Fourth Quarter 2020 Highlights
- Net Earnings of
$116.8 Million , or$0.99 Per Diluted Share - Strong Pre-Provision, Pre-Tax Net Revenue (“PPNR”) of
$163.4 Million - Provision for Credit Losses of
$10.0 Million in Q4 Compared to$97.0 Million in Q3 - Core Deposits Up
$1.1 Billion or 5% in Q4; Represents 89% of Total Deposits - Strong Capital Position – CET1 Ratio of 10.53%
Full Year 2020 Highlights
- Excluding Goodwill Impairment, Net Earnings of
$232.4 Million , or$1.97 Per Diluted Share - Net Loss of
$1.24 Billion , or$(10.61) Per Diluted Share Due to$1.47 Billion Goodwill Impairment - Strong Pre-Provision, Pre-Tax Net Revenue (“PPNR”) of
$646.6 Million - Provision for Credit Losses of
$339.0 Million Compared to$22.0 Million in 2019 - Core Deposits Up
$6.1 Billion or 38% in 2020 - Strong Capital Position – Increased CET1 Ratio
75 Basis Points to 10.53% in 2020 - Increased Allowance for Credit Losses Ratio to 2.41% (Excluding PPP Loans)
Net loss for the full year 2020 was
FINANCIAL HIGHLIGHTS
At or For the | At or For the | ||||||||||||||||||||||
Three Months Ended | Year Ended | ||||||||||||||||||||||
Increase | Increase | ||||||||||||||||||||||
Financial Highlights | 2020 | 2020 | (Decrease) | 2020 | 2019 | (Decrease) | |||||||||||||||||
(Dollars in thousands, except per share data) | |||||||||||||||||||||||
Net earnings (loss) | $ | 116,830 | $ | 45,503 | $ | 71,327 | $ | (1,237,574 | ) | $ | 468,636 | $ | (1,706,210 | ) | |||||||||
Diluted earnings (loss) | |||||||||||||||||||||||
per share | $ | 0.99 | $ | 0.38 | $ | 0.61 | $ | (10.61 | ) | $ | 3.90 | $ | (14.51 | ) | |||||||||
Pre-provision, pre-goodwill | |||||||||||||||||||||||
impairment, pre-tax net | |||||||||||||||||||||||
revenue ("PPNR") (1) | $ | 163,376 | $ | 156,174 | $ | 7,202 | $ | 646,599 | $ | 654,940 | $ | (8,341 | ) | ||||||||||
Return on average assets | 1.58 | % | 0.65 | % | 0.93 | (4.46 | )% | 1.80 | % | (6.26 | ) | ||||||||||||
PPNR return on average | |||||||||||||||||||||||
assets (1) | 2.22 | % | 2.22 | % | - | 2.33 | % | 2.51 | % | (0.18 | ) | ||||||||||||
Return on average | |||||||||||||||||||||||
tangible equity (1) | 19.63 | % | 8.20 | % | 11.43 | 10.36 | % | 21.49 | % | (11.13 | ) | ||||||||||||
Yield on average loans and | |||||||||||||||||||||||
leases (tax equivalent) | 5.15 | % | 5.01 | % | 0.14 | 5.18 | % | 6.00 | % | (0.82 | ) | ||||||||||||
Cost of average total | |||||||||||||||||||||||
deposits | 0.14 | % | 0.17 | % | (0.03 | ) | 0.27 | % | 0.77 | % | (0.50 | ) | |||||||||||
Net interest margin ("NIM") | |||||||||||||||||||||||
(tax equivalent) | 3.83 | % | 3.90 | % | (0.07 | ) | 4.05 | % | 4.54 | % | (0.49 | ) | |||||||||||
Efficiency ratio | 43.6 | % | 45.1 | % | (1.5 | ) | 43.1 | % | 42.7 | % | 0.4 | ||||||||||||
Total assets | $ | 29,498,442 | $ | 28,426,716 | $ | 1,071,726 | $ | 29,498,442 | $ | 26,770,806 | $ | 2,727,636 | |||||||||||
Loans and leases held | |||||||||||||||||||||||
for investment, | |||||||||||||||||||||||
net of deferred fees | $ | 19,083,377 | $ | 19,026,200 | $ | 57,177 | $ | 19,083,377 | $ | 18,846,872 | $ | 236,505 | |||||||||||
Noninterest-bearing | |||||||||||||||||||||||
demand deposits | $ | 9,193,827 | $ | 9,346,744 | $ | (152,917 | ) | $ | 9,193,827 | $ | 7,243,298 | $ | 1,950,529 | ||||||||||
Core deposits | $ | 22,264,480 | $ | 21,117,629 | $ | 1,146,851 | $ | 22,264,480 | $ | 16,187,287 | $ | 6,077,193 | |||||||||||
Total deposits | $ | 24,940,717 | $ | 23,965,695 | $ | 975,022 | $ | 24,940,717 | $ | 19,233,036 | $ | 5,707,681 | |||||||||||
As percentage of total | |||||||||||||||||||||||
deposits: | |||||||||||||||||||||||
Noninterest-bearing | |||||||||||||||||||||||
demand deposits | 37 | % | 39 | % | (2 | ) | 37 | % | 38 | % | (1 | ) | |||||||||||
Core deposits | 89 | % | 88 | % | 1 | 89 | % | 84 | % | 5 | |||||||||||||
Equity to assets ratio | 12.19 | % | 12.26 | % | (0.07 | ) | 12.19 | % | 18.51 | % | (6.32 | ) | |||||||||||
Tangible common equity | |||||||||||||||||||||||
ratio (1) | 8.78 | % | 8.71 | % | 0.07 | 8.78 | % | 9.79 | % | (1.01 | ) | ||||||||||||
Book value per share | $ | 30.36 | $ | 29.42 | $ | 0.94 | $ | 30.36 | $ | 41.36 | $ | (11.00 | ) | ||||||||||
Tangible book value per | |||||||||||||||||||||||
share (1) | $ | 21.05 | $ | 20.09 | $ | 0.96 | $ | 21.05 | $ | 19.77 | $ | 1.28 | |||||||||||
(1) Non-GAAP measure. | |||||||||||||||||||||||
INCOME STATEMENT HIGHLIGHTS
Net Interest Income
Net interest income increased by
The tax equivalent NIM was 3.83% for the fourth quarter of 2020 compared to 3.90% for the third quarter of 2020. The decrease in the NIM was due mostly to the change in the earning asset mix. Average loans and leases decreased by
The cost of average total deposits decreased to 0.14% for the fourth quarter of 2020 from 0.17% for the third quarter of 2020. The lower cost of average total deposits was due primarily to the repricing of maturing brokered time deposits.
