||||||||||||||
| Total commercial | 10,402 | 47 | 16,213 | 630 | (5,811 | ) | (583 | ) | ||||||||||||||||
| Consumer | 387 | 994 | 414 | 1,004 | (27 | ) | (10 | ) | ||||||||||||||||
| Total held for investment | $ | 66,538 | $ | 55,647 | $ | 61,174 | $ | 48,759 | $ | 5,364 | $ | 6,888 | ||||||||||||
The increase in accruing and 30-89 days past due loans in the residential real estate construction category is primarily due to an increase in short-term, single-family residential renovation loans. With this product, it is common for the borrower to let the loan become delinquent once they enter escrow to sell the renovated home as the loan will be paid off through the closing of escrow. This increase in accruing and 30-89 days past due loans was offset partially by a decrease in the income producing and other residential loans category, which was due mainly to a reduction in past due purchased single-family loans.
Page 10
CAPITAL
Our capital ratios decreased during the first quarter of 2022 as risk-weighted assets grew by $1.8 billion primarily as a result of loan growth. We are considering various non-common equity capital enhancing strategies, such as a preferred offering depending on market conditions, to increase capital given our growth in the last three quarters and anticipated future loan growth. The following table presents certain actual capital ratios and ratios excluding PPP loans:
| March 31, 2022 | ||||||||||||
| Excluding | December 31, | |||||||||||
| PPP | 2021 | |||||||||||
| Actual (1) | Loans (1) | Actual | ||||||||||
| PacWest Bancorp Consolidated: | ||||||||||||
| Tier 1 leverage capital ratio | 7.11 | % | 7.13 | %(3) | 6.84 | % | ||||||
| Common equity tier 1 capital ratio | 8.64 | % | 8.64 | % | 8.86 | % | ||||||
| Tier 1 capital ratio | 9.07 | % | 9.07 | % | 9.32 | % | ||||||
| Total capital ratio | 12.27 | % | 12.27 | % | 12.69 | % | ||||||
| Risk-weighted assets (in thousands) | $ | 30,297,945 | $ | 30,297,945 | $ | 28,508,808 | ||||||
| Tangible common equity ratio (2) | 5.83 | % | 5.84 | %(3) | 6.54 | % | ||||||
| (1) | Capital information for March 31, 2022 is preliminary. |
| (2) | Non-GAAP measure. |
| (3) | PPP loans have been excluded from total assets in the denominator as they are zero risk-weighted. |
ABOUT PACWEST BANCORP
PacWest Bancorp (“PacWest”) is a bank holding company with over $39 billion in assets headquartered in Los Angeles, California, with an executive office in Denver, Colorado, with one wholly-owned banking subsidiary, Pacific Western Bank (the “Bank”). The Bank is focused on relationship-based business banking to small, middle-market, and venture-backed businesses nationwide. The Bank offers a broad range of loan and lease and deposit products and services through 69 full-service branches located in California, one branch located in Durham, North Carolina, one branch located in Denver, Colorado, and numerous loan production offices across the country. The Bank provides community banking products including lending and comprehensive deposit and treasury management services to small and medium-sized businesses conducted primarily through our California-based branch offices and Denver, Colorado branch office. The Bank offers national lending products including asset-based, equipment, and real estate loans and treasury management services to established middle-market businesses on a national basis. The Bank provides venture banking products including a comprehensive suite of financial services focused on entrepreneurial and venture-backed businesses and their venture capital and private equity investors, with offices located in key innovative hubs across the United States. The Bank also offers financing of business-purpose, non-owner-occupied investor properties through Civic, a wholly-owned subsidiary. The Bank also provides a specialized suite of services for the HOA industry. For more information about PacWest Bancorp or Pacific Western Bank, visit www.pacwest.com.
Page 11
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. Statements that are not historical or current facts, including statements about future financial and operational results, expectations, or intentions are forward-looking statements. Such statements are based on information available at the time of the communication and are based on current beliefs and expectations of the Company’s management and are subject to significant risks, uncertainties and contingencies, many of which are beyond our control, which may cause actual results, performance, or achievements to differ materially from those expressed in them. The ongoing COVID-19 pandemic continues to affect PacWest, its employees, customers and third-party service providers, and the ultimate extent of the impacts on its business, financial position, results of operations, liquidity and prospects is uncertain due in part to the new variants of COVID-19. The risks from the COVID-19 pandemic have decreased as the pandemic subsides, however, new variants may continue to impact key macro-economic indicators such as unemployment and GDP and may have a material impact on our allowance for credit losses and related provision for credit losses. Continued deterioration in general business and economic conditions could adversely affect PacWest’s revenues and the values of its assets, including goodwill, and liabilities, lead to a tightening of credit, and increase stock price volatility. In addition, PacWest’s results could be adversely affected by changes in interest rates, sustained high unemployment rates, deterioration in the credit quality of its loan portfolio or in the value of the collateral securing those loans, deterioration in the value of its investment securities, and legal and regulatory developments. 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 PacWest with the U.S. Securities and Exchange Commission.
All forward-looking statements in this communication are based on information available at the time the statement is made. 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.
