Attached files
| file | filename |
|---|---|
| 8-K - 8-K - PACWEST BANCORP | a17-2696_18k.htm |
Exhibit 99.1
|
PRESS RELEASE |
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PacWest Bancorp |
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(NASDAQ: PACW) |
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Contact: |
Donald D. Destino |
|
|
|
Executive Vice President |
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|
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Corporate Development and Investor Relations |
|
|
Phone: |
310-887-8521 |
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FOR IMMEDIATE RELEASE |
January 19, 2017 |
PACWEST BANCORP ANNOUNCES RESULTS
FOR THE FOURTH QUARTER AND FULL YEAR 2016
Fourth Quarter 2016 Highlights
· Net Earnings of $85.6 Million, or $0.71 Per Diluted Share
· New Loan and Lease Production of $1.3 Billion; $713 Million of Net Loan Growth
· Core Deposits Increase of $513 Million and Represent 79% of Total Deposits
· Tax Equivalent Net Interest Margin of 5.47%; Core Tax Equivalent Net Interest Margin of 5.09%
Full Year 2016 Highlights
· Net Earnings of $352.2 Million, or $2.90 Per Diluted Share
· New Loan and Lease Production of $4.1 Billion; $978 Million of Net Loan Growth
· Core Deposits Increase of $2.0 Billion
· Tax Equivalent Net Interest Margin of 5.40%; Core Tax Equivalent Net Interest Margin of 5.10%
Los Angeles, California . . . PacWest Bancorp (Nasdaq: PACW) today announced net earnings for the fourth quarter of 2016 of $85.6 million, or $0.71 per diluted share, compared to net earnings for the third quarter of 2016 of $93.9 million, or $0.77 per diluted share. Net earnings for the full year 2016 were $352.2 million, or $2.90 per diluted share, compared to net earnings for the full year 2015 of $299.6 million, or $2.79 per diluted share. The 18% increase in annual net earnings was due mostly to including the operations of Square 1 Financial, Inc. for all of 2016 compared to including its operations in 2015 from the October 6, 2015 acquisition date.
Matt Wagner, President and CEO, commented, “Our strong fourth quarter results capped a year of profitable growth and continued solid operating performance. Our full year 2016 return on assets of 1.66% and return on tangible equity of 15.52% drove a 4% increase in diluted EPS. These exceptional operating results allowed us to return $271 million to our stockholders in 2016 through stock repurchases and dividends.”
Patrick Rusnak, Executive Vice President and CFO stated, “Our fourth quarter core tax equivalent NIM increased one basis point to 5.09% while our NIM excluding all purchase accounting items increased six basis points to 5.04%. Our NIM has continued to hold up during this sustained period of low interest rates and, with our large concentrations of floating rate loans and core deposits, our balance sheet is well-positioned for a rising rate environment.”
Mr. Rusnak continued, “We are pleased with the 2016 full year loan and lease growth of 7% as it was produced by various business groups, maintaining our favorable loan diversification along our product lines.”
Mr. Wagner continued, “We are very well-positioned for continued growth and superior financial performance in 2017 given our proven and efficient business banking model supported by talented bankers. Even with the prospect of a more favorable outlook for economic growth and the banking sector, we will remain vigilant with respect to prudent risk management. Our financial performance was recently recognized in Forbes magazine’s 2017 List of America’s Best Banks where PacWest was named the best performing of the 100 largest publicly-traded U.S. banks.”
FINANCIAL HIGHLIGHTS
|
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At or For the Three Months Ended |
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At or For the Year Ended |
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December 31, |
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September 30, |
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December 31, |
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2016 |
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2016 |
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Change |
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2016 |
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2015 |
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Change |
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(Dollars in thousands, except per share data) |
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Financial Highlights |
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Net Earnings |
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$ |
85,647 |
|
$ |
93,895 |
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$ |
(8,248 |
) |
$ |
352,166 |
|
$ |
299,619 |
|
$ |
52,547 |
|
|
Diluted Earnings Per Share |
|
$ |
0.71 |
|
$ |
0.77 |
|
$ |
(0.06 |
) |
$ |
2.90 |
|
$ |
2.79 |
|
$ |
0.11 |
|
|
Return on Average Assets |
|
1.59 |
% |
1.77 |
% |
(0.18 |
) |
1.66 |
% |
1.70 |
% |
(0.04 |
) | ||||||
|
Return on Average Tangible Equity (1) |
|
14.88 |
% |
16.15 |
% |
(1.27 |
) |
15.52 |
% |
15.76 |
% |
(0.24 |
) | ||||||
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Net Interest Margin (tax equivalent) |
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5.47 |
% |
5.26 |
% |
0.21 |
|
5.40 |
% |
5.60 |
% |
(0.20 |
) | ||||||
|
Core Net Interest Margin (tax equivalent) (1) |
|
5.09 |
% |
5.08 |
% |
0.01 |
|
5.10 |
% |
5.25 |
% |
(0.15 |
) | ||||||
|
Efficiency Ratio |
|
40.1 |
% |
40.1 |
% |
— |
|
39.8 |
% |
38.5 |
% |
1.3 |
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Total Assets |
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$ |
21,869,767 |
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$ |
21,315,291 |
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$ |
554,476 |
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$ |
21,869,767 |
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$ |
21,288,490 |
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$ |
581,277 |
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Loans and Leases, Net of Deferred Fees |
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$ |
15,455,954 |
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$ |
14,742,846 |
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$ |
713,108 |
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$ |
15,455,954 |
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$ |
14,478,254 |
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$ |
977,700 |
|
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Noninterest-Bearing Deposits |
|
$ |
6,659,016 |
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$ |
6,521,946 |
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$ |
137,070 |
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$ |
6,659,016 |
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$ |
6,171,455 |
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$ |
487,561 |
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Core Deposits |
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$ |
12,523,834 |
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$ |
12,010,639 |
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$ |
513,195 |
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$ |
12,523,834 |
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$ |
10,571,573 |
|
$ |
1,952,261 |
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Total Deposits |
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$ |
15,870,611 |
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$ |
15,645,668 |
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$ |
224,943 |
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$ |
15,870,611 |
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$ |
15,666,182 |
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$ |
204,429 |
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|
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Noninterest-Bearing Deposits as Percentage of Total Deposits |
|
42 |
% |
42 |
% |
— |
|
42 |
% |
39 |
% |
3 |
| ||||||
|
Core Deposits as Percentage of Total Deposits |
|
79 |
% |
77 |
% |
2 |
|
79 |
% |
67 |
% |
12 |
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Equity to Assets Ratio |
|
20.48 |
% |
21.31 |
% |
(0.83 |
) |
20.48 |
% |
20.66 |
% |
(0.18 |
) | ||||||
|
Tangible Common Equity Ratio (1) |
|
11.54 |
% |
12.19 |
% |
(0.65 |
) |
11.54 |
% |
11.38 |
% |
0.16 |
| ||||||
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Book Value Per Share |
|
$ |
36.93 |
|
$ |
37.29 |
|
$ |
(0.36 |
) |
$ |
36.93 |
|
$ |
36.22 |
|
$ |
0.71 |
|
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Tangible Book Value Per Share (1) |
|
$ |
18.71 |
|
$ |
19.12 |
|
$ |
(0.41 |
) |
$ |
18.71 |
|
$ |
17.86 |
|
$ |
0.85 |
|
(1) Non-GAAP measure.
INCOME STATEMENT HIGHLIGHTS
Net Interest Income
Net interest income increased by $13.7 million to $248.3 million in the fourth quarter of 2016 compared to $234.6 million in the third quarter of 2016 due to the combination of higher discount accretion on acquired loans and higher average loan and lease balances, offset by lower nonaccrual interest recoveries. Total accretion on acquired loans was $21.2 million in the fourth quarter of 2016 (56 basis points on the loan and lease yield) compared to $14.2 million in the third quarter of 2016 (39 basis points on the loan and lease yield). The increase in accretion was due primarily to higher accelerated accretion from payoffs on acquired loans, including $13.5 million from the payoff of a nonaccrual purchased credit impaired (“PCI”) loan. The loan and lease yield for the fourth quarter of 2016 was 6.31% compared to 6.17% for the third quarter of 2016. The increase in the loan and lease yield was due to the higher accretion on acquired loans offset by a lower yield on new production relative to the current portfolio yield. Excluding accelerated accretion, the core loan and lease yield was 5.85% in the fourth quarter compared to 5.94% in the third quarter.
The tax equivalent NIM for the fourth quarter of 2016 was 5.47% compared to 5.26% for the third quarter of 2016. The increase in the NIM was mostly due to higher accretion on acquired loans. Such accretion contributed 46 basis points to the NIM in the fourth quarter of 2016 and 31 basis points to the NIM in the third quarter of 2016. Excluding accelerated accretion, the core tax equivalent NIM was 5.09% in the fourth quarter compared to 5.08% for the third quarter.
Included in net interest income for the third quarter of 2016 was $3.0 million of interest resulting from the full payoff of a nonperforming loan. This recovery contributed seven basis points to the NIM and eight basis points of loan and lease yield for the third quarter of 2016.
The cost of total deposits was 0.19% in the fourth quarter, unchanged from the third quarter.
The tax equivalent NIM and loan and lease yield are impacted by volatility in accretion of acquisition discounts on acquired loans and leases. The effects of this item are shown in the following table for the periods indicated:
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Three Months Ended |
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Three Months Ended |
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|
December 31, 2016 |
|
September 30, 2016 |
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Loan and |
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Loan and |
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NIM |
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Lease Yield |
|
NIM |
|
Lease Yield |
|
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Reported |
|
5.47 |
% |
6.31 |
% |
5.26 |
% |
6.17 |
% |
|
Less: Accelerated accretion of acquisition discounts from early payoffs of acquired loans |
|
(0.38 |
)% |
(0.46 |
)% |
(0.18 |
)% |
(0.23 |
)% |
|
Core |
|
5.09 |
% |
5.85 |
% |
5.08 |
% |
5.94 |
% |
|
Less: Remaining accretion of Non-PCI loan acquisition discounts |
|
(0.08 |
)% |
(0.10 |
)% |
(0.13 |
)% |
(0.16 |
)% |
|
Excluding total accretion of loan acquisition discounts |
|
5.01 |
% |
5.75 |
% |
4.95 |
% |
5.78 |
% |
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|
|
|
|
|
|
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Total accretion of loan acquisition discounts |
|
(0.46 |
)% |
(0.56 |
)% |
(0.31 |
)% |
(0.39 |
)% |
The impact on the tax equivalent net interest income and NIM from all purchase accounting items is set forth in the table below for the periods indicated:
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|
Three Months Ended |
|
Three Months Ended |
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|
December 31, 2016 |
|
September 30, 2016 |
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Impact on |
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Impact on |
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Amount |
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NIM |
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Amount |
|
NIM |
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(Dollars in thousands) |
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Net interest income/NIM |
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$ |
253,131 |
|
5.47 |
% |
$ |
239,473 |
|
5.26 |
% |
|
Less: Accelerated accretion of acquisition discounts from early payoffs of acquired loans |
|
(17,454 |
) |
(0.38 |
)% |
(8,226 |
) |
(0.18 |
)% | ||
|
Remaining accretion of Non-PCI loan acquisition discounts |
|
(3,726 |
) |
(0.08 |
)% |
(5,997 |
) |
(0.13 |
)% | ||
|
Total accretion of loan acquisition discounts |
|
(21,180 |
) |
(0.46 |
)% |
(14,223 |
) |
(0.31 |
)% | ||
|
Amortization of TruPS discount |
|
1,388 |
|
0.03 |
% |
1,391 |
|
0.03 |
% | ||
|
Accretion of time deposits premium |
|
(94 |
) |
0.00 |
% |
(121 |
) |
0.00 |
% | ||
|
|
|
(19,886 |
) |
(0.43 |
)% |
(12,953 |
) |
(0.28 |
)% | ||
|
Net interest income/NIM - excluding purchase accounting |
|
$ |
233,245 |
|
5.04 |
% |
$ |
226,520 |
|
4.98 |
% |
Noninterest Income
Noninterest income increased by $2.0 million to $28.9 million in the fourth quarter of 2016 compared to $26.9 million for the third quarter of 2016 due mostly to a $1.1 million increase in dividends and gains on equity investments and a $1.1 million increase in other income attributable mainly to higher warrant income.