Provision for Credit Losses
The following table presents details of the provision for credit losses for the periods indicated:
Three Months Ended | ||||||||||
Increase | ||||||||||
Provision for Credit Losses | 2020 | 2020 | (Decrease) | |||||||
(In thousands) | ||||||||||
Addition to allowance for loan and lease losses | $ | 21,000 | $ | 81,000 | $ | (60,000 | ) | |||
(Reduction in) addition to reserve for | ||||||||||
unfunded loan commitments | (11,000 | ) | 16,000 | (27,000 | ) | |||||
Total provision for credit losses | $ | 10,000 | $ | 97,000 | $ | (87,000 | ) | |||
The provision for credit losses decreased by
Noninterest Income
The following table presents details of noninterest income for the periods indicated:
Three Months Ended | |||||||||||
Increase | |||||||||||
Noninterest Income | 2020 | 2020 | (Decrease) | ||||||||
(In thousands) | |||||||||||
Service charges on deposit accounts | $ | 3,119 | $ | 2,570 | $ | 549 | |||||
Other commissions and fees | 9,974 | 10,541 | (567 | ) | |||||||
Leased equipment income | 9,440 | 9,900 | (460 | ) | |||||||
Gain on sale of loans and leases | 1,671 | 35 | 1,636 | ||||||||
Gain on sale of securities | 4 | 5,270 | (5,266 | ) | |||||||
Other income: | |||||||||||
Dividends and gains on equity investments | 5,064 | 6,945 | (1,881 | ) | |||||||
Warrant income | 7,299 | 500 | 6,799 | ||||||||
Other | 3,279 | 2,491 | 788 | ||||||||
Total noninterest income | $ | 39,850 | $ | 38,252 | $ | 1,598 |
Noninterest income increased by
Noninterest Expense
The following table presents details of noninterest expense for the periods indicated:
Three Months Ended | ||||||||||
Increase | ||||||||||
Noninterest Expense | 2020 | 2020 | (Decrease) | |||||||
(In thousands) | ||||||||||
Compensation | $ | 73,171 | $ | 75,131 | $ | (1,960 | ) | |||
Occupancy | 14,083 | 14,771 | (688 | ) | ||||||
Data processing | 6,718 | 6,505 | 213 | |||||||
Other professional services | 6,800 | 4,713 | 2,087 | |||||||
Insurance and assessments | 5,064 | 3,939 | 1,125 | |||||||
Intangible asset amortization | 3,172 | 3,751 | (579 | ) | ||||||
Leased equipment depreciation | 7,501 | 7,057 | 444 | |||||||
Foreclosed assets (income) expense, net | (272 | ) | 335 | (607 | ) | |||||
Acquisition, integration and reorganization costs | 1,060 | - | 1,060 | |||||||
Customer related expense | 4,430 | 4,762 | (332 | ) | ||||||
Loan expense | 3,926 | 3,499 | 427 | |||||||
Other | 10,029 | 8,939 | 1,090 | |||||||
Total noninterest expense | $ | 135,682 | $ | 133,402 | $ | 2,280 | ||||
Noninterest expense increased by
Income Taxes
The effective income tax rate was 23.8% for the fourth quarter of 2020 compared to 23.1% for the third quarter of 2020. The effective tax rate for the year ended
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 | Year Ended | ||||||||||
Roll Forward of Loans and Leases Held | |||||||||||
for Investment, Net of Deferred Fees (1) | 2020 | 2020 | 2020 | ||||||||
(Dollars in thousands) | |||||||||||
Balance, beginning of period | $ | 19,026,200 | $ | 19,694,631 | $ | 18,846,872 | |||||
Additions: | |||||||||||
Production | 1,131,165 | 519,671 | 4,243,538 | ||||||||
Disbursements | 1,354,038 | 1,008,336 | 5,159,912 | ||||||||
Total production and disbursements | 2,485,203 | 1,528,007 | 9,403,450 | ||||||||
Reductions: | |||||||||||
Payoffs | (1,330,321 | ) | (982,889 | ) | (3,738,754 | ) | |||||
Paydowns | (957,075 | ) | (1,160,692 | ) | (5,193,848 | ) | |||||
Total payoffs and paydowns | (2,287,396 | ) | (2,143,581 | ) | (8,932,602 | ) | |||||
Sales | (119,931 | ) | (2,979 | ) | (125,999 | ) | |||||
Transfers to foreclosed assets | (385 | ) | (12,594 | ) | (14,755 | ) | |||||
Charge-offs | (20,314 | ) | (37,284 | ) | (93,589 | ) | |||||
Total reductions | (2,428,026 | ) | (2,196,438 | ) | (9,166,945 | ) | |||||
Net increase (decrease) | 57,177 | (668,431 | ) | 236,505 | |||||||
Balance, end of period | $ | 19,083,377 | $ | 19,026,200 | $ | 19,083,377 | |||||
Weighted average rate on production (2) | 4.41 | % | 4.95 | % | 3.57 | % | |||||
(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 25 basis points to loan yields in 2020. | |||||||||||
Loans and leases held for investment, net of deferred fees, increased by
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:
% of | % of | % of | ||||||||||||
Loan and Lease Portfolio | Balance | Total | Balance | Total | Balance | Total | ||||||||
(In thousands) | ||||||||||||||
Real estate mortgage: | ||||||||||||||
Commercial | $ | 4,096,671 | 21 | % | $ | 4,192,466 | 22 | % | $ | 4,202,687 | 22 | % | ||
Income producing and other | ||||||||||||||
residential | 3,803,265 | 20 | % | 3,684,579 | 19 | % | 3,770,060 | 20 | % | |||||
Total real estate mortgage | 7,899,936 | 41 | % | 7,877,045 | 41 | % | 7,972,747 | 42 | % | |||||
Real estate construction and land: | ||||||||||||||
Commercial | 1,117,121 | 6 | % | 1,241,647 | 7 | % | 1,082,368 | 6 | % | |||||
Residential | 2,243,160 | 12 | % | 2,182,100 | 11 | % | 1,655,434 | 9 | % | |||||
Total real estate construction | ||||||||||||||
and land | 3,360,281 | 18 | % | 3,423,747 | 18 | % | 2,737,802 | 15 | % | |||||
Total real estate | 11,260,217 | 59 | % | 11,300,792 | 59 | % | 10,710,549 | 57 | % | |||||
Commercial: | ||||||||||||||
Asset-based | 3,429,283 | 18 | % | 3,153,048 | 17 | % | 3,748,407 | 20 | % | |||||
Venture capital | 1,698,508 | 9 | % | 1,637,132 | 9 | % | 2,179,422 | 12 | % | |||||
Other commercial | 2,375,114 | 12 | % | 2,572,994 | 13 | % | 1,767,667 | 9 | % | |||||
Total commercial | 7,502,905 | 39 | % | 7,363,174 | 39 | % | 7,695,496 | 41 | % | |||||
Consumer | 320,255 | 2 | % | 362,234 | 2 | % | 440,827 | 2 | % | |||||
Total loans and leases held for | ||||||||||||||
investment, net of deferred fees | $ | 19,083,377 | 100 | % | $ | 19,026,200 | 100 | % | $ | 18,846,872 | 100 | % | ||
Total unfunded loan commitments | $ | 7,601,390 | $ | 7,178,506 | $ | 8,183,158 | ||||||||
Allowance for Credit Losses
The following tables present roll forwards of the allowance for credit losses for the periods indicated:
Three Months Ended | |||||||||||
Allowance for | Reserve for | Total | |||||||||
Allowance for Credit | Loan and | Unfunded Loan | Allowance for | ||||||||
Losses Rollforward | Lease Losses | Commitments | Credit Losses | ||||||||
(In thousands) | |||||||||||
Beginning balance | $ | 345,966 | $ | 96,571 | $ | 442,537 | |||||
Charge-offs | (20,314 | ) | - | (20,314 | ) | ||||||
Recoveries | 1,529 | - | 1,529 | ||||||||
Net charge-offs | (18,785 | ) | - | (18,785 | ) | ||||||
Provision | 21,000 | (11,000 | ) | 10,000 | |||||||
Ending balance | $ | 348,181 | $ | 85,571 | $ | 433,752 | |||||
Three Months Ended | |||||||||||
Allowance for | Reserve for | Total | |||||||||
Allowance for Credit | Loan and | Unfunded Loan | Allowance for | ||||||||
Losses Rollforward | Lease Losses | Commitments | Credit Losses | ||||||||
(In thousands) | |||||||||||
Beginning balance | $ | 301,050 | $ | 80,571 | $ | 381,621 | |||||
Charge-offs | (37,284 | ) | - | (37,284 | ) | ||||||
Recoveries | 1,200 | - | 1,200 | ||||||||
Net charge-offs | (36,084 | ) | - | (36,084 | ) | ||||||
Provision | 81,000 | 16,000 | 97,000 | ||||||||
Ending balance | $ | 345,966 | $ | 96,571 | $ | 442,537 | |||||
Allowance for Credit | Year Ended | ||||||||||
Losses Rollforward | 2020 | 2019 | |||||||||
(In thousands) | |||||||||||
Beginning balance | $ | 174,646 | $ | 169,333 | |||||||
Cumulative effect of change in | |||||||||||
accounting principle - CECL | 7,327 | - | |||||||||
Charge-offs | (93,589 | ) | (32,262 | ) | |||||||
Recoveries | 6,368 | 15,575 | |||||||||
Net charge-offs | (87,221 | ) | (16,687 | ) | |||||||
Provision | 339,000 | 22,000 | |||||||||
Ending balance | $ | 433,752 | $ | 174,646 | |||||||
The allowance for credit losses decreased by
Net charge-offs were
Net charge-offs were
Security monitoring loans have decreased 47% from
For the fourth quarter of 2020 and third quarter of 2020, annualized net charge-offs to average loans and leases were 0.40% and 0.75%, respectively.
