PacWest Bancorp Announces Results for the Third Quarter 2023
*THIRD QUARTER 2023 HIGHLIGHTS*
· Net loss available to common stockholders of $33.3 million, or a loss of $0.28 per diluted share
· Pending merger with Banc of California, Inc. is on track with all regulatory approvals received and is expected to close on or about November 30, 2023
· The Bank put in place a large liquidity base to cautiously navigate the end of the first quarter of 2023 through the third quarter of 2023. The excess borrowings, including $1.4 billion of brokered deposits (at a rate of 5.19%) and the $1.3 billion repurchase agreement facility (at a rate of 8.50%), are expected to roll off in the fourth quarter of 2023. We believe this will accelerate the Bank’s return to more normalized funding levels and improved profitability, with significantly lower interest and FDIC insurance expenses
· We continue to execute on our profitability initiatives by optimizing resources, contracts, facilities, and processes, the benefits of which we anticipate realizing in the quarters ahead. Third quarter noninterest expense had notable movement, with compensation expense down 14% over the prior quarter to $71.6 million, with a higher than usual FDIC insurance expense that we expect will normalize over time, and with $9.9 million of non-recurring merger-related costs
· Adjusted loss available to common stockholders of $37.3 million and adjusted diluted loss per common share of $0.31, which exclude the effect of $9.9 million of merger-related costs related to the pending merger with Banc of California, Inc. and a $14.5 million credit related to a legal settlement gain (see GAAP to non-GAAP reconciliation financial tables at the end of this press release)
· Allowance for loan and lease losses ratio increased from 0.98% to 1.01%
· Third quarter results were marked by enhanced capital and liquidity
· All capital ratios increased from June 30, 2023, with CET1 increasing from 11.16% to 11.23%
· Immediately available liquidity (on-balance sheet liquidity and unused borrowing capacity) of $16.7 billion, with $5.9 billion of available cash on hand at September 30, 2023
· Community Banking deposits grew by 2% in the quarter as a result of strategic efforts to attract and retain customers
· Brokered deposits continue to mature, with balances decreasing by $1.9 billion in the quarter. $1.4 billion more are scheduled to mature in the fourth quarter of 2023
· The repurchase agreement facility interest expense was $35 million in the quarter and the facility will be repaid in December 2023
LOS ANGELES, Oct. 24, 2023 (GLOBE NEWSWIRE) --
*CEO COMMENTARY*
Paul Taylor, President and CEO, commented, “The integration planning for our merger with Banc of California, Inc. continues to progress very well. We expect the closing of the merger to occur on or about November 30, 2023, subject to receipt of stockholder approvals. We all look forward to completing the merger so we can begin to execute on a successful business plan for the combined company that we expect will drive significant value for PacWest’s stockholders, customers, communities, and employees.”
Mr. Taylor concluded, “As we work toward the completion of the merger, our primary strategic focus is adding new deposit customers and continuing to provide outstanding customer service to our existing customers. Our credit quality continues to be stable. Our funding profile improved in the third quarter as we strategically reduced higher-cost brokered deposits and we are pleased to see growth in the Community Bank return. We strategically put in place a high-cost liquidity buffer over the past few quarters to safely navigate the turmoil in the regional banking market. We created this buffer by selling loans and adding customer deposits and wholesale funding. We expect our profitability to improve as we continue to wind down wholesale funding, benefit from lower FDIC insurance expense, and execute on our profitability initiatives.”
*FINANCIAL HIGHLIGHTS*
*At or For the * *At or For the * *Three Months Ended* *Nine Months Ended* *September 30,* *June 30,* *Increase* *September 30,* *Increase*
*Financial Highlights * *2023* *2023* *(Decrease)* *2023* *2022* *(Decrease)* *(Dollars in thousands, except per share amounts)*
Net (loss) earnings available
to common stockholders $ (33,291 ) $ (207,361 ) $ 174,070 $ (1,446,023 ) $ 364,712 $ (1,810,735 )
Diluted (loss) earnings per
common share $ (0.28 ) $ (1.75 ) $ 1.47 $ (12.23 ) $ 3.04 $ (15.27 )
Pre-provision, pre-goodwill
impairment, pre-tax net
revenue ("PPNR") (1) $ (26,566 ) $ (262,443 ) $ 235,877 $ (169,613 ) $ 514,917 $ (684,530 )
Return on average assets (0.24 )% (1.84 )% 1.60 (4.60 )% 1.24 % (5.84 )
PPNR return on average
assets (1) (0.28 )% (2.45 )% 2.17 (0.55 )% 1.71 % (2.26 )
Return on average
tangible common equity (1) (6.33 )% (37.62 )% 31.29 (8.49 )% 22.90 % (31.39 )
Yield on average loans and
leases (tax equivalent) 5.54 % 6.08 % (0.54 ) 5.95 % 4.82 % 1.13
Cost of average total
deposits 2.98 % 2.62 % 0.36 2.50 % 0.32 % 2.18
Net interest margin ("NIM")
(tax equivalent) 1.45 % 1.82 % (0.37 ) 2.07 % 3.52 % (1.45 )
Efficiency ratio 108.5 % 527.0 % (418.5 ) 123.5 % 50.2 % 73.3
Total assets $ 36,877,833 $ 38,337,250 $ (1,459,417 ) $ 36,877,833 $ 41,404,592 $ (4,526,759 )
Loans and leases held
for investment,
net of deferred fees $ 21,920,946 $ 22,258,210 $ (337,264 ) $ 21,920,946 $ 27,660,041 $ (5,739,095 )
Noninterest-bearing
demand deposits $ 5,579,033 $ 6,055,358 $ (476,325 ) $ 5,579,033 $ 12,775,756 $ (7,196,723 )
Interest-bearing deposits $ 21,019,648 $ 21,841,725 $ (822,077 ) $ 21,019,648 $ 21,420,116 $ (400,468 )
Total deposits $ 26,598,681 $ 27,897,083 $ (1,298,402 ) $ 26,598,681 $ 34,195,872 $ (7,597,191 )
As percentage of total
deposits:
Noninterest-bearing
demand deposits 21 % 22 % (1 ) 21 % 37 % (16 )
Interest-bearing deposits 79 % 78 % 1 79 % 63 % 16
Equity to assets ratio 6.51 % 6.61 % (0.10 ) 6.51 % 9.36 % (2.85 )
Common equity tier 1
capital ratio 11.23 % 11.16 % 0.07 11.23 % 8.56 % 2.67
Tier 1 capital ratio 13.84 % 13.70 % 0.14 13.84 % 10.46 % 3.38
Total capital ratio 17.83 % 17.61 % 0.22 17.83 % 13.43 % 4.40
Tangible common equity
ratio (1) 5.09 % 5.24 % (0.15 ) 5.09 % 4.85 % 0.24
Tangible book value per
common share (1) $ 15.64 $ 16.71 $ (1.07 ) $ 15.64 $ 16.11 $ (0.47 )
(1) Non-GAAP measure.
