Press Release

PacWest Bancorp Announces Results for the Third Quarter 2019

Company Release - 10/16/2019 7:00 AM ET

Highlights

  • Net Earnings of $110.0 Million, or $0.92 Per Diluted Share
  • Loan and Lease Production of $1.2 Billion; $263 Million of Net Loan Growth
  • Core Deposits Growth of $854 million; Represent 84% of Total Deposits
  • Net Charge-offs to Average Loans of 10 basis points in Third Quarter; 12 basis points Year-To-Date

LOS ANGELES, Oct. 16, 2019 (GLOBE NEWSWIRE) -- PacWest Bancorp (Nasdaq: PACW) today announced net earnings for the third quarter of 2019 of $110.0 million, or $0.92 per diluted share, compared to net earnings for the second quarter of 2019 of $128.1 million, or $1.07 per diluted share. The decrease in net earnings in the third quarter of 2019 was due primarily to a $22.2 million pre-tax gain on the sale of securities in the second quarter of 2019 that contributed $0.13 per diluted share.

Matt Wagner, President and CEO, commented, “We had a solid quarter highlighted by very strong core deposits growth, another quarter of consistent loan production from all of our business groups, and the continuation of our trend of lower credit costs. Our third quarter of 2019 results produced a return on assets of 1.65% and a return on tangible equity of 19.01%.”

Mr. Wagner continued, “In a very competitive market, we achieved our largest core deposit growth quarter ever with growth of $854 million in the third quarter. Core deposits generation, with an emphasis on noninterest-bearing deposits, remains a priority in this declining-rate environment. We achieved solid loan and lease production of $1.2 billion in the third quarter bringing our net loan growth to $778 million, or 6% annualized, for the first nine months of 2019.”

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 
 2019   2019   (Decrease)   2019
   2018   (Decrease)
 
                        
 (Dollars in thousands, except per share data)
Net earnings$  110,026  $  128,125  $  (18,099) $  350,755  $  350,298  $  457 
Diluted earnings per share$  0.92  $  1.07  $  (0.15) $  2.91  $  2.79  $  0.12 
Return on average assets1.65% 1.99%   (0.34) 1.80% 1.94%   (0.14)
Return on average                 
tangible equity (1) 19.01% 23.15%   (4.14) 20.90% 21.22%   (0.32)
                  
Net interest margin ("NIM")                 
(tax equivalent)4.46% 4.72%   (0.26) 4.62% 5.09%   (0.47)
Yield on average loans and                  
leases (tax equivalent)5.91% 6.26%   (0.35) 6.11% 6.20%   (0.09)
Cost of average total                  
deposits0.83% 0.81%   0.02  0.79% 0.38%   0.41 
Efficiency ratio42.3% 41.6%   0.7  42.1% 40.8%   1.3 
                  
Total assets$  26,724,627  $  26,344,414  $  380,213  $  26,724,627  $  24,782,126  $  1,942,501 
Loans and leases held                  
for investment,                  
net of deferred fees$  18,735,543  $  18,472,852  $  262,691  $  18,735,543  $  17,230,146  $  1,505,397 
Noninterest-bearing                  
demand deposits$  7,441,185  $  7,299,213  $  141,972  $  7,441,185  $  7,834,480  $  (393,295)
Core deposits$  16,471,264  $  15,617,488  $  853,776  $  16,471,264  $  15,512,742  $  958,522 
Total deposits$  19,733,203  $  18,805,756  $  927,447  $  19,733,203  $  17,879,543  $  1,853,660 
                  
As percentage of total                 
deposits:                 
Noninterest-bearing                  
demand deposits38% 39%   (1) 38% 44%   (6)
Core deposits 84% 83%   1  84% 87%   (3)
                  
Equity to assets ratio 18.41% 18.42%   (0.01) 18.41% 19.13%   (0.72)
Tangible common equity                  
ratio (1)9.65% 9.50%   0.15  9.65% 9.61%   0.04 
Book value per share$  41.06  $  40.49  $  0.57  $  41.06  $  38.46  $  2.60 
Tangible book value per                  
share (1)$  19.43  $  18.83  $  0.60  $  19.43  $  17.28  $  2.15 
                  
(1) Non-GAAP measure.                 