The following table presents details of noninterest income for the periods indicated:
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|
Three Months Ended |
| |||||||
|
|
|
December 31, |
|
September 30, |
|
Increase |
| |||
|
Noninterest Income |
|
2016 |
|
2016 |
|
(Decrease) |
| |||
|
|
|
(In thousands) |
| |||||||
|
|
|
|
|
|
|
|
| |||
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Service charges on deposit accounts |
|
$ |
3,557 |
|
$ |
3,488 |
|
$ |
69 |
|
|
Other commissions and fees |
|
12,036 |
|
12,528 |
|
(492 |
) | |||
|
Leased equipment income |
|
8,614 |
|
8,538 |
|
76 |
| |||
|
Gain on sale of loans and leases |
|
119 |
|
157 |
|
(38 |
) | |||
|
Gain on securities |
|
515 |
|
382 |
|
133 |
| |||
|
Other income: |
|
|
|
|
|
|
| |||
|
Dividends and realized gains on equity investments |
|
1,453 |
|
377 |
|
1,076 |
| |||
|
Foreign currency translation net (losses) gains |
|
(171 |
) |
(224 |
) |
53 |
| |||
|
Other |
|
2,772 |
|
1,674 |
|
1,098 |
| |||
|
Total noninterest income |
|
$ |
28,895 |
|
$ |
26,920 |
|
$ |
1,975 |
|
Noninterest Expense
Noninterest expense increased by $7.9 million to $118.6 million for the fourth quarter of 2016 compared to $110.7 million for the third quarter of 2016. The increase was due mostly to higher compensation expense of $3.4 million, higher foreclosed assets expense of $2.9 million, higher loan expense of $1.2 million, and higher other expense of $1.0 million, offset by lower intangible asset amortization of $1.0 million. Compensation expense increased due mainly to higher severance, bonus, and commissions expense. Foreclosed assets expense increased due primarily to a $2.6 million write-down on an existing property. Loan expense increased primarily due to a $0.9 million recovery of work-out expenses for a single credit in the third quarter. Intangible asset amortization decreased due to declining amortization on the Square 1 customer deposit and customer relationship intangible assets.
The following table presents details of noninterest expense for the periods indicated:
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|
|
Three Months Ended |
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|
|
|
December 31, |
|
September 30, |
|
Increase |
| |||
|
Noninterest Expense |
|
2016 |
|
2016 |
|
(Decrease) |
| |||
|
|
|
(In thousands) |
| |||||||
|
|
|
|
|
|
|
|
| |||
|
Compensation |
|
$ |
66,013 |
|
$ |
62,661 |
|
$ |
3,352 |
|
|
Occupancy |
|
12,076 |
|
12,010 |
|
66 |
| |||
|
Data processing |
|
6,574 |
|
6,234 |
|
340 |
| |||
|
Other professional services |
|
4,880 |
|
4,625 |
|
255 |
| |||
|
Insurance and assessments |
|
4,124 |
|
4,324 |
|
(200 |
) | |||
|
Intangible asset amortization |
|
3,176 |
|
4,224 |
|
(1,048 |
) | |||
|
Leased equipment depreciation |
|
5,291 |
|
5,298 |
|
(7 |
) | |||
|
Foreclosed assets expense (income), net |
|
2,693 |
|
(248 |
) |
2,941 |
| |||
|
Other expense: |
|
|
|
|
|
|
| |||
|
Loan expense |
|
3,140 |
|
1,931 |
|
1,209 |
| |||
|
Other |
|
10,655 |
|
9,651 |
|
1,004 |
| |||
|
Total noninterest expense |
|
$ |
118,622 |
|
$ |
110,710 |
|
$ |
7,912 |
|
Income Taxes
The overall effective income tax rate was 36.7% in the fourth quarter of 2016 and 34.1% in the third quarter of 2016. The effective rate for the third quarter was lower due to certain discrete items associated with completion of the 2015 tax returns. The effective tax rate for the full year 2016 was 36.9%. The estimated effective tax rate for the full year 2017 is approximately 38.5%.
BALANCE SHEET HIGHLIGHTS
Loans and Leases
Total loans and leases increased by $713.1 million in the fourth quarter to $15.5 billion at December 31, 2016. The net increase was driven by fourth quarter originations and purchases of $1.3 billion, offset partially by principal repayments of $526.2 million. For the year ended December 31, 2016, total loans and leases increased by $977.7 million, or approximately 7%.
The following table presents a roll forward of the loan and lease portfolio for the periods indicated:
|
|
|
Three Months Ended |
|
Year Ended |
| |||||
|
|
|
December 31, |
|
September 30, |
|
December 31, |
| |||
|
Loan and Lease Roll Forward (1) |
|
2016 |
|
2016 |
|
2016 |
| |||
|
|
|
(Dollars in thousands) |
| |||||||
|
|
|
|
|
|
|
|
| |||
|
Beginning balance |
|
$ |
14,742,846 |
|
$ |
14,641,460 |
|
$ |
14,478,254 |
|
|
New production |
|
1,272,900 |
|
1,071,943 |
|
4,118,330 |
| |||
|
Existing loans and leases: |
|
|
|
|
|
|
| |||
|
Principal repayments, net (2) |
|
(526,232 |
) |
(933,037 |
) |
(2,844,553 |
) | |||
|
Loan and lease sales |
|
(14,825 |
) |
(27,065 |
) |
(120,144 |
) | |||
|
Transfers to foreclosed assets |
|
(652 |
) |
— |
|
(781 |
) | |||
|
Charge-offs |
|
(18,083 |
) |
(10,455 |
) |
(35,954 |
) | |||
|
Sale of PWEF |
|
— |
|
— |
|
(139,198 |
) | |||
|
Ending balance |
|
$ |
15,455,954 |
|
$ |
14,742,846 |
|
$ |
15,455,954 |
|
|
|
|
|
|
|
|
|
| |||
|
Weighted average rate on new production |
|
4.83 |
% |
5.11 |
% |
4.92 |
% | |||
(1) Includes direct financing leases but excludes equipment leased to others under operating leases.
(2) Includes principal repayments on existing loans, changes in revolving lines of credit (repayments and draws), loan participation sales and other changes within the loan portfolio.
The following table presents the composition of our loan and lease portfolio as of the dates indicated:
|
|
|
December 31, |
|
September 30, |
|
June 30, |
|
December 31, |
| ||||
|
Loan and Lease Portfolio |
|
2016 |
|
2016 |
|
2016 |
|
2015 |
| ||||
|
|
|
(In thousands) |
| ||||||||||
|
Real estate mortgage: |
|
|
|
|
|
|
|
|
| ||||
|
Commercial |
|
$ |
4,396,696 |
|
$ |
4,327,565 |
|
$ |
4,519,209 |
|
$ |
4,645,533 |
|
|
Residential |
|
1,314,036 |
|
1,242,254 |
|
1,164,784 |
|
1,211,209 |
| ||||
|
Total real estate mortgage |
|
5,710,732 |
|
5,569,819 |
|
5,683,993 |
|
5,856,742 |
| ||||
|
Real estate construction and land: |
|
|
|
|
|
|
|
|
| ||||
|
Commercial |
|
581,246 |
|
510,831 |
|
417,144 |
|
345,991 |
| ||||
|
Residential |
|
384,001 |
|
323,104 |
|
281,788 |
|
184,382 |
| ||||
|
Total real estate construction and land |
|
965,247 |
|
833,935 |
|
698,932 |
|
530,373 |
| ||||
|
Total real estate loans |
|
6,675,979 |
|
6,403,754 |
|
6,382,925 |
|
6,387,115 |
| ||||
|
Commercial: |
|
|
|
|
|
|
|
|
| ||||
|
Cash flow |
|
3,112,890 |
|
3,071,606 |
|
3,048,439 |
|
3,073,965 |
| ||||
|
Asset-based |
|
2,611,796 |
|
2,573,437 |
|
2,683,913 |
|
2,547,665 |
| ||||
|
Venture capital |
|
1,987,900 |
|
1,766,509 |
|
1,666,352 |
|
1,458,013 |
| ||||
|
Equipment finance |
|
691,967 |
|
670,783 |
|
646,940 |
|
890,349 |
| ||||
|
Total commercial |
|
8,404,553 |
|
8,082,335 |
|
8,045,644 |
|
7,969,992 |
| ||||
|
Consumer |
|
375,422 |
|
256,757 |
|
212,891 |
|
121,147 |
| ||||
|
Total loans and leases, net of deferred fees |
|
$ |
15,455,954 |
|
$ |
14,742,846 |
|
$ |
14,641,460 |
|
$ |
14,478,254 |
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Total unfunded loan commitments |
|
$ |
4,166,703 |
|
$ |
4,156,147 |
|
$ |
3,888,686 |
|
$ |
3,580,655 |
|
Loan growth in the fourth quarter came primarily from the venture capital, construction, and consumer portfolios.