*INCOME STATEMENT HIGHLIGHTS**NET INTEREST INCOME*
Net interest income decreased by $55.3 million to $130.7 million for the third quarter of 2023 compared to $186.1 million for the second quarter of 2023 due mainly to lower interest income on loans and leases and higher interest expense on deposits, offset partially by lower interest expense on borrowings. Interest income on loans and leases decreased by $98.6 million in the third quarter of 2023 due to a $4.8 billion decrease in the average balance of loans and leases and a 54 basis points decrease in the tax equivalent yield on loans and leases compared to the second quarter of 2023. The tax equivalent yield on loans and leases was 5.54% in the third quarter of 2023 compared to 6.08% in the second quarter of 2023. The decrease in the tax equivalent yield on loans and leases was due primarily to lower levels of higher-yielding Civic and construction loans. Interest expense on deposits increased by $27.2 million in the third quarter of 2023 due mainly to increased market rates that contributed to a 36 basis points increase in the cost of total deposits. Interest expense on borrowings decreased by $66.7 million due mainly to a $5.1 billion decrease in the average balance. Interest expense on the repurchase agreement facility is at 8.50% and totaled $35 million in the third quarter. This interest expense will decrease in the fourth quarter, as we intend to pay off this borrowing in mid-December with existing balance sheet liquidity, and be eliminated by the first quarter of 2024.
The tax equivalent NIM was 1.45% for the third quarter of 2023 compared to 1.82% for the second quarter of 2023. The decrease in the NIM was due mainly to the lower yield on loans and leases and a higher cost of total deposits.
The cost of total deposits was 2.98% for the third quarter of 2023 compared to 2.62% for the second quarter of 2023 due mainly to higher market interest rates.
*PROVISION FOR CREDIT LOSSES*
The following table presents details of the provision for credit losses for the periods indicated:
*Three Months Ended* *September 30,* *June 30,* *Increase*
*Provision for Credit Losses* *2023* *2023* *(Decrease)* *(In thousands)*
Addition to allowance for
loan and lease losses $ 8,000 $ 40,000 $ (32,000 )
Reduction in reserve for
unfunded loan commitments (8,000 ) (38,000 ) 30,000
Total loan-related provision - 2,000 (2,000 )
Addition to allowance for
held-to-maturity securities - - -
Total provision for credit losses $ - $ 2,000 $ (2,000 )
There was no provision for credit losses for the third quarter of 2023 compared to $2.0 million for the second quarter of 2023. The provision for the third quarter of 2023 reflected an addition to the allowance for loan and lease losses, primarily due to an increase in qualitative reserves for loans secured by office properties, which was offset by a reduction in the reserve for unfunded commitments due to lower unfunded commitments. The provision for the second quarter of 2023 reflected the impact of an updated economic forecast, higher net charge-offs and higher reserves for downgraded loans largely offset by lower reserves needed for lower loan and unfunded commitment balances.*NONINTEREST INCOME*
The following table presents details of noninterest income for the periods indicated: *Three Months Ended* *September 30,* *June 30,* *Increase*
*Noninterest Income* *2023* *2023* *(Decrease)* *(In thousands)*
Service charges on deposit accounts $ 4,018 $ 4,315 $ (297 )
Other commissions and fees 7,641 11,241 (3,600 )
Leased equipment income 14,554 22,387 (7,833 )
Loss on sale of loans and leases (1,901 ) (158,881 ) 156,980
Dividends and gains on equity investments 3,837 2,658 1,179
Warrant loss (88 ) (124 ) 36
LOCOM HFS adjustment 307 (11,943 ) 12,250
Other income 15,440 2,265 13,175
Total noninterest income (loss) $ 43,808 $ (128,082 ) $ 171,890
Noninterest income increased by $171.9 million to an income of $43.8 million for the third quarter of 2023 compared to a loss of $128.1 million for the second quarter of 2023 due primarily to a $157.0 million decrease in the loss on sale of loans and leases, the $12.3 million increase in the lower of cost or market held for sale (“LOCOM HFS”) adjustment and a $13.2 million increase in other income, partially offset by a $7.8 million decrease in leased equipment income and a $3.6 million decrease in other commissions and fees. The decrease in the loss on sale of loans and leases was due to the $158.9 million of losses recorded in the second quarter of 2023 related to the sale of three significant non-core loan portfolios. The increase in the LOCOM HFS adjustment was due to the negative $11.9 million LOCOM adjustment made in the second quarter of 2023 related to the $478.1 million of loans held for sale at June 30, 2023. The increase in other income is primarily due to a $14.5 million recovery of a prior year legal settlement. The decrease in leased equipment income was due primarily to lower early lease termination gains and rental income compared to the second quarter of 2023. The decrease in other commissions and fees was due primarily to lower loan-related fee income and lower customer success fees.*NONINTEREST EXPENSE*
The following table presents details of noninterest expense for the periods indicated:
*Three Months Ended* *September 30,* *June 30,* *Increase*
*Noninterest Expense* *2023* *2023* *(Decrease)* *(In thousands)*
Compensation $ 71,642 $ 82,881 $ (11,239 )
Occupancy 15,293 15,383 (90 )
Data processing 11,104 10,963 141
Other professional services 5,597 9,973 (4,376 )
Insurance and assessments 38,298 25,635 12,663
Intangible asset amortization 2,389 2,389 -
Leased equipment depreciation 8,333 9,088 (755 )
Foreclosed assets (income) expense, net (609 ) 2 (611 )
Customer related expense 26,971 27,302 (331 )
Loan expense 4,243 5,245 (1,002 )
Other 7,917 119,182 (111,265 )
Acquisition, integration and reorganization costs 9,925 12,394 (2,469 )
Total noninterest expense $ 201,103 $ 320,437 $ (119,334 )
Noninterest expense decreased by $119.3 million to $201.1 million in the third quarter of 2023 compared to $320.4 million in the second quarter of 2023 due primarily to a decrease of $111.3 million in other expense and a decrease of $11.2 million in compensation expense, offset partially by a $12.7 million increase in insurance and assessments expense. The decrease in other expense was due mainly to $106.8 million of unfunded commitments fair value loss adjustments in the second quarter of 2023. The decrease in compensation expense was due mostly to lower salary expense, stock compensation, and commissions expense. The increase in insurance and assessments was due primarily to higher FDIC assessment expense attributable to an increased assessment rate due to lower core earnings and lower core deposits.*INCOME TAXES*
The effective income tax rate was 12.1% for the third quarter of 2023 compared to 25.3% for the second quarter of 2023. The decrease from the second quarter of 2023 was due primarily to higher disallowed FDIC assessment expense in the third quarter of 2023.
