Headline: PacWest Bancorp Announces Results for the Fourth Quarter and Full Year 2021
Location: Los Angeles, CA, US
Post Date: Jan 19, 2022 4:30 PM
TAG ID: pznews309686
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Full story:
PacWest Bancorp Announces Results for the Fourth Quarter and Full Year 2021

LOS ANGELES, Jan. 19, 2022 (GLOBE NEWSWIRE) -- PacWest Bancorp (Nasdaq: PACW) -  FOURTH QUARTER 2021 RESULTS $136.0M$1.14$181.7M22.06%Net EarningsDiluted Earningsper SharePPNRROATE     FOURTH QUARTER 2021 HIGHLIGHTS Net Earnings of $136.0 Million or $1.14 Per Diluted ShareCore Deposits Up $4.6 Billion or 16.3% of which $4.1 Billion Related to the Acquisition of the HOA Business in October; Represents 93% of Total DepositsLoan Growth of $2.4 Billion or 11.8%Civic Loan Production of $480 Million in 4Q21, Compared to $481 Million in 3Q21PPNR of $181.7 Million, Up 8.3% Compared to 3Q21Provision for Credit Losses Benefit of $6.0 Million in 4Q21 Compared to Benefit of $20.0 Million in 3Q21Net Interest Income (TE) of $304.5 Million in 4Q21, Compared to $279.8 Million in 3Q21Noninterest Income of $57.4 Million in 4Q21, Compared to $51.3 Million in 3Q21, With Continued Strength in Warrant IncomeNoninterest Expense of $176.1 Million in 4Q21, Up 10.5% From 3Q21, Due Mainly to First Quarter of Operating Expenses Related to Acquired HOA Business plus Acquisition Costs of $5.6 MillionClassified and Special Mention Loans Fell $25.5 Million and $104.8 Million, Respectively, From 3Q21ACL Ratio of 1.19% and ALLL Ratio of 0.87%Net Charge-offs of $169 ThousandCost of Deposits Remained at 8bpsLoan and Lease Production of $3.4 Billion, Up From $2.4 Billion in 3Q21; WAC of 3.89% vs. 4.24% in 3Q21Strong Capital Position – CET1 Ratio of 8.86% and Total Capital Ratio of 12.69% at 4Q21Tangible Book Value Per Share Decreased From $22.57 at 3Q21 to $21.31 at 4Q21 Due Mainly to Cash Used for the HOA Acquisition FULL YEAR 2021 RESULTS $607.0M$5.10$660.3M24.41%Net EarningsDiluted Earningsper SharePPNRROATE     FULL YEAR 2021 HIGHLIGHTS Net Earnings of $607.0 Million or $5.10 Per Diluted ShareCore Deposits Up $10.5 Billion or 47.0% in 2021; Venture Banking Up $4.5 Billion; HOA Acquisition Added $4.1 BillionLoan Growth of $3.9 Billion or 20.2%PPNR of $660.3 Million, Up 2.1% Compared to 2020Provision for Credit Losses Benefit of $162.0 Million in 2021 Compared to Provision of $339.0 Million in 2020Net Interest Income (TE) of $1.1 Billion in 2021, Compared to $1.0 Billion in 2020Classified and Special Mention Loans Fell $149.2 Million and $329.7 Million, Respectively, From 2020Net Recoveries of $1.9 MillionCost of Deposits 9bps for 2021 Down From 27 bps in 2020Loan and Lease Production of $9.1 Billion, Up From $4.2 Billion in 2020; WAC of 4.19% vs. 3.57% in 2020Tangible Book Value Per Share Increased From $21.05 at the End of 2020 to $21.31 at the End of 2021Noninterest Income of $193.9 Million in 2021, Compared to $146.1 Million in 2020, With Record Warrant Income of $49.3 Million in 2021 CEO COMMENTARY Matt Wagner, President and CEO, commented, “We are very pleased to deliver another strong quarter. We deployed approximately $3.8 billion of excess liquidity into higher-yielding securities and loans during the fourth quarter which resulted in a $24.6 million increase in net interest income and helped drive a $13.9 million increase in our pre-tax pre-provision net revenue compared to the third quarter. Loans grew by $2.4 billion in the fourth quarter to an all-time high of $22.9 billion.” “We continued to experience strong deposit growth as core deposits increased by $4.6 billion during the fourth quarter driven by the $4.1 billion of deposits acquired with the HOA business.” “Credit quality continues the improvement seen throughout 2021 with net recoveries of $1.9 million for the year and continued decreases in special mention (down 46% in 2021) and classified loans and leases (down 56% in 2021) which resulted in a provision benefit for the fourth consecutive quarter.” “We had a strong year in 2021 and produced record net earnings of over $600 million, ended the year with record high balances for loans and deposits and crossed the $40 billion total assets milestone. We completed two strategic acquisitions with Civic Financial Services in February and the HOA business in October which expanded our product offerings and position us well for a rising rate environment. ” “Our strategy of prioritizing a strong balance sheet, followed by profitability and growth, in that order, served us well in 2021 and we are well positioned as we begin 2022.” A photo accompanying this announcement is available at https://www.globenewswire.com/NewsRoom/AttachmentNg/be14ae62-9832-453c-9087-7d077d54bfcc FINANCIAL HIGHLIGHTS ` At or For the    At or For the     Three Months Ended   Year Ended    December 31, September 30, Increase December 31, IncreaseFinancial Highlights (1)  2021   2021  (Decrease)  2021   2020  (Decrease)  (Dollars in thousands, except per share data)Net earnings (loss) $136,045  $139,996  $(3,951) $606,959  $(1,237,574) $1,844,533 Diluted earnings (loss) per share $1.14  $1.17  $(0.03) $5.10  $(10.61) $15.71 Pre-provision, pre-goodwill impairment, pre-tax net revenue ("PPNR") (2) $181,677  $167,766  $13,911  $660,334  $646,599  $13,735 Return on average assets  1.34%  1.55%  (0.21)  1.71%  (4.46)%  6.17 PPNR return on average assets (2)  1.79%  1.86%  (0.07)  1.86%  2.33%  (0.47)Return on average tangible equity (2)  22.06%  21.03%  1.03   24.41%  10.36%  14.05              Yield on average loans and leases (tax equivalent)  4.93%  5.01%  (0.08)  5.08%  5.18%  (0.10)Cost of average total deposits  0.08%  0.08%  -   0.09%  0.27%  (0.18)Net interest margin ("NIM") (tax equivalent)  3.24%  3.33%  (0.09)  3.40%  4.05%  (0.65)Efficiency ratio  46.2%  47.2%  (1.0)  46.9%  43.1%  3.8              Total assets $40,443,344  $35,885,676  $4,557,668  $40,443,344  $29,498,442  $10,944,902 Loans and leases held for investment, net of deferred fees $22,941,548  $20,511,020  $2,430,528  $22,941,548  $19,083,377  $3,858,171 Noninterest-bearing demand deposits $14,543,133  $12,881,806  $1,661,327  $14,543,133  $9,193,827  $5,349,306 Core deposits $32,734,949  $28,140,708  $4,594,241  $32,734,949  $22,264,480  $10,470,469 Total deposits $34,997,757  $30,559,745  $4,438,012  $34,997,757  $24,940,717  $10,057,040              As percentage of total deposits:            Noninterest-bearing demand deposits  41%  42%  (1)  41%  37%  4 Core deposits  93%  92%  1   93%  89%  4              Equity to assets ratio  9.89%  10.92%  (1.03)  9.89%  12.19%  (2.30)Common equity tier 1 capital ratio  8.86%  10.15%  (1.29)  8.86%  10.53%  (1.67)Total capital ratio  12.69%  14.36%  (1.67)  12.69%  13.76%  (1.07)Tangible common equity ratio (2)  6.54%  7.79%  (1.25)  6.54%  8.78%  (2.24)Book value per share $33.45  $32.77  $0.68  $33.45  $30.36  $3.09 Tangible book value per share (2) $21.31  $22.57  $(1.26) $21.31  $21.05  $0.26              (1) The operations of the Homeowners Association Services business are included from its October 8, 2021 acquisition date and the operations of Civic are included from its February 1, 2021 acquisition date.