Deposits and Client Investment Funds
The following table presents the composition of our deposit portfolio as of the dates indicated:
|
|
|
December 31, |
|
September 30, |
|
June 30, |
|
December 31, |
| ||||
|
Deposit Category |
|
2016 |
|
2016 |
|
2016 |
|
2015 |
| ||||
|
|
|
(Dollars in thousands) |
| ||||||||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
Noninterest-bearing demand deposits |
|
$ |
6,659,016 |
|
$ |
6,521,946 |
|
$ |
6,222,696 |
|
$ |
6,171,455 |
|
|
Interest checking deposits |
|
1,448,394 |
|
1,184,350 |
|
1,035,395 |
|
874,349 |
| ||||
|
Money market deposits |
|
3,705,385 |
|
3,532,050 |
|
3,392,811 |
|
2,782,974 |
| ||||
|
Savings deposits |
|
711,039 |
|
772,293 |
|
761,090 |
|
742,795 |
| ||||
|
Total core deposits |
|
12,523,834 |
|
12,010,639 |
|
11,411,992 |
|
10,571,573 |
| ||||
|
Brokered non-maturity deposits |
|
1,174,487 |
|
1,082,114 |
|
972,820 |
|
942,253 |
| ||||
|
Total non-maturity deposits |
|
13,698,321 |
|
13,092,753 |
|
12,384,812 |
|
11,513,826 |
| ||||
|
Time deposits under $100,000 |
|
1,018,849 |
|
1,180,428 |
|
1,114,074 |
|
1,656,227 |
| ||||
|
Time deposits of $100,000 and over |
|
1,153,441 |
|
1,372,487 |
|
1,649,123 |
|
2,496,129 |
| ||||
|
Total time deposits |
|
2,172,290 |
|
2,552,915 |
|
2,763,197 |
|
4,152,356 |
| ||||
|
Total deposits |
|
$ |
15,870,611 |
|
$ |
15,645,668 |
|
$ |
15,148,009 |
|
$ |
15,666,182 |
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Noninterest-bearing demand deposits as percentage of total deposits |
|
42 |
% |
42 |
% |
41 |
% |
39 |
% | ||||
|
Core deposits as percentage of total deposits |
|
79 |
% |
77 |
% |
75 |
% |
67 |
% | ||||
At December 31, 2016, core deposits totaled $12.5 billion, or 79% of total deposits, including $6.7 billion of noninterest-bearing demand deposits, or 42% of total deposits.
In addition to deposit products, we also offer alternative non-depository cash investment options for select clients; these alternatives include investments managed by Square 1 Asset Management, Inc. (“S1AM”), our registered investment advisor subsidiary, and third-party sweep products. Total client investment funds at December 31, 2016 were $1.3 billion, of which $1.1 billion was managed by S1AM.
PROVISION AND ALLOWANCE FOR CREDIT LOSSES
A provision for credit losses of $23.2 million was recorded in the fourth quarter of 2016 compared to $8.5 million in the third quarter of 2016. The fourth quarter provision consisted of $21.0 million for non-purchased credit impaired (“Non-PCI”) loans and leases and $2.2 million for PCI loans; this compares to $8.0 million and $0.5 million for the third quarter. The higher fourth quarter 2016 provision was due to significant loan and lease portfolio growth and lower recoveries. The allowance for Non-PCI credit losses to Non-PCI loans and leases coverage ratio was 1.05% at December 31, 2016 and September 30, 2016.
The following tables show roll forwards of the allowance for credit losses for the periods indicated:
|
|
|
Three Months Ended December 31, 2016 |
| |||||||||||||
|
|
|
Non-PCI |
|
|
|
|
|
|
|
|
| |||||
|
Allowance for Credit |
|
Loans and |
|
Unfunded |
|
Total |
|
PCI |
|
|
| |||||
|
Losses Rollforward |
|
Leases |
|
Commitments |
|
Non-PCI |
|
Loans |
|
Total |
| |||||
|
|
|
(In thousands) |
| |||||||||||||
|
Beginning balance |
|
$ |
136,747 |
|
$ |
17,323 |
|
$ |
154,070 |
|
$ |
11,229 |
|
$ |
165,299 |
|
|
Charge-offs |
|
(18,083 |
) |
— |
|
(18,083 |
) |
— |
|
(18,083 |
) | |||||
|
Recoveries |
|
4,291 |
|
— |
|
4,291 |
|
39 |
|
4,330 |
| |||||
|
Net (charge-offs) recoveries |
|
(13,792 |
) |
— |
|
(13,792 |
) |
39 |
|
(13,753 |
) | |||||
|
Provision |
|
20,800 |
|
200 |
|
21,000 |
|
2,215 |
|
23,215 |
| |||||
|
Ending balance |
|
$ |
143,755 |
|
$ |
17,523 |
|
$ |
161,278 |
|
$ |
13,483 |
|
$ |
174,761 |
|
|
|
|
Three Months Ended September 30, 2016 |
| |||||||||||||
|
|
|
Non-PCI |
|
|
|
|
|
|
|
|
| |||||
|
Allowance for Credit |
|
Loans and |
|
Unfunded |
|
Total |
|
PCI |
|
|
| |||||
|
Losses Rollforward |
|
Leases |
|
Commitments |
|
Non-PCI |
|
Loans |
|
Total |
| |||||
|
|
|
(In thousands) |
| |||||||||||||
|
Beginning balance |
|
$ |
132,000 |
|
$ |
17,944 |
|
$ |
149,944 |
|
$ |
11,289 |
|
$ |
161,233 |
|
|
Charge-offs |
|
(9,924 |
) |
— |
|
(9,924 |
) |
(531 |
) |
(10,455 |
) | |||||
|
Recoveries |
|
6,050 |
|
— |
|
6,050 |
|
— |
|
6,050 |
| |||||
|
Net (charge-offs) |
|
(3,874 |
) |
— |
|
(3,874 |
) |
(531 |
) |
(4,405 |
) | |||||
|
Provision |
|
8,621 |
|
(621 |
) |
8,000 |
|
471 |
|
8,471 |
| |||||
|
Ending balance |
|
$ |
136,747 |
|
$ |
17,323 |
|
$ |
154,070 |
|
$ |
11,229 |
|
$ |
165,299 |
|
The higher fourth quarter 2016 charge-offs were principally due to the charge-off of $15.7 million of specific reserves that were established in previous quarters compared to $9.7 million in the third quarter.
All acquired loans are recorded initially at their estimated fair value including an estimate of credit losses. The table below presents two alternative views of credit risk coverage ratios for Non-PCI loans reflecting adjustments for acquired loans and leases and associated purchase accounting discounts:
|
|
|
December 31, 2016 |
|
September 30, 2016 |
| ||||||||||||
|
Non-PCI Adjusted |
|
Non-PCI |
|
|
|
|
|
Non-PCI |
|
|
|
|
| ||||
|
Allowance for Credit Losses |
|
Loans and |
|
Allowance/ |
|
Coverage |
|
Loans and |
|
Allowance/ |
|
Coverage |
| ||||
|
to Loans and Leases |
|
Leases |
|
Discount |
|
Ratio |
|
Leases |
|
Discount |
|
Ratio |
| ||||
|
|
|
(Dollars in thousands) |
| ||||||||||||||
|
Adjustment for - Acquired loans and leases and related allowance: |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Ending balance |
|
$ |
15,412,092 |
|
$ |
161,278 |
|
1.05 |
% |
$ |
14,686,206 |
|
$ |
154,070 |
|
1.05 |
% |
|
Acquired loans and allowance |
|
(4,413,176 |
) |
(44,352 |
)(1) |
|
|
(4,612,787 |
) |
(46,039 |
)(1) |
|
| ||||
|
Adjusted balance |
|
$ |
10,998,916 |
|
$ |
116,926 |
|
1.06 |
% |
$ |
10,073,419 |
|
$ |
108,031 |
|
1.07 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Adjustment for - Unamortized net discount on acquired loans and leases: |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Ending balance |
|
$ |
15,412,092 |
|
$ |
161,278 |
|
1.05 |
% |
$ |
14,686,206 |
|
$ |
154,070 |
|
1.05 |
% |
|
Unamortized net discount |
|
45,639 |
|
45,639 |
(2) |
|
|
53,041 |
|
53,041 |
(2) |
|
| ||||
|
Adjusted balance |
|
$ |
15,457,731 |
|
$ |
206,917 |
|
1.34 |
% |
$ |
14,739,247 |
|
$ |
207,111 |
|
1.41 |
% |
(1) Allowance attributed to $4.4 billion and $4.6 billion of acquired Non-PCI loans at December 31, 2016 and September 30, 2016, based on the allowance calculation that includes an amount for credit deterioration on acquired loans and leases since their acquisition dates.
(2) Unamortized net discount relates to $4.4 billion and $4.6 billion of acquired Non-PCI loans at December 31, 2016 and September 30, 2016, and is assigned specifically to those loans only. Such discount represents the acquisition date fair value adjustment based on market, liquidity, interest rate risk and credit risk and is being accreted to interest income over the remaining life of the respective loans using the interest method. Use of the interest method results in steadily declining amounts being taken into income in each reporting period. The remaining discount of $45.6 million at December 31, 2016, is expected to be substantially accreted to income by the end of 2018.