Page 12
PACWEST BANCORP AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
| March 31, | December 31, | March 31, | ||||||||||
| 2022 | 2021 | 2021 | ||||||||||
| (Dollars in thousands, except per share data) | ||||||||||||
| ASSETS: | ||||||||||||
| Cash and due from banks | $ | 205,446 | $ | 112,548 | $ | 177,199 | ||||||
| Interest-earning deposits in financial institutions | 1,865,235 | 3,944,686 | 5,517,667 | |||||||||
| Total cash and cash equivalents | 2,070,681 | 4,057,234 | 5,694,866 | |||||||||
| Securities available-for-sale, at estimated fair value | 9,975,109 | 10,694,458 | 5,941,690 | |||||||||
| Federal Home Loan Bank stock, at cost | 17,250 | 17,250 | 17,250 | |||||||||
| Total investment securities | 9,992,359 | 10,711,708 | 5,958,940 | |||||||||
| Loans held for sale | - | - | 25,554 | |||||||||
| Gross loans and leases held for investment | 24,439,749 | 23,026,308 | 19,055,165 | |||||||||
| Deferred fees, net | (87,677 | ) | (84,760 | ) | (75,937 | ) | ||||||
| Total loans and leases held for investment, net of deferred fees | 24,352,072 | 22,941,548 | 18,979,228 | |||||||||
| Allowance for loan and lease losses | (197,398 | ) | (200,564 | ) | (292,445 | ) | ||||||
| Total loans and leases held for investment, net | 24,154,674 | 22,740,984 | 18,686,783 | |||||||||
| Equipment leased to others under operating leases | 325,305 | 339,150 | 327,413 | |||||||||
| Premises and equipment, net | 51,011 | 46,740 | 39,622 | |||||||||
| Foreclosed assets, net | 304 | 12,843 | 14,298 | |||||||||
| Goodwill | 1,405,736 | 1,405,736 | 1,204,092 | |||||||||
| Core deposit and customer relationship intangibles, net | 41,308 | 44,957 | 21,312 | |||||||||
| Other assets | 1,208,261 | 1,083,992 | 883,653 | |||||||||
| Total assets | $ | 39,249,639 | $ | 40,443,344 | $ | 32,856,533 | ||||||
| LIABILITIES: | ||||||||||||
| Noninterest-bearing deposits | $ | 14,057,051 | $ | 14,543,133 | $ | 11,017,462 | ||||||
| Interest-bearing deposits | 19,167,844 | 20,454,624 | 17,205,829 | |||||||||
| Total deposits | 33,224,895 | 34,997,757 | 28,223,291 | |||||||||
| Borrowings | 991,000 | - | 19,750 | |||||||||
| Subordinated debt | 863,880 | 863,283 | 465,814 | |||||||||
| Accrued interest payable and other liabilities | 519,269 | 582,674 | 493,541 | |||||||||
| Total liabilities | 35,599,044 | 36,443,714 | 29,202,396 | |||||||||
| STOCKHOLDERS' EQUITY (1) | 3,650,595 | 3,999,630 | 3,654,137 | |||||||||
| Total liabilities and stockholders’ equity | $ | 39,249,639 | $ | 40,443,344 | $ | 32,856,533 | ||||||
| Book value per share | $ | 30.52 | $ | 33.45 | $ | 30.68 | ||||||
| Tangible book value per share (2) | $ | 18.42 | $ | 21.31 | $ | 20.39 | ||||||
| Shares outstanding | 119,601,766 | 119,584,854 | 119,105,642 | |||||||||
| (1) Includes net unrealized (loss) gain on securities available-for-sale, net | $ | (376,475 | ) | $ | 65,968 | $ | 106,381 | |||||
| (2) Non-GAAP measure. |
Page 13
PACWEST BANCORP AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF EARNINGS
| Three Months Ended | ||||||||||||
| March 31, | December 31, | March 31, | ||||||||||
| 2022 | 2021 | 2021 | ||||||||||
| (In thousands, except per share data) | ||||||||||||
| Interest income: | ||||||||||||
| Loans and leases | $ | 267,759 | $ | 263,662 | $ | 241,544 | ||||||
| Investment securities | 53,422 | 48,469 | 30,265 | |||||||||
| Deposits in financial institutions | 1,723 | 2,674 | 1,528 | |||||||||
| Total interest income | 322,904 | 314,805 | 273,337 | |||||||||
| Interest expense: | ||||||||||||
| Deposits | 6,208 | 6,622 | 7,500 | |||||||||
| Borrowings | 161 | 64 | 193 | |||||||||
| Subordinated debt | 7,818 | 7,714 | 4,375 | |||||||||
| Total interest expense | 14,187 | 14,400 | 12,068 | |||||||||
| Net interest income | 308,717 | 300,405 | 261,269 | |||||||||
| Provision for credit losses | - | (6,000 | ) | (48,000 | ) | |||||||
| Net interest income after provision for credit losses | 308,717 | 306,405 | 309,269 | |||||||||
| Noninterest income: | ||||||||||||
| Service charges on deposit accounts | 3,571 | 3,476 | 2,934 | |||||||||
| Other commissions and fees | 11,580 | 10,633 | 9,158 | |||||||||