(2) Non-GAAP measure.  INCOME STATEMENT HIGHLIGHTS NET INTEREST INCOME Net interest income increased by $24.6 million to $300.4 million for the fourth quarter of 2021 compared to $275.8 million for the third quarter of 2021 due mainly to higher income on investment securities and loans and leases primarily resulting from higher average balances as we deployed our excess liquidity. Income on investment securities increased by $7.7 million in the fourth quarter of 2021 due to a $1.9 billion increase in the average balance of investment securities, offset partially by a 10 basis point decrease in the yield on average investment securities. Income on loans and leases increased by $16.9 million in the fourth quarter of 2021 due to a $1.7 billion increase in the average balance of loans and leases, offset partially by an eight basis point decrease in the yield on average loans and leases. The tax equivalent yield on average loans and leases was 4.93% for the fourth quarter of 2021 compared to 5.01% for the third quarter of 2021. The decrease in the tax equivalent yield on average loans and leases was due primarily to the purchases of lower yielding single-family loans and higher loan premium amortization of $4.1 million. The tax equivalent NIM was 3.24% for the fourth quarter of 2021 compared to 3.33% for the third quarter of 2021. The decrease in the NIM was due primarily to the change in the earning assets mix driven by the increase in the balance of average investment securities as a percentage of average earning assets and the decrease in the balance of average loans and leases as a percentage of average earning assets, as well as lower yields on average loans and leases and average investment securities. The average balance of investment securities increased by $1.9 billion to $10.0 billion, the average balance of deposits in financial institutions increased by $303.3 million to $6.0 billion, and the average balance of loans and leases increased by $1.7 billion to $21.4 billion in the fourth quarter of 2021. The increase in average balances of investment securities and loans and leases was the result of deploying some of our excess liquidity ahead of the closing of the acquisition of the HOA Services Division of MUFG Union Bank that added approximately $4.1 billion of deposits on October 8, 2021. The cost of average total deposits was 0.08% in the fourth quarter of 2021, unchanged from 0.08% in the third quarter of 2021. PROVISION FOR CREDIT LOSSES The following table presents details of the provision for credit losses for the periods indicated:   Three Months Ended    December 31, September 30, IncreaseProvision for Credit Losses  2021   2021  (Decrease)  (In thousands)    (Reduction in) addition to allowance for loan and lease losses $(3,000) $(21,500) $18,500 (Reduction in) addition to reserve for unfunded loan commitments  (3,000)  1,500   (4,500)Total provision for credit losses $(6,000) $(20,000) $14,000               The provision for credit losses benefit was $6.0 million for the fourth quarter of 2021 compared to a benefit of $20.0 million for the third quarter of 2021. The fourth quarter benefit was primarily impacted by changes in the qualitative component and a slightly improved economic forecast offset by an increased provision for loan growth. NONINTEREST INCOME The following table presents details of noninterest income for the periods indicated:   Three Months Ended    December 31, September 30, IncreaseNoninterest Income  2021   2021  (Decrease)  (In thousands)    Service charges on deposit accounts $3,476  $3,407  $69 Other commissions and fees  10,633   11,792   (1,159)Leased equipment income  12,602   10,943   1,659 Gain on sale of loans and leases  172   -   172 Gain on sale of securities  999   515   484 Other income:      Dividends and gains on equity investments  (1,570)  8,387   (9,957)Warrant income  23,990   13,578   10,412 Other  7,080   2,723   4,357 Total noninterest income $57,382  $51,345  $6,037               Noninterest income increased by $6.0 million to $57.4 million for the fourth quarter of 2021 compared to $51.3 million for the third quarter of 2021 due primarily to increases of $10.4 million in warrant income, $4.4 million in other income, and $1.7 million in leased equipment income, offset partially by a $10.0 million decrease in dividends and gains on equity investments. Warrant income increased due to continued strength in the capital markets activity including our single largest warrant gain ever of $13.6 million along with a second warrant gain of $5.2 million. Other income increased due primarily to higher gains from early lease terminations of $4.5 million. Leased equipment income increased due to a higher average balance of leased equipment and the return of one large lease to accrual status in December 2021. Dividends and gains on equity investments decreased due primarily to lower gains on sales of equity investments, higher fair value losses on equity investments still held, and lower income distributions and fair value marks on SBIC investments. NONINTEREST EXPENSE The following table presents details of noninterest expense for the periods indicated:   Three Months Ended    December 31, September 30, IncreaseNoninterest Expense  2021   2021  (Decrease)  (In thousands)    Compensation $99,700  $98,061  $1,639 Occupancy  14,656   14,928   (272)Data processing  8,171   7,391   780 Other professional services  5,946   5,164   782 Insurance and assessments  5,032   3,685   1,347 Intangible asset amortization  3,876   2,890   986 Leased equipment depreciation  9,569   8,603   966 Foreclosed assets (income) expense, net  (260)  165   (425)Acquisition, integration and reorganization costs  5,590   200   5,390 Customer related expense  6,175   4,538   1,637 Loan expense  5,627   4,180   1,447 Other  12,028   9,616   2,412 Total noninterest expense $176,110  $159,421  $16,689               Noninterest expense increased by $16.7 million to $176.1 million for the fourth quarter of 2021 compared to $159.4 million for the third quarter of 2021 due primarily to increases in several expense categories such as compensation expense by $1.6 million, data processing by $0.8 million, insurance and assessments by $1.3 million, intangible asset amortization by $1.0 million, acquisition, integration and reorganization costs by $5.4 million, and customer related expense by $1.6 million. The increases related primarily to the acquisition of the HOA business on October 8, 2021. Total operating expenses for the quarter, excluding the acquisition, integration and reorganization costs of $5.6 million, were $170.5 million including $5.9 million of operating expenses for the acquired HOA business. INCOME TAXES The effective income tax rate was 27.5% in the fourth quarter of 2021 compared to 25.4% in the third quarter of 2021. The increase was due primarily to an increase in state tax rates for fiscal year 2021 caused by a shift in apportionment and a tax benefit from the release of a valuation allowance recorded in the third quarter. The effective income tax rate for