CREDIT QUALITY
The following table presents Non-PCI loan and lease credit quality metrics as of the dates indicated:
|
|
|
December 31, |
|
September 30, |
| ||
|
Non-PCI Credit Quality Metrics |
|
2016 |
|
2016 |
| ||
|
|
|
(Dollars in thousands) |
| ||||
|
|
|
|
|
|
| ||
|
Nonaccrual loans and leases |
|
$ |
170,599 |
|
$ |
171,085 |
|
|
Classified loans and leases |
|
409,645 |
|
417,541 |
| ||
|
Performing troubled debt restructured loans |
|
64,952 |
|
70,348 |
| ||
|
Allowance for credit losses |
|
161,278 |
|
154,070 |
| ||
|
Net charge-offs (for the quarter) |
|
13,792 |
|
3,874 |
| ||
|
Provision for credit losses (for the quarter) |
|
21,000 |
|
8,000 |
| ||
|
Allowance for credit losses to loans and leases |
|
1.05 |
% |
1.05 |
% | ||
|
Allowance for credit losses to nonaccrual loans and leases |
|
94.5 |
% |
90.1 |
% | ||
|
Nonaccrual loans and leases to loans and leases |
|
1.11 |
% |
1.16 |
% | ||
|
Nonperforming assets to loans and leases and foreclosed assets |
|
1.19 |
% |
1.27 |
% | ||
|
Classified loans and leases to loans and leases |
|
2.66 |
% |
2.84 |
% | ||
The following table presents Non-PCI nonaccrual loans and leases and accruing loans and leases past due between 30 and 89 days by portfolio segment and class as of the dates indicated:
|
|
|
Non-PCI Nonaccrual Loans and Leases |
|
Non-PCI Accruing and |
| ||||||||||||
|
|
|
December 31, 2016 |
|
September 30, 2016 |
|
30-89 Days Past Due |
| ||||||||||
|
|
|
|
|
% of |
|
|
|
% of |
|
December 31, |
|
September 30, |
| ||||
|
|
|
|
|
Loan |
|
|
|
Loan |
|
2016 |
|
2016 |
| ||||
|
|
|
Amount |
|
Category |
|
Amount |
|
Category |
|
Amount |
|
Amount |
| ||||
|
|
|
(Dollars in thousands) |
| ||||||||||||||
|
Real estate mortgage: |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Commercial |
|
$ |
62,454 |
|
1.4 |
% |
$ |
74,606 |
|
1.7 |
% |
$ |
7,691 |
|
$ |
2,146 |
|
|
Residential |
|
6,881 |
|
0.5 |
% |
5,089 |
|
0.4 |
% |
5,524 |
|
— |
| ||||
|
Total real estate mortgage |
|
69,335 |
|
1.2 |
% |
79,695 |
|
1.5 |
% |
13,215 |
|
2,146 |
| ||||
|
Real estate construction and land: |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Commercial |
|
— |
|
0.0 |
% |
1,245 |
|
0.2 |
% |
— |
|
— |
| ||||
|
Residential |
|
364 |
|
0.1 |
% |
366 |
|
0.1 |
% |
— |
|
— |
| ||||
|
Total real estate construction and land |
|
364 |
|
0.0 |
% |
1,611 |
|
0.2 |
% |
— |
|
— |
| ||||
|
Commercial: |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Cash flow |
|
53,908 |
|
1.7 |
% |
27,831 |
|
0.9 |
% |
153 |
|
21 |
| ||||
|
Asset-based |
|
2,118 |
|
0.1 |
% |
4,044 |
|
0.2 |
% |
1,500 |
|
6,644 |
| ||||
|
Venture capital |
|
11,687 |
|
0.6 |
% |
10,782 |
|
0.6 |
% |
13,295 |
|
— |
| ||||
|
Equipment finance |
|
32,848 |
|
4.7 |
% |
46,916 |
|
7.0 |
% |
218 |
|
— |
| ||||
|
Total commercial |
|
100,561 |
|
1.2 |
% |
89,573 |
|
1.1 |
% |
15,166 |
|
6,665 |
| ||||
|
Consumer |
|
339 |
|
0.1 |
% |
206 |
|
0.1 |
% |
224 |
|
— |
| ||||
|
Total Non-PCI loans and leases |
|
$ |
170,599 |
|
1.1 |
% |
$ |
171,085 |
|
1.2 |
% |
$ |
28,605 |
|
$ |
8,811 |
|
The following table presents nonperforming assets as of the dates indicated:
|
|
|
December 31, |
|
September 30, |
| ||
|
Nonperforming Assets |
|
2016 |
|
2016 |
| ||
|
|
|
(Dollars in thousands) |
| ||||
|
|
|
|
|
|
| ||
|
Nonaccrual Non-PCI loans and leases |
|
$ |
170,599 |
|
$ |
171,085 |
|
|
Nonaccrual PCI loans |
|
2,928 |
|
3,478 |
| ||
|
Total nonaccrual loans and leases |
|
173,527 |
|
174,563 |
| ||
|
Foreclosed assets, net |
|
12,976 |
|
15,113 |
| ||
|
Total nonperforming assets |
|
$ |
186,503 |
|
$ |
189,676 |
|
|
|
|
|
|
|
| ||
|
Nonaccrual loans and leases to loans and leases |
|
1.12 |
% |
1.18 |
% | ||
|
Nonperforming assets to loans and leases and foreclosed assets |
|
1.20 |
% |
1.28 |
% | ||
STOCK REPURCHASE PROGRAM
In the fourth quarter of 2016, the Company repurchased 652,835 shares of common stock for a total amount of $27.9 million under its previously announced $400 million stock repurchase program. The repurchased shares were retired by the Company.
SALE AND CLOSURE OF BRANCHES
In December 2016, Pacific Western Bank completed the sale of two branches to First Foundation Bank (the “Transaction”). The branches were located in Laguna Hills and Seal Beach, California (the “Branches”). The deposits of the Branches totaled approximately $180 million, principally comprised of time deposits. No loans were sold in connection with the Transaction. In addition, Pacific Western Bank will close its three branches located in the San Francisco Bay Area in the first quarter of 2017. At December 31, 2016, the deposits of these branches totaled approximately $100 million. No significant one-time charges are expected to be incurred related to the closure of these branches.
ABOUT PACWEST BANCORP
PacWest Bancorp (“PacWest”) is a bank holding company with over $21 billion in assets with one wholly-owned banking subsidiary, Pacific Western Bank (“Pacific Western”). The Bank has 77 full-service branches located throughout the state of California and one branch in Durham, North Carolina. Pacific Western provides commercial banking services, including real estate, construction, and commercial loans, and comprehensive deposit and treasury management services to small and medium-sized businesses. Pacific Western offers additional products and services under the brands of its business groups, CapitalSource and Square 1 Bank. CapitalSource provides cash flow, asset-based, equipment and real estate loans and treasury management services to established middle market businesses on a national basis. Square 1 Bank offers a comprehensive suite of financial services focused on entrepreneurial businesses and their venture capital and private equity investors, with offices located in key innovation hubs across the United States. For more information about PacWest Bancorp, visit www.pacwestbancorp.com, or to learn more about Pacific Western Bank, visit www.pacificwesternbank.com.
FORWARD LOOKING STATEMENTS
This release contains certain “forward-looking statements” about the Company and its subsidiaries within the meaning of the Private Securities Litigation Reform Act of 1995, including forward-looking statements relating to the Company’s current business plans and expectations regarding future operating results and metrics. All statements contained in this release that are not clearly historical in nature are forward-looking, and the words “anticipate,” “assume,” “intend,” “believe,” “forecast,” “expect,” “estimate,” “plan,” “continue,” “will,” “should,” “look forward” and similar expressions are generally intended to identify forward-looking statements. All forward-looking statements (including statements regarding future financial and operating results and future transactions and their results) involve risks, uncertainties and contingencies, many of which are beyond our control, which may cause actual results, performance, or achievements to differ materially from anticipated results, performance or achievements. These risks and uncertainties include, but are not limited to, our ability to compete effectively against other financial institutions in our banking markets; the impact of changes in interest rates or levels of market activity, especially on our loan and investment portfolios; deterioration, weaker than expected improvement, or other changes in the state of the economy or the markets in which we conduct business (including the levels of IPOs and M&A activities); changes in credit quality and the effect of credit quality on our provision for loan and lease losses and allowance for loan and leases losses; our ability to attract deposits and other sources of funding or liquidity; our capital requirements and our ability to generate capital internally or raise capital on favorable terms; the costs and effects of legal, compliance and regulatory actions, changes and developments, including the impact of adverse judgments or settlements in litigation, the initiation and resolution of regulatory or other governmental inquiries or investigations, and/or the results of regulatory examinations or reviews; and our success at managing the risks involved in the foregoing items and all other factors set forth in the Company’s public reports, including the Annual Report on Form 10-K for the year ended December 31, 2015, and particularly the discussion of risk factors within that document.
All forward-looking statements included in this release are based on information available at the time of the release. We are under no obligation to (and expressly disclaim any such obligation to) update or alter our forward-looking statements, whether as a result of new information, future events or otherwise except as required by law.
PACWEST BANCORP AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
|
|
|
December 31, |
|
September 30, |
|
December 31, |
| |||
|
|
|
2016 |
|
2016 |
|
2015 |
| |||
|
|
|
(Dollars in thousands, except per share data) |
| |||||||
|
ASSETS: |
|
|
|
|
|
|
| |||
|
Cash and due from banks |
|
$ |
337,965 |
|
$ |
286,371 |
|
$ |
161,020 |
|
|
Interest-earning deposits in financial institutions |
|
81,705 |
|
253,994 |
|
235,466 |
| |||
|
Total cash and cash equivalents |
|
419,670 |
|
540,365 |
|
396,486 |
| |||
|
|
|
|
|
|
|
|
| |||
|
Securities available-for-sale, at estimated fair value |
|
3,223,830 |
|
3,341,335 |
|
3,559,437 |
| |||
|
Federal Home Loan Bank stock, at cost |
|
21,870 |
|
19,386 |
|
19,710 |
| |||
|
Total investment securities |
|
3,245,700 |
|
3,360,721 |
|
3,579,147 |
| |||
|
|
|
|
|
|
|
|
| |||
|
Non-PCI loans and leases |
|
15,412,092 |
|
14,686,206 |
|
14,339,070 |
| |||
|
PCI loans |
|
108,445 |
|
120,221 |
|
189,095 |
| |||
|
Total gross loans and leases |
|
15,520,537 |
|
14,806,427 |
|
14,528,165 |
| |||
|
Deferred fees, net |
|
(64,583 |
) |
(63,581 |
) |
(49,911 |
) | |||
|
Total loans and leases, net of deferred fees |
|
15,455,954 |
|
14,742,846 |
|
14,478,254 |
| |||
|
Allowance for loan and lease losses |
|
(157,238 |
) |
(147,976 |
) |
(115,111 |
) | |||
|
Total loans and leases, net |
|
15,298,716 |
|
14,594,870 |
|
14,363,143 |
| |||
|
|
|
|
|
|
|
|
| |||
|
Equipment leased to others under operating leases |
|
229,905 |
|
198,931 |
|
197,452 |
| |||
|
Premises and equipment, net |
|
38,594 |
|
38,977 |
|
39,197 |
| |||
|
Foreclosed assets, net |
|
12,976 |
|
15,113 |
|
22,120 |
| |||
|
Deferred tax asset, net |
|
94,112 |
|
27,073 |
|
126,389 |
| |||
|
Goodwill |
|
2,173,949 |
|
2,173,949 |
|
2,176,291 |
| |||
|
Core deposit and customer relationship intangibles, net |
|
36,366 |
|
39,542 |
|
53,220 |
| |||
|
Other assets |
|
319,779 |
|
325,750 |
|
335,045 |
| |||
|
Total assets |
|
$ |
21,869,767 |
|
$ |
21,315,291 |
|
$ |
21,288,490 |
|
|
|
|
|
|
|
|
|
| |||
|
LIABILITIES: |
|
|
|
|
|
|
| |||
|
Noninterest-bearing deposits |
|
$ |
6,659,016 |
|
$ |
6,521,946 |
|
$ |
6,171,455 |
|
|
Interest-bearing deposits |
|
9,211,595 |
|
9,123,722 |
|
9,494,727 |
| |||
|
Total deposits |
|
15,870,611 |
|
15,645,668 |
|
15,666,182 |
| |||
|
Borrowings |
|
905,812 |
|
541,011 |
|
621,914 |
| |||
|
Subordinated debentures |
|
440,744 |
|
441,112 |
|
436,000 |
| |||
|
Accrued interest payable and other liabilities |
|
173,545 |
|
144,905 |
|
166,703 |
| |||
|
Total liabilities |
|
17,390,712 |
|
16,772,696 |
|
16,890,799 |
| |||
|
STOCKHOLDERS’ EQUITY (1) |
|
4,479,055 |
|
4,542,595 |
|
4,397,691 |
| |||
|
Total liabilities and stockholders’ equity |
|
$ |
21,869,767 |
|
$ |
21,315,291 |
|
$ |
21,288,490 |
|
|
|
|
|
|
|
|
|
| |||
|
Book value per share |
|
$ |
36.93 |
|
$ |
37.29 |
|
$ |
36.22 |
|
|
Tangible book value per share (2) |
|
$ |
18.71 |
|
$ |
19.12 |
|
$ |
17.86 |
|
|
Shares outstanding |
|
121,283,669 |
|
121,817,524 |
|
121,413,727 |
| |||
|
(1) Includes net unrealized gain on securities available-for-sale, net |
|
$ |
5,982 |
|
$ |
72,073 |
|
$ |
27,828 |
|
(2) Non-GAAP measure.