*BALANCE SHEET HIGHLIGHTS*
*DEPOSITS AND CLIENT INVESTMENT FUNDS*
The following tables present the composition of our deposit portfolio as of the dates indicated:
*September 30, 2023* *June 30, 2023* *September 30, 2022* *% of * *% of * *% of *
*Deposits By Account Type* *Balance* *Total* *Balance* *Total* *Balance* *Total* *(Dollars in thousands)*
Noninterest-bearing $ 5,579,033 21 % $ 6,055,358 22 % $ 12,775,756 37 %
Interest-bearing:
Transaction (NOW) 7,038,808 27 % 7,112,807 26 % 7,070,021 21 %
Money market 5,424,347 20 % 5,678,323 20 % 10,440,202 30 %
Savings 1,441,700 5 % 897,277 3 % 640,875 2 %
Time deposits (1) 7,114,793 27 % 8,153,318 29 % 3,269,018 10 %
Total interest-bearing 21,019,648 79 % 21,841,725 78 % 21,420,116 63 %
Total deposits $ 26,598,681 100 % $ 27,897,083 100 % $ 34,195,872 100 %
(1) Includes time deposits over $250,000 of $979.1 million, $853.4 million, and $1.0 billion at September 30, 2023, June 30, 2023, and September 30, 2022, respectively. *September 30, 2023* *June 30, 2023* *September 30, 2022* *% of * *% of * *% of *
*Deposits By Customer Type* *Balance* *Total* *Balance* *Total* *Balance* *Total* *(Dollars in thousands)*
Noninterest-bearing $ 5,579,033 21 % $ 6,055,358 22 % $ 12,775,756 37 %
Interest-bearing:
Consumer and commercial:
Reciprocal 7,839,052 30 % 7,935,479 29 % 3,916,768 11 %
Non-reciprocal 7,442,635 27 % 6,257,971 22 % 13,645,111 41 %
Brokered 5,737,961 22 % 7,648,275 27 % 3,858,237 11 %
Total interest-bearing 21,019,648 79 % 21,841,725 78 % 21,420,116 63 %
Total deposits $ 26,598,681 100 % $ 27,897,083 100 % $ 34,195,872 100 %
Total deposits decreased by $1.3 billion or 4.7% in the third quarter of 2023 due primarily to the $1.9 billion strategic reduction of higher-cost brokered deposits, partially offset by growth in customer deposits. At September 30, 2023, noninterest-bearing deposits totaled $5.6 billion or 21% of total deposits and interest-bearing deposits totaled $21.0 billion or 79% of total deposits.The following table presents the composition of our deposit portfolio by division as of the dates indicated:
*September 30, 2023* *June 30, 2023* *% of * *% of * *Increase*
*Deposits By Division* *Balance* *Total* *Balance* *Total* *(Decrease)* *(Dollars in thousands)*
Community Banking $ 14,631,092 55 % $ 14,353,851 51 % $ 277,241
Venture Banking 5,662,435 21 % 5,764,220 21 % (101,785 )
Brokered/Other 6,305,154 24 % 7,779,012 28 % (1,473,858 )
Total deposits $ 26,598,681 100 % $ 27,897,083 100 % $ (1,298,402 )
As of September 30, 2023, FDIC-insured deposits represented approximately 81% of total deposits and FDIC-insured venture-specific deposits accounted for approximately 90% of total venture-specific deposits. The Bank’s spot deposit rate increased from 2.71% at June 30, 2023 to 2.97% at September 30, 2023.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 decreased from $0.8 billion as of June 30, 2023 to $0.7 billion at September 30, 2023, of which $0.3 billion was managed by PWAM.
*BORROWINGS *
The following table presents the composition of our borrowings as of the dates indicated:
*September 30, 2023* *June 30, 2023* *Weighted* *Weighted* *Average * *Average * *Increase*
*Borrowing Type* *Balance* *Rate* *Balance* *Rate* *(Decrease)* *(Dollars in thousands)*
FHLB secured advances $ - - $ - - $ -
Bank Term Funding Program 4,910,000 4.38 % 4,910,000 4.38 % -
Repurchase agreement (1) 1,260,743 8.50 % 1,324,273 8.50 % (63,530 )
Credit-linked notes 123,782 16.00 % 123,065 15.77 % 717
Total borrowings $ 6,294,525 5.43 % $ 6,357,338 5.46 % $ (62,813 )
(1) Balance is net of unamortized issuance costs of $10.9 million and $4.8 million of accrued exit fees. Rate calculation does not include the effects of issuance costs and exit fees.
The $62.8 million decrease in borrowings in the third quarter of 2023 was due mainly to paydowns of the repurchase agreement facility. Available borrowing capacity was approximately $10.8 billion at September 30, 2023.*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* *Nine Months Ended*
*Roll Forward of Loans and Leases Held* *September 30,* *June 30,* *September 30,*
*for Investment, Net of Deferred Fees * *2023* *2023* *2023* *(Dollars in thousands)*
Balance, beginning of period $ 22,258,210 $ 25,672,381 $ 28,609,129
Additions:
Production 81,402 189,201 739,274
Disbursements 1,495,471 1,143,347 4,261,716
Total production and disbursements 1,576,873 1,332,548 5,000,990
Reductions:
Payoffs (1,245,502 ) (942,962 ) (3,210,116 )
Paydowns (663,939 ) (817,033 ) (2,446,509 )
Total payoffs and paydowns (1,909,441 ) (1,759,995 ) (5,656,625 )
Sales (15,617 ) (3,038,672 ) (3,286,087 )
Transfers to foreclosed assets (6,725 ) (6,657 ) (15,950 )
Charge-offs (6,695 ) (31,708 ) (48,800 )
Transfers to loans held for sale - (280,062 ) (3,076,427 )
Total reductions (1,938,478 ) (5,117,094 ) (12,083,889 )
Transfers from loans held for sale 24,341 370,375 394,716
Net (decrease) increase (337,264 ) (3,414,171 ) (6,688,183 )
Balance, end of period $ 21,920,946 $ 22,258,210 $ 21,920,946
Weighted average rate on production (1) 7.48 % 7.64 % 8.13 %
(1) The weighted average rate on production presents contractual rates on a tax equivalent basis and excludes amortized fees. Amortized fees added approximately 15 basis points to loan yields in 2023.