the full year 2021 was 26.2%. The effective tax rate for the full year 2022 is currently estimated to be in the range of 25% to 27%. BALANCE SHEET HIGHLIGHTS DEPOSITS AND CLIENT INVESTMENT FUNDS The following table presents the composition of our deposit portfolio as of the dates indicated:   December 31, 2021 September 30, 2021 December 31, 2020   % of   % of   % of Deposit Composition BalanceTotal BalanceTotal BalanceTotal  (Dollars in thousands)Noninterest-bearing demand $14,543,133 41% $12,881,806 42% $9,193,827 37%Interest checking  7,319,898 21%  7,168,472 24%  5,974,910 24%Money market  10,241,265 29%  7,463,261 24%  6,532,917 26%Savings  630,653 2%  627,169 2%  562,826 2%Total core deposits  32,734,949 93%  28,140,708 92%  22,264,480 89%Non-core non-maturity deposits  889,976 3%  960,438 3%  1,149,467 5%Total non-maturity deposits  33,624,925 96%  29,101,146 95%  23,413,947 94%Time deposits $250,000 and under  885,938 3%  882,551 3%  994,197 4%Time deposits over $250,000  486,894 1%  576,048 2%  532,573 2%Total time deposits  1,372,832 4%  1,458,599 5%  1,526,770 6%Total deposits $34,997,757 100% $30,559,745 100% $24,940,717 100%                    At December 31, 2021, core deposits totaled $32.7 billion or 93% of total deposits, including $14.5 billion of noninterest-bearing demand deposits or 41% of total deposits. Core deposits increased by $4.6 billion or 16.3% in the fourth quarter of 2021 driven primarily by the $4.1 billion of core deposits acquired with the HOA business on October 8, 2021. 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 at December 31, 2021 were $1.4 billion, of which $0.9 billion was managed by PWAM. 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 Year EndedRoll Forward of Loans and Leases Held December 31, September 30, December 31,for Investment, Net of Deferred Fees (1)  2021   2021   2021   (Dollars in thousands)Balance, beginning of period $20,511,020  $19,506,257  $19,083,377 Additions:      Production  3,372,815   2,406,024   9,054,767 Disbursements  1,917,195   1,349,333   5,952,158 Total production and disbursements  5,290,010   3,755,357   15,006,925 Reductions:      Payoffs  (2,000,293)  (1,732,621)  (7,337,296)Paydowns  (845,443)  (1,013,867)  (3,728,950)Total payoffs and paydowns  (2,845,736)  (2,746,488)  (11,066,246)Sales  (15,837)  (2,175)  (117,263)Transfers to foreclosed assets  -   (415)  (1,062)Charge-offs  (4,395)  (1,516)  (10,715)Transfers to loans held for sale  -   -   (25,554)Total reductions  (2,865,968)  (2,750,594)  (11,220,840)Loans acquired through acquisitions  6,486   -   72,086 Net increase (decrease)  2,430,528   1,004,763   3,858,171 Balance, end of period $22,941,548  $20,511,020  $22,941,548        Weighted average rate on production (2)  3.89%  4.24%  4.19%       (1) Includes direct financing leases but excludes equipment leased to others under operating leases.(2) The weighted average rate on production presents contractual rates on a tax equivalent basis and excludes amortized fees. Amortized fees added approximately 38 basis points to loan yields in 2021.  Loans and leases held for investment, net of deferred fees, increased by $2.4 billion or 11.8% in the fourth quarter of 2021 to $22.9 billion at December 31, 2021. Excluding PPP loan activity, loans grew by $2.5 billion or 12.6%. The overall increase in the loans and leases balance for the fourth quarter of 2021 was due primarily to increases in the income producing and other residential, venture capital, and asset-based portfolios, offset partially by a reduction in the commercial real estate construction portfolio. Civic loan production was $480 million in the fourth quarter of 2021 compared to $481 million in the third quarter of 2021. The total outstanding balance of the Civic loan portfolio as of December 31, 2021 was $1.4 billion. The PPP loan forgiveness in the fourth quarter of 2021 was $111 million, down from $338 million in the third quarter of 2021. Net fees for PPP loans were $3.6 million in the fourth quarter of 2021, down from the $7.9 million in the third quarter of 2021. Remaining PPP loans totaled $157 million as of December 31, 2021 with $4.2 million of net fees to amortize over the remaining life of the loans. The weighted average rate on the $3.4 billion of new production for the fourth quarter of 2021 decreased to 3.89% from 4.24% in the third quarter of 2021 due primarily to the loan mix (higher levels of single-family loan pool purchases and equity fund loans). In the fourth quarter of 2021, we purchased $1.1 billion in single-family loan pools compared to $1.0 billion in the third quarter of 2021. The total of the single-family loan pool purchase portfolio as of December 31, 2021 was $2.3 billion. 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:   December 31, 2021 September 30, 2021 December 31, 2020   % of   % of   % of Loan and Lease Portfolio  BalanceTotal BalanceTotal BalanceTotal  (In thousands)Real estate mortgage:         Commercial $3,762,299 17% $3,694,597 18% $4,096,671 21%Income producing and other residential  7,416,421 32%  6,153,662 30%  3,803,265 20%Total real estate mortgage  11,178,720 49%  9,848,259 48%  7,899,936 41%Real estate construction and land:         Commercial  832,591 4%  992,003 5%  1,117,121 6%Residential  2,604,536 11%  2,392,568 12%  2,243,160 12%Total real estate construction and land  3,437,127 15%  3,384,571 17%  3,360,281 18%Total real estate  14,615,847 64%  13,232,830 65%  11,260,217 59%Commercial:         Asset-based  4,075,477 18%  3,661,769 18%  3,429,283 18%Venture capital  2,320,593 10%  1,632,861 8%  1,698,508 9%Other commercial  1,471,981 6%  1,577,592 7%  2,375,114 12%Total commercial  7,868,051 34%  6,872,222 33%  7,502,905 39%Consumer  457,650 2%  405,968 2%  320,255 2%Total loans and leases held for investment, net of deferred fees $22,941,548 100% $20,511,020 100% $19,083,377 100%          Total unfunded loan commitments $9,006,350   $8,480,599   $7,601,390                   ALLOWANCE FOR CREDIT LOSSES The following tables present roll forwards of the allowance for credit losses for the periods indicated:   Three Months Ended December 31, 2021  Allowance for Reserve for  TotalAllowance for Credit  Loan and  Unfunded Loan Allowance forLosses Rollforward Lease Losses Commitments Credit Losses  (In thousands)Beginning balance $203,733  $76,071  $279,804 Charge-offs  (4,395)  -   (4,395)Recoveries  4,226   -   4,226 Net charge-offs  (169)  -   (169)Provision  (3,000)  (3,000)  (6,000)Ending balance $200,564  $73,071  $273,635                 Three Months Ended September 30, 2021  Allowance for Reserve for  TotalAllowance for Credit  Loan and  Unfunded Loan Allowance forLosses Rollforward Lease Losses Commitments Credit Losses  (In thousands)Beginning balance $225,600  $74,571  $300,171 Charge-offs  (1,516)  -   (1,516)Recoveries  1,149   -   1,149 Net charge-offs  (367)  -   (367)Provision  (21,500)  1,500   (20,000)Ending balance $203,733  $76,071  $279,804  Allowance for Credit  Year Ended December 31, Losses Rollforward  2021   2020   (In thousands)Beginning balance $433,752  $174,646 Cumulative effect of change