PACWEST BANCORP AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF EARNINGS
|
|
|
Three Months Ended |
|
Year Ended |
| |||||||||||
|
|
|
December 31, |
|
September 30, |
|
December 31, |
|
December 31, |
| |||||||
|
|
|
2016 |
|
2016 |
|
2015 |
|
2016 |
|
2015 |
| |||||
|
|
|
(Dollars in thousands, except per share data) |
| |||||||||||||
|
Interest income: |
|
|
|
|
|
|
|
|
|
|
| |||||
|
Loans and leases |
|
$ |
238,223 |
|
$ |
225,370 |
|
$ |
219,677 |
|
$ |
924,294 |
|
$ |
819,094 |
|
|
Investment securities |
|
23,403 |
|
22,187 |
|
23,648 |
|
90,557 |
|
64,368 |
| |||||
|
Deposits in financial institutions |
|
147 |
|
298 |
|
172 |
|
1,061 |
|
476 |
| |||||
|
Total interest income |
|
261,773 |
|
247,855 |
|
243,497 |
|
1,015,912 |
|
883,938 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Interest expense: |
|
|
|
|
|
|
|
|
|
|
| |||||
|
Deposits |
|
7,369 |
|
7,247 |
|
9,391 |
|
31,512 |
|
41,503 |
| |||||
|
Borrowings |
|
631 |
|
695 |
|
159 |
|
2,259 |
|
554 |
| |||||
|
Subordinated debentures |
|
5,468 |
|
5,278 |
|
4,748 |
|
20,850 |
|
18,535 |
| |||||
|
Total interest expense |
|
13,468 |
|
13,220 |
|
14,298 |
|
54,621 |
|
60,592 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Net interest income |
|
248,305 |
|
234,635 |
|
229,199 |
|
961,291 |
|
823,346 |
| |||||
|
Provision for credit losses |
|
23,215 |
|
8,471 |
|
13,772 |
|
65,729 |
|
45,481 |
| |||||
|
Net interest income after provision for credit losses |
|
225,090 |
|
226,164 |
|
215,427 |
|
895,562 |
|
777,865 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Noninterest income: |
|
|
|
|
|
|
|
|
|
|
| |||||
|
Service charges on deposit accounts |
|
3,557 |
|
3,488 |
|
3,901 |
|
14,534 |
|
11,688 |
| |||||
|
Other commissions and fees |
|
12,036 |
|
12,528 |
|
12,691 |
|
47,126 |
|
31,586 |
| |||||
|
Leased equipment income |
|
8,614 |
|
8,538 |
|
7,791 |
|
33,919 |
|
24,023 |
| |||||
|
Gain on sale of loans and leases |
|
119 |
|
157 |
|
183 |
|
909 |
|
373 |
| |||||
|
Gain on securities |
|
515 |
|
382 |
|
— |
|
9,485 |
|
3,744 |
| |||||
|
FDIC loss sharing expense, net |
|
— |
|
— |
|
(4,291 |
) |
(8,917 |
) |
(18,246 |
) | |||||
|
Other income |
|
4,054 |
|
1,827 |
|
7,783 |
|
15,419 |
|
31,142 |
| |||||
|
Total noninterest income |
|
28,895 |
|
26,920 |
|
28,058 |
|
112,475 |
|
84,310 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Noninterest expense: |
|
|
|
|
|
|
|
|
|
|
| |||||
|
Compensation |
|
66,013 |
|
62,661 |
|
58,992 |
|
251,913 |
|
203,914 |
| |||||
|
Occupancy |
|
12,076 |
|
12,010 |
|
12,194 |
|
48,911 |
|
44,144 |
| |||||
|
Data processing |
|
6,574 |
|
6,234 |
|
5,585 |
|
24,356 |
|
18,617 |
| |||||
|
Other professional services |
|
4,880 |
|
4,625 |
|
3,811 |
|
16,478 |
|
13,760 |
| |||||
|
Insurance and assessments |
|
4,124 |
|
4,324 |
|
5,450 |
|
18,364 |
|
16,996 |
| |||||
|
Intangible asset amortization |
|
3,176 |
|
4,224 |
|
4,910 |
|
16,517 |
|
9,410 |
| |||||
|
Leased equipment depreciation |
|
5,291 |
|
5,298 |
|
4,235 |
|
20,899 |
|
13,603 |
| |||||
|
Foreclosed assets expense (income), net |
|
2,693 |
|
(248 |
) |
(3,185 |
) |
1,881 |
|
(668 |
) | |||||
|
Acquisition, integration and reorganization costs |
|
— |
|
— |
|
17,600 |
|
200 |
|
21,247 |
| |||||
|
Other expense |
|
13,795 |
|
11,582 |
|
12,672 |
|
50,582 |
|
41,016 |
| |||||
|
Total noninterest expense |
|
118,622 |
|
110,710 |
|
122,264 |
|
450,101 |
|
382,039 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Earnings before income taxes |
|
135,363 |
|
142,374 |
|
121,221 |
|
557,936 |
|
480,136 |
| |||||
|
Income tax expense |
|
(49,716 |
) |
(48,479 |
) |
(49,380 |
) |
(205,770 |
) |
(180,517 |
) | |||||
|
Net earnings |
|
$ |
85,647 |
|
$ |
93,895 |
|
$ |
71,841 |
|
$ |
352,166 |
|
$ |
299,619 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Basic and diluted earnings per share |
|
$ |
0.71 |
|
$ |
0.77 |
|
$ |
0.60 |
|
$ |
2.90 |
|
$ |
2.79 |
|
PACWEST BANCORP AND SUBSIDIARIES
NET EARNINGS PER SHARE CALCULATIONS
|
|
|
Three Months Ended |
|
Year Ended |
| |||||||||||
|
|
|
December 31, |
|
September 30, |
|
December 31, |
|
December 31, |
| |||||||
|
|
|
2016 |
|
2016 |
|
2015 |
|
2016 |
|
2015 |
| |||||
|
|
|
(Dollars in thousands, except per share data) |
| |||||||||||||
|
Basic Earnings Per Share: |
|
|
|
|
|
|
|
|
|
|
| |||||
|
Net earnings |
|
$ |
85,647 |
|
$ |
93,895 |
|
$ |
71,841 |
|
$ |
352,166 |
|
$ |
299,619 |
|
|
Less: earnings allocated to unvested restricted stock (1) |
|
(1,004 |
) |
(1,048 |
) |
(690 |
) |
(3,988 |
) |
(2,892 |
) | |||||
|
Net earnings allocated to common shares |
|
$ |
84,643 |
|
$ |
92,847 |
|
$ |
71,151 |
|
$ |
348,178 |
|
$ |
296,727 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Weighted-average basic shares and unvested restricted stock outstanding |
|
121,464 |
|
121,818 |
|
120,385 |
|
121,670 |
|
107,401 |
| |||||
|
Less: weighted-average unvested restricted stock outstanding |
|
(1,450 |
) |
(1,401 |
) |
(1,133 |
) |
(1,431 |
) |
(1,074 |
) | |||||
|
Weighted-average basic shares outstanding |
|
120,014 |
|
120,417 |
|
119,252 |
|
120,239 |
|
106,327 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Basic earnings per share |
|
$ |
0.71 |
|
$ |
0.77 |
|
$ |
0.60 |
|
$ |
2.90 |
|
$ |
2.79 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Diluted Earnings Per Share: |
|
|
|
|
|
|
|
|
|
|
| |||||
|
Net earnings allocated to common shares |
|
$ |
84,643 |
|
$ |
92,847 |
|
$ |
71,151 |
|
$ |
348,178 |
|
$ |
296,727 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Weighted-average basic shares outstanding |
|
120,014 |
|
120,417 |
|
119,252 |
|
120,239 |
|
106,327 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Diluted earnings per share |
|
$ |
0.71 |
|
$ |
0.77 |
|
$ |
0.60 |
|
$ |
2.90 |
|
$ |
2.79 |
|
(1) Represents cash dividends paid to holders of unvested stock, net of estimated forfeitures, plus undistributed earnings amounts available to holders of unvested restricted stock, if any.