| Leased equipment income | 13,094 | 12,602 | 11,354 | |||||||||
| Gain on sale of loans and leases | 60 | 172 | 139 | |||||||||
| Gain on sale of securities | 104 | 999 | 101 | |||||||||
| Dividends and (losses) gains on equity investments | (11,375 | ) | (1,570 | ) | 10,904 | |||||||
| Warrant income | 629 | 23,990 | 6,123 | |||||||||
| Other income | 3,155 | 7,080 | 4,116 | |||||||||
| Total noninterest income | 20,818 | 57,382 | 44,829 | |||||||||
| Noninterest expense: | ||||||||||||
| Compensation | 92,240 | 99,700 | 79,882 | |||||||||
| Occupancy | 15,200 | 14,656 | 14,054 | |||||||||
| Data processing | 9,629 | 8,171 | 6,957 | |||||||||
| Other professional services | 5,954 | 5,946 | 5,126 | |||||||||
| Insurance and assessments | 5,490 | 5,032 | 4,903 | |||||||||
| Intangible asset amortization | 3,649 | 3,876 | 3,079 | |||||||||
| Leased equipment depreciation | 9,189 | 9,569 | 8,969 | |||||||||
| Foreclosed assets (income) expense, net | (3,353 | ) | (260 | ) | 1 | |||||||
| Acquisition, integration and reorganization costs | - | 5,590 | 3,425 | |||||||||
| Customer related expense | 12,655 | 6,175 | 4,818 | |||||||||
| Loan expense | 5,157 | 5,627 | 3,193 | |||||||||
| Other expense | 11,616 | 12,028 | 15,729 | |||||||||
| Total noninterest expense | 167,426 | 176,110 | 150,136 | |||||||||
| Earnings before income taxes | 162,109 | 187,677 | 203,962 | |||||||||
| Income tax expense | 41,981 | 51,632 | 53,556 | |||||||||
| Net earnings | $ | 120,128 | $ | 136,045 | $ | 150,406 | ||||||
| Basic and diluted earnings per share | $ | 1.01 | $ | 1.14 | $ | 1.27 | ||||||
| Dividends declared and paid per share | $ | 0.25 | $ | 0.25 | $ | 0.25 | ||||||
Page 14
PACWEST BANCORP AND SUBSIDIARIES
NET EARNINGS PER SHARE CALCULATIONS
| Three Months Ended | ||||||||||||
| March 31, | December 31, | March 31, | ||||||||||
| 2022 | 2021 | 2021 | ||||||||||
| (Dollars in thousands, except per share data) | ||||||||||||
| Basic Earnings Per Share: | ||||||||||||
| Net earnings | $ | 120,128 | $ | 136,045 | $ | 150,406 | ||||||
| Less: earnings allocated to unvested restricted stock (1) | (2,037 | ) | (2,311 | ) | (2,355 | ) | ||||||
| Net earnings allocated to common shares | $ | 118,091 | $ | 133,734 | $ | 148,051 | ||||||
| Weighted average basic shares and unvested restricted stock outstanding | 119,595 | 119,577 | 118,852 | |||||||||
| Less: weighted average unvested restricted stock outstanding | (2,246 | ) | (2,314 | ) | (2,003 | ) | ||||||
| Weighted average basic shares outstanding | 117,349 | 117,263 | 116,849 | |||||||||
| Basic earnings per share | $ | 1.01 | $ | 1.14 | $ | 1.27 | ||||||
| Diluted Earnings Per Share: | ||||||||||||
| Net earnings allocated to common shares | $ | 118,091 | $ | 133,734 | $ | 148,051 | ||||||
| Weighted average diluted shares outstanding | 117,349 | 117,263 | 116,849 | |||||||||
| Diluted earnings per share | $ | 1.01 | $ | 1.14 | $ | 1.27 | ||||||
| (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. |
Page 15
PACWEST BANCORP AND SUBSIDIARIES
AVERAGE BALANCE SHEET AND YIELD ANALYSIS
| Three Months Ended | ||||||||||||||||||||||||||||||||||||
| March 31, 2022 | December 31, 2021 | March 31, 2021 | ||||||||||||||||||||||||||||||||||
| 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) | $ | 23,433,019 | $ | 269,521 | 4.66 | % | $ | 21,367,665 | $ | 265,549 | 4.93 | % | $ | 18,927,314 | $ | 242,846 | 5.20 | % | ||||||||||||||||||
| Investment securities (3) | 10,397,709 | 55,594 | 2.17 | % | 9,964,568 | 50,710 | 2.02 | % | 5,383,140 | 32,329 | 2.44 | % | ||||||||||||||||||||||||
| Deposits in financial institutions | 3,083,159 | 1,723 | 0.23 | % | 5,961,104 | 2,674 | 0.18 | % | 4,790,231 | 1,528 | 0.13 | % | ||||||||||||||||||||||||
| Total interest-earning assets (1) | 36,913,887 | 326,838 | 3.59 | % | 37,293,337 | 318,933 | 3.39 | % | 29,100,685 | 276,703 | 3.86 | % | ||||||||||||||||||||||||
| Other assets | 2,969,417 | 3,064,810 | 2,315,197 | |||||||||||||||||||||||||||||||||
| Total assets | $ | 39,883,304 | $ | 40,358,147 | $ | 31,415,882 | ||||||||||||||||||||||||||||||
| Liabilities and Stockholders' Equity: | ||||||||||||||||||||||||||||||||||||