in accounting principle - CECL  -   7,327 Balance, January 1  433,752   181,973 Charge-offs  (10,715)  (93,589)Recoveries  12,598   6,368 Net recoveries (charge-offs)  1,883   (87,221)Provision  (162,000)  339,000 Ending balance $273,635  $433,752           The following table presents allowance for credit losses information as of and for the dates and periods indicated:   December 31, September 30, IncreaseAllowance for Credit Losses  2021   2021  (Decrease)  (Dollars in thousands)Allowance for loan and lease losses $200,564  $203,733  $(3,169)Reserve for unfunded loan commitments  73,071   76,071   (3,000)Allowance for credit losses $273,635  $279,804  $(6,169)       Provision for credit losses (for the quarter) $(6,000) $(20,000) $14,000 Net charge-offs (recoveries) (for the quarter) $169  $367  $(198)Net charge-offs (recoveries) to average loans and leases (for the quarter)  0.00%  0.01%  Allowance for loan and lease losses to loans and leases held for investment  0.87%  0.99%  Allowance for loan and lease losses to loans and leases held for investment, excluding PPP loans  0.88%  1.01%  Allowance for credit losses to loans and leases held for investment  1.19%  1.36%  Allowance for credit losses to loans and leases held for investment, excluding PPP loans  1.20%  1.38%              The allowance for credit losses decreased by $6.2 million in the fourth quarter of 2021 to $273.6 million at December 31, 2021. The decrease in the allowance for credit losses during the fourth quarter of 2021 was attributable to a provision for credit losses benefit of $6.0 million and $0.2 million in net charge-offs. The allowance for credit losses ratio, excluding PPP loans, of 1.20% remains robust and moderately higher than the pre-pandemic level of 0.97% as of the January 1, 2020 CECL adoption date. Net charge-offs were $0.2 million for the fourth quarter of 2021 as gross charge-offs of $4.4 million were reduced by recoveries of $4.2 million. Net charge-offs were $0.4 million for the third quarter of 2021 as gross charge-offs of $1.5 million were reduced by recoveries of $1.1 million. On a year-to-date basis for the year ended December 31, 2021, net recoveries were $1.9 million as gross charge-offs of $10.7 million were reduced by recoveries of $12.6 million. CREDIT QUALITY The following table presents loan and lease credit quality metrics as of the dates indicated:   December 31, September 30, IncreaseCredit Quality Metrics   2021   2021  (Decrease)  (Dollars in thousands)NPAs and Performing TDRs:      Nonaccrual loans and leases held for investment (1) $61,174  $64,507  $(3,333)Accruing loans contractually past due 90 days or more  -   -   - Foreclosed assets, net  12,843   13,364   (521)Total nonperforming assets ("NPAs") $74,017  $77,871  $(3,854)       Performing TDRs held for investment $24,430  $36,750  $(12,320)       Nonaccrual loans and leases held for investment to loans and leases held for investment  0.27%  0.31%  Nonperforming assets to loans and leases held for investment and foreclosed assets  0.32%  0.38%  Allowance for credit losses to nonaccrual loans and leases held for investment  447.3%  433.8%         Loan and Lease Credit Risk Ratings:      Pass $22,433,833  $19,873,050  $2,560,783 Special mention  391,611   496,366   (104,755)Classified  116,104   141,604   (25,500)Total loans and leases held for investment, net of deferred fees $22,941,548  $20,511,020  $2,430,528        Classified loans and leases held for investment to loans and leases held for investment  0.51%  0.69%         (1) Nonaccrual loans include SBA guaranteed amounts of $22.1 million at December 31, 2021 and $20.1 million at September 30, 2021.  Since downgrading certain loans at the onset of the pandemic in the first quarter of 2020 given all the uncertainty at the time, special mention loans and leases have decreased by $507.0 million or 56% from their peak in the first quarter of 2020, while classified loans and leases have decreased by $177.1 million or 60% from their peak in the second quarter of 2020, and each have significantly declined in the fourth quarter of 2021. Classified loans and leases are now below pre-pandemic levels while special mention loans and leases are also approaching pre-pandemic levels. Nonaccrual loans and leases decreased by $3.3 million to $61.2 million in the fourth quarter of 2021 due primarily to a decrease in nonaccrual short-term, single-family residential renovation loans as a result of payoffs during the quarter. 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:   December 31, 2021 September 30, 2021 Increase (Decrease)    Accruing   Accruing   Accruing    and 30-89   and 30-89   and 30-89    Days Past   Days Past   Days Past  Nonaccrual  Due Nonaccrual Due Nonaccrual Due  (Dollars in thousands)Real estate mortgage:            Commercial $27,540  $2,165  $25,615  $676  $1,925  $1,489 Income producing and other residential  12,292   39,929   7,547   3,760   4,745   36,169 Total real estate mortgage  39,832   42,094   33,162   4,436   6,670   37,658 Real estate construction and land:            Commercial  -   -   -   -   -   - Residential  4,715   5,031   19,918   12,809   (15,203)  (7,778)Total real estate construction and land  4,715   5,031   19,918   12,809   (15,203)  (7,778)Commercial:            Asset-based  1,464   -   1,605   -   (141)  - Venture capital  2,799   -   2,348   1,670   451   (1,670)Other commercial  11,950   630   6,979   340   4,971   290 Total commercial  16,213   630   10,932   2,010   5,281   (1,380)Consumer  414   1,004   495   1,042   (81)  (38)Total held for investment $61,174  $48,759  $64,507  $20,297  $(3,333) $28,462                           The increase in accruing and 30-89 days past due loans is primarily due to $19.3 million in past due purchased single-family loans. As of January 14, 2022, $5.9 million of these loans remained over 30 days past due. The delinquency related to these loans was attributable to delayed payment application stemming from servicing being transferred following our purchase of the loans. The increase in this category was also due to an increase of $9.1 million in single-family residential loans originated by Civic. CAPITAL The following table presents certain actual capital ratios and ratios excluding PPP loans:   December 31, 2021      Excluding September 30,    PPP  2021   Actual (1)  Loans (1) Actual PacWest Bancorp Consolidated:      Tier 1 leverage capital ratio  6.84%  6.88%(3) 8.05%Common equity tier 1 capital ratio  8.86%  8.86%  10.15%Tier 1 capital ratio  9.32%  9.32%  10.65%Total capital ratio  12.69%  12.69%  14.36%Risk-weighted assets $28,508,808  $28,508,808  $26,057,583 Tangible common equity ratio (2)  6.54%  6.56%(3) 7.79%       (1) Capital information for December 31, 2021 is preliminary.(2) Non-GAAP measure.(3) PPP loans have been excluded from total assets in the denominator as they are zero risk-weighted.  