PACWEST BANCORP AND SUBSIDIARIES
AVERAGE BALANCE SHEET AND YIELD ANALYSIS
|
|
|
Three Months Ended |
| ||||||||||||||||||||||
|
|
|
December 31, 2016 |
|
September 30, 2016 |
|
December 31, 2015 |
| ||||||||||||||||||
|
|
|
|
|
Interest |
|
Average |
|
|
|
Interest |
|
Average |
|
|
|
Interest |
|
Average |
| ||||||
|
|
|
Average |
|
Income/ |
|
Yield/ |
|
Average |
|
Income/ |
|
Yield/ |
|
Average |
|
Income/ |
|
Yield/ |
| ||||||
|
|
|
Balance |
|
Expense |
|
Cost |
|
Balance |
|
Expense |
|
Cost |
|
Balance |
|
Expense |
|
Cost |
| ||||||
|
|
|
(Dollars in thousands) |
| ||||||||||||||||||||||
|
Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
|
PCI loans |
|
$ |
104,234 |
|
$ |
17,481 |
|
66.72 |
% |
$ |
117,781 |
|
$ |
5,868 |
|
19.82 |
% |
$ |
169,772 |
|
$ |
6,345 |
|
14.83 |
% |
|
Non-PCI loans and leases |
|
14,904,034 |
|
220,742 |
|
5.89 |
% |
14,417,170 |
|
219,502 |
|
6.06 |
% |
13,861,330 |
|
213,332 |
|
6.11 |
% | ||||||
|
Total loans and leases |
|
15,008,268 |
|
238,223 |
|
6.31 |
% |
14,534,951 |
|
225,370 |
|
6.17 |
% |
14,031,102 |
|
219,677 |
|
6.21 |
% | ||||||
|
Investment securities (1) |
|
3,293,003 |
|
28,229 |
|
3.41 |
% |
3,338,209 |
|
27,025 |
|
3.22 |
% |
3,492,124 |
|
28,408 |
|
3.23 |
% | ||||||
|
Deposits in financial institutions |
|
111,918 |
|
147 |
|
0.52 |
% |
238,425 |
|
298 |
|
0.50 |
% |
254,308 |
|
172 |
|
0.27 |
% | ||||||
|
Total interest-earning assets |
|
18,413,189 |
|
266,599 |
|
5.76 |
% |
18,111,585 |
|
252,693 |
|
5.55 |
% |
17,777,534 |
|
248,257 |
|
5.54 |
% | ||||||
|
Other assets |
|
3,014,761 |
|
|
|
|
|
2,960,468 |
|
|
|
|
|
3,047,714 |
|
|
|
|
| ||||||
|
Total assets |
|
$ |
21,427,950 |
|
|
|
|
|
$ |
21,072,053 |
|
|
|
|
|
$ |
20,825,248 |
|
|
|
|
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
|
Liabilities and Stockholders’ Equity: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
|
Interest checking |
|
$ |
1,449,346 |
|
951 |
|
0.26 |
% |
$ |
1,161,931 |
|
604 |
|
0.21 |
% |
$ |
889,035 |
|
345 |
|
0.15 |
% | |||
|
Money market |
|
4,740,944 |
|
3,672 |
|
0.31 |
% |
4,514,525 |
|
3,303 |
|
0.29 |
% |
3,557,364 |
|
1,543 |
|
0.17 |
% | ||||||
|
Savings |
|
751,817 |
|
331 |
|
0.18 |
% |
764,415 |
|
341 |
|
0.18 |
% |
747,054 |
|
445 |
|
0.24 |
% | ||||||
|
Time |
|
2,384,973 |
|
2,415 |
|
0.40 |
% |
2,666,434 |
|
2,999 |
|
0.45 |
% |
4,439,940 |
|
7,058 |
|
0.63 |
% | ||||||
|
Total interest-bearing deposits |
|
9,327,080 |
|
7,369 |
|
0.31 |
% |
9,107,305 |
|
7,247 |
|
0.32 |
% |
9,633,393 |
|
9,391 |
|
0.39 |
% | ||||||
|
Borrowings |
|
505,567 |
|
631 |
|
0.50 |
% |
583,982 |
|
695 |
|
0.47 |
% |
206,236 |
|
159 |
|
0.31 |
% | ||||||
|
Subordinated debentures |
|
440,907 |
|
5,468 |
|
4.93 |
% |
439,970 |
|
5,278 |
|
4.77 |
% |
435,293 |
|
4,748 |
|
4.33 |
% | ||||||
|
Total interest-bearing liabilities |
|
10,273,554 |
|
13,468 |
|
0.52 |
% |
10,131,257 |
|
13,220 |
|
0.52 |
% |
10,274,922 |
|
14,298 |
|
0.55 |
% | ||||||
|
Noninterest-bearing demand deposits |
|
6,496,221 |
|
|
|
|
|
6,274,294 |
|
|
|
|
|
6,043,900 |
|
|
|
|
| ||||||
|
Other liabilities |
|
156,227 |
|
|
|
|
|
135,801 |
|
|
|
|
|
160,264 |
|
|
|
|
| ||||||
|
Total liabilities |
|
16,926,002 |
|
|
|
|
|
16,541,352 |
|
|
|
|
|
16,479,086 |
|
|
|
|
| ||||||
|
Stockholders’ equity |
|
4,501,948 |
|
|
|
|
|
4,530,701 |
|
|
|
|
|
4,346,162 |
|
|
|
|
| ||||||
|
Total liabilities and stockholders’ equity |
|
$ |
21,427,950 |
|
|
|
|
|
$ |
21,072,053 |
|
|
|
|
|
$ |
20,825,248 |
|
|
|
|
| |||
|
Net interest income (2) |
|
|
|
$ |
253,131 |
|
|
|
|
|
$ |
239,473 |
|
|
|
|
|
$ |
233,959 |
|
|
| |||
|
Net interest spread (2) |
|
|
|
|
|
5.24 |
% |
|
|
|
|
5.03 |
% |
|
|
|
|
4.99 |
% | ||||||
|
Net interest margin (2) |
|
|
|
|
|
5.47 |
% |
|
|
|
|
5.26 |
% |
|
|
|
|
5.22 |
% | ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
|
Total deposits (3) |
|
$ |
15,823,301 |
|
$ |
7,369 |
|
0.19 |
% |
$ |
15,381,599 |
|
$ |
7,247 |
|
0.19 |
% |
$ |
15,677,293 |
|
$ |
9,391 |
|
0.24 |
% |
|
Funding sources (4) |
|
$ |
16,769,775 |
|
$ |
13,468 |
|
0.32 |
% |
$ |
16,405,551 |
|
$ |
13,220 |
|
0.32 |
% |
$ |
16,318,822 |
|
$ |
14,298 |
|
0.35 |
% |
(1) Includes tax equivalent adjustments of $4.8 million, $4.8 million, and $4.8 million for the three months ended December 31, 2016, September 30, 2016 and December 31, 2015 related to tax exempt income on municipal securities. The federal statutory tax rate utilized was 35% for the periods.
(2) Tax equivalent.
(3) Total deposits is the sum of total interest-bearing deposits and noninterest-bearing demand deposits. The cost of total deposits is calculated as annualized interest expense on deposits divided by average total deposits.
(4) Funding sources is the sum of total interest-bearing liabilities and noninterest-bearing demand deposits. The cost of funding sources is calculated as annualized total interest expense divided by average funding sources.
PACWEST BANCORP AND SUBSIDIARIES
FIVE QUARTER BALANCE SHEET
|
|
|
December 31, |
|
September 30, |
|
June 30, |
|
March 31, |
|
December 31, |
| |||||
|
|
|
2016 |
|
2016 |
|
2016 |
|
2016 |
|
2015 |
| |||||
|
|
|
(Dollars in thousands, except per share data) |
| |||||||||||||
|
ASSETS: |
|
|
|
|
|
|
|
|
|
|
| |||||
|
Cash and due from banks |
|
$ |
337,965 |
|
$ |
286,371 |
|
$ |
226,471 |
|
$ |
161,977 |
|
$ |
161,020 |
|
|
Interest-earning deposits in financial institutions |
|
81,705 |
|
253,994 |
|
218,882 |
|
357,541 |
|
235,466 |
| |||||
|
Total cash and cash equivalents |
|
419,670 |
|
540,365 |
|
445,353 |
|
519,518 |
|
396,486 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Securities available-for-sale |
|
3,223,830 |
|
3,341,335 |
|
3,347,546 |
|
3,240,586 |
|
3,559,437 |
| |||||
|
Federal Home Loan Bank stock |
|
21,870 |
|
19,386 |
|
24,214 |
|
17,250 |
|
19,710 |
| |||||
|
Total investment securities |
|
3,245,700 |
|
3,360,721 |
|
3,371,760 |
|
3,257,836 |
|
3,579,147 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Non-PCI loans and leases |
|
15,412,092 |
|
14,686,206 |
|
14,566,425 |
|
14,365,915 |
|
14,339,070 |
| |||||
|
PCI loans |
|
108,445 |
|
120,221 |
|
136,901 |
|
176,607 |
|
189,095 |
| |||||
|
Total gross loans and leases |
|
15,520,537 |
|
14,806,427 |
|
14,703,326 |
|
14,542,522 |
|
14,528,165 |
| |||||
|
Deferred fees, net |
|
(64,583 |
) |
(63,581 |
) |
(61,866 |
) |
(59,005 |
) |
(49,911 |
) | |||||
|
Total loans and leases, net of deferred fees |
|
15,455,954 |
|
14,742,846 |
|
14,641,460 |
|
14,483,517 |
|
14,478,254 |
| |||||
|
Allowance for loan and lease losses |
|
(157,238 |
) |
(147,976 |
) |
(143,289 |
) |
(130,361 |
) |
(115,111 |
) | |||||
|
Total loans and leases, net |
|
15,298,716 |
|
14,594,870 |
|
14,498,171 |
|
14,353,156 |
|
14,363,143 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Equipment leased to others under operating leases |
|
229,905 |
|
198,931 |
|
204,062 |
|
205,163 |
|
197,452 |
| |||||
|
Premises and equipment, net |
|
38,594 |
|
38,977 |
|
38,718 |
|
39,713 |
|
39,197 |
| |||||
|
Foreclosed assets, net |
|
12,976 |
|
15,113 |
|
16,181 |
|
18,310 |
|
22,120 |
| |||||
|
Deferred tax asset, net |
|
94,112 |
|
27,073 |
|
24,413 |
|
91,126 |
|
126,389 |
| |||||
|
Goodwill |
|
2,173,949 |
|
2,173,949 |
|
2,175,791 |
|
2,175,791 |
|
2,176,291 |
| |||||
|
Core deposit and customer relationship intangibles, net |
|
36,366 |
|
39,542 |
|
43,766 |
|
48,137 |
|
53,220 |
| |||||
|
Other assets |
|
319,779 |
|
325,750 |
|
328,924 |
|
322,259 |
|
335,045 |
| |||||
|
Total assets |
|
$ |
21,869,767 |
|
$ |
21,315,291 |
|
$ |
21,147,139 |
|
$ |
21,031,009 |
|
$ |
21,288,490 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
LIABILITIES: |
|
|
|
|
|
|
|
|
|
|
| |||||
|
Noninterest-bearing deposits |
|
$ |
6,659,016 |
|
$ |
6,521,946 |
|
$ |
6,222,696 |
|
$ |
6,139,963 |
|
$ |
6,171,455 |
|
|
Interest-bearing deposits |
|
9,211,595 |
|
9,123,722 |
|
8,925,313 |
|
9,301,412 |
|
9,494,727 |
| |||||
|
Total deposits |
|
15,870,611 |
|
15,645,668 |
|
15,148,009 |
|
15,441,375 |
|
15,666,182 |
| |||||
|
Borrowings |
|
905,812 |
|
541,011 |
|
918,208 |
|
551,401 |
|
621,914 |
| |||||
|
Subordinated debentures |
|
440,744 |
|
441,112 |
|
439,322 |
|
438,723 |
|
436,000 |
| |||||
|
Accrued interest payable and other liabilities |
|
173,545 |
|
144,905 |
|
128,296 |
|
142,918 |
|
166,703 |
| |||||
|
Total liabilities |
|
17,390,712 |
|
16,772,696 |