| Interest checking | $ | 7,094,623 | 1,776 | 0.10 | % | $ | 7,767,211 | 2,041 | 0.10 | % | $ | 6,401,869 | 2,232 | 0.14 | % | |||||||||||||||||||||
| Money market | 10,852,454 | 3,461 | 0.13 | % | 10,226,366 | 3,400 | 0.13 | % | 7,975,996 | 3,278 | 0.17 | % | ||||||||||||||||||||||||
| Savings | 642,709 | 39 | 0.02 | % | 634,874 | 39 | 0.02 | % | 572,959 | 35 | 0.02 | % | ||||||||||||||||||||||||
| Time | 1,278,609 | 932 | 0.30 | % | 1,421,859 | 1,142 | 0.32 | % | 1,493,267 | 1,955 | 0.53 | % | ||||||||||||||||||||||||
| Total interest-bearing deposits | 19,868,395 | 6,208 | 0.13 | % | 20,050,310 | 6,622 | 0.13 | % | 16,444,091 | 7,500 | 0.18 | % | ||||||||||||||||||||||||
| Borrowings | 298,444 | 161 | 0.22 | % | 234,391 | 64 | 0.11 | % | 226,053 | 193 | 0.35 | % | ||||||||||||||||||||||||
| Subordinated debt | 863,572 | 7,818 | 3.67 | % | 862,777 | 7,714 | 3.55 | % | 466,101 | 4,375 | 3.81 | % | ||||||||||||||||||||||||
| Total interest-bearing liabilities | 21,030,411 | 14,187 | 0.27 | % | 21,147,478 | 14,400 | 0.27 | % | 17,136,245 | 12,068 | 0.29 | % | ||||||||||||||||||||||||
| Noninterest-bearing demand deposits | 14,463,667 | 14,713,385 | 10,173,459 | |||||||||||||||||||||||||||||||||
| Other liabilities | 541,745 | 543,017 | 488,930 | |||||||||||||||||||||||||||||||||
| Total liabilities | 36,035,823 | 36,403,880 | 27,798,634 | |||||||||||||||||||||||||||||||||
| Stockholders' equity | 3,847,481 | 3,954,267 | 3,617,248 | |||||||||||||||||||||||||||||||||
| Total liabilities and stockholders' equity | $ | 39,883,304 | $ | 40,358,147 | $ | 31,415,882 | ||||||||||||||||||||||||||||||
| Net interest income (1) | $ | 312,651 | $ | 304,533 | $ | 264,635 | ||||||||||||||||||||||||||||||
| Net interest spread (1) | 3.32 | % | 3.12 | % | 3.57 | % | ||||||||||||||||||||||||||||||
| Net interest margin (1) | 3.43 | % | 3.24 | % | 3.69 | % | ||||||||||||||||||||||||||||||
| Total deposits (4) | $ | 34,332,062 | $ | 6,208 | 0.07 | % | $ | 34,763,695 | $ | 6,622 | 0.08 | % | $ | 26,617,550 | $ | 7,500 | 0.11 | % | ||||||||||||||||||
| (1) | Tax equivalent. |
| (2) | Includes net loan premium amortization of $5.7 million, $6.4 million, and $1.2 million for the three months ended March 31, 2022, December 31, 2021, and March 31, 2021, respectively. |
| (3) | Includes tax-equivalent adjustments of $2.2 million, $2.2 million, and $2.1 million for the three months ended March 31, 2022, December 31, 2021, and March 31, 2021 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. |
Page 16
PACWEST BANCORP AND SUBSIDIARIES
FIVE QUARTER BALANCE SHEET
| March 31, | December 31, | September 30, | June 30, | March 31, | ||||||||||||||||
| 2022 | 2021 | 2021 | 2021 | 2021 | ||||||||||||||||
| (Dollars in thousands, except per share data) | ||||||||||||||||||||
| ASSETS: | ||||||||||||||||||||
| Cash and due from banks | $ | 205,446 | $ | 112,548 | $ | 174,585 | $ | 179,505 | $ | 177,199 | ||||||||||
| Interest-earning deposits in financial institutions | 1,865,235 | 3,944,686 | 3,524,613 | 5,678,587 | 5,517,667 | |||||||||||||||
| Total cash and cash equivalents | 2,070,681 | 4,057,234 | 3,699,198 | 5,858,092 | 5,694,866 | |||||||||||||||
| Securities available-for-sale | 9,975,109 | 10,694,458 | 9,276,926 | 7,198,608 | 5,941,690 | |||||||||||||||
| Federal Home Loan Bank stock | 17,250 | 17,250 | 17,250 | 17,250 | 17,250 | |||||||||||||||
| Total investment securities | 9,992,359 | 10,711,708 | 9,294,176 | 7,215,858 | 5,958,940 | |||||||||||||||
| Loans held for sale | - | - | - | - | 25,554 | |||||||||||||||
| Gross loans and leases held for investment | 24,439,749 | 23,026,308 | 20,588,255 | 19,580,731 | 19,055,165 | |||||||||||||||
| Deferred fees, net | (87,677 | ) | (84,760 | ) | (77,235 | ) | (74,474 | ) | (75,937 | ) | ||||||||||
| Total loans and leases held for investment, net of deferred fees | 24,352,072 | 22,941,548 | 20,511,020 | 19,506,257 | 18,979,228 | |||||||||||||||
| Allowance for loan and lease losses | (197,398 | ) | (200,564 | ) | (203,733 | ) | (225,600 | ) | (292,445 | ) | ||||||||||
| Total loans and leases held for investment, net | 24,154,674 | 22,740,984 | 20,307,287 | 19,280,657 | 18,686,783 | |||||||||||||||