The decreases in the capital ratios during the fourth quarter of 2021 were due primarily to the increase in goodwill related to the HOA acquisition combined with an increase in risk-weighted assets as we deployed $3.8 billion of excess liquidity into securities and loans and leases during the quarter. ABOUT PACWEST BANCORP PacWest Bancorp (“PacWest”) is a bank holding company with over $40 billion in assets headquartered in Los Angeles, California, with an executive office in Denver, Colorado, with one wholly-owned banking subsidiary, Pacific Western Bank (the “Bank”). The Bank has 69 full-service branches located in California, one branch located in Durham, North Carolina, and one branch located in Denver, Colorado. The Bank provides community banking products including lending and comprehensive deposit and treasury management services to small and medium-sized businesses conducted primarily through our California-based branch offices and Denver, Colorado branch office. The Bank offers national lending products including asset-based, equipment, and real estate loans and treasury management services to established middle-market businesses on a national basis. The Bank provides venture banking products including a comprehensive suite of financial services focused on entrepreneurial and venture-backed businesses and their venture capital and private equity investors, with offices located in key innovative hubs across the United States. The Bank also offers financing of non-owner-occupied investor properties through Civic Financial Services a wholly-owned subsidiary. The Bank also offers a specialized suite of services for the HOA industry. 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 that is intended to be covered by the safe harbor for “forward-looking statements” provided by the Private Securities Litigation Reform Act of 1995. Statements that are not historical or current facts, including statements about future financial and operational results, expectations, or intentions are forward-looking statements. Such statements are based on information available at the time of the communication and are based on current beliefs and expectations of the Company’s management and are subject to significant risks, uncertainties and contingencies, many of which are beyond our control. The ongoing COVID-19 pandemic has adversely affected PacWest, its employees, customers and third-party service providers, and the ultimate extent of the impacts on its business, financial position, results of operations, liquidity and prospects is uncertain. The risks from the COVID-19 pandemic have decreased as the pandemic subsides, however, new variants may continue to impact key macro-economic indicators such as unemployment and GDP and may have a material impact on our allowance for credit losses and related provision for credit losses. Continued deterioration in general business and economic conditions could adversely affect PacWest’s revenues and the values of its assets, including goodwill, and liabilities, lead to a tightening of credit, and increase stock price volatility. In addition, PacWest’s results could be adversely affected by changes in interest rates, sustained high unemployment rates, deterioration in the credit quality of its loan portfolio or in the value of the collateral securing those loans, deterioration in the value of its investment securities, the magnitude of individual loan losses on security monitoring loans, and legal and regulatory developments. Actual results may differ materially from those set forth or implied in the forward-looking statements due to a variety of factors, including the risk factors described in documents filed by PacWest with the U.S. Securities and Exchange Commission. We are under no obligation (and expressly disclaim any such obligation) to update or alter our forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.  PACWEST BANCORP AND SUBSIDIARIESCONDENSED CONSOLIDATED BALANCE SHEET         December 31, September 30, December 31,   2021   2021   2020   (Dollars in thousands, except per share data)ASSETS:      Cash and due from banks $112,548  $174,585  $150,464 Interest-earning deposits in financial institutions  3,944,686   3,524,613   3,010,197 Total cash and cash equivalents   4,057,234   3,699,198   3,160,661        Securities available-for-sale, at estimated fair value  10,694,458   9,276,926   5,235,591 Federal Home Loan Bank stock, at cost  17,250   17,250   17,250 Total investment securities  10,711,708   9,294,176   5,252,841        Loans held for sale  -   -   -        Gross loans and leases held for investment  23,026,308   20,588,255   19,153,357 Deferred fees, net  (84,760)  (77,235)  (69,980)Total loans and leases held for investment, net of deferred fees  22,941,548   20,511,020   19,083,377 Allowance for loan and lease losses  (200,564)  (203,733)  (348,181)Total loans and leases held for investment, net  22,740,984   20,307,287   18,735,196        Equipment leased to others under operating leases  339,150   334,275   333,846 Premises and equipment, net  46,740   47,246   39,234 Foreclosed assets, net  12,843   13,364   14,027 Goodwill  1,405,736   1,204,118   1,078,670 Core deposit and customer relationship intangibles, net  44,957   15,533   23,641 Other assets  1,083,992   970,479   860,326 Total assets $40,443,344  $35,885,676  $29,498,442        LIABILITIES:      Noninterest-bearing deposits $14,543,133  $12,881,806  $9,193,827 Interest-bearing deposits  20,454,624   17,677,939   15,746,890 Total deposits  34,997,757   30,559,745   24,940,717 Borrowings  -   -   5,000 Subordinated debt  863,283   862,447   465,812 Accrued interest payable and other liabilities  582,674   545,050   491,962 Total liabilities  36,443,714   31,967,242   25,903,491 STOCKHOLDERS' EQUITY (1)  3,999,630   3,918,434   3,594,951 Total liabilities and stockholders’ equity $40,443,344  $35,885,676  $29,498,442        Book value per share $33.45  $32.77  $30.36 Tangible book value per share (2) $21.31  $22.57  $21.05 Shares outstanding  119,584,854   119,579,566   118,414,853        (1) Includes net unrealized gain on securities available-for-sale, net $65,968  $98,859  $172,523 (2) Non-GAAP measure.         PACWEST BANCORP AND SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENT OF EARNINGS (LOSS)             Three Months Ended Year Ended  December 31, September 30, December 31, December 31,   2021   2021   2020   2021   2020   (Dollars in thousands, except per share data)Interest income:          Loans and leases $263,662  $246,722  $242,198  $996,457  $993,138 Investment securities  48,469   40,780   28,843   153,468   106,770 Deposits in financial institutions  2,674   2,580   1,135   8,804   3,583 Total interest income  314,805   290,082   272,176   1,158,729   1,103,491            Interest expense:          Deposits  6,622   6,417   8,454   27,808   59,663 Borrowings  64   101   37   623   8,161 Subordinated debt  7,714   7,722   4,477   26,474   21,109 Total interest expense  14,400   14,240   12,968   54,905   88,933            Net interest income  300,405   275,842   259,208   1,103,824   1,014,558 Provision for credit losses  (6,000)  (20,000)  10,000   (162,000)  339,000 Net interest income after provision for credit losses  306,405   295,842   249,208   1,265,824   675,558            Noninterest income:          