The allowance for credit losses as a percentage of loans and leases held for investment was 2.27% at
For the full year 2020, gross charge-offs were
For the full year 2020, recoveries were
For the full year 2020, net charge-offs to average loans and leases increased to 0.45% from 0.09% for the full year 2019.
Deposits and Client Investment Funds
The following table presents the composition of our deposit portfolio as of the dates indicated:
(Keep as 12/31) | ||||||||||||||||||||
% of | % of | % of | % of | |||||||||||||||||
Deposit Composition | Balance | Total | Balance | Total | Balance | Total | Balance | Total | ||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
Noninterest-bearing demand | $ | 9,193,827 | 37 | % | $ | 9,346,744 | 39 | % | $ | 7,243,298 | 38 | % | $ | 7,243,298 | 38 | % | ||||
Interest checking | 5,974,910 | 24 | % | 4,657,511 | 20 | % | 3,753,978 | 19 | % | 3,753,978 | 19 | % | ||||||||
Money market | 6,532,917 | 26 | % | 6,539,313 | 27 | % | 4,690,420 | 24 | % | 4,690,420 | 24 | % | ||||||||
Savings | 562,826 | 2 | % | 574,061 | 2 | % | 499,591 | 3 | % | 499,591 | 3 | % | ||||||||
Total core deposits | 22,264,480 | 89 | % | 21,117,629 | 88 | % | 16,187,287 | 84 | % | 16,187,287 | 84 | % | ||||||||
Non-core non-maturity deposits | 1,149,467 | 5 | % | 1,123,909 | 5 | % | 496,407 | 3 | % | 496,407 | 3 | % | ||||||||
Total non-maturity deposits | 23,413,947 | 94 | % | 22,241,538 | 93 | % | 16,683,694 | 87 | % | 16,683,694 | 87 | % | ||||||||
Time deposits | 994,197 | 4 | % | 1,047,621 | 4 | % | 2,065,733 | 11 | % | 2,065,733 | 11 | % | ||||||||
Time deposits over | 532,573 | 2 | % | 676,536 | 3 | % | 483,609 | 2 | % | 483,609 | 2 | % | ||||||||
Total time deposits | 1,526,770 | 6 | % | 1,724,157 | 7 | % | 2,549,342 | 13 | % | 2,549,342 | 13 | % | ||||||||
Total deposits | $ | 24,940,717 | 100 | % | $ | 23,965,695 | 100 | % | $ | 19,233,036 | 100 | % | $ | 19,233,036 | 100 | % | ||||
At
In addition to deposit products, we also offer alternative non-depository cash investment options for select clients; these alternatives include investments managed by
CREDIT QUALITY
The following table presents loan and lease credit quality metrics as of the dates indicated:
Increase | |||||||||||
Credit Quality Metrics | 2020 | 2020 | (Decrease) | ||||||||
(Dollars in thousands) | |||||||||||
NPAs and Performing TDRs: | |||||||||||
Nonaccrual loans and leases held for investment (1) | $ | 91,163 | $ | 85,615 | $ | 5,548 | |||||
Accruing loans contractually past due 90 days or more | - | - | - | ||||||||
Foreclosed assets, net | 14,027 | 13,747 | 280 | ||||||||
Total nonperforming assets ("NPAs") | $ | 105,190 | $ | 99,362 | $ | 5,828 | |||||
Performing TDRs held for investment | $ | 14,254 | $ | 13,679 | $ | 575 | |||||
Nonaccrual loans and leases held for investment | |||||||||||
to loans and leases held for investment | 0.48 | % | 0.45 | % | |||||||
Nonperforming assets to loans and leases | |||||||||||
held for investment and foreclosed assets | 0.55 | % | 0.52 | % | |||||||
Loan and Lease Credit Risk Ratings: | |||||||||||
Pass | $ | 18,076,832 | $ | 17,967,872 | $ | 108,960 | |||||
Special mention | 741,283 | 783,756 | (42,473 | ) | |||||||
Classified | 265,262 | 274,572 | (9,310 | ) | |||||||
Total loans and leases held for investment, | |||||||||||
net of deferred fees | $ | 19,083,377 | $ | 19,026,200 | $ | 57,177 | |||||
Classified loans and leases held for investment | |||||||||||
to loans and leases held for investment | 1.39 | % | 1.44 | % | |||||||
Allowance for Credit Losses: | |||||||||||
Allowance for loan and lease losses | $ | 348,181 | $ | 345,966 | $ | 2,215 | |||||
Reserve for unfunded loan commitments | 85,571 | 96,571 | (11,000 | ) | |||||||
Allowance for credit losses | $ | 433,752 | $ | 442,537 | $ | (8,785 | ) | ||||
Provision for credit losses (for the quarter) | $ | 10,000 | $ | 97,000 | $ | (87,000 | ) | ||||
Net charge-offs (for the quarter) | $ | 18,785 | $ | 36,084 | $ | (17,299 | ) | ||||
Net charge-offs to average loans and leases | |||||||||||
(for the quarter) | 0.40 | % | 0.75 | % | |||||||
Allowance for loan and lease losses to loans | |||||||||||
and leases held for investment | 1.82 | % | 1.82 | % | |||||||
Allowance for credit losses to loans and leases | |||||||||||
held for investment | 2.27 | % | 2.33 | % | |||||||
Allowance for credit losses to nonaccrual loans | |||||||||||
and leases held for investment | 475.8 | % | 516.9 | % | |||||||
(1) Nonaccrual loans include guaranteed amounts of | |||||||||||
After taking pro-active and decisive steps in the first quarter at the onset of the pandemic to downgrade certain loans, the level of special mention loans and leases, which peaked in the first quarter of 2020, and classified and nonaccrual loans and leases, which peaked in the second quarter of 2020, have declined with the enhanced ongoing monitoring of the loan and lease portfolio during the course of the year. Despite the early actions, enhanced monitoring, and build in the allowance for credit losses, certain credit metrics remain elevated as we continue to manage the credit environment and economic impacts caused by the pandemic.