| Equipment leased to others under operating leases | 325,305 | 339,150 | 334,275 | 313,574 | 327,413 | |||||||||||||||
| Premises and equipment, net | 51,011 | 46,740 | 47,246 | 39,541 | 39,622 | |||||||||||||||
| Foreclosed assets, net | 304 | 12,843 | 13,364 | 13,227 | 14,298 | |||||||||||||||
| Goodwill | 1,405,736 | 1,405,736 | 1,204,118 | 1,204,118 | 1,204,092 | |||||||||||||||
| Core deposit and customer relationship intangibles, net | 41,308 | 44,957 | 15,533 | 18,423 | 21,312 | |||||||||||||||
| Other assets | 1,208,261 | 1,083,992 | 970,479 | 924,497 | 883,653 | |||||||||||||||
| Total assets | $ | 39,249,639 | $ | 40,443,344 | $ | 35,885,676 | $ | 34,867,987 | $ | 32,856,533 | ||||||||||
| LIABILITIES: | ||||||||||||||||||||
| Noninterest-bearing deposits | $ | 14,057,051 | $ | 14,543,133 | $ | 12,881,806 | $ | 11,252,286 | $ | 11,017,462 | ||||||||||
| Interest-bearing deposits | 19,167,844 | 20,454,624 | 17,677,939 | 18,394,748 | 17,205,829 | |||||||||||||||
| Total deposits | 33,224,895 | 34,997,757 | 30,559,745 | 29,647,034 | 28,223,291 | |||||||||||||||
| Borrowings | 991,000 | - | - | 6,625 | 19,750 | |||||||||||||||
| Subordinated debt | 863,880 | 863,283 | 862,447 | 861,788 | 465,814 | |||||||||||||||
| Accrued interest payable and other liabilities | 519,269 | 582,674 | 545,050 | 505,859 | 493,541 | |||||||||||||||
| Total liabilities | 35,599,044 | 36,443,714 | 31,967,242 | 31,021,306 | 29,202,396 | |||||||||||||||
| STOCKHOLDERS' EQUITY (1) | 3,650,595 | 3,999,630 | 3,918,434 | 3,846,681 | 3,654,137 | |||||||||||||||
| Total liabilities and stockholders’ equity | $ | 39,249,639 | $ | 40,443,344 | $ | 35,885,676 | $ | 34,867,987 | $ | 32,856,533 | ||||||||||
| Book value per share | $ | 30.52 | $ | 33.45 | $ | 32.77 | $ | 32.17 | $ | 30.68 | ||||||||||
| Tangible book value per share (2) | $ | 18.42 | $ | 21.31 | $ | 22.57 | $ | 21.95 | $ | 20.39 | ||||||||||
| Shares outstanding | 119,601,766 | 119,584,854 | 119,579,566 | 119,555,102 | 119,105,642 | |||||||||||||||
| (1) Includes net unrealized (loss) gain on securities available-for-sale, net | $ | (376,475 | ) | $ | 65,968 | $ | 98,859 | $ | 145,516 | $ | 106,381 | |||||||||
| (2) Non-GAAP measure. |
Page 17
PACWEST BANCORP AND SUBSIDIARIES
FIVE QUARTER STATEMENT OF EARNINGS
| Three Months Ended | ||||||||||||||||||||
| March 31, | December 31, | September 30, | June 30, | March 31, | ||||||||||||||||
| 2022 | 2021 | 2021 | 2021 | 2021 | ||||||||||||||||
| (In thousands, except per share data) | ||||||||||||||||||||
| Interest income: | ||||||||||||||||||||
| Loans and leases | $ | 267,759 | $ | 263,662 | $ | 246,722 | $ | 244,529 | $ | 241,544 | ||||||||||
| Investment securities | 53,422 | 48,469 | 40,780 | 33,954 | 30,265 | |||||||||||||||
| Deposits in financial institutions | 1,723 | 2,674 | 2,580 | 2,022 | 1,528 | |||||||||||||||
| Total interest income | 322,904 | 314,805 | 290,082 | 280,505 | 273,337 | |||||||||||||||
| Interest expense: | ||||||||||||||||||||
| Deposits | 6,208 | 6,622 | 6,417 | 7,269 | 7,500 | |||||||||||||||
| Borrowings | 161 | 64 | 101 | 265 | 193 | |||||||||||||||
| Subordinated debt | 7,818 | 7,714 | 7,722 | 6,663 | 4,375 | |||||||||||||||
| Total interest expense | 14,187 | 14,400 | 14,240 | 14,197 | 12,068 | |||||||||||||||
| Net interest income | 308,717 | 300,405 | 275,842 | 266,308 | 261,269 | |||||||||||||||
| Provision for credit losses | - | (6,000 | ) | (20,000 | ) | (88,000 | ) | (48,000 | ) | |||||||||||
| Net interest income after provision for credit losses | 308,717 | 306,405 | 295,842 | 354,308 | 309,269 | |||||||||||||||
| Noninterest income: | ||||||||||||||||||||
| Service charges on deposit accounts | 3,571 | 3,476 | 3,407 | 3,452 | 2,934 | |||||||||||||||
| Other commissions and fees | 11,580 | 10,633 | 11,792 | 10,704 | 9,158 | |||||||||||||||
| Leased equipment income | 13,094 | 12,602 | 10,943 | 10,847 | 11,354 | |||||||||||||||
| Gain on sale of loans and leases | 60 | 172 | - | 1,422 | 139 | |||||||||||||||
| Gain on sale of securities | 104 | 999 | 515 | - | 101 | |||||||||||||||
| Dividends and (losses) gains on equity investments | (11,375 | ) | (1,570 | ) | 8,387 | 5,394 | 10,904 | |||||||||||||