Loans and leases held for investment, net of deferred fees, decreased by $337.3 million, or 1.5% in the third quarter of 2023 to $21.9 billion at September 30, 2023. The overall decrease in the loans and leases balance for the third quarter of 2023 was due primarily to a decrease in commercial loans led by decreases in venture capital loans and asset-based loans.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:
*September 30, 2023* *June 30, 2023* *September 30, 2022* *% of * *% of * *% of *
*Loan and Lease Portfolio * *Balance* *Total* *Balance* *Total* *Balance* *Total* *(Dollars in thousands)*
Real estate mortgage:
Commercial $ 3,526,308 16 % $ 3,610,320 16 % $ 3,770,706 14 %
Multi-family 5,279,659 24 % 5,304,544 24 % 5,510,876 20 %
Other residential 5,228,524 24 % 5,373,178 24 % 5,883,182 21 %
Total real estate mortgage 14,034,491 64 % 14,288,042 64 % 15,164,764 55 %
Real estate construction and land:
Commercial 465,266 2 % 415,997 2 % 843,086 3 %
Residential 2,272,271 10 % 2,049,526 9 % 2,916,415 10 %
Total real estate construction
and land 2,737,537 12 % 2,465,523 11 % 3,759,501 13 %
Total real estate 16,772,028 76 % 16,753,565 75 % 18,924,265 68 %
Commercial:
Asset-based 2,287,893 10 % 2,357,098 11 % 5,154,654 19 %
Venture capital 1,464,160 7 % 1,723,476 8 % 2,001,086 7 %
Other commercial 1,002,377 5 % 1,014,212 4 % 1,115,442 4 %
Total commercial 4,754,430 22 % 5,094,786 23 % 8,271,182 30 %
Consumer 394,488 2 % 409,859 2 % 464,594 2 %
Total loans and leases held for
investment, net of deferred fees $ 21,920,946 100 % $ 22,258,210 100 % $ 27,660,041 100 %
Total unfunded loan commitments $ 5,289,221 $ 5,845,375 $ 11,227,234
*ALLOWANCE FOR CREDIT LOSSES ON LOANS AND LEASES*
The following tables present roll forwards of the allowance for credit losses on loans and leases for the periods indicated:
*Three Months Ended September 30, 2023*
*Allowance for Credit * *Allowance for* *Reserve for * *Total*
*Losses on Loans and * *Loan and * *Unfunded Loan* *Allowance for*
*Leases Rollforward* *Lease Losses* *Commitments* *Credit Losses* *(In thousands)*
Beginning balance $ 219,234 $ 37,571 $ 256,805
Charge-offs (6,695 ) - (6,695 )
Recoveries 1,758 - 1,758
Net charge-offs (4,937 ) - (4,937 )
Provision 8,000 (8,000 ) -
Ending balance $ 222,297 $ 29,571 $ 251,868 *Three Months Ended June 30, 2023*
*Allowance for Credit * *Allowance for* *Reserve for * *Total*
*Losses on Loans and * *Loan and * *Unfunded Loan* *Allowance for*
*Leases Rollforward* *Lease Losses* *Commitments* *Credit Losses* *(In thousands)*
Beginning balance $ 210,055 $ 75,571 $ 285,626
Civic loan sale charge-offs (22,446 ) - (22,446 )
Other charge-offs (9,262 ) - (9,262 )
Total charge-offs (31,708 ) - (31,708 )
Recoveries 887 - 887
Net charge-offs (30,821 ) - (30,821 )
Provision 40,000 (38,000 ) 2,000
Ending balance $ 219,234 $ 37,571 $ 256,805
The following table presents allowance for credit losses information on loans and leases as of and for the dates and periods indicated:
*Allowance for Credit Losses* *September 30,* *June 30,* *Increase*
*on Loans and Leases* *2023* *2023* *(Decrease)* *(Dollars in thousands)*
Allowance for loan and lease losses $ 222,297 $ 219,234 $ 3,063
Reserve for unfunded loan commitments 29,571 37,571 (8,000 )
Allowance for credit losses $ 251,868 $ 256,805 $ (4,937 )
Provision for credit losses (for the quarter) $ - $ 2,000 $ (2,000 )
Net charge-offs (for the quarter) $ 4,937 $ 30,821 $ (25,884 )
Net charge-offs to average loans
and leases (for the quarter) 0.09 % 0.46 %
Allowance for loan and lease losses to loans
and leases held for investment 1.01 % 0.98 %
Allowance for credit losses to loans and leases
held for investment 1.15 % 1.15 %
The allowance for credit losses decreased by $4.9 million in the third quarter of 2023 to $251.9 million at September 30, 2023. This decrease was attributable mainly to lower reserves needed due to the decrease in loans and leases held for investment and unfunded loan commitments.Net charge-offs over the trailing twelve months were $47.5 million, which resulted in net charge-offs to average loans and leases over the trailing twelve months of 0.19%.