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:
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 | $ | 43,731 | $ | 3,636 | $ | 45,120 | $ | - | $ | (1,389 | ) | $ | 3,636 | ||||||
Income producing and other | |||||||||||||||||||
residential | 1,826 | 600 | 2,008 | 1,761 | (182 | ) | (1,161 | ) | |||||||||||
Total real estate mortgage | 45,557 | 4,236 | 47,128 | 1,761 | (1,571 | ) | 2,475 | ||||||||||||
Real estate construction and land: | |||||||||||||||||||
Commercial | 315 | - | 324 | - | (9 | ) | - | ||||||||||||
Residential | - | 759 | - | 3,108 | - | (2,349 | ) | ||||||||||||
Total real estate | |||||||||||||||||||
construction and land | 315 | 759 | 324 | 3,108 | (9 | ) | (2,349 | ) | |||||||||||
Commercial: | |||||||||||||||||||
Asset-based | 2,679 | - | 2,817 | - | (138 | ) | - | ||||||||||||
Venture capital | 1,980 | 540 | 2,001 | 2,319 | (21 | ) | (1,779 | ) | |||||||||||
Other commercial | 40,243 | 2,078 | 32,941 | 185 | 7,302 | 1,893 | |||||||||||||
Total commercial | 44,902 | 2,618 | 37,759 | 2,504 | 7,143 | 114 | |||||||||||||
Consumer | 389 | 1,260 | 404 | 791 | (15 | ) | 469 | ||||||||||||
Total held for investment | $ | 91,163 | $ | 8,873 | $ | 85,615 | $ | 8,164 | $ | 5,548 | $ | 709 | |||||||
During the fourth quarter of 2020, nonaccrual loans and leases increased by
CAPITAL
The following table presents certain actual capital ratios and ratios excluding PPP loans:
Excluding | |||||||||
PPP | 2020 | ||||||||
Actual (1) | Loans (1) | Actual | |||||||
PacWest Bancorp Consolidated: | |||||||||
Tier 1 leverage capital ratio | 8.55 | % | 8.93 | % | (3 | ) | 8.66 | % | |
Common equity tier 1 capital ratio | 10.53 | % | 10.53 | % | 10.45 | % | |||
Total capital ratio | 13.76 | % | 13.76 | % | 13.74 | % | |||
Tangible common equity ratio (2) | 8.78 | % | 9.12 | % | (3 | ) | 8.71 | % | |
(1) Capital information for | |||||||||
(2) Non-GAAP measure. | |||||||||
(3) PPP loans have been excluded from total assets in denominator as they are zero risk-weighted. | |||||||||
ABOUT
FORWARD LOOKING STATEMENTS
This communication contains certain forward-looking information about
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 | |||||||||||
2020 | 2020 | 2019 | |||||||||
(Dollars in thousands, except per share data) | |||||||||||
ASSETS: | |||||||||||
Cash and due from banks | $ | 150,464 | $ | 187,176 | $ | 172,585 | |||||
Interest-earning deposits in financial institutions | 3,010,197 | 2,766,020 | 465,039 | ||||||||
Total cash and cash equivalents | 3,160,661 | 2,953,196 | 637,624 | ||||||||
Securities available-for-sale, at estimated fair value | 5,235,591 | 4,532,614 | 3,797,187 | ||||||||
17,250 | 17,250 | 40,924 | |||||||||
Total investment securities | 5,252,841 | 4,549,864 | 3,838,111 | ||||||||
Gross loans and leases held for investment | 19,153,357 | 19,101,680 | 18,910,740 | ||||||||
Deferred fees, net | (69,980 | ) | (75,480 | ) | (63,868 | ) | |||||
Total loans and leases held for investment, | |||||||||||
net of deferred fees | 19,083,377 | 19,026,200 | 18,846,872 | ||||||||
Allowance for loan and lease losses | (348,181 | ) | (345,966 | ) | (138,785 | ) | |||||
Total loans and leases held for investment, net | 18,735,196 | 18,680,234 | 18,708,087 | ||||||||
Equipment leased to others under operating leases | 333,846 | 286,425 | 324,084 | ||||||||
Premises and equipment, net | 39,234 | 40,544 | 38,585 | ||||||||
Foreclosed assets, net | 14,027 | 13,747 | 440 | ||||||||
1,078,670 | 1,078,670 | 2,548,670 | |||||||||
Core deposit and customer relationship intangibles, net | 23,641 | 26,813 | 38,394 | ||||||||
Other assets | 860,326 | 797,223 | 636,811 | ||||||||
Total assets | $ | 29,498,442 | $ | 28,426,716 | $ | 26,770,806 | |||||
LIABILITIES: | |||||||||||
Noninterest-bearing deposits | $ | 9,193,827 | $ | 9,346,744 | $ | 7,243,298 | |||||
Interest-bearing deposits | 15,746,890 | 14,618,951 | 11,989,738 | ||||||||
Total deposits | 24,940,717 | 23,965,695 | 19,233,036 | ||||||||
Borrowings | 5,000 | 60,000 | 1,759,008 | ||||||||
Subordinated debentures | 465,812 | 463,282 | 458,209 | ||||||||
Accrued interest payable and other liabilities | 491,962 | 451,508 | 365,856 | ||||||||
Total liabilities | 25,903,491 | 24,940,485 | 21,816,109 | ||||||||
STOCKHOLDERS' EQUITY: | |||||||||||
Common stock | 1,207 | 1,208 | 1,219 | ||||||||
Additional paid-in-capital | 3,100,633 | 3,125,554 | 3,306,006 | ||||||||
Retained earnings | 409,391 | 292,561 | 1,652,248 | ||||||||
(88,803 | ) | (88,566 | ) | (83,434 | ) | ||||||
Accumulated other comprehensive income | 172,523 | 155,474 | 78,658 | ||||||||
STOCKHOLDERS' EQUITY (1) | 3,594,951 | 3,486,231 | 4,954,697 | ||||||||
Total liabilities and stockholders’ equity | $ | 29,498,442 | $ | 28,426,716 | $ | 26,770,806 | |||||
Book value per share | $ | 30.36 | $ | 29.42 | $ | 41.36 | |||||
Tangible book value per share (2) | $ | 21.05 | $ | 20.09 | $ | 19.77 | |||||
Shares outstanding | 118,414,853 | 118,489,927 | 119,781,605 | ||||||||
(1) Includes net unrealized gain on securities | |||||||||||
available-for-sale, net | $ | 172,523 | $ | 155,474 | $ | 78,658 | |||||
(2) Non-GAAP measure. | |||||||||||
PACWEST BANCORP AND SUBSIDIARIES | |||||||||||||||||||
CONDENSED CONSOLIDATED STATEMENT OF EARNINGS (LOSS) | |||||||||||||||||||