Service charges on deposit accounts  3,476   3,407   3,119   13,269   10,351 Other commissions and fees  10,633   11,792   9,974   42,287   40,347 Leased equipment income  12,602   10,943   9,440   45,746   43,628 Gain on sale of loans and leases  172   -   1,671   1,733   2,139 Gain on sale of securities  999   515   4   1,615   13,171 Other income  29,500   24,688   15,642   89,277   36,424 Total noninterest income  57,382   51,345   39,850   193,927   146,060            Noninterest expense:          Compensation  99,700   98,061   73,171   368,450   271,494 Occupancy  14,656   14,928   14,083   58,422   57,555 Data processing  8,171   7,391   6,718   30,277   26,779 Other professional services  5,946   5,164   6,800   21,492   19,917 Insurance and assessments  5,032   3,685   5,064   17,365   22,625 Intangible asset amortization  3,876   2,890   3,172   12,734   14,753 Leased equipment depreciation  9,569   8,603   7,501   35,755   28,865 Foreclosed assets (income) expense, net  (260)  165   (272)  (213)  (17)Acquisition, integration and reorganization costs  5,590   200   1,060   9,415   1,060 Customer related expense  6,175   4,538   4,430   20,504   17,532 Loan expense  5,627   4,180   3,926   17,031   13,454 Goodwill impairment  -   -   -   -   1,470,000 Other expense  12,028   9,616   10,029   46,185   40,002 Total noninterest expense  176,110   159,421   135,682   637,417   1,984,019            Earnings (loss) before income taxes  187,677   187,766   153,376   822,334   (1,162,401)Income tax expense  51,632   47,770   36,546   215,375   75,173 Net earnings (loss) $136,045  $139,996  $116,830  $606,959  $(1,237,574)           Basic and diluted earnings (loss) per share $1.14  $1.17  $0.99  $5.10  $(10.61)Dividends declared and paid per share $0.25  $0.25  $0.25  $1.00  $1.35    PACWEST BANCORP AND SUBSIDIARIES          NET EARNINGS (LOSS) PER SHARE CALCULATIONS                     Three Months Ended  December 31, September 30, December 31, December 31,   2021   2021   2020   2021   2020   (In thousands, except per share data)Basic Earnings (Loss) Per Share:          Net earnings (loss) $136,045  $139,996  $116,830  $606,959  $(1,237,574)Less: earnings allocated to unvested restricted stock (1)  (2,311)  (2,417)  (1,398)  (10,248)  (1,782)Net earnings (loss) allocated to common shares $133,734  $137,579  $115,432  $596,711  $(1,239,356)           Weighted average basic shares and unvested restricted stock outstanding  119,577   119,569   118,446   119,349   118,463 Less: weighted average unvested restricted stock outstanding  (2,314)  (2,340)  (1,652)  (2,255)  (1,610)Weighted average basic shares outstanding  117,263   117,229   116,794   117,094   116,853            Basic earnings (loss) per share $1.14  $1.17  $0.99  $5.10  $(10.61)           Diluted Earnings (Loss) Per Share:          Net earnings (loss) allocated to common shares $133,734  $137,579  $115,432  $596,711  $(1,239,356)           Weighted average diluted shares outstanding  117,263   117,229   116,794   117,094   116,853            Diluted earnings (loss) per share $1.14  $1.17  $0.99  $5.10  $(10.61)           (1) Represents cash dividends paid to holders of unvested stock, net of forfeitures, plus undistributed earnings amounts available to holders of unvested restricted stock, if any.   PACWEST BANCORP AND SUBSIDIARIES         AVERAGE BALANCE SHEET AND YIELD ANALYSIS                     Three Months Ended December 31, 2021 September 30, 2021 December 31, 2020  InterestAverage  InterestAverage  InterestAverage Average Income/Yield/ Average Income/Yield/ Average Income/Yield/ BalanceExpenseCost BalanceExpenseCost BalanceExpenseCost (Dollars in thousands)Assets:           Loans and leases (1)(2)$21,367,665$265,5494.93% $19,670,671$248,4855.01% $18,769,214$243,1885.15%Investment securities (3) 9,964,568 50,7102.02%  8,047,098 42,9522.12%  4,888,993 30,7572.50%Deposits in financial institutions 5,961,104 2,6740.18%  5,657,768 2,5800.18%  3,576,335 1,1350.13%Total interest-earning assets (1) 37,293,337 318,9333.39%  33,375,537 294,0173.50%  27,234,542 275,0804.02%Other assets 3,064,810    2,496,127    2,100,247  Total assets$40,358,147   $35,871,664   $29,334,789              Liabilities and Stockholders' Equity:          Interest checking$7,767,211 2,0410.10% $7,372,859 2,0420.11% $5,191,435 2,0640.16%Money market 10,226,366 3,4000.13%  8,662,449 2,9970.14%  7,636,220 3,2250.17%Savings 634,874 390.02%  620,079 380.02%  567,646 350.02%Time 1,421,859 1,1420.32%  1,475,307 1,3400.36%  1,650,150 3,1300.75%Total interest-bearing deposits 20,050,310 6,6220.13%  18,130,694 6,4170.14%  15,045,451 8,4540.22%Borrowings 234,391 640.11%  238,335 1010.17%  237,098 370.06%Subordinated debt 862,777 7,7143.55%  862,272 7,7223.55%  463,951 4,4773.84%Total interest-bearing liabilities 21,147,478 14,4000.27%  19,231,301 14,2400.29%  15,746,500 12,9680.33%Noninterest-bearing demand deposits 14,713,385    12,198,313    9,589,789  Other liabilities 543,017    525,429    462,075  Total liabilities 36,403,880    31,955,043    25,798,364  Stockholders' equity 3,954,267    3,916,621    3,536,425  Total liabilities and stockholders' equity$40,358,147   $35,871,664   $29,334,789  Net interest income (1) $304,533   $279,777   $262,112 Net interest spread (1)  3.12%   3.21%   3.69%Net interest margin (1)  3.24%   3.33%   3.83%            Total deposits (4)$34,763,695$6,6220.08% $30,329,007$6,4170.08% $24,635,240$8,4540.14%            (1) Tax equivalent.(2) Includes net loan premium amortization of $6.4 million and $2.4 million and net loan discount accretion of $1.2 for the three months ended December 31, 2021, September 30, 2021, and December 31, 2020, respectively.(3) Includes tax-equivalent adjustments of $2.2 million, $2.2 million, and $1.9 million for the three months ended December 31, 2021, September 30, 2021, and December 31, 2020 related to tax-exempt income on investment securities The federal statutory tax rate utilized was 21%.(4) Total deposits is the sum of total interest-bearing deposits and noninterest-bearing demand deposits. The cost of total deposits is calculated as annualized interest expense on total deposits divided by average total deposits. PACWEST BANCORP AND SUBSIDIARIESFIVE QUARTER BALANCE SHEET             December 31, September 30, June 30, March 31, December 31,   2021   2021   2021   2021   2020   (Dollars in thousands, except per share data)ASSETS:          Cash and due from banks $112,548  $174,585  $179,505  $177,199  $150,464 Interest-earning deposits in financial institutions  3,944,686   3,524,613   5,678,587   5,517,667   3,010,197 Total cash and cash equivalents   4,057,234   3,699,198   5,858,092   5,694,866   3,160,661            Securities available-for-sale  10,694,458   9,276,926   7,198,608   5,941,690   5,235,591 Federal Home Loan Bank stock  17,250   17,250   17,250   17,250   17,250  Total investment securities  10,711,708   9,294,176   7,215,858   5,958,940   5,252,841            Loans held for sale  -   -   -   25,554   -            Gross loans and leases held for investment  23,026,308   20,588,255   19,580,731   19,055,165   19,153,357 