*CREDIT QUALITY *
The following table presents loan and lease credit quality metrics as of the dates indicated:
*September 30,* *June 30,* *Increase*
*Credit Quality Metrics * *2023* *2023* *(Decrease)* *(Dollars in thousands)*
*Nonperforming Assets:*
Nonaccrual loans and leases held for investment (1) $ 125,396 $ 104,886 $ 20,510
Accruing loans contractually past due 90 days or more - - -
Foreclosed assets, net 6,829 8,426 (1,597 )
Total nonperforming assets ("NPAs") $ 132,225 $ 113,312 $ 18,913
Nonaccrual loans and leases held for investment
to loans and leases held for investment 0.57 % 0.47 %
Nonperforming assets to loans and leases
held for investment and foreclosed assets 0.60 % 0.51 %
Allowance for credit losses to nonaccrual loans
and leases held for investment 200.9 % 244.8 %
*Loan and Lease Credit Risk Ratings:*
Pass $ 21,349,720 $ 21,679,908 $ (330,188 )
Special mention 360,131 366,368 (6,237 )
Classified 211,095 211,934 (839 )
Total loans and leases held for investment,
net of deferred fees $ 21,920,946 $ 22,258,210 $ (337,264 )
Special mention loans and leases held for investment
to loans and leases held for investment 1.64 % 1.65 %
Classified loans and leases held for investment
to loans and leases held for investment 0.96 % 0.95 %
(1) Nonaccrual loans include SBA guaranteed amounts of $13.7 million at September 30, 2023 and $14.8 millionat June 30, 2023.
Nonaccrual loans and leases increased by $20.5 million in the third quarter of 2023 to $125.4 million at September 30, 2023, due primarily to an increase in nonaccrual Civic loans. The increase is primarily due to a sale of non-performing Civic loans in the second quarter which made the balance at June 30, 2023, lower than normal.
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:
*September 30, 2023* *June 30, 2023* *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 $ 31,465 $ 13 $ 37,191 $ - $ (5,726 ) $ 13
Multi-family - - - - - -
Other residential 88,329 35,349 63,626 45,805 24,703 (10,456 )
Total real estate mortgage 119,794 35,362 100,817 45,805 18,977 (10,443 )
Real estate construction and land:
Commercial - - - - - -
Residential - - - - - -
Total real estate
construction and land - - - - - -
Commercial:
Asset-based 363 - 385 - (22 ) -
Venture capital 2,001 - - 1,845 2,001 (1,845 )
Other commercial 3,031 411 3,479 147 (448 ) 264
Total commercial 5,395 411 3,864 1,992 1,531 (1,581 )
Consumer 207 2,254 205 2,024 2 230
Total held for investment $ 125,396 $ 38,027 $ 104,886 $ 49,821 $ 20,510 $ (11,794 )
Loans and leases accruing and 30-89 days past due generally fluctuate from period to period. The $11.8 million decrease to $38.0 million in the third quarter of 2023 was due mainly to a decrease in Civic delinquent loans.
*CAPITAL*
The following table presents capital ratios as of the dates indicated:
*September 30,* *June 30,* *September 30,* *2023* *2023* *2022*
*PacWest Bancorp Consolidated:*
Common equity tier 1 capital ratio (1) 11.23 % 11.16 % 8.56 %
Tier 1 capital ratio (1) 13.84 % 13.70 % 10.46 %
Total capital ratio (1) 17.83 % 17.61 % 13.43 %
Tier 1 leverage capital ratio (1) 8.65 % 7.76 % 8.63 %
Risk-weighted assets (1) (in thousands) $ 24,127,271 $ 24,771,837 $ 33,042,173
Tangible common equity ratio (2) 5.09 % 5.24 % 4.85 %
(1) Capital information for September 30, 2023 is preliminary.
(2) Non-GAAP measure.
*PACWEST BANCORP*PacWest is a bank holding company headquartered in Los Angeles, California, with an executive office in Denver, Colorado, with one wholly-owned banking subsidiary, Pacific Western Bank (the “Bank”). Pacific Western Bank is a relationship-based community bank focused on providing business banking and treasury management services to small, middle-market, and venture-backed businesses. The Bank offers a broad range of loan and lease and deposit products and services through full-service branches throughout California and in Durham, North Carolina and Denver, Colorado, and loan production offices around the country. For more information about PacWest Bancorp or Pacific Western Bank, visit www.pacwest.com.
*FORWARD-LOOKING STATEMENTS*
This communication contains certain forward-looking information about PacWest (the “Company”) 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 often use words such as “anticipates,” “targets,” “expects,” “estimates,” “intends,” “plans,” “believes,” “continue” and other similar expressions or future or conditional verbs such as “will,” “may,” “might,” “should,” “would” and “could.” These forward-looking statements include, but are not limited to, statements regarding the proposed transaction between PacWest and Banc of California, Inc. (“Banc of California”) including statements as to the expected timing, completion and effects of the proposed transaction. Such statements are based on information available at the time of the communication and are based on current beliefs and expectations of PacWest’s and Banc of California’s management and are subject to significant risks, uncertainties and contingencies, many of which are beyond the control of PacWest and Banc of California, which may cause actual results, performance, or achievements to differ materially from those expressed in them. Continued deterioration in general business, economic, and political conditions, geopolitical tensions, uncertainty in U.S. fiscal monetary policy, including the interest rate policies of the Federal Reserve Board, and volatility and disruptions in credit and capital markets could lead to a tightening of credit and an increase in credit losses, adversely affect PacWest’s revenues and the values of our assets and liabilities, increase stock price volatility, and adversely impact our ability to raise capital. In addition, PacWest and its results could be adversely affected by changes in interest rates, continued high inflation, and unemployment rates, our ability to attract and retain deposits and other sources of funding and liquidity particularly in a rising or high interest rate environment, the impact of bank failures or other adverse developments at other banks on general investor sentiment regarding the stability and liquidity of banks, the safety of deposits, and depositor behavior, the quality and composition of our deposits, deterioration in the credit quality of our loan portfolio or in the value of the collateral securing those loans, especially the risks associated with concentrations in real estate related loans, deterioration in the value of our investment securities as a result of rising interest rates or otherwise, our ability to successfully execute on our strategic plan and digital and innovation initiatives, the effectiveness of our risk management framework and quantitative models, legal and regulatory developments, the ability to complete, or any delays in completing, the proposed transaction between us and Banc of California, any failure to realize the anticipated benefits of the transaction when expected or at all, certain restrictions during the pendency of the proposed transaction that may impact our ability to pursue certain business opportunities or strategic transactions, the possibility that the transaction may be more expensive to complete than anticipated, including as a result of unexpected factors or events, diversion of management’s attention from ongoing business operations and opportunities, and potential adverse reactions or changes to business or employee relationships, including those resulting from the completion of the transaction and integration of the companies. We also caution that the amount and timing of any future common stock dividends will depend on the earnings, cash requirements and financial condition of the Company, market conditions, capital requirements, applicable law and regulations (including federal securities laws and federal banking regulations), and other factors deemed relevant by the Company’s Board of Directors, and may be subject to regulatory approval or conditions. 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 (the “SEC”).