|
16,633,835 |
|
16,574,417 |
|
16,890,799 |
| |||||
|
STOCKHOLDERS’ EQUITY (1) |
|
4,479,055 |
|
4,542,595 |
|
4,513,304 |
|
4,456,592 |
|
4,397,691 |
| |||||
|
Total liabilities and stockholders’ equity |
|
$ |
21,869,767 |
|
$ |
21,315,291 |
|
$ |
21,147,139 |
|
$ |
21,031,009 |
|
$ |
21,288,490 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Book value per share |
|
$ |
36.93 |
|
$ |
37.29 |
|
$ |
37.05 |
|
$ |
36.60 |
|
$ |
36.22 |
|
|
Tangible book value per share (2) |
|
$ |
18.71 |
|
$ |
19.12 |
|
$ |
18.83 |
|
$ |
18.33 |
|
$ |
17.86 |
|
|
Shares outstanding |
|
121,283,669 |
|
121,817,524 |
|
121,819,849 |
|
121,771,252 |
|
121,413,727 |
| |||||
|
(1) Includes net unrealized gain on securities available-for-sale, net |
|
$ |
5,982 |
|
$ |
72,073 |
|
$ |
81,744 |
|
$ |
48,479 |
|
$ |
27,828 |
|
|
(2) Non-GAAP measure. |
|
|
|
|
|
|
|
|
|
|
| |||||
PACWEST BANCORP AND SUBSIDIARIES
FIVE QUARTER STATEMENT OF EARNINGS
|
|
|
Three Months Ended |
| |||||||||||||
|
|
|
December 31, |
|
September 30, |
|
June 30, |
|
March 31, |
|
December 31, |
| |||||
|
|
|
2016 |
|
2016 |
|
2016 |
|
2016 |
|
2015 |
| |||||
|
|
|
(Dollars in thousands, except per share data) |
| |||||||||||||
|
Interest income: |
|
|
|
|
|
|
|
|
|
|
| |||||
|
Loans and leases |
|
$ |
238,223 |
|
$ |
225,370 |
|
$ |
224,326 |
|
$ |
236,375 |
|
$ |
219,677 |
|
|
Investment securities |
|
23,403 |
|
22,187 |
|
22,420 |
|
22,547 |
|
23,648 |
| |||||
|
Deposits in financial institutions |
|
147 |
|
298 |
|
308 |
|
308 |
|
172 |
| |||||
|
Total interest income |
|
261,773 |
|
247,855 |
|
247,054 |
|
259,230 |
|
243,497 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Interest expense: |
|
|
|
|
|
|
|
|
|
|
| |||||
|
Deposits |
|
7,369 |
|
7,247 |
|
7,823 |
|
9,073 |
|
9,391 |
| |||||
|
Borrowings |
|
631 |
|
695 |
|
352 |
|
581 |
|
159 |
| |||||
|
Subordinated debentures |
|
5,468 |
|
5,278 |
|
5,122 |
|
4,982 |
|
4,748 |
| |||||
|
Total interest expense |
|
13,468 |
|
13,220 |
|
13,297 |
|
14,636 |
|
14,298 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Net interest income |
|
248,305 |
|
234,635 |
|
233,757 |
|
244,594 |
|
229,199 |
| |||||
|
Provision for credit losses |
|
23,215 |
|
8,471 |
|
13,903 |
|
20,140 |
|
13,772 |
| |||||
|
Net interest income after provision for credit losses |
|
225,090 |
|
226,164 |
|
219,854 |
|
224,454 |
|
215,427 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Noninterest income: |
|
|
|
|
|
|
|
|
|
|
| |||||
|
Service charges on deposit accounts |
|
3,557 |
|
3,488 |
|
3,633 |
|
3,856 |
|
3,901 |
| |||||
|
Other commissions and fees |
|
12,036 |
|
12,528 |
|
11,073 |
|
11,489 |
|
12,691 |
| |||||
|
Leased equipment income |
|
8,614 |
|
8,538 |
|
8,523 |
|
8,244 |
|
7,791 |
| |||||
|
Gain on sale of loans and leases |
|
119 |
|
157 |
|
388 |
|
245 |
|
183 |
| |||||
|
Gain on securities |
|
515 |
|
382 |
|
478 |
|
8,110 |
|
— |
| |||||
|
FDIC loss sharing expense, net |
|
— |
|
— |
|
(6,502 |
) |
(2,415 |
) |
(4,291 |
) | |||||
|
Other income |
|
4,054 |
|
1,827 |
|
4,528 |
|
5,010 |
|
7,783 |
| |||||
|
Total noninterest income |
|
28,895 |
|
26,920 |
|
22,121 |
|
34,539 |
|
28,058 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Noninterest expense: |
|
|
|
|
|
|
|
|
|
|
| |||||
|
Compensation |
|
66,013 |
|
62,661 |
|
62,174 |
|
61,065 |
|
58,992 |
| |||||
|
Occupancy |
|
12,076 |
|
12,010 |
|
12,193 |
|
12,632 |
|
12,194 |
| |||||
|
Data processing |
|
6,574 |
|
6,234 |
|
5,644 |
|
5,904 |
|
5,585 |
| |||||
|
Other professional services |
|
4,880 |
|
4,625 |
|
3,401 |
|
3,572 |
|
3,811 |
| |||||
|
Insurance and assessments |
|
4,124 |
|
4,324 |
|
4,951 |
|
4,965 |
|
5,450 |
| |||||
|
Intangible asset amortization |
|
3,176 |
|
4,224 |
|
4,371 |
|
4,746 |
|
4,910 |
| |||||
|
Leased equipment depreciation |
|
5,291 |
|
5,298 |
|
5,286 |
|
5,024 |
|
4,235 |
| |||||
|
Foreclosed assets expense (income), net |
|
2,693 |
|
(248 |
) |
(3 |
) |
(561 |
) |
(3,185 |
) | |||||
|
Acquisition, integration and reorganization costs |
|
— |
|
— |
|
— |
|
200 |
|
17,600 |
| |||||
|
Other expense |
|
13,795 |
|
11,582 |
|
12,064 |
|
13,141 |
|
12,672 |
| |||||
|
Total noninterest expense |
|
118,622 |
|
110,710 |
|
110,081 |
|
110,688 |
|
122,264 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Earnings before income taxes |
|
135,363 |
|
142,374 |
|
131,894 |
|
148,305 |
|
121,221 |
| |||||
|
Income tax expense |
|
(49,716 |
) |
(48,479 |
) |
(49,726 |
) |
(57,849 |
) |
(49,380 |
) | |||||
|
Net earnings |
|
$ |
85,647 |
|
$ |
93,895 |
|
$ |
82,168 |
|
$ |
90,456 |
|
$ |
71,841 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Basic and diluted earnings per share |
|
$ |
0.71 |
|
$ |
0.77 |
|
$ |
0.68 |
|
$ |
0.74 |
|
$ |
0.60 |
|
PACWEST BANCORP AND SUBSIDIARIES
FIVE QUARTER SELECTED FINANCIAL DATA
|
|
|
At or For the Three Months Ended |
| |||||||||||||
|
|
|
December 31, |
|
September 30, |
|
June 30, |
|
March 31, |
|
December 31, |
| |||||
|
|
|
2016 |
|
2016 |
|
2016 |
|
2016 |
|
2015 |
| |||||
|
|
|
(Dollars in thousands) |
| |||||||||||||
|
Performance Ratios: |
|
|
|
|
|
|
|
|
|
|
| |||||
|
Return on average assets (1) |
|
1.59 |
% |
1.77 |
% |
1.57 |
% |
1.72 |
% |
1.37 |
% | |||||
|
Return on average equity (1) |
|
7.57 |
% |
8.24 |
% |
7.37 |
% |
8.20 |
% |
6.56 |
% | |||||
|
Return on average tangible equity (1)(2) |
|
14.88 |
% |
16.15 |
% |
14.61 |
% |
16.45 |
% |
13.14 |
% | |||||
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Yield on average loans and leases (1) |
|
6.31 |
% |
6.17 |
% |
6.24 |
% |
6.57 |
% |
6.21 |
% | |||||
|
Yield on average interest-earning assets (1)(3) |
|
5.76 |
% |
5.55 |
% |
5.63 |
% |
5.85 |
% |
5.54 |
% | |||||
|
Cost of average total deposits (1) |
|
0.19 |
% |
0.19 |
% |
0.20 |
% |
0.23 |
% |
0.24 |
% | |||||
|
Cost of average time deposits (1) |
|
0.40 |
% |
0.45 |
% |
0.52 |
% |
0.61 |
% |
0.63 |
% | |||||
|
Cost of average interest-bearing liabilities (1) |
|
0.52 |
% |
0.52 |
% |
0.54 |
% |
0.57 |
% |
0.55 |
% | |||||
|
Cost of average funding sources (1) |
|
0.32 |
% |
0.32 |
% |
0.33 |
% |
0.35 |
% |
0.35 |
% | |||||
|
Net interest rate spread (1)(3) |
|
5.24 |
% |
5.03 |
% |
5.09 |
% |
5.28 |
% |
4.99 |
% | |||||
|
Net interest margin (1)(3) |
|
5.47 |
% |
5.26 |
% |
5.33 |
% |
5.53 |
% |
5.22 |
% | |||||
|
Core net interest margin (1)(2)(3) |
|
5.09 |
% |
5.08 |
% |
5.11 |
% |
5.10 |
% |
5.10 |
% | |||||
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Efficiency ratio |
|
40.1 |
% |
40.1 |
% |
40.6 |
% |
38.5 |
% |
39.3 |
% | |||||
|
Noninterest expense as a percentage of average assets (1) |
|
2.20 |
% |
2.09 |
% |
2.11 |
% |
2.10 |
% |
2.33 |
% | |||||
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Average Balances: |
|
|
|
|
|
|
|
|
|
|
| |||||
|
Loans and leases |
|
$ |
15,008,268 |
|
$ |
14,534,951 |
|
$ |
14,468,590 |
|
$ |
14,471,165 |
|
$ |
14,031,102 |
|
|
Interest-earning assets |
|
18,413,189 |
|
18,111,585 |
|
18,003,075 |
|
18,161,751 |
|
17,777,534 |
| |||||
|
Total assets |
|
21,427,950 |
|
21,072,053 |
|
20,999,942 |
|
21,198,594 |
|
20,825,248 |
| |||||
|
Noninterest-bearing deposits |
|
6,496,221 |
|
6,274,294 |
|
6,437,720 |
|
6,273,249 |
|
6,043,900 |
| |||||
|
Interest-bearing deposits |
|
9,327,080 |
|
9,107,305 |
|
9,199,097 |
|
9,388,652 |
|
9,633,393 |
| |||||
|
Total deposits |
|
15,823,301 |
|
15,381,599 |
|
15,636,817 |
|
15,661,901 |
|
15,677,293 |
| |||||
|
Borrowings and subordinated |
|
|
|
|
|
|
|
|
|
|
| |||||
|
debentures |
|
946,474 |
|
1,023,952 |
|
739,509 |
|
931,260 |
|
641,529 |
| |||||
|
Interest-bearing liabilities |
|
10,273,554 |
|
10,131,257 |
|
9,938,606 |
|
10,319,912 |
|
10,274,922 |
| |||||
|
Funding sources |
|
16,769,775 |
|
16,405,551 |
|
16,376,326 |
|
16,593,161 |
|
16,318,822 |
| |||||
|
Stockholders’ equity |
|
4,501,948 |
|
4,530,701 |
|
4,483,593 |
|
4,438,602 |
|
4,346,162 |
| |||||
(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 |
| |||||||||||||
|
|
|
December 31, |
|
September 30, |
|
June 30, |
|
March 31, |
|
December 31, |
| |||||
|
|
|
2016 |
|
2016 |
|
2016 |
|
2016 |
|
2015 |
| |||||
|
|
|
(Dollars in thousands) |
| |||||||||||||
|
Non-PCI Credit Quality: |
|
|
|
|
|
|
|
|
|
|
| |||||
|
Allowance for credit losses to loans and leases |
|
1.05 |
% |
1.05 |
% |
1.03 |
% |
0.96 |
% |
0.85 |
% | |||||
|
Allowance for credit losses to nonaccrual loans and leases |