Deferred fees, net  (84,760)  (77,235)  (74,474)  (75,937)  (69,980)Total loans and leases held for investment, net of deferred fees  22,941,548   20,511,020   19,506,257   18,979,228   19,083,377 Allowance for loan and lease losses  (200,564)  (203,733)  (225,600)  (292,445)  (348,181)Total loans and leases held for investment, net  22,740,984   20,307,287   19,280,657   18,686,783   18,735,196            Equipment leased to others under operating leases  339,150   334,275   313,574   327,413   333,846 Premises and equipment, net  46,740   47,246   39,541   39,622   39,234 Foreclosed assets, net  12,843   13,364   13,227   14,298   14,027 Goodwill  1,405,736   1,204,118   1,204,118   1,204,092   1,078,670 Core deposit and customer relationship intangibles, net  44,957   15,533   18,423   21,312   23,641 Other assets  1,083,992   970,479   924,497   883,653   860,326 Total assets $40,443,344  $35,885,676  $34,867,987  $32,856,533  $29,498,442            LIABILITIES:          Noninterest-bearing deposits $14,543,133  $12,881,806  $11,252,286  $11,017,462  $9,193,827 Interest-bearing deposits  20,454,624   17,677,939   18,394,748   17,205,829   15,746,890 Total deposits  34,997,757   30,559,745   29,647,034   28,223,291   24,940,717 Borrowings  -   -   6,625   19,750   5,000 Subordinated debt  863,283   862,447   861,788   465,814   465,812 Accrued interest payable and other liabilities  582,674   545,050   505,859   493,541   491,962 Total liabilities  36,443,714   31,967,242   31,021,306   29,202,396   25,903,491 STOCKHOLDERS' EQUITY (1)  3,999,630   3,918,434   3,846,681   3,654,137   3,594,951 Total liabilities and stockholders’ equity $40,443,344  $35,885,676  $34,867,987  $32,856,533  $29,498,442            Book value per share $33.45  $32.77  $32.17  $30.68  $30.36 Tangible book value per share (2) $21.31  $22.57  $21.95  $20.39  $21.05 Shares outstanding  119,584,854   119,579,566   119,555,102   119,105,642   118,414,853            (1) Includes net unrealized gain on securities available-for-sale, net $65,968  $98,859  $145,516  $106,381  $172,523 (2) Non-GAAP measure.           PACWEST BANCORP AND SUBSIDIARIESFIVE QUARTER STATEMENT OF EARNINGS             Three Months Ended  December 31, September 30, June 30, March 31, December 31,   2021   2021   2021   2021   2020   (Dollars in thousands, except per share data)Interest income:          Loans and leases $263,662  $246,722  $244,529  $241,544  $242,198 Investment securities  48,469   40,780   33,954   30,265   28,843 Deposits in financial institutions  2,674   2,580   2,022   1,528   1,135 Total interest income  314,805   290,082   280,505   273,337   272,176            Interest expense:          Deposits  6,622   6,417   7,269   7,500   8,454 Borrowings  64   101   265   193   37 Subordinated debt  7,714   7,722   6,663   4,375   4,477 Total interest expense  14,400   14,240   14,197   12,068   12,968            Net interest income  300,405   275,842   266,308   261,269   259,208 Provision for credit losses  (6,000)  (20,000)  (88,000)  (48,000)  10,000 Net interest income after provision for credit losses  306,405   295,842   354,308   309,269   249,208            Noninterest income:          Service charges on deposit accounts  3,476   3,407   3,452   2,934   3,119 Other commissions and fees  10,633   11,792   10,704   9,158   9,974 Leased equipment income  12,602   10,943   10,847   11,354   9,440 Gain on sale of loans and leases  172   -   1,422   139   1,671 Gain on sale of securities  999   515   -   101   4 Other income  29,500   24,688   13,946   21,143   15,642 Total noninterest income  57,382   51,345   40,371   44,829   39,850            Noninterest expense:          Compensation  99,700   98,061   90,807   79,882   73,171 Occupancy  14,656   14,928   14,784   14,054   14,083 Data processing  8,171   7,391   7,758   6,957   6,718 Other professional services  5,946   5,164   5,256   5,126   6,800 Insurance and assessments  5,032   3,685   3,745   4,903   5,064 Intangible asset amortization  3,876   2,890   2,889   3,079   3,172 Leased equipment depreciation  9,569   8,603   8,614   8,969   7,501 Foreclosed assets (income) expense, net  (260)  165   (119)  1   (272)Acquisition, integration and reorganization costs  5,590   200   200   3,425   1,060 Customer related expense  6,175   4,538   4,973   4,818   4,430 Loan expense  5,627   4,180   4,031   3,193   3,926 Other expense  12,028   9,616   8,812   15,729   10,029 Total noninterest expense  176,110   159,421   151,750   150,136   135,682            Earnings before income taxes  187,677   187,766   242,929   203,962   153,376 Income tax expense  51,632   47,770   62,417   53,556   36,546 Net earnings  $136,045  $139,996  $180,512  $150,406  $116,830            Basic and diluted earnings per share $1.14  $1.17  $1.52  $1.27  $0.99 Dividends declared and paid per share $0.25  $0.25  $0.25  $0.25  $0.25  PACWEST BANCORP AND SUBSIDIARIESFIVE QUARTER SELECTED FINANCIAL DATA             At or For the Three Months Ended  December 31, September 30, June 30, March 31, December 31,   2021   2021   2021   2021   2020   (Dollars in thousands)Performance Ratios:          Return on average assets (1)  1.34%  1.55%  2.11%  1.94%  1.58%Pre-provision, pre-goodwill impairment, pre-tax net revenue ("PPNR") return on average assets (1)(2)  1.79%  1.86%  1.81%  2.01%  2.22%Return on average equity (1)  13.65%  14.18%  19.36%  16.86%  13.14%Return on average tangible equity (1)(2)  22.06%  21.03%  29.25%  25.67%  19.63%Efficiency ratio  46.2%  47.2%  47.9%  46.4%  43.6%Noninterest expense as a percentage of average assets (1)  1.73%  1.76%  1.77%  1.94%  1.84%           Average Yields/Costs (1):          Yield on:          Average loans and leases (3)  4.93%  5.01%  5.18%  5.20%  5.15%Average investment securities (3)  2.02%  2.12%  2.23%  2.44%  2.50%Average interest-earning assets (3)  3.39%  3.50%  3.57%  3.86%  4.02%Cost of:          Average interest-bearing deposits  0.13%  0.14%  0.16%  0.18%  0.22%Average total deposits  0.08%  0.08%  0.10%  0.11%  0.14%Average interest-bearing liabilities  0.27%  0.29%  0.30%  0.29%  0.33%Net interest spread (3)  3.12%  3.21%  3.27%  3.57%  3.69%Net interest margin (3)  3.24%  3.33%  3.40%  3.69%  3.83%           Average Balances:          Assets:          Loans and leases, net of deferred fees $21,367,665  $19,670,671  $19,057,420  $18,927,314  $18,769,214 Investment securities  9,964,568   8,047,098   6,492,721   5,383,140   4,888,993 Deposits in financial institutions  5,961,104   5,657,768   6,347,764   4,790,231   3,576,335 Interest-earning assets  37,293,337   33,375,537   31,897,905   29,100,685   27,234,542 Total assets  40,358,147   35,871,664   34,326,112   31,415,882   29,334,789 Liabilities:          Noninterest-bearing deposits  14,713,385   12,198,313   11,304,757   10,173,459   9,589,789 Interest-bearing deposits  20,050,310   18,130,694   17,817,053   16,044,091   15,045,451 Total deposits  34,763,695   30,329,007   29,121,810   26,217,550   24,635,240 Borrowings  234,391   238,335   225,446   226,053   237,098 Subordinated debt  862,777   862,272   735,725   466,101   463,951 Interest-bearing liabilities  21,147,478   19,231,301   18,778,224   17,136,245   15,746,500 Stockholders' equity  3,954,267   3,916,621   3,739,042   3,617,248   3,536,425            (1) Annualized.