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.
*NO OFFER OR SOLICITATION*
This communication is not a proxy statement or solicitation or a proxy, consent or authorization with respect to any securities or in respect of the proposed transaction and shall not constitute an offer to sell or a solicitation of an offer to buy the securities of PacWest, Banc of California, or the combined company, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offer of securities shall be deemed to be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act, and otherwise in accordance with applicable law.
*ADDITIONAL INFORMATION AND WHERE TO FIND IT*
This communication includes information relating to the proposed transaction between PacWest and Banc of California and the proposed investment in Banc of California by Warburg Pincus LLC and Centerbridge Partners, L.P. Banc of California filed a registration statement on Form S-4 with the SEC on August 28, 2023 (as amended on September 29, 2023, and further amended on October 16, 2023, and October 19, 2023) that the SEC declared effective on October 20, 2023, and in connection with PacWest’s and Banc of California’s solicitation of proxies for the vote by PacWest’s stockholders and Banc of California’s stockholders with respect to the proposed transaction, on October 23, 2023, PacWest and Banc of California commenced mailing of a definitive joint proxy statement/prospectus to holders of PacWest’s common stock and Banc of California’s common stock who, as of the applicable record date, are entitled to vote on the matters being considered at the PacWest stockholder meeting and at the Banc of California stockholder meeting, as applicable. PacWest or Banc of California may also file other documents with the SEC regarding the proposed transaction.
BEFORE MAKING ANY VOTING OR INVESTMENT DECISION, INVESTORS AND SECURITY HOLDERS ARE URGED TO CAREFULLY READ THE ENTIRE REGISTRATION STATEMENT AND THE DEFINITIVE JOINT PROXY STATEMENT/PROSPECTUS (INCLUDING ALL AMENDMENTS AND SUPPLEMENTS THERETO), AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO SUCH DOCUMENTS, CAREFULLY AND IN THEIR ENTIRETY BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION.
Investors and security holders are able to obtain free copies of the registration statement, the definitive joint proxy statement/prospectus and all other relevant documents filed or that will be filed with the SEC by PacWest or Banc of California through the website maintained by the SEC at www.sec.gov.
The documents filed by PacWest or Banc of California with the SEC also may be obtained free of charge at PacWest’s or Banc of California’s website at www.pacwestbancorp.com, under the heading “SEC Filings,” or https://investors.bancofcal.com, under the heading “Financials and Filings,” respectively, or upon written request to PacWest, Attention: Investor Relations, 9701 Wilshire Boulevard, Suite 700, Beverly Hills, CA 90212 or Banc of California, Attention: Investor Relations, 3 MacArthur Place, Santa Ana, CA 92707, respectively.
*PARTICIPANTS IN SOLICITATION*
PacWest and Banc of California and their respective directors and executive officers may be deemed to be participants in the solicitation of proxies from PacWest’s stockholders or Banc of California’s stockholders in connection with the proposed transaction under the rules of the SEC. PacWest’s stockholders, Banc of California’s stockholders, and other interested persons are able to obtain, without charge, more detailed information regarding the names, affiliations and interests of directors and executive officers of PacWest and Banc of California in Banc of California’s registration statement on Form S-4, as well other documents filed by PacWest or Banc of California from time to time with the SEC. Other information regarding persons who may, under the rules of the SEC, be deemed the participants in the proxy solicitation of PacWest’s or Banc of California’s stockholders in connection with the proposed transaction and a description of their direct and indirect interests, by security holdings or otherwise, is included in the definitive joint proxy statement/prospectus filed with the SEC and may be contained in other relevant materials to be filed with the SEC regarding the proposed transaction. You may obtain free copies of these documents at the SEC’s website at www.sec.gov. Copies of documents filed with the SEC by PacWest or Banc of California will also be available free of charge from PacWest or Banc of California using the contact information above.
*PACWEST BANCORP AND SUBSIDIARIES*
*CONDENSED CONSOLIDATED BALANCE SHEET* *September 30,* *June 30,* *September 30,* *2023* *2023* *2022* *(Dollars in thousands, except per share amounts)*
*ASSETS:*
Cash and due from banks $ 182,261 $ 208,300 $ 216,436
Interest-earning deposits in financial institutions 5,887,406 6,489,847 2,244,272
*Total cash and cash equivalents * 6,069,667 6,698,147 2,460,708
Securities available-for-sale, at estimated fair value 4,487,172 4,708,519 5,891,328
Securities held-to-maturity, at amortized cost,
net of allowance for credit losses 2,282,586 2,278,202 2,264,601
Federal Home Loan Bank stock, at cost 17,250 17,250 36,990
*Total investment securities* 6,787,008 7,003,971 8,192,919
*Loans held for sale* 188,866 478,146 15,534
Gross loans and leases held for investment 21,969,789 22,311,292 27,775,962
Deferred fees, net (48,843 ) (53,082 ) (115,921 )
Total loans and leases held for investment,
net of deferred fees 21,920,946 22,258,210 27,660,041
Allowance for loan and lease losses (222,297 ) (219,234 ) (189,327 )
*Total loans and leases held for investment, net* 21,698,649 22,038,976 27,470,714
Equipment leased to others under operating leases 352,330 380,022 338,691
Premises and equipment, net 50,236 57,078 50,781
Foreclosed assets, net 6,829 8,426 2,967
Goodwill - - 1,405,736
Core deposit and customer relationship intangibles, net 24,192 26,581 34,010
Deferred tax asset, net 506,248 426,304 321,650
Other assets 1,193,808 1,219,599 1,110,882
*Total assets* $ 36,877,833 $ 38,337,250 $ 41,404,592
*LIABILITIES:*
Noninterest-bearing deposits $ 5,579,033 $ 6,055,358 $ 12,775,756
Interest-bearing deposits 21,019,648 21,841,725 21,420,116
*Total deposits* 26,598,681 27,897,083 34,195,872
Borrowings 6,294,525 6,357,338 1,864,815
Subordinated debt 870,896 870,378 863,379
Accrued interest payable and other liabilities 714,454 679,256 604,581
*Total liabilities* 34,478,556 35,804,055 37,528,647
*STOCKHOLDERS' EQUITY (1)* 2,399,277 2,533,195 3,875,945
*Total liabilities and stockholders’ equity* $ 36,877,833 $ 38,337,250 $ 41,404,592
Book value per common share $ 15.84 $ 16.93 $ 28.07
Tangible book value per common share (2) $ 15.64 $ 16.71 $ 16.11
Common shares outstanding 119,967,984 120,169,012 120,314,023
(1) Includes net unrealized loss on: Securities available-for-sale, net $ (691,557 ) $ (583,684 ) $ (637,346 )Securities held to maturity $ (187,275 ) $ (193,058 ) $ (210,868 )
(2) Non-GAAP measure.