INCOME STATEMENT HIGHLIGHTS

Net Interest Income

Net interest income decreased by $8.7 million to $252.2 million for the third quarter of 2019 compared to $260.9 million for the second quarter of 2019 due mainly to a lower yield on average loans and leases, offset partially by a higher balance of average loans and leases and one more day in the third quarter of 2019. The tax equivalent yield on average loans and leases was 5.91% for the third quarter of 2019 compared to 6.26% for the second quarter of 2019. The decrease in the yield on average loans and leases was due principally to the repricing of variable-rate loans causing lower coupon interest in addition to lower loan prepayment fees in the third quarter compared to the second quarter. The prepayment fees added five basis points to the third quarter loan and lease yield and 14 basis points to the second quarter loan and lease yield.

The tax equivalent NIM was 4.46% for the third quarter of 2019 compared to 4.72% for the second quarter of 2019. The decrease in the NIM was due mainly to lower coupon interest, lower loan prepayment fees, and lower loan fee income.

The cost of average total deposits increased to 0.83% for the third quarter of 2019 from 0.81% for the second quarter of 2019 due to a higher average balance of core interest-bearing deposits combined with a lower average balance of noninterest-bearing deposits. The cost of average interest-bearing deposits declined by one basis point in the third quarter and the cost of average total deposits for the month of September was 0.80%, reflecting actions taken to reduce certain deposit rates in light of the fed funds target rate cuts during the third quarter.

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 Losses2019  2019  (Decrease) 
     (In thousands)     
Addition to allowance for loan and lease losses$  8,000  $  10,000  $  (2,000)
Reduction to reserve for unfunded loan commitments  (1,000)   (2,000)   1,000 
Total provision for credit losses$  7,000  $  8,000  $  (1,000)


Noninterest Income

The following table presents details of noninterest income for the periods indicated:

 Three Months Ended    
 September 30, June 30,  Increase 
Noninterest Income2019 2019  (Decrease) 
    (In thousands)     
Service charges on deposit accounts$  3,525 $  3,771  $  (246)
Other commissions and fees  10,855   11,590    (735)
Leased equipment income  9,615   9,182    433 
Gain on sale of loans and leases  765   326    439 
Gain on sale of securities  908   22,192    (21,284)
Other income:       
Dividends and gains (losses) on equity investments  14   (83)   97 
Warrant income  3,936   1,214    2,722 
Other  3,811   2,701    1,110 
Total noninterest income $  33,429 $  50,893  $  (17,464)


Noninterest income decreased by $17.5 million to $33.4 million for the third quarter of 2019 compared to $50.9 million for the second quarter of 2019 due primarily to a $21.3 million decrease in the gain on sale of securities attributable to a $0.9 million net gain on sales of $143 million in the third quarter of 2019 compared to a $22.2 million net gain on sales of $980 million in the second quarter of 2019. We re-positioned a portion of our securities portfolio in the second quarter to shorten the duration of the portfolio and to enhance liquidity. Partially offsetting the decrease in the gain on sale of securities was a $2.7 million increase in warrant income and a $1.1 million increase in other income for the third quarter of 2019. The increase in warrant income was due to higher gains resulting from exercised warrants. The increase in other income was mainly due to higher gains from lease terminations.