| Warrant income | 629 | 23,990 | 13,578 | 5,650 | 6,123 | |||||||||||||||
| Other income | 3,155 | 7,080 | 2,723 | 2,902 | 4,116 | |||||||||||||||
| Total noninterest income | 20,818 | 57,382 | 51,345 | 40,371 | 44,829 | |||||||||||||||
| Noninterest expense: | ||||||||||||||||||||
| Compensation | 92,240 | 99,700 | 98,061 | 90,807 | 79,882 | |||||||||||||||
| Occupancy | 15,200 | 14,656 | 14,928 | 14,784 | 14,054 | |||||||||||||||
| Data processing | 9,629 | 8,171 | 7,391 | 7,758 | 6,957 | |||||||||||||||
| Other professional services | 5,954 | 5,946 | 5,164 | 5,256 | 5,126 | |||||||||||||||
| Insurance and assessments | 5,490 | 5,032 | 3,685 | 3,745 | 4,903 | |||||||||||||||
| Intangible asset amortization | 3,649 | 3,876 | 2,890 | 2,889 | 3,079 | |||||||||||||||
| Leased equipment depreciation | 9,189 | 9,569 | 8,603 | 8,614 | 8,969 | |||||||||||||||
| Foreclosed assets (income) expense, net | (3,353 | ) | (260 | ) | 165 | (119 | ) | 1 | ||||||||||||
| Acquisition, integration and reorganization costs | - | 5,590 | 200 | 200 | 3,425 | |||||||||||||||
| Customer related expense | 12,655 | 6,175 | 4,538 | 4,973 | 4,818 | |||||||||||||||
| Loan expense | 5,157 | 5,627 | 4,180 | 4,031 | 3,193 | |||||||||||||||
| Other expense | 11,616 | 12,028 | 9,616 | 8,812 | 15,729 | |||||||||||||||
| Total noninterest expense | 167,426 | 176,110 | 159,421 | 151,750 | 150,136 | |||||||||||||||
| Earnings before income taxes | 162,109 | 187,677 | 187,766 | 242,929 | 203,962 | |||||||||||||||
| Income tax expense | 41,981 | 51,632 | 47,770 | 62,417 | 53,556 | |||||||||||||||
| Net earnings | $ | 120,128 | $ | 136,045 | $ | 139,996 | $ | 180,512 | $ | 150,406 | ||||||||||
| Basic and diluted earnings per share | $ | 1.01 | $ | 1.14 | $ | 1.17 | $ | 1.52 | $ | 1.27 | ||||||||||
| Dividends declared and paid per share | $ | 0.25 | $ | 0.25 | $ | 0.25 | $ | 0.25 | $ | 0.25 | ||||||||||
Page 18
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, | ||||||||||||||||
| 2022 | 2021 | 2021 | 2021 | 2021 | ||||||||||||||||
| (Dollars in thousands) | ||||||||||||||||||||
| Performance Ratios: | ||||||||||||||||||||
| Return on average assets (1) | 1.22 | % | 1.34 | % | 1.55 | % | 2.11 | % | 1.94 | % | ||||||||||
| Pre-provision, pre-tax net revenue ("PPNR") return on average assets (1)(2) | 1.65 | % | 1.79 | % | 1.86 | % | 1.81 | % | 2.01 | % | ||||||||||
| Return on average equity (1) | 12.66 | % | 13.65 | % | 14.18 | % | 19.36 | % | 16.86 | % | ||||||||||
| Return on average tangible equity (1)(2) | 20.93 | % | 22.06 | % | 21.03 | % | 29.25 | % | 25.67 | % | ||||||||||
| Efficiency ratio | 50.1 | % | 46.2 | % | 47.2 | % | 47.9 | % | 46.4 | % | ||||||||||
| Noninterest expense as a percentage of average assets (1) | 1.70 | % | 1.73 | % | 1.76 | % | 1.77 | % | 1.94 | % | ||||||||||
| Average Yields/Costs (1): | ||||||||||||||||||||
| Yield on: | ||||||||||||||||||||
| Average loans and leases (3) | 4.66 | % | 4.93 | % | 5.01 | % | 5.18 | % | 5.20 | % | ||||||||||
| Average investment securities (3) | 2.17 | % | 2.02 | % | 2.12 | % | 2.23 | % | 2.44 | % | ||||||||||
| Average interest-earning assets (3) | 3.59 | % | 3.39 | % | 3.50 | % | 3.57 | % | 3.86 | % | ||||||||||
| Cost of: | ||||||||||||||||||||
| Average interest-bearing deposits | 0.13 | % | 0.13 | % | 0.14 | % | 0.16 | % | 0.18 | % | ||||||||||
| Average total deposits | 0.07 | % | 0.08 | % | 0.08 | % | 0.10 | % | 0.11 | % | ||||||||||
| Average interest-bearing liabilities | 0.27 | % | 0.27 | % | 0.29 | % | 0.30 | % | 0.29 | % | ||||||||||
| Net interest spread (3) | 3.32 | % | 3.12 | % | 3.21 | % | 3.27 | % | 3.57 | % | ||||||||||
| Net interest margin (3) | 3.43 | % | 3.24 | % | 3.33 | % | 3.40 | % | 3.69 | % | ||||||||||
| Average Balances: | ||||||||||||||||||||
| Assets: | ||||||||||||||||||||
| Loans and leases, net of deferred fees | $ | 23,433,019 | $ | 21,367,665 | $ | 19,670,671 | $ | 19,057,420 | $ | 18,927,314 | ||||||||||
| Investment securities | 10,397,709 | 9,964,568 | 8,047,098 | 6,492,721 | 5,383,140 | |||||||||||||||
| Deposits in financial institutions | 3,083,159 | 5,961,104 | 5,657,768 | 6,347,764 | 4,790,231 | |||||||||||||||