(2) Non-GAAP measure.(3) Tax equivalent. PACWEST BANCORP AND SUBSIDIARIESFIVE QUARTER SELECTED FINANCIAL DATA             At or For the Three Months Ended  December 31, September 30, June 30, March 31, December 31,   2021   2021   2021   2021   2020   (Dollars in thousands)Credit Quality Ratios:          Nonaccrual loans and leases held for investment to loans and leases held for investment  0.27%  0.31%  0.29%  0.36%  0.48%Nonperforming assets to loans and leases held for investment and foreclosed assets  0.32%  0.38%  0.36%  0.43%  0.55%Classified loans and leases held for investment to loans and leases held for investment  0.51%  0.69%  0.75%  0.86%  1.39%Provision for credit losses (for the quarter) to average loans and leases held for investment (annualized)  (0.11)%  (0.40)%  (1.85)%  (1.03)%  0.21%Net charge-offs (for the quarter) to average loans and leases held for investment (annualized)  0.00%  0.01%  (0.11)%  0.06%  0.40%Trailing 12 months net charge-offs to average loans and leases held for investment  (0.01)%  0.09%  0.27%  0.37%  0.45%Allowance for loan and lease losses to loans and leases held for investment  0.87%  0.99%  1.16%  1.54%  1.82%Allowance for credit losses to loans and leases held for investment  1.19%  1.36%  1.54%  2.02%  2.27%Allowance for credit losses to nonaccrual loans and leases held for investment  447.3%  433.8%  528.4%  566.2%  475.8%           PacWest Bancorp Consolidated:          Tier 1 leverage capital ratio (1)  6.84%  8.05%  7.67%  7.95%  8.55%Common equity tier 1 capital ratio (1)  8.86%  10.15%  10.41%  10.39%  10.53%Tier 1 capital ratio (1)  9.32%  10.65%  10.41%  10.39%  10.53%Total capital ratio (1)  12.69%  14.36%  14.99%  13.60%  13.76%Risk-weighted assets (1) $28,508,808  $26,057,583  $24,274,256  $23,012,350  $22,837,693            Equity to assets ratio  9.89%  10.92%  11.03%  11.12%  12.19%Tangible common equity ratio (2)  6.54%  7.79%  7.80%  7.68%  8.78%Book value per share $33.45  $32.77  $32.17  $30.68  $30.36 Tangible book value per share (2) $21.31  $22.57  $21.95  $20.39  $21.05            Pacific Western Bank:          Tier 1 leverage capital ratio (1)  7.00%  8.40%  8.47%  8.83%  9.53%Common equity tier 1 capital ratio (1)  9.56%  11.12%  11.51%  11.54%  11.73%Tier 1 capital ratio (1)  9.56%  11.12%  11.51%  11.54%  11.73%Total capital ratio (1)  11.80%  13.59%  14.22%  12.80%  12.99%           (1) Capital information for December 31, 2021 is preliminary.(2) Non-GAAP measure.  GAAP TO NON-GAAP RECONCILIATIONS This press release contains certain non-GAAP financial disclosures for: (1) Pre-provision, pre-goodwill impairment, pre-tax net revenue (“PPNR”), (2) PPNR return on average assets (3) return on average tangible equity, (4) tangible common equity ratio, and (5) tangible book value per share. The Company uses these non-GAAP financial measures to provide meaningful supplemental information regarding the Company’s operational performance and to enhance investors’ overall understanding of such financial performance. In particular, the use of return on average tangible equity, tangible common equity ratio, tangible book value per share, and PPNR is prevalent among banking regulators, investors, and analysts. Accordingly, we disclose the non-GAAP measures in addition to the related GAAP measures of: (1) net earnings, (2) return on average assets, (3) return on average equity, (4) equity to assets ratio, and (5) book value per share. The tables below present the reconciliations of these GAAP financial measures to the related non-GAAP financial measures:   Three Months Ended Year EndedPPNR and PPNR Return  December 31, September 30, December 31, December 31,on Average Assets  2021   2021   2020   2021   2020   (Dollars in thousands)Net earnings (loss) $136,045  $139,996  $116,830  $606,959  $(1,237,574)Add: Provision for credit losses  (6,000)  (20,000)  10,000   (162,000)  339,000 Add: Goodwill impairment  -   -   -   -   1,470,000 Add: Income tax expense  51,632   47,770   36,546   215,375   75,173 Pre-provision, pre-goodwill impairment, pre-tax net revenue ("PPNR") $181,677  $167,766  $163,376  $660,334  $646,599            Average assets $40,358,147  $35,871,664  $29,334,789  $35,518,488  $27,752,412            Return on average assets (1)  1.34%  1.55%  1.58%  1.71%  (4.46)%PPNR return on average assets (2)  1.79%  1.86%  2.22%  1.86%  2.33%           (1) Annualized net earnings (loss) divided by average assets.(2) Annualized PPNR divided by average assets.   Three Months Ended Year Ended  December 31, September 30, December 31, December 31,Return on Average Tangible Equity  2021   2021   2020   2021   2020   (Dollars in thousands)Net earnings (loss) $136,045  $139,996  $116,830  $606,959  $(1,237,574)Add: Intangible asset amortization  3,876   2,890   3,172   12,734   14,753 Add: Goodwill impairment  -   -   -   -   1,470,000 Adjusted net earnings $139,921  $142,886  $120,002  $619,693  $247,179            Average stockholders' equity $3,954,267  $3,916,621  $3,536,425  $3,808,019  $3,857,610 Less: Average intangible assets  1,437,780   1,221,253   1,103,945   1,269,546   1,470,989 Average tangible common equity $2,516,487  $2,695,368  $2,432,480  $2,538,473  $2,386,621            Return on average equity (1)  13.65%  14.18%  13.14%  15.94%  (32.08)%Return on average tangible equity (2)  22.06%  21.03%  19.63%  24.41%  10.36%           (1) Annualized net earnings divided by average stockholders' equity.(2) Annualized adjusted net earnings divided by average tangible common equity. Tangible Common Equity Ratio/ December 31, September 30, June 30, March 31, December 31,Tangible Book Value Per Share  2021   2021   2021   2021   2020   (Dollars in thousands, except per share data)Stockholders' equity $3,999,630  $3,918,434  $3,846,681  $3,654,137  $3,594,951 Less: Intangible assets  1,450,693   1,219,651   1,222,541   1,225,404   1,102,311 Tangible common equity $2,548,937  $2,698,783  $2,624,140  $2,428,733  $2,492,640            Total assets $40,443,344  $35,885,676  $34,867,987  $32,856,533  $29,498,442 Less: Intangible assets  1,450,693   1,219,651   1,222,541   1,225,404   1,102,311 Tangible assets $38,992,651  $34,666,025  $33,645,446  $31,631,129  $28,396,131            Equity to assets ratio  9.89%  10.92%  11.03%  11.12%  12.19%Tangible common equity ratio (1)  6.54%  7.79%  7.80%  7.68%  8.78%           Book value per share $33.45  $32.77  $32.17  $30.68  $30.36 Tangible book value per share (2) $21.31  $22.57  $21.95  $20.39  $21.05 Shares outstanding  119,584,854   119,579,566   119,555,102   119,105,642   118,414,853            (1) Tangible common equity divided by tangible assets.(2) Tangible common equity divided by shares outstanding.  CONTACTS Matthew P. Wagner President and CEO 303.802.8900Bart R. Olson EVP and CFO 714.989.4149William J. Black EVP Strategy and Corporate Development 919.597.7466

 
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