Noninterest Expense

The following table presents details of noninterest expense for the periods indicated:

 Three Months Ended    
 September 30, June 30,  Increase 
Noninterest Expense2019 2019  (Decrease) 
    (In thousands)     
Compensation$  71,424 $  68,956  $  2,468 
Occupancy   14,089   14,457    (368)
Data processing  7,044   6,817    227 
Other professional services  4,400   4,629    (229)
Insurance and assessments  4,100   4,098    2 
Intangible asset amortization  4,833   4,870    (37)
Leased equipment depreciation  5,951   5,558    393 
Foreclosed assets expense (income), net  8   (146)   154 
Loan expense  3,628   3,451    177 
Other  11,332   12,737    (1,405)
Total noninterest expense$  126,809 $  125,427  $  1,382 

 

Noninterest expense increased by $1.4 million to $126.8 million for the third quarter of 2019 compared to $125.4 million for the second quarter of 2019 attributable primarily to a $2.5 million increase in compensation expense, offset partially by a $1.4 million decrease in other expense. Compensation expense increased due mainly to higher incentives expense and higher stock compensation expense, partially offset by lower payroll taxes and benefits expense. Other expense decreased primarily due to lower business development expense and a loss on the early termination of an office lease in the second quarter.

Income Taxes

The overall effective income tax rate was 27.5% for the third quarter of 2019 and 28.2% for the second quarter of 2019. The effective tax rate for the full year 2019 is estimated to be in the range of 27-28%.

BALANCE SHEET HIGHLIGHTS

Loans and Leases

The following table presents roll forwards of loans and leases held for investment, net of deferred fees, for the periods indicated:

 Three Months Ended  Nine Months Ended
Roll Forward of Loans and Leases HeldSeptember 30,   June 30,   September 30, 
for Investment, Net of Deferred Fees (1)2019  2019  2019
     (Dollars in thousands)     
Balance, beginning of period$  18,472,852  $  18,307,697  $  17,957,713 
Additions:        
Production  1,230,817    1,436,299    3,841,954 
Disbursements  1,288,111    1,293,747    3,774,830 
Total production and disbursements  2,518,928    2,730,046    7,616,784 
Reductions:        
Payoffs  (1,390,883)   (1,529,213)   (3,853,396)
Paydowns  (837,551)   (979,987)   (2,856,502)
Total payoffs and paydowns  (2,228,434)   (2,509,200)   (6,709,898)
Sales   (21,302)   (38,054)   (76,292)
Transfers to foreclosed assets  -    -    (37)
Charge-offs  (6,501)   (17,637)   (27,603)
Transfers to loans held for sale  -    -    (25,124)
Total reductions  (2,256,237)   (2,564,891)   (6,838,954)
Net increase   262,691    165,155    777,830 
Balance, end of period$  18,735,543  $  18,472,852  $  18,735,543 
         
Weighted average rate on production (2)5.45% 5.15% 5.21%
         
(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 30 basis points to loan yields in 2019 and 31 basis points to loan yields in 2018.


Loans and leases held for investment, net of deferred fees, increased by $262.7 million, or 6% annualized, in the third quarter of 2019 to $18.7 billion at September 30, 2019. The net loan growth in the third quarter was primarily from the asset-based loan portfolio class and residential real estate construction loan portfolio class.

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, 2019  June 30, 2019  September 30, 2018 
  % of    % of    % of  
Loan and Lease Portfolio AmountTotal  AmountTotal  AmountTotal 
     (In thousands)     
Real estate mortgage:           
Commercial$  4,300,56623% $  4,435,27424% $  4,932,82328%
Income producing and other            
residential  3,596,35819%   3,640,75220%   2,745,83716%
Total real estate mortgage  7,896,92442%   8,076,02644%   7,678,66044%
Real estate construction and land:           
Commercial  1,009,3626%   972,8915%   854,3465%
Residential  1,542,1128%   1,403,2398%   1,146,6117%
Total real estate construction            
and land  2,551,47414%   2,376,13013%   2,000,95712%
Total real estate   10,448,39856%   10,452,15657%   9,679,61756%
Commercial:           
Asset-based  3,810,74120%   3,606,00719%   3,222,31119%
Venture capital  2,209,64912%   2,194,74312%   2,031,89512%
Other commercial  1,858,16710%   1,773,56410%   1,897,85211%
Total commercial  7,878,55742%   7,574,31441%   7,152,05842%
Consumer  408,5882%   446,3822%   398,4712%
Total loans and leases held for            
investment, net of deferred fees$  18,735,543100% $  18,472,852100% $  17,230,146100%
            