*PACWEST BANCORP AND SUBSIDIARIES*
*CONDENSED CONSOLIDATED STATEMENT OF EARNINGS (LOSS)* *Three Months Ended* *Nine Months Ended* *September 30,* *June 30,* *September 30,* *September 30,* *2023* *2023* *2022* *2023* *2022* *(In thousands, except per share amounts)*
*Interest income:*
Loans and leases $ 310,392 $ 408,972 $ 346,550 $ 1,150,049 $ 907,595
Investment securities 45,326 44,153 53,135 133,716 159,459
Deposits in financial institutions 90,366 86,763 10,359 219,995 16,412
Total interest income 446,084 539,888 410,044 1,503,760 1,083,466
*Interest expense:*
Deposits 205,982 178,789 61,288 540,663 82,858
Borrowings 94,234 160,914 3,081 324,270 5,683
Subordinated debt 15,139 14,109 10,494 42,750 27,102
Total interest expense 315,355 353,812 74,863 907,683 115,643
*Net interest income* 130,729 186,076 335,181 596,077 967,823
Provision for credit losses - 2,000 3,000 5,000 14,500
Net interest income after provision
for credit losses 130,729 184,076 332,181 591,077 953,323
*Noninterest income:*
Service charges on deposit accounts 4,018 4,315 3,608 11,906 10,813
Other commissions and fees 7,641 11,241 10,034 29,226 32,427
Leased equipment income 14,554 22,387 12,835 50,798 38,264
(Loss) gain on sale of loans and leases (1,901 ) (158,881 ) 58 (157,820 ) 130
Gain (loss) on sale of securities - - 86 - (1,019 )
Dividends and gains (losses) on equity investments 3,837 2,658 3,228 7,593 (4,050 )
Warrant (loss) income (88 ) (124 ) 292 (545 ) 2,536
LOCOM HFS adjustment 307 (11,943 ) - (11,636 ) -
Other income 15,440 2,265 8,478 22,595 14,682
Total noninterest income (loss) 43,808 (128,082 ) 38,619 (47,883 ) 93,783
*Noninterest expense:*
Compensation 71,642 82,881 105,933 242,999 300,715
Occupancy 15,293 15,383 15,574 45,743 46,042
Data processing 11,104 10,963 9,568 33,005 28,455
Other professional services 5,597 9,973 10,674 21,643 23,354
Insurance and assessments 38,298 25,635 7,159 75,650 18,281
Intangible asset amortization 2,389 2,389 3,649 7,189 10,947
Leased equipment depreciation 8,333 9,088 8,908 26,796 27,031
Foreclosed assets (income) expense, net (609 ) 2 (248 ) (244 ) (3,629 )
Acquisition, integration and reorganization costs 9,925 12,394 - 30,833 -
Customer related expense 26,971 27,302 12,673 78,278 37,076
Loan expense 4,243 5,245 6,228 16,012 18,422
Goodwill impairment - - - 1,376,736 -
Other expense 7,917 119,182 15,500 139,903 39,995
Total noninterest expense 201,103 320,437 195,618 2,094,543 546,689
(Loss) earnings before income taxes (26,566 ) (264,443 ) 175,182 (1,551,349 ) 500,417
Income tax (benefit) expense (3,222 ) (67,029 ) 43,566 (135,167 ) 126,313
*Net (loss) earnings * (23,344 ) (197,414 ) 131,616 (1,416,182 ) 374,104
Preferred stock dividends 9,947 9,947 9,392 29,841 9,392
*Net (loss) earnings available to *
*common stockholders* $ (33,291 ) $ (207,361 ) $ 122,224 $ (1,446,023 ) $ 364,712
Basic and diluted (loss) earnings per
common share $ (0.28 ) $ (1.75 ) $ 1.02 $ (12.23 ) $ 3.04
Dividends declared and paid per common share $ 0.01 $ 0.01 $ 0.25 $ 0.27 $ 0.75
*PACWEST BANCORP AND SUBSIDIARIES*
*AVERAGE BALANCE SHEET AND YIELD ANALYSIS* *Three Months Ended* *September 30, 2023* *June 30, 2023* *September 30, 2022* *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)(3) $ 22,226,390 $ 310,392 5.54 % $ 26,992,283 $ 408,972 6.08 % $ 27,038,873 $ 348,639 5.12 %
Investment securities (3) 6,919,948 45,326 2.60 % 7,183,986 44,153 2.47 % 8,803,349 54,423 2.45 %
Deposits in financial
institutions 6,645,335 90,366 5.40 % 6,835,075 86,763 5.09 % 1,809,809 10,359 2.27 %
Total interest-earning
assets (1) 35,791,673 446,084 4.94 % 41,011,344 539,888 5.28 % 37,652,031 413,421 4.36 %
Other assets 2,016,085 2,028,985 3,189,241
Total assets $ 37,807,758 $ 43,040,329 $ 40,841,272
*Liabilities and *
*Stockholders' Equity:*
Interest checking $ 6,983,013 57,237 3.25 % $ 6,601,034 46,798 2.84 % $ 6,650,477 19,475 1.16 %
Money market 5,662,980 42,516 2.98 % 6,590,615 47,008 2.86 % 10,914,027 31,780 1.16 %
Savings 1,163,827 10,255 3.50 % 733,818 3,678 2.01 % 649,574 42 0.03 %
Time 7,801,880 95,974 4.88 % 7,492,094 81,305 4.35 % 3,000,187 9,991 1.32 %
Total interest-bearing
deposits 21,611,700 205,982 3.78 % 21,417,561 178,789 3.35 % 21,214,265 61,288 1.15 %
Borrowings 6,325,537 94,234 5.91 % 11,439,742 160,914 5.64 % 505,482 3,081 2.42 %
Subordinated debt 870,968 15,139 6.90 % 869,419 14,109 6.51 % 863,719 10,494 4.82 %
Total interest-bearing
liabilities 28,808,205 315,355 4.34 % 33,726,722 353,812 4.21 % 22,583,466 74,863 1.32 %
Noninterest-bearing
demand deposits 5,817,488 5,968,625 13,653,177
Other liabilities 701,355 625,610 593,450
Total liabilities 35,327,048 40,320,957 36,830,093
Stockholders' equity 2,480,710 2,719,372 4,011,179
Total liabilities and
stockholders' equity $ 37,807,758 $ 43,040,329 $ 40,841,272
Net interest income (1) $ 130,729 $ 186,076 $ 338,558
Net interest spread (1) 0.60 % 1.07 % 3.04 %
Net interest margin (1) 1.45 % 1.82 % 3.57 %
Total deposits (4) $ 27,429,188 $ 205,982 2.98 % $ 27,386,186 $ 178,789 2.62 % $ 34,867,442 $ 61,288 0.70 %
(1) Tax equivalent.