| Interest-earning assets | 36,913,887 | 37,293,337 | 33,375,537 | 31,897,905 | 29,100,685 | |||||||||||||||
| Total assets | 39,883,304 | 40,358,147 | 35,871,664 | 34,326,112 | 31,415,882 | |||||||||||||||
| Liabilities: | ||||||||||||||||||||
| Noninterest-bearing deposits | 14,463,667 | 14,713,385 | 12,198,313 | 11,304,757 | 10,173,459 | |||||||||||||||
| Interest-bearing deposits | 19,868,395 | 20,050,310 | 18,130,694 | 17,817,053 | 16,444,091 | |||||||||||||||
| Total deposits | 34,332,062 | 34,763,695 | 30,329,007 | 29,121,810 | 26,617,550 | |||||||||||||||
| Borrowings | 298,444 | 234,391 | 238,335 | 225,446 | 226,053 | |||||||||||||||
| Subordinated debt | 863,572 | 862,777 | 862,272 | 735,725 | 466,101 | |||||||||||||||
| Interest-bearing liabilities | 21,030,411 | 21,147,478 | 19,231,301 | 18,778,224 | 17,136,245 | |||||||||||||||
| Stockholders' equity | 3,847,481 | 3,954,267 | 3,916,621 | 3,739,042 | 3,617,248 | |||||||||||||||
| (1) | Annualized. |
| (2) | Non-GAAP measure. |
| (3) | Tax equivalent. |
Page 19
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, | ||||||||||||||||
| 2022 | 2021 | 2021 | 2021 | 2021 | ||||||||||||||||
| (Dollars in thousands, except per share data) | ||||||||||||||||||||
| Credit Quality Ratios: | ||||||||||||||||||||
| Nonaccrual loans and leases held for investment to loans and leases held for investment | 0.27 | % | 0.27 | % | 0.31 | % | 0.29 | % | 0.36 | % | ||||||||||
| Nonperforming assets to loans and leases held for investment and foreclosed assets | 0.27 | % | 0.32 | % | 0.38 | % | 0.36 | % | 0.43 | % | ||||||||||
| Classified loans and leases held for investment to loans and leases held for investment | 0.34 | % | 0.51 | % | 0.69 | % | 0.75 | % | 0.86 | % | ||||||||||
| Provision for credit losses (for the quarter) to average loans and leases held for investment (annualized) | 0.00 | % | (0.11 | )% | (0.40 | )% | (1.85 | )% | (1.03 | )% | ||||||||||
| Net charge-offs (for the quarter) to average loans and leases held for investment (annualized) | 0.02 | % | 0.00 | % | 0.01 | % | (0.11 | )% | 0.06 | % | ||||||||||
| Trailing 12 months net charge-offs to average loans and leases held for investment | (0.02 | )% | (0.01 | )% | 0.09 | % | 0.27 | % | 0.37 | % | ||||||||||
| Allowance for loan and lease losses to loans and leases held for investment | 0.81 | % | 0.87 | % | 0.99 | % | 1.16 | % | 1.54 | % | ||||||||||
| Allowance for credit losses to loans and leases held for investment | 1.12 | % | 1.19 | % | 1.36 | % | 1.54 | % | 2.02 | % | ||||||||||
| Allowance for credit losses to nonaccrual loans and leases held for investment | 409.5 | % | 447.3 | % | 433.8 | % | 528.4 | % | 566.2 | % | ||||||||||
| PacWest Bancorp Consolidated: | ||||||||||||||||||||
| Tier 1 leverage capital ratio (1) | 7.11 | % | 6.84 | % | 8.05 | % | 7.67 | % | 7.95 | % | ||||||||||
| Common equity tier 1 capital ratio (1) | 8.64 | % | 8.86 | % | 10.15 | % | 10.41 | % | 10.39 | % | ||||||||||
| Tier 1 capital ratio (1) | 9.07 | % | 9.32 | % | 10.65 | % | 10.41 | % | 10.39 | % | ||||||||||
| Total capital ratio (1) | 12.27 | % | 12.69 | % | 14.36 | % | 14.99 | % | 13.60 | % | ||||||||||
| Risk-weighted assets (1) | $ | 30,297,945 | $ | 28,508,808 | $ | 26,057,583 | $ | 24,274,256 | $ | 23,012,350 | ||||||||||
| Equity to assets ratio | 9.30 | % | 9.89 | % | 10.92 | % | 11.03 | % | 11.12 | % | ||||||||||
| Tangible common equity ratio (2) | 5.83 | % | 6.54 | % | 7.79 | % | 7.80 | % | 7.68 | % | ||||||||||
| Book value per share | $ | 30.52 | $ | 33.45 | $ | 32.77 | $ | 32.17 | $ | 30.68 | ||||||||||
| Tangible book value per share (2) | $ | 18.42 | $ | 21.31 | $ | 22.57 | $ | 21.95 | $ | 20.39 | ||||||||||
| Pacific Western Bank: | ||||||||||||||||||||
| Tier 1 leverage capital ratio (1) | 7.31 | % | 7.00 | % | 8.40 | % | 8.47 | % | 8.83 | % | ||||||||||
| Common equity tier 1 capital ratio (1) | 9.32 | % | 9.56 | % | 11.12 | % | 11.51 | % | 11.54 | % | ||||||||||
| Tier 1 capital ratio (1) | 9.32 | % | 9.56 | % | 11.12 | % | 11.51 | % | 11.54 | % | ||||||||||
| Total capital ratio (1) | 11.45 | % | 11.80 | % | 13.59 | % | 14.22 | % | 12.80 | % | ||||||||||
| (1) | Capital information for March 31, 2022 is preliminary. |