Total unfunded loan commitments$  7,790,796   $  7,610,899   $  7,055,833  


Allowance for Credit Losses

The following tables present roll forwards of the allowance for credit losses for the periods indicated:

 Three Months Ended September 30, 2019
 Allowance for  Reserve for   Total 
Allowance for Credit Loan and   Unfunded Loan  Allowance for 
Losses RollforwardLease Losses  Commitments  Credit Losses 
    (In thousands)    
Beginning balance$  135,037  $  34,861  $  169,898 
Charge-offs  (6,501)   -    (6,501)
Recoveries  2,016    -    2,016 
Net charge-offs  (4,485)   -    (4,485)
Provision   8,000    (1,000)   7,000 
Ending balance$  138,552  $  33,861  $  172,413 


 Three Months Ended June 30, 2019 
 Allowance for  Reserve for   Total 
Allowance for Credit Loan and   Unfunded Loan  Allowance for 
Losses RollforwardLease Losses  Commitments  Credit Losses 
    (In thousands)    
Beginning balance$  136,281  $  36,861  $  173,142 
Charge-offs  (17,637)   -    (17,637)
Recoveries  6,393    -    6,393 
Net charge-offs  (11,244)   -    (11,244)
Provision   10,000    (2,000)   8,000 
Ending balance$  135,037  $  34,861  $  169,898 


The allowance for credit losses as a percentage of loans and leases held for investment was 0.92% at both September 30, 2019 and June 30, 2019.

Gross charge-offs for the third quarter of 2019 were $6.5 million and included $4.4 million for venture capital loans and $1.7 million for other commercial loans compared to gross charge-offs for the second quarter of 2019 of $17.6 million that included $11.8 million for a single asset-based loan, $3.7 million for other commercial loans, and $1.5 million for venture capital loans.

Recoveries for the third quarter of 2019 were $2.0 million and included $1.2 million for other commercial loans and $0.4 million for venture capital loans compared to recoveries for the second quarter of 2019 of $6.4 million that included $4.8 million for venture capital loans and $1.0 million for other commercial loans.

For the third quarter of 2019 and second quarter of 2019, annualized net charge-offs to average loans and leases were 0.10% and 0.25%.

Deposits and Client Investment Funds

The following table presents the composition of our deposit portfolio as of the dates indicated:

 September 30, 2019  June 30, 2019  September 30, 2018 
  % of    % of    % of  
Deposit CompositionAmountTotal  AmountTotal  AmountTotal 
     (Dollars in thousands)     
Noninterest-bearing demand$  7,441,18538% $  7,299,21339% $  7,834,48044%
Interest checking   3,645,66018%   3,220,35317%   2,277,53713%
Money market   4,870,34425%   4,578,08324%   4,782,72427%
Savings   514,0753%   519,8393%   618,0013%
Total core deposits  16,471,26484%   15,617,48883%   15,512,74287%
Non-core non-maturity deposits  479,7322%   436,8332%   483,5283%
Total non-maturity deposits  16,950,99686%   16,054,32185%   15,996,27090%
Time deposits $250,000 and under  2,282,97612%   2,284,02312%   1,509,2148%
Time deposits over $250,000  499,2312%   467,4123%   374,0592%
Total time deposits  2,782,20714%   2,751,43515%   1,883,27310%
Total deposits$  19,733,203100% $  18,805,756100% $  17,879,543100%


At September 30, 2019, core deposits totaled $16.5 billion, or 84% of total deposits, including $7.4 billion of noninterest-bearing demand deposits, or 38% of total deposits. The $854 million increase in core deposits for the third quarter of 2019 included strong growth in both our Venture Banking and Community Banking groups.