(2) Includes net loan premium amortization of $1.7 million, $1.6 million, and $3.8 million for the three months ended September 30, 2023,June 30, 2023, and September 30, 2022, respectively.
(3) Includes tax-equivalent adjustments of $0.0 million, $0.0 million, and $2.1 million for the three months ended September 30, 2023,June 30, 2023, and September 30, 2022 related to tax-exempt income on loans. Includes tax-equivalent adjustments of $0.0 million, $0.0 million, and $1.3 million for the three months ended September 30, 2023,June 30, 2023, and September 30, 2022 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 iscalculated as annualized interest expense on total deposits divided by average total deposits.
*PACWEST BANCORP AND SUBSIDIARIES*
*FIVE QUARTER BALANCE SHEET* *September 30,* *June 30,* *March 31,* *December 31,* *September 30,* *2023* *2023* *2023* *2022* *2022* *(Dollars in thousands, except per share amounts)*
*ASSETS:*
Cash and due from banks $ 182,261 $ 208,300 $ 218,830 $ 212,273 $ 216,436
Interest-earning deposits in financial
institutions 5,887,406 6,489,847 6,461,306 2,027,949 2,244,272
*Total cash and cash equivalents * 6,069,667 6,698,147 6,680,136 2,240,222 2,460,708
Securities available-for-sale 4,487,172 4,708,519 4,848,607 4,843,487 5,891,328
Securities held-to-maturity 2,282,586 2,278,202 2,273,650 2,269,135 2,264,601
Federal Home Loan Bank stock 17,250 17,250 147,150 34,290 36,990
* Total investment securities* 6,787,008 7,003,971 7,269,407 7,146,912 8,192,919
*Loans held for sale* 188,866 478,146 2,796,208 65,076 15,534
Gross loans and leases held for investment 21,969,789 22,311,292 25,770,912 28,726,016 27,775,962
Deferred fees, net (48,843 ) (53,082 ) (98,531 ) (116,887 ) (115,921 )
Total loans and leases held for
investment, net of deferred fees 21,920,946 22,258,210 25,672,381 28,609,129 27,660,041
Allowance for loan and lease losses (222,297 ) (219,234 ) (210,055 ) (200,732 ) (189,327 )
*Total loans and leases held for*
*investment, net* 21,698,649 22,038,976 25,462,326 28,408,397 27,470,714
Equipment leased to others under
operating leases 352,330 380,022 399,972 404,245 - 338,691
Premises and equipment, net 50,236 57,078 60,358 54,315 50,781
Foreclosed assets, net 6,829 8,426 2,135 5,022 2,967
Goodwill - - - 1,376,736 1,405,736
Core deposit and customer relationship
intangibles, net 24,192 26,581 28,970 31,381 34,010
Deferred tax asset, net 506,248 426,304 342,557 281,848 321,650
Other assets 1,193,808 1,219,599 1,260,912 1,214,782 1,110,882
*Total assets* $ 36,877,833 $ 38,337,250 $ 44,302,981 $ 41,228,936 $ 41,404,592
*LIABILITIES:*
Noninterest-bearing deposits $ 5,579,033 $ 6,055,358 $ 7,030,759 $ 11,212,357 $ 12,775,756
Interest-bearing deposits 21,019,648 21,841,725 21,156,802 22,723,977 21,420,116
*Total deposits* 26,598,681 27,897,083 28,187,561 33,936,334 34,195,872
Borrowings 6,294,525 6,357,338 11,881,712 1,764,030 1,864,815
Subordinated debt 870,896 870,378 868,815 867,087 863,379
Accrued interest payable and other
liabilities 714,454 679,256 593,416 710,954 604,581
*Total liabilities* 34,478,556 35,804,055 41,531,504 37,278,405 37,528,647
*STOCKHOLDERS' EQUITY (1)* 2,399,277 2,533,195 2,771,477 3,950,531 3,875,945
*Total liabilities and stockholders’ *
*equity* $ 36,877,833 $ 38,337,250 $ 44,302,981 $ 41,228,936 $ 41,404,592
Book value per common share $ 15.84 $ 16.93 $ 18.90 $ 28.71 $ 28.07
Tangible book value per common share (2) $ 15.64 $ 16.71 $ 18.66 $ 17.00 $ 16.11
Common shares outstanding 119,967,984 120,169,012 120,244,214 120,222,057 120,314,023
(1) Includes net unrealized loss on: Securities available-for-sale, net $ (691,557 ) $ (583,684 ) $ (537,307 ) $ (586,450 ) $ (637,346 )Securities held to maturity $ (187,275 ) $ (193,058 ) $ (198,753 ) $ (204,453 ) $ (210,868 )
(2) Non-GAAP measure. *PACWEST BANCORP AND SUBSIDIARIES*
*FIVE QUARTER STATEMENT OF EARNINGS (LOSS)* *Three Months Ended* *September 30,* *June 30,* *March 31,* *December 31,* *September 30,* *2023* *2023* *2023* *2022* *2022* *(In thousands, except per share amounts)*
*Interest income:*
Loans and leases $ 310,392 $ 408,972 $ 430,685 $ 404,985 $ 346,550
Investment securities 45,326 44,153 44,237 50,292 53,135
Deposits in financial institutions 90,366 86,763 42,866 17,746 10,359
Total interest income 446,084 539,888 517,788 473,023 410,044
*Interest expense:*
Deposits 205,982 178,789 155,892 117,591 61,288
Borrowing