| (2) | Non-GAAP measure. |
Page 20
GAAP TO NON-GAAP RECONCILIATIONS
This press release contains certain non-GAAP financial disclosures for: (1) Pre-provision, pre-tax net revenue (“PPNR”), (2) PPNR return on average assets (3) return on average tangible equity, (4) tangible common equity ratio, and (5) tangible book value per share. 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 PPNR, 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) net earnings, (2) return on average assets, (3) return on average equity, (4) equity to assets ratio, and (5) 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, | ||||||||||
| PPNR and PPNR Return on Average Assets | 2022 | 2021 | 2021 | |||||||||
| (Dollars in thousands) | ||||||||||||
| Net earnings | $ | 120,128 | $ | 136,045 | $ | 150,406 | ||||||
| Add: Provision for credit losses | - | (6,000 | ) | (48,000 | ) | |||||||
| Add: Income tax expense | 41,981 | 51,632 | 53,556 | |||||||||
| Pre-provision, pre-tax net revenue ("PPNR") | $ | 162,109 | $ | 181,677 | $ | 155,962 | ||||||
| Average assets | $ | 39,883,304 | $ | 40,358,147 | $ | 31,415,882 | ||||||
| Return on average assets (1) | 1.22 | % | 1.34 | % | 1.94 | % | ||||||
| PPNR return on average assets (2) | 1.65 | % | 1.79 | % | 2.01 | % | ||||||
| (1) | Annualized net earnings divided by average assets. |
| (2) | Annualized PPNR divided by average assets. |
| Three Months Ended | ||||||||||||
| March 31, | December 31, | March 31, | ||||||||||
| Return on Average Tangible Equity | 2022 | 2021 | 2021 | |||||||||
| (Dollars in thousands) | ||||||||||||
| Net earnings | $ | 120,128 | $ | 136,045 | $ | 150,406 | ||||||
| Add: Intangible asset amortization | 3,649 | 3,876 | 3,079 | |||||||||
| Adjusted net earnings | $ | 123,777 | $ | 139,921 | $ | 153,485 | ||||||
| Average stockholders' equity | $ | 3,847,481 | $ | 3,954,267 | $ | 3,617,248 | ||||||
| Less: Average intangible assets | 1,449,056 | 1,437,780 | 1,192,780 | |||||||||
| Average tangible common equity | $ | 2,398,425 | $ | 2,516,487 | $ | 2,424,468 | ||||||
| Return on average equity (1) | 12.66 | % | 13.65 | % | 16.86 | % | ||||||
| Return on average tangible equity (2) | 20.93 | % | 22.06 | % | 25.67 | % | ||||||
| (1) | Annualized net earnings divided by average stockholders' equity. |
| (2) | Annualized adjusted net earnings divided by average tangible common equity. |
Page 21
| March 31, | December 31, | September 30, | June 30, | March 31, | ||||||||||||||||
| Tangible Common Equity Ratio/Tangible Book Value Per Share | 2022 | 2021 | 2021 | 2021 | 2021 | |||||||||||||||
| (Dollars in thousands, except per share data) | ||||||||||||||||||||
| Stockholders' equity | $ | 3,650,595 | $ | 3,999,630 | $ | 3,918,434 | $ | 3,846,681 | $ | 3,654,137 | ||||||||||
| Less: Intangible assets | 1,447,044 | 1,450,693 | 1,219,651 | 1,222,541 | 1,225,404 | |||||||||||||||
| Tangible common equity | $ | 2,203,551 | $ | 2,548,937 | $ | 2,698,783 | $ | 2,624,140 | $ | 2,428,733 | ||||||||||
| Total assets | $ | 39,249,639 | $ | 40,443,344 | $ | 35,885,676 | $ | 34,867,987 | $ | 32,856,533 | ||||||||||
| Less: Intangible assets | 1,447,044 | 1,450,693 | 1,219,651 | 1,222,541 | 1,225,404 | |||||||||||||||
| Tangible assets | $ | 37,802,595 | $ | 38,992,651 | $ | 34,666,025 | $ | 33,645,446 | $ | 31,631,129 | ||||||||||
| Equity to assets ratio | 9.30 | % | 9.89 | % | 10.92 | % | 11.03 | % | 11.12 | % | ||||||||||
| Tangible common equity ratio (1) | 5.83 | % | 6.54 | % | 7.79 | % | 7.80 | % | 7.68 | % | ||||||||||
| Book value per share | $ | 30.52 | $ | 33.45 | $ | 32.77 | $ | 32.17 | $ | 30.68 | ||||||||||
| Tangible book value per share (2) | $ | 18.42 | $ | 21.31 | $ | 22.57 | $ | 21.95 | $ | 20.39 | ||||||||||
| Shares outstanding | 119,601,766 | 119,584,854 | 119,579,566 | 119,555,102 | 119,105,642 | |||||||||||||||
| (1) | Tangible common equity divided by tangible assets. |
| (2) | Tangible common equity divided by shares outstanding. |
CONTACTS
| Matthew P. Wagner President and CEO 303.802.8900 |
Bart R. Olson EVP and CFO 714.989.4149 |
William J. Black EVP Strategy and Corporate Development 919.597.7466 |
Page 22