In addition to deposit products, we also offer alternative non-depository cash investment options for select clients; these alternatives 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 September 30, 2019 were $1.8 billion, of which $1.5 billion was managed by PWAM.

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 2019  2019  (Decrease) 
    (Dollars in thousands)    
NPAs and Performing TDRs:        
Nonaccrual loans and leases held for investment (1)$  99,113  $  81,265  $  17,848 
Accruing loans contractually past due 90 days or more  -    -    - 
Foreclosed assets, net  1,366    1,472    (106)
  Total nonperforming assets ("NPAs")$  100,479  $  82,737  $  17,742 
         
Nonaccrual loans and leases held for investment         
to loans and leases held for investment0.53% 0.44%   
Nonperforming assets to loans and leases         
held for investment and foreclosed assets0.54% 0.45%   
         
Nonaccrual loans and leases held for investment (1)$  99,113  $  81,265  $  17,848 
Performing TDRs held for investment  16,329    16,464    (135)
Total impaired loans and leases$  115,442  $  97,729  $  17,713 
         
Loan and Lease Credit Risk Ratings:        
Pass $  18,279,011  $  18,042,569  $  236,442 
Special mention  267,925    239,304    28,621 
Classified   188,607    190,979    (2,372)
Total loans and leases held for investment,         
net of deferred fees$  18,735,543  $  18,472,852  $  262,691 
         
Classified loans and leases held for investment         
to loans and leases held for investment1.01% 1.03%   
         
Allowance for Credit Losses:        
Allowance for credit losses$  172,413  $  169,898  $  2,515 
Provision for credit losses (for the quarter)$  7,000  $  8,000  $  (1,000)
Net charge-offs (for the quarter)$  4,485  $  11,244  $  (6,759)
Net charge-offs to average loans and leases        
(for the quarter)0.10% 0.25%   
Allowance for credit losses to loans and leases        
held for investment0.92% 0.92%   
Allowance for credit losses to nonaccrual loans         
and leases held for investment174.0% 209.1%   
         
(1) Nonaccrual loans include guaranteed amounts of $15.4 million at September 30, 2019 and $13.0 million at June 30, 2019.


Nonaccrual, classified, and special mention loans and leases fluctuate from period to period as a result of loan repayments and our ongoing active portfolio monitoring.

During the third quarter of 2019, nonaccrual loans and leases increased by $17.8 million, while classified loans and leases decreased by $2.4 million and special mention loans and leases increased by $28.6 million. The increase in nonaccrual loans was primarily attributable to one previously classified $14.9 million security monitoring commercial loan. The increase in special mention loans and leases was due primarily to the downgrade of two security monitoring commercial loans totaling $49 million, partially offset by a net decrease from other activity.

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:

 Nonaccrual Loans and Leases  Accruing and
 September 30, 2019  June 30, 2019  30-89 Days Past Due 
  % of    % of   September 30, June 30,
  Loan    Loan   2019 2019
 AmountCategory  AmountCategory  Amount Amount
     (Dollars in thousands)     
Real estate mortgage:           
Commercial$  19,5150.5% $  17,0120.4%  $- $  3,948
Income producing and other            
residential  2,8680.1%   2,8830.1%   3,750   3,262
Total real estate mortgage  22,3830.3%   19,8950.2%   3,750   7,210
Real estate construction and land:           
Commercial  3770.0%   3900.0%   -   -
Residential  -0.0%   -0.0%   2,622   4,672
Total real estate            
construction and land  3770.0%   3900.0%   2,622   4,672
Commercial:           
Asset-based  33,0150.9%   32,2360.9%   48   12,382
Venture capital  20,1310.9%   22,5011.0%   -   -
Other commercial  22,5541.2%   5,7990.3%   4,068   439
Total commercial  75,7001.0%   60,5360.8%   4,116   12,821
Consumer  6530.2%   4440.1%   795   964
Total held for investment $  99,1130.5% $  81,2650.4% $  11,283 $  25,667


STOCK REPURCHASE PROGRAM

During the third quarter of 2019, there were no stock repurchases. At September 30, 2019, the remaining amount that could be used to repurchase shares under the $225 million Stock Repurchase Program was $124.7 million.