|
95 |
% |
90 |
% |
118 |
% |
106 |
% |
95 |
% | |||||
|
Nonaccrual loans and leases to loans and leases |
|
1.11 |
% |
1.16 |
% |
0.88 |
% |
0.91 |
% |
0.90 |
% | |||||
|
Nonperforming assets to loans and leases and foreclosed assets |
|
1.19 |
% |
1.27 |
% |
0.99 |
% |
1.05 |
% |
1.06 |
% | |||||
|
Nonperforming assets to total assets |
|
0.84 |
% |
0.87 |
% |
0.68 |
% |
0.72 |
% |
0.71 |
% | |||||
|
Trailing twelve month net charge-offs to average loans and leases |
|
0.15 |
% |
0.04 |
% |
0.04 |
% |
0.03 |
% |
0.06 |
% | |||||
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
PacWest Bancorp Consolidated Capital: |
|
|
|
|
|
|
|
|
|
|
| |||||
|
Tier 1 leverage ratio (1) |
|
11.91 |
% |
12.13 |
% |
11.92 |
% |
11.51 |
% |
11.67 |
% | |||||
|
Common equity tier 1 capital ratio (1) |
|
12.31 |
% |
12.83 |
% |
12.72 |
% |
12.63 |
% |
12.58 |
% | |||||
|
Tier 1 capital ratio (1) |
|
12.31 |
% |
12.83 |
% |
12.72 |
% |
12.63 |
% |
12.60 |
% | |||||
|
Total capital ratio (1) |
|
15.56 |
% |
16.18 |
% |
16.08 |
% |
15.96 |
% |
15.65 |
% | |||||
|
Risk-weighted assets (1) |
|
$ |
18,568,724 |
|
$ |
17,713,506 |
|
$ |
17,520,609 |
|
$ |
17,226,658 |
|
$ |
17,170,292 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Equity to assets ratio |
|
20.48 |
% |
21.31 |
% |
21.34 |
% |
21.19 |
% |
20.66 |
% | |||||
|
Tangible common equity ratio (2) |
|
11.54 |
% |
12.19 |
% |
12.12 |
% |
11.87 |
% |
11.38 |
% | |||||
|
Book value per share |
|
$ |
36.93 |
|
$ |
37.29 |
|
$ |
37.05 |
|
$ |
36.60 |
|
$ |
36.22 |
|
|
Tangible book value per share (2) |
|
$ |
18.71 |
|
$ |
19.12 |
|
$ |
18.83 |
|
$ |
18.33 |
|
$ |
17.86 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Pacific Western Bank Capital: |
|
|
|
|
|
|
|
|
|
|
| |||||
|
Tier 1 leverage ratio (1) |
|
11.40 |
% |
11.54 |
% |
11.38 |
% |
11.10 |
% |
11.40 |
% | |||||
|
Common equity tier 1 capital ratio (1) |
|
11.78 |
% |
12.21 |
% |
12.13 |
% |
12.18 |
% |
12.03 |
% | |||||
|
Tier 1 capital ratio (1) |
|
11.78 |
% |
12.21 |
% |
12.13 |
% |
12.18 |
% |
12.03 |
% | |||||
|
Total capital ratio (1) |
|
12.72 |
% |
13.15 |
% |
13.06 |
% |
13.05 |
% |
12.80 |
% | |||||
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Equity to assets ratio |
|
20.02 |
% |
20.77 |
% |
20.82 |
% |
20.70 |
% |
20.19 |
% | |||||
|
Tangible common equity ratio (2) |
|
11.02 |
% |
11.56 |
% |
11.51 |
% |
11.27 |
% |
10.80 |
% | |||||
(1) Capital information for December 31, 2016 is preliminary.
(2) Non-GAAP measure.
GAAP TO NON-GAAP RECONCILIATION
This press release contains certain non-GAAP financial disclosures for return on average tangible equity, tangible common equity ratio, tangible book value per share, core net interest margin, core loan and lease yield, and adjusted allowance for credit losses to loans and leases. The Company uses these non-GAAP financial measures to provide meaningful supplemental information regarding the Company’s operational performance and to enhance investors’ overall understanding of such financial performance. In particular, the use of return on average tangible equity, tangible common equity ratio, and tangible book value per share is prevalent among banking regulators, investors and analysts. Accordingly, we disclose the non-GAAP measures in addition to the related GAAP measures of return on average equity, equity to assets ratio, book value per share, net interest margin, loan and lease yield, and allowance for credit losses to loans and leases, respectively.
The reconciliations for the following GAAP financial measures to the non-GAAP financial measures are presented earlier in this press release: (1) net interest margin to core net interest margin, (2) loan and lease yield to core loan and lease yield, and (3) allowance for credit losses to loans and leases to adjusted allowance for credit losses to loans and leases.
The reconciliations for the following GAAP financial measures to the non-GAAP financial measures are presented below: (1) return on average equity to return on average tangible equity, (2) equity to assets ratio to tangible common equity ratio, and (3) book value per share to tangible book value per share.
PACWEST BANCORP AND SUBSIDIARIES
GAAP TO NON-GAAP RECONCILIATION
|
|
|
Three Months Ended |
|
Year Ended |
| |||||||||||
|
|
|
December 31, |
|
September 30, |
|
December 31, |
|
December 31, |
| |||||||
|
Return on Average Tangible Equity |
|
2016 |
|
2016 |
|
2015 |
|
2016 |
|
2015 |
| |||||
|
|
|
(Dollars in thousands) |
| |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Net earnings |
|
$ |
85,647 |
|
$ |
93,895 |
|
$ |
71,841 |
|
$ |
352,166 |
|
$ |
299,619 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Average stockholders’ equity |
|
$ |
4,501,948 |
|
$ |
4,530,701 |
|
$ |
4,346,162 |
|
$ |
4,488,862 |
|
$ |
3,751,995 |
|
|
Less: Average intangible assets |
|
2,212,042 |
|
2,217,564 |
|
2,177,631 |
|
2,219,756 |
|
1,850,988 |
| |||||
|
Average tangible common equity |
|
$ |
2,289,906 |
|
$ |
2,313,137 |
|
$ |
2,168,531 |
|
$ |
2,269,106 |
|
$ |
1,901,007 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Return on average equity (1) |
|
7.57 |
% |
8.24 |
% |
6.56 |
% |
7.85 |
% |
7.99 |
% | |||||
|
Return on average tangible equity (2) |
|
14.88 |
% |
16.15 |
% |
13.14 |
% |
15.52 |
% |
15.76 |
% | |||||
(1) Annualized net earnings divided by average stockholders’ equity.
(2) Annualized net earnings divided by average tangible common equity.
PACWEST BANCORP AND SUBSIDIARIES
GAAP TO NON-GAAP RECONCILIATION
|
Tangible Common Equity Ratio/ |
|
December 31, |
|
September 30, |
|
June 30, |
|
March 31, |
|
December 31, |
| |||||
|
Tangible Book Value Per Share |
|
2016 |
|
2016 |
|
2016 |
|
2016 |
|
2015 |
| |||||
|
|
|
(Dollars in thousands, except per share data) |
| |||||||||||||
|
PacWest Bancorp Consolidated: |
|
|
|
|
|
|
|
|
|
|
| |||||
|
Stockholders’ equity |
|
$ |
4,479,055 |
|
$ |
4,542,595 |
|
$ |
4,513,304 |
|
$ |
4,456,592 |
|
$ |
4,397,691 |
|
|
Less: Intangible assets |
|
2,210,315 |
|
2,213,491 |
|
2,219,557 |
|
2,223,928 |
|
2,229,511 |
| |||||
|
Tangible common equity |
|
$ |
2,268,740 |
|
$ |
2,329,104 |
|
$ |
2,293,747 |
|
$ |
2,232,664 |
|
$ |
2,168,180 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Total assets |
|
$ |
21,869,767 |
|
$ |
21,315,291 |
|
$ |
21,147,139 |
|
$ |
21,031,009 |
|
$ |
21,288,490 |
|
|
Less: Intangible assets |
|
2,210,315 |
|
2,213,491 |
|
2,219,557 |
|
2,223,928 |
|
2,229,511 |
| |||||
|
Tangible assets |
|
$ |
19,659,452 |
|
$ |
19,101,800 |
|
$ |
18,927,582 |
|
$ |
18,807,081 |
|
$ |
19,058,979 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Equity to assets ratio |
|
20.48 |
% |
21.31 |
% |
21.34 |
% |
21.19 |
% |
20.66 |
% | |||||
|
Tangible common equity ratio (1) |
|
11.54 |
% |
12.19 |
% |
12.12 |
% |
11.87 |
% |
11.38 |
% | |||||
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Book value per share |
|
$ |
36.93 |
|
$ |
37.29 |
|
$ |
37.05 |
|
$ |
36.60 |
|
$ |
36.22 |
|
|
Tangible book value per share (2) |
|
$ |
18.71 |
|
$ |
19.12 |
|
$ |
18.83 |
|
$ |
18.33 |
|
$ |
17.86 |
|
|
Shares outstanding |
|
121,283,669 |
|
121,817,524 |
|
121,819,849 |
|
121,771,252 |
|
121,413,727 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Pacific Western Bank: |
|
|
|
|
|
|
|
|
|
|
| |||||
|
Stockholder’s equity |
|
$ |
4,374,478 |
|
$ |
4,416,623 |
|
$ |
4,390,928 |
|
$ |
4,331,841 |
|
$ |
4,276,279 |
|
|
Less: Intangible assets |
|
2,210,315 |
|
2,213,491 |
|
2,219,557 |
|
2,223,928 |
|
2,229,511 |
| |||||
|
Tangible common equity |
|
$ |
2,164,163 |
|
$ |
2,203,132 |
|
$ |
2,171,371 |
|
$ |
2,107,913 |
|
$ |
2,046,768 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Total assets |
|
$ |
21,848,644 |
|
$ |
21,266,705 |
|
$ |
21,084,950 |
|
$ |
20,928,105 |
|
$ |
21,180,689 |
|
|
Less: Intangible assets |
|
2,210,315 |
|
2,213,491 |
|
2,219,557 |
|
2,223,928 |
|
2,229,511 |
| |||||
|
Tangible assets |
|
$ |
19,638,329 |
|
$ |
19,053,214 |
|
$ |
18,865,393 |
|
$ |
18,704,177 |
|
$ |
18,951,178 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Equity to assets ratio |
|
20.02 |
% |
20.77 |
% |
20.82 |
% |
20.70 |
% |
20.19 |
% | |||||
|
Tangible common equity ratio (1) |
|
11.02 |
% |
11.56 |
% |
11.51 |
% |
11.27 |
% |
10.80 |
% | |||||
(1) Tangible common equity divided by tangible assets.
(2) Tangible common equity divided by shares outstanding.