Three Months Ended | Year Ended | ||||||||||||||||||
2020 | 2020 | 2019 | 2020 | 2019 | |||||||||||||||
(Dollars in thousands, except per share data) | |||||||||||||||||||
Interest income: | |||||||||||||||||||
Loans and leases | $ | 242,198 | $ | 240,811 | $ | 263,402 | $ | 993,138 | $ | 1,097,845 | |||||||||
Investment securities | 28,843 | 24,443 | 28,135 | 106,770 | 115,569 | ||||||||||||||
Deposits in financial institutions | 1,135 | 654 | 2,056 | 3,583 | 6,479 | ||||||||||||||
Total interest income | 272,176 | 265,908 | 293,593 | 1,103,491 | 1,219,893 | ||||||||||||||
Interest expense: | |||||||||||||||||||
Deposits | 8,454 | 9,887 | 34,802 | 59,663 | 148,460 | ||||||||||||||
Borrowings | 37 | 27 | 5,189 | 8,161 | 26,961 | ||||||||||||||
Subordinated debentures | 4,477 | 4,670 | 6,983 | 21,109 | 29,843 | ||||||||||||||
Total interest expense | 12,968 | 14,584 | 46,974 | 88,933 | 205,264 | ||||||||||||||
Net interest income | 259,208 | 251,324 | 246,619 | 1,014,558 | 1,014,629 | ||||||||||||||
Provision for credit losses | 10,000 | 97,000 | 3,000 | 339,000 | 22,000 | ||||||||||||||
Net interest income after | |||||||||||||||||||
provision for credit losses | 249,208 | 154,324 | 243,619 | 675,558 | 992,629 | ||||||||||||||
Noninterest income: | |||||||||||||||||||
Service charges on deposit accounts | 3,119 | 2,570 | 3,611 | 10,351 | 14,637 | ||||||||||||||
Other commissions and fees | 9,974 | 10,541 | 10,170 | 40,347 | 43,623 | ||||||||||||||
Leased equipment income | 9,440 | 9,900 | 10,648 | 43,628 | 38,727 | ||||||||||||||
Gain on sale of loans and leases | 1,671 | 35 | 23 | 2,139 | 1,114 | ||||||||||||||
Gain on sale of securities | 4 | 5,270 | 184 | 13,171 | 25,445 | ||||||||||||||
Other income | 15,642 | 9,936 | 2,540 | 36,424 | 19,016 | ||||||||||||||
Total noninterest income | 39,850 | 38,252 | 27,176 | 146,060 | 142,562 | ||||||||||||||
Noninterest expense: | |||||||||||||||||||
Compensation | 73,171 | 75,131 | 74,637 | 271,494 | 285,862 | ||||||||||||||
Occupancy | 14,083 | 14,771 | 14,541 | 57,555 | 57,407 | ||||||||||||||
Data processing | 6,718 | 6,505 | 6,770 | 26,779 | 27,556 | ||||||||||||||
Other professional services | 6,800 | 4,713 | 4,261 | 19,917 | 17,803 | ||||||||||||||
Insurance and assessments | 5,064 | 3,939 | 4,168 | 22,625 | 16,404 | ||||||||||||||
Intangible asset amortization | 3,172 | 3,751 | 4,153 | 14,753 | 18,726 | ||||||||||||||
Leased equipment depreciation | 7,501 | 7,057 | 6,856 | 28,865 | 24,016 | ||||||||||||||
Foreclosed assets (income) expense, net | (272 | ) | 335 | (3,446 | ) | (17 | ) | (3,555 | ) | ||||||||||
Acquisition, integration and | |||||||||||||||||||
reorganization costs | 1,060 | - | (269 | ) | 1,060 | 349 | |||||||||||||
Customer related expense | 4,430 | 4,762 | 3,952 | 17,532 | 13,839 | ||||||||||||||
Loan expense | 3,926 | 3,499 | 2,967 | 13,454 | 12,931 | ||||||||||||||
- | - | - | 1,470,000 | - | |||||||||||||||
Other expense | 10,029 | 8,939 | 5,138 | 40,002 | 30,913 | ||||||||||||||
Total noninterest expense | 135,682 | 133,402 | 123,728 | 1,984,019 | 502,251 | ||||||||||||||
Earnings (loss) before income taxes | 153,376 | 59,174 | 147,067 | (1,162,401 | ) | 632,940 | |||||||||||||
Income tax expense | 36,546 | 13,671 | 29,186 | 75,173 | 164,304 | ||||||||||||||
Net earnings (loss) | $ | 116,830 | $ | 45,503 | $ | 117,881 | $ | (1,237,574 | ) | $ | 468,636 | ||||||||
Basic and diluted earnings (loss) per share | $ | 0.99 | $ | 0.38 | $ | 0.98 | $ | (10.61 | ) | $ | 3.90 | ||||||||
Dividends declared and paid per share | $ | 0.25 | $ | 0.25 | $ | 0.60 | $ | 1.35 | $ | 2.40 | |||||||||
PACWEST BANCORP AND SUBSIDIARIES | |||||||||||||||||||
NET EARNINGS (LOSS) PER SHARE CALCULATIONS | |||||||||||||||||||
Three Months Ended | Year Ended | ||||||||||||||||||
2020 | 2020 | 2019 | 2020 | 2019 | |||||||||||||||
(In thousands, except per share data) | |||||||||||||||||||
Basic Earnings (Loss) Per Share: | |||||||||||||||||||
Net earnings (loss) | $ | 116,830 | $ | 45,503 | $ | 117,881 | $ | (1,237,574 | ) | $ | 468,636 | ||||||||
Less: earnings allocated to unvested | |||||||||||||||||||
restricted stock (1) | (1,398 | ) | (578 | ) | (1,458 | ) | (1,782 | ) | (5,182 | ) | |||||||||
Net earnings (loss) allocated to | |||||||||||||||||||
common shares | $ | 115,432 | $ | 44,925 | $ | 116,423 | $ | (1,239,356 | ) | $ | 463,454 | ||||||||
Weighted-average basic shares and | |||||||||||||||||||
unvested restricted stock outstanding | 118,446 | 118,438 | 119,804 | 118,463 | 120,468 | ||||||||||||||
Less: weighted-average unvested | |||||||||||||||||||
restricted stock outstanding | (1,652 | ) | (1,684 | ) | (1,566 | ) | (1,610 | ) | (1,502 | ) | |||||||||
Weighted-average basic shares | |||||||||||||||||||
outstanding | 116,794 | 116,754 | 118,238 | 116,853 | 118,966 | ||||||||||||||
Basic earnings (loss) per share | $ | 0.99 | $ | 0.38 | $ | 0.98 | $ | (10.61 | ) | $ | 3.90 | ||||||||
Diluted Earnings (Loss) Per Share: | |||||||||||||||||||
Net earnings (loss) allocated to | |||||||||||||||||||
common shares | $ | 115,432 | $ | 44,925 | $ | 116,423 | $ | (1,239,356 | ) | $ | 463,454 | ||||||||
Weighted-average diluted shares | |||||||||||||||||||
outstanding | 116,794 | 116,754 | 118,238 | 116,853 | 118,966 | ||||||||||||||
Diluted earnings (loss) per share | $ | 0.99 | $ | 0.38 | $ | 0.98 | $ | (10.61 | ) | $ | 3.90 | ||||||||
(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 | ||||||||||||||||||
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) | $ | 18,769,214 | $ | 243,188 | 5.15% | $ | 19,195,737 | $ | 241,547 | 5.01% | $ | 18,470,583 | $ | 263,783 | 5.67% | |||
Investment securities (3) | 4,888,993 | 30,757 | 2.50% | 4,107,915 | 26,015 | 2.52% | 3,811,216 | 29,509 | 3.07% | |||||||||
Deposits in financial | ||||||||||||||||||
institutions | 3,576,335 | 1,135 | 0.13% | 2,554,349 | 654 | 0.10% | 498,068 | 2,056 | 1.64% | |||||||||
Total interest-earning | ||||||||||||||||||
assets (1) | 27,234,542 | 275,080 | 4.02% | 25,858,001 | 268,216 | 4.13% | 22,779,867 | 295,348 | 5.14% | |||||||||
Other assets | 2,100,247 | 2,077,192 | 3,600,872 | |||||||||||||||
Total assets | $ | 29,334,789 | $ | 27,935,193 | $ | 26,380,739 | ||||||||||||
Liabilities and | ||||||||||||||||||
Stockholders' Equity: | ||||||||||||||||||
Interest checking | $ | 5,191,435 | 2,064 | 0.16% | $ | 4,904,614 | 2,019 | 0.16% | $ | 3,731,696 | 10,031 | 1.07% | ||||||
Money market | 7,636,220 | 3,225 | 0.17% | 7,170,842 | 3,081 | 0.17% | 5,117,553 | 12,063 | 0.94% | |||||||||
Savings | 567,646 | 35 | 0.02% | 565,395 | 35 | 0.02% | 509,497 | 204 | 0.16% | |||||||||
Time | 1,650,150 | 3,130 | 0.75% | 1,876,072 | 4,752 | 1.01% | 2,744,156 | 12,504 | 1.81% | |||||||||
Total interest-bearing | ||||||||||||||||||
deposits | 15,045,451 | 8,454 | 0.22% | 14,516,923 | 9,887 | 0.27% | 12,102,902 | 34,802 | 1.14% | |||||||||
Borrowings | 237,098 | 37 | 0.06% | 181,315 | 27 | 0.06% | 1,179,220 | 5,189 | 1.75% | |||||||||
Subordinated debentures | 463,951 | 4,477 | 3.84% | 462,375 | 4,670 | 4.02% | 456,997 | 6,983 | 6.06% | |||||||||
Total interest-bearing | ||||||||||||||||||
liabilities | 15,746,500 | 12,968 | 0.33% | 15,160,613 | 14,584 | 0.38% | 13,739,119 | 46,974 | 1.36% | |||||||||
Noninterest-bearing | ||||||||||||||||||
demand deposits | 9,589,789 | 8,812,391 | 7,338,888 | |||||||||||||||
Other liabilities | 462,075 | 464,320 | 372,550 | |||||||||||||||
Total liabilities | 25,798,364 | 24,437,324 | 21,450,557 | |||||||||||||||
Stockholders' equity | 3,536,425 | 3,497,869 | 4,930,182 | |||||||||||||||
Total liabilities and | ||||||||||||||||||
stockholders' equity | $ | 29,334,789 | $ | 27,935,193 | $ | 26,380,739 | ||||||||||||
Net interest income (1) | $ | 262,112 | $ | 253,632 | $ | 248,374 | ||||||||||||
Net interest spread (1) | 3.69% | 3.75% | 3.78% | |||||||||||||||
Net interest margin (1) | 3.83% | 3.90% | 4.33% | |||||||||||||||
Total deposits (4) | $ | 24,635,240 | $ | 8,454 | 0.14% | $ | 23,329,314 | $ | 9,887 | 0.17% | $ | 19,441,790 | $ | 34,802 | 0.71% | |||
(1) Tax equivalent. | ||||||||||||||||||
(2) Includes discount accretion on acquired loans of | ||||||||||||||||||
September 30, 2020, and | ||||||||||||||||||
(3) Includes tax-equivalent adjustments of | ||||||||||||||||||
September 30, 2020, and | ||||||||||||||||||
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 SUBSIDIARIES | |||||||||||||||||||
FIVE QUARTER BALANCE SHEET | |||||||||||||||||||
2020 | 2020 | 2020 | 2020 | 2019 | |||||||||||||||
(Dollars in thousands, except per share data) | |||||||||||||||||||
ASSETS: | |||||||||||||||||||
Cash and due from banks | $ | 150,464 | $ | 187,176 | $ | 174,059 | $ | 172,570 | $ | 172,585 | |||||||||
Interest-earning deposits in financial | |||||||||||||||||||
institutions | 3,010,197 | 2,766,020 | 1,747,077 | 439,690 | 465,039 | ||||||||||||||
Total cash and cash equivalents | 3,160,661 | 2,953,196 | 1,921,136 | 612,260 | 637,624 | ||||||||||||||
Securities available-for-sale | 5,235,591 | 4,532,614 | 3,851,141 | 3,757,663 | 3,797,187 | ||||||||||||||
17,250 | 17,250 | 17,250 | 54,244 | 40,924 | |||||||||||||||
Total investment securities | 5,252,841 | 4,549,864 | 3,868,391 | 3,811,907 | 3,838,111 | ||||||||||||||
Gross loans and leases held for investment | 19,153,357 | 19,101,680 | 19,780,476 | 19,806,394 | 18,910,740 | ||||||||||||||
Deferred fees, net | (69,980 | ) | (75,480 | ) | (85,845 | ) | (61,089 | ) | (63,868 | ) | |||||||||
Total loans and leases held for | |||||||||||||||||||
investment, net of deferred fees | 19,083,377 | 19,026,200 | 19,694,631 | 19,745,305 | 18,846,872 | ||||||||||||||
Allowance for loan and lease losses | (348,181 | ) | (345,966 | ) | (301,050 | ) | (221,292 | ) | (138,785 | ) | |||||||||
Total loans and leases held for | |||||||||||||||||||
investment, net | 18,735,196 | 18,680,234 | 19,393,581 | 19,524,013 | 18,708,087 | ||||||||||||||
Equipment leased to others under | |||||||||||||||||||
operating leases | 333,846 | 286,425 | 295,191 | 306,530 | - | 324,084 | |||||||||||||
Premises and equipment, net | 39,234 | 40,544 | 42,299 | 39,799 | 38,585 | ||||||||||||||
Foreclosed assets, net | 14,027 | 13,747 | 1,449 | 1,701 | 440 | ||||||||||||||
1,078,670 | 1,078,670 | 1,078,670 | 1,078,670 | 2,548,670 | |||||||||||||||
Core deposit and customer relationship | |||||||||||||||||||
intangibles, net | 23,641 | 26,813 | 30,564 | 34,446 | 38,394 | ||||||||||||||
Other assets | 860,326 | 797,223 | 734,457 | 733,941 | 636,811 | ||||||||||||||
Total assets | $ | 29,498,442 | $ | 28,426,716 | $ | 27,365,738 | $ | 26,143,267 | $ | 26,770,806 | |||||||||
LIABILITIES: | |||||||||||||||||||
Noninterest-bearing deposits | $ | 9,193,827 | $ | 9,346,744 | $ | 8,629,543 | $ | 7,510,218 | $ | 7,243,298 | |||||||||
Interest-bearing deposits | 15,746,890 | 14,618,951 | 14,299,036 | 12,065,619 | 11,989,738 | ||||||||||||||
Total deposits | 24,940,717 | 23,965,695 | 22,928,579 | 19,575,837 | 19,233,036 | ||||||||||||||
Borrowings | 5,000 | 60,000 | 60,000 | 2,295,000 | 1,759,008 | ||||||||||||||
Subordinated debentures | 465,812 | 463,282 | 460,772 | 458,994 | 458,209 | ||||||||||||||
Accrued interest payable and other | |||||||||||||||||||
liabilities | 491,962 | 451,508 | 463,489 | 423,047 | 365,856 | ||||||||||||||
Total liabilities | 25,903,491 | 24,940,485 | 23,912,840 | 22,752,878 | 21,816,109 | ||||||||||||||
STOCKHOLDERS' EQUITY (1) | 3,594,951 | 3,486,231 | 3,452,898 | 3,390,389 | 4,954,697 | ||||||||||||||
Total liabilities and stockholders’ | |||||||||||||||||||
equity | $ | 29,498,442 | $ | 28,426,716 | $ | 27,365,738 | $ | 26,143,267 | $ | 26,770,806 | |||||||||
Book value per share | $ | 30.36 | $ | 29.42 | $ | 29.17 | $ | 28.75 | $ | 41.36 | |||||||||
Tangible book value per share (2) | $ | 21.05 | $ | 20.09 | $ | 19.80 | $ | 19.31 | $ | 19.77 | |||||||||
Shares outstanding | 118,414,853 | 118,489,927 | 118,374,603 | 117,916,789 | 119,781,605 | ||||||||||||||
(1) Includes net unrealized gain on | |||||||||||||||||||
securities available-for-sale, net | $ | 172,523 | $ | 155,474 | $ | 145,038 | $ | 90,916 | $ | 78,658 | |||||||||
(2) Non-GAAP measure. | |||||||||||||||||||
PACWEST BANCORP AND SUBSIDIARIES | |||||||||||||||||||
FIVE QUARTER STATEMENT OF EARNINGS (LOSS) | |||||||||||||||||||
Three Months Ended | |||||||||||||||||||
2020 | 2020 | 2020 | 2020 | 2019 | |||||||||||||||
(Dollars in thousands, except per share data) | |||||||||||||||||||
Interest income: | |||||||||||||||||||
Loans and leases | $ | 242,198 | $ | 240,811 | $ | 247,851 | $ | 262,278 | $ | 263,402 | |||||||||
Investment securities | 28,843 | 24,443 | 26,038 | 27,446 | 28,135 | ||||||||||||||
Deposits in financial institutions | 1,135 | 654 | 186 | 1,608 | 2,056 | ||||||||||||||
Total interest income | 272,176 | 265,908 | 274,075 | 291,332 | 293,593 | ||||||||||||||
Interest expense: | |||||||||||||||||||
Deposits | 8,454 | 9,887 | 13,075 | 28,247 | 34,802 | ||||||||||||||
Borrowings | 37 | 27 | 1,319 | 6,778 | 5,189 | ||||||||||||||
Subordinated debentures | 4,477 | 4,670 | 5,402 | 6,560 | 6,983 | ||||||||||||||
Total interest expense | 12,968 | 14,584 | 19,796 | 41,585 | 46,974 | ||||||||||||||
Net interest income | 259,208 | 251,324 | 254,279 | 249,747 | 246,619 | ||||||||||||||
Provision for credit losses | 10,000 | 97,000 | 120,000 | 112,000 | 3,000 | ||||||||||||||
Net interest income after | |||||||||||||||||||
provision for credit losses | 249,208 | 154,324 | 134,279 | 137,747 | 243,619 | ||||||||||||||
Noninterest income: | |||||||||||||||||||
Service charges on deposit accounts | 3,119 | 2,570 | 2,004 | 2,658 | 3,611 | ||||||||||||||
Other commissions and fees | 9,974 | 10,541 | 10,111 | 9,721 | 10,170 | ||||||||||||||
Leased equipment income | 9,440 | 9,900 | 12,037 | 12,251 | 10,648 | ||||||||||||||
Gain on sale of loans and leases | 1,671 | 35 | 346 | 87 | 23 | ||||||||||||||
Gain on sale of securities | 4 | 5,270 | 7,715 | 182 | 184 | ||||||||||||||
Other income | 15,642 | 9,936 | 6,645 | 4,201 | 2,540 | ||||||||||||||
Total noninterest income | 39,850 | 38,252 | 38,858 | 29,100 | 27,176 | ||||||||||||||
Noninterest expense: | |||||||||||||||||||
Compensation | 73,171 | 75,131 | 61,910 | 61,282 | 74,637 | ||||||||||||||
Occupancy | 14,083 | 14,771 | 14,494 | 14,207 | 14,541 | ||||||||||||||
Data processing | 6,718 | 6,505 | 7,102 | 6,454 | 6,770 | ||||||||||||||
Other professional services | 6,800 | 4,713 | 4,146 | 4,258 | 4,261 | ||||||||||||||
Insurance and assessments | 5,064 | 3,939 | 9,373 | 4,249 | 4,168 | ||||||||||||||
Intangible asset amortization | 3,172 | 3,751 | 3,882 | 3,948 | 4,153 | ||||||||||||||
Leased equipment depreciation | 7,501 | 7,057 | 7,102 | 7,205 | 6,856 | ||||||||||||||
Foreclosed assets (income) expense, net | (272 | ) | 335 | (146 | ) | 66 | (3,446 | ) | |||||||||||
Acquisition, integration and | |||||||||||||||||||
reorganization costs | 1,060 | - | - | - | (269 | ) | |||||||||||||
Customer related expense | 4,430 | 4,762 | 4,408 | 3,932 | 3,952 | ||||||||||||||
Loan expense | 3,926 | 3,499 | 3,379 | 2,650 | 2,967 | ||||||||||||||
- | - | - | 1,470,000 | - | |||||||||||||||
Other expense | 10,029 | 8,939 | 11,315 | 9,719 | 5,138 | ||||||||||||||
Total noninterest expense | 135,682 | 133,402 | 126,965 | 1,587,970 | 123,728 | ||||||||||||||
Earnings (loss) before income taxes | 153,376 | 59,174 | 46,172 | (1,421,123 | ) | 147,067 | |||||||||||||
Income tax expense | 36,546 | 13,671 | 12,968 | 11,988 | 29,186 | ||||||||||||||
Net earnings (loss) | $ | 116,830 | $ | 45,503 | $ | 33,204 | $ | (1,433,111 | ) | $ | 117,881 | ||||||||
Basic and diluted earnings (loss) per share | $ | 0.99 | $ | 0.38 | $ | 0.28 | $ | (12.23 | ) | $ | 0.98 | ||||||||
Dividends declared and paid per share | $ | 0.25 | $ | 0.25 | $ | 0.25 | $ | 0.60 | $ | 0.60 | |||||||||
PACWEST BANCORP AND SUBSIDIARIES | |||||||||||||||||||
FIVE QUARTER SELECTED FINANCIAL DATA | |||||||||||||||||||