ABOUT PACWEST BANCORP

PacWest Bancorp (“PacWest”) is a bank holding company with over $26 billion in assets with one wholly-owned banking subsidiary, Pacific Western Bank (the “Bank”). The Bank has 74 full-service branches located throughout the state of California and one branch in Durham, North Carolina. Our Community Banking group provides lending and comprehensive deposit and treasury management services to small and medium-sized businesses conducted primarily through our California-based branch offices. We offer additional products and services through our National Lending and Venture Banking groups. National Lending provides asset-based, equipment, real estate and security monitoring cash flow loans and treasury management services to established middle-market businesses on a national basis. Venture Banking offers a comprehensive suite of financial services focused on entrepreneurial businesses and their venture capital and private equity investors, with offices located in key innovative hubs across the United States. For more information about PacWest Bancorp, visit www.pacwestbancorp.com, or to learn more about Pacific Western Bank, visit www.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. Such statements include future financial and operating results, expectations, intentions and other statements that are not historical facts. Such statements are based on information available at the time of this communication and are based on current beliefs and expectations of the Company’s management and are subject to significant risks, uncertainties and contingencies, many of which are beyond our control. Actual results may differ materially from those set forth in the forward-looking statements due to a variety of factors, including the risk factors described in documents filed by the Company with the Securities and Exchange Commission.

We are under no obligation (and expressly disclaim any such obligation) to update or alter our forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

PACWEST BANCORP AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
         
 September 30,  June 30,  December 31, 
 2019  2019  2018 
         
  (Dollars in thousands, except per share data) 
ASSETS:        
Cash and due from banks$  252,596  $  185,075  $  175,830 
Interest-earning deposits in financial institutions  483,405    422,663    209,937 
Total cash and cash equivalents   736,001    607,738    385,767 
         
Securities available-for-sale, at estimated fair value  3,817,348    3,807,244    4,009,431 
Federal Home Loan Bank stock, at cost  26,865    43,146    32,103 
Total investment securities  3,844,213    3,850,390    4,041,534 
         
Loans held for sale  -    -    - 
         
Gross loans and leases held for investment  18,796,011    18,532,740    18,026,365 
Deferred fees, net  (60,468)   (59,888)   (68,652)
Total loans and leases held for investment,        
net of deferred fees  18,735,543    18,472,852    17,957,713 
Allowance for loan and lease losses  (138,552)   (135,037)   (132,472)
Total loans and leases held for investment, net  18,596,991    18,337,815    17,825,241 
         
Equipment leased to others under operating leases  295,854    300,668    292,677 
Premises and equipment, net  37,926    38,162    34,661 
Foreclosed assets, net  1,366    1,472    5,299 
Deferred tax asset, net  -    -    17,489 
Goodwill  2,548,670    2,548,670    2,548,670 
Core deposit and customer relationship intangibles, net  42,547    47,380    57,120 
Other assets  621,059    612,119    522,896 
Total assets$  26,724,627  $  26,344,414  $  25,731,354 
         
LIABILITIES:        
Noninterest-bearing deposits$  7,441,185  $  7,299,213  $  7,888,915 
Interest-bearing deposits  12,292,018    11,506,543    10,981,586 
Total deposits  19,733,203    18,805,756    18,870,501 
Borrowings  1,253,031    1,913,059    1,371,114 
Subordinated debentures  456,145    456,112    453,846 
Accrued interest payable and other liabilities  362,140    317,477    210,305 
Total liabilities  21,804,519    21,492,404    20,905,766 
STOCKHOLDERS' EQUITY (1)  4,920,108    4,852,010    4,825,588 
Total liabilities and stockholders’ equity$  26,724,627  $  26,344,414  $  25,731,354 
         
Book value per share$  41.06  $  40.49  $  39.17 
Tangible book value per share (2)$  19.43  $  18.83  $  18.02 
Shares outstanding   119,831,192    119,829,104    123,189,833 
         
(1) Includes net unrealized gain (loss) on securities        
available-for-sale, net$  95,887  $  73,066  $  (6,075)
(2) Non-GAAP measure.        



 

PACWEST BANCORP AND SUBSIDIARIES             
CONDENSED CONSOLIDATED STATEMENT OF EARNINGS             
              
 Three Months Ended
 Nine Months Ended
 
 September 30, June 30,  September 30,  September 30,
 
 2019 2019  2018  2019  2018 
              
 (Dollars in thousands, except per share data)
Interest income:             
Loans and leases$  275,978 $  284,236  $  264,062  $  834,443  $  775,447 
Investment securities  28,806   28,948    28,061    87,434    81,929 
Deposits in financial institutions  2,424   1,349    519    4,423    1,555 
Total interest income  307,208   314,533    292,642    926,300    858,931 
              
Interest expense:             
Deposits  40,703   38,720    21,121    113,658    51,306 
Borrowings  6,852   7,210    3,814    21,772    7,383 
Subordinated debentures  7,417   7,705    7,390    22,860    21,093 
Total interest expense  54,972   53,635    32,325    158,290    79,782 
              
Net interest income  252,236   260,898    260,317    768,010    779,149 
Provision for credit losses  7,000   8,000    11,500    19,000    33,000 
Net interest income after              
provision for credit losses  245,236   252,898    248,817    749,010    746,149 
              
Noninterest income:             
Service charges on deposit accounts  3,525   3,771    3,979    11,026    12,418 
Other commissions and fees  10,855   11,590    12,397    33,453    34,429 
Leased equipment income  9,615   9,182    9,120    28,079    28,497 
Gain on sale of loans and leases  765   326    -    1,091    4,675 
Gain on sale of securities  908   22,192    826    25,261    7,390 
Other income  7,761   3,832    10,590    16,476    27,700 
Total noninterest income  33,429   50,893    36,912    115,386    115,109 
              
Noninterest expense:             
Compensation   71,424   68,956    72,333    211,225    213,269 
Occupancy  14,089   14,457    13,069    42,866    39,867 
Data processing  7,044   6,817    6,740    20,786    20,295 
Other professional services  4,400   4,629    6,058    13,542    15,754 
Insurance and assessments  4,100   4,098    5,446    12,236    16,503 
Intangible asset amortization  4,833   4,870    5,587    14,573    17,520 
Leased equipment depreciation  5,951   5,558    5,001    17,160    15,613 
Foreclosed assets expense (income), net  8   (146)   (257)   (109)   (440)
Acquisition, integration and              
reorganization costs   -   -    800    618    800 
Loan expense  3,628   3,451    2,249    9,964    7,578 
Other expense  11,332   12,737    11,127    35,662    35,238 
Total noninterest expense  126,809   125,427    128,153    378,523    381,997 
              
Earnings before income taxes  151,856   178,364    157,576    485,873    479,261 
Income tax expense   41,830   50,239    41,289    135,118    128,963 
Net earnings $  110,026 $  128,125  $  116,287  $  350,755  $  350,298 
              
Basic and diluted earnings per share$  0.92 $  1.07  $  0.94  $  2.91  $  2.79 
Dividends declared and paid per share$  0.60 $  0.60  $  0.60  $  1.80  $  1.70 




PACWEST BANCORP AND SUBSIDIARIES
NET EARNINGS PER SHARE CALCULATIONS
               
 Three Months Ended
 Nine Months Ended
 September 30,  June 30,  September 30,  September 30,
 2019  2019  2018  2019  2018 
               
 (In thousands, except per share data)
Basic Earnings Per Share:              
Net earnings $  110,026  $  128,125  $  116,287  $  350,755