At or For the Three Months Ended | |||||||||||||||||||
2020 | 2020 | 2020 | 2020 | 2019 | |||||||||||||||
(Dollars in thousands) | |||||||||||||||||||
Performance Ratios: | |||||||||||||||||||
Return on average assets (1) | 1.58 | % | 0.65 | % | 0.50 | % | (21.27 | )% | 1.77 | % | |||||||||
Pre-provision, pre-goodwill impairment, | |||||||||||||||||||
pre-tax net revenue ("PPNR") | |||||||||||||||||||
return on average assets (1)(2) | 2.22 | % | 2.22 | % | 2.51 | % | 2.39 | % | 2.26 | % | |||||||||
Return on average equity (1) | 13.14 | % | 5.18 | % | 3.87 | % | (116.28 | )% | 9.49 | % | |||||||||
Return on average tangible equity (1)(2) | 19.63 | % | 8.20 | % | 6.39 | % | 6.88 | % | 20.68 | % | |||||||||
Efficiency ratio | 43.6 | % | 45.1 | % | 42.9 | % | 40.6 | % | 44.8 | % | |||||||||
Noninterest expense as a percentage | |||||||||||||||||||
of average assets (1) | 1.84 | % | 1.90 | % | 1.92 | % | 23.57 | % | 1.86 | % | |||||||||
Average Yields/Costs (1): | |||||||||||||||||||
Yield on: | |||||||||||||||||||
Average loans and leases (3) | 5.15 | % | 5.01 | % | 5.01 | % | 5.54 | % | 5.67 | % | |||||||||
Average interest-earning assets (3) | 4.02 | % | 4.13 | % | 4.53 | % | 5.02 | % | 5.14 | % | |||||||||
Cost of: | |||||||||||||||||||
Average interest-bearing deposits | 0.22 | % | 0.27 | % | 0.40 | % | 0.95 | % | 1.14 | % | |||||||||
Average total deposits | 0.14 | % | 0.17 | % | 0.25 | % | 0.59 | % | 0.71 | % | |||||||||
Average interest-bearing liabilities | 0.33 | % | 0.38 | % | 0.55 | % | 1.16 | % | 1.36 | % | |||||||||
Net interest spread (3) | 3.69 | % | 3.75 | % | 3.98 | % | 3.86 | % | 3.78 | % | |||||||||
Net interest margin (3) | 3.83 | % | 3.90 | % | 4.20 | % | 4.31 | % | 4.33 | % | |||||||||
Average Balances: | |||||||||||||||||||
Assets: | |||||||||||||||||||
Loans and leases, net of deferred fees | $ | 18,769,214 | $ | 19,195,737 | $ | 19,951,603 | $ | 19,065,035 | $ | 18,470,583 | |||||||||
Interest-earning assets | 27,234,542 | 25,858,001 | 24,531,204 | 23,455,636 | 22,779,867 | ||||||||||||||
Total assets | 29,334,789 | 27,935,193 | 26,621,227 | 27,099,040 | 26,380,739 | ||||||||||||||
Liabilities: | |||||||||||||||||||
Noninterest-bearing deposits | 9,589,789 | 8,812,391 | 8,292,151 | 7,357,717 | 7,338,888 | ||||||||||||||
Interest-bearing deposits | 15,045,451 | 14,516,923 | 13,116,297 | 11,896,780 | 12,102,902 | ||||||||||||||
Total deposits | 24,635,240 | 23,329,314 | 21,408,448 | 19,254,497 | 19,441,790 | ||||||||||||||
Borrowings | 237,098 | 181,315 | 871,110 | 2,026,749 | 1,179,220 | ||||||||||||||
Subordinated debentures | 463,951 | 462,375 | 459,466 | 458,399 | 456,997 | ||||||||||||||
Interest-bearing liabilities | 15,746,500 | 15,160,613 | 14,446,873 | 14,381,928 | 13,739,119 | ||||||||||||||
Stockholders' equity | 3,536,425 | 3,497,869 | 3,446,850 | 4,956,778 | 4,930,182 | ||||||||||||||
(1) Annualized. | |||||||||||||||||||
(2) Non-GAAP measure. | |||||||||||||||||||
(3) Tax equivalent. | |||||||||||||||||||
PACWEST BANCORP AND SUBSIDIARIES | |||||||||||||||||||
FIVE QUARTER SELECTED FINANCIAL DATA | |||||||||||||||||||
At or For the Three Months Ended | |||||||||||||||||||
2020 | 2020 | 2020 | 2020 | 2019 | |||||||||||||||
(Dollars in thousands) | |||||||||||||||||||
Credit Quality Ratios: | |||||||||||||||||||
Nonaccrual loans and leases held for | |||||||||||||||||||
investment to loans and leases | |||||||||||||||||||
held for investment | 0.48 | % | 0.45 | % | 0.84 | % | 0.48 | % | 0.49 | % | |||||||||
Nonperforming assets to loans and | |||||||||||||||||||
leases held for investment and | |||||||||||||||||||
foreclosed assets | 0.55 | % | 0.52 | % | 0.85 | % | 0.49 | % | 0.49 | % | |||||||||
Classified loans and leases held for | |||||||||||||||||||
investment to loans and leases | |||||||||||||||||||
held for investment | 1.39 | % | 1.44 | % | 1.49 | % | 0.75 | % | 0.93 | % | |||||||||
Provision for credit losses (for the | |||||||||||||||||||
quarter) to average loans and leases | |||||||||||||||||||
held for investment (annualized) | 0.21 | % | 2.01 | % | 2.42 | % | 2.36 | % | 0.06 | % | |||||||||
Net charge-offs (for the quarter) to | |||||||||||||||||||
average loans and leases held | |||||||||||||||||||
for investment (annualized) | 0.40 | % | 0.75 | % | 0.27 | % | 0.40 | % | 0.02 | % | |||||||||
Trailing 12 months net charge-offs | |||||||||||||||||||
to average loans and leases | |||||||||||||||||||
held for investment | 0.45 | % | 0.36 | % | 0.20 | % | 0.19 | % | 0.09 | % | |||||||||
Allowance for loan and lease losses to | |||||||||||||||||||
loans and leases held for investment | 1.82 | % | 1.82 | % | 1.53 | % | 1.12 | % | 0.74 | % | |||||||||
Allowance for credit losses to loans | |||||||||||||||||||
and leases held for investment | 2.27 | % | 2.33 | % | 1.94 | % | 1.39 | % | 0.93 | % | |||||||||
Allowance for credit losses to | |||||||||||||||||||
nonaccrual loans and leases | |||||||||||||||||||
held for investment | 475.8 | % | 516.9 | % | 229.7 | % | 287.5 | % | 189.1 | % | |||||||||
PacWest Bancorp Consolidated: | |||||||||||||||||||
Tier 1 leverage capital ratio (1) | 8.55 | % | 8.66 | % | 8.93 | % | 8.63 | % | 9.74 | % | |||||||||
Common equity tier 1 capital ratio (1) | 10.53 | % | 10.45 | % | 9.97 | % | 9.22 | % | 9.78 | % | |||||||||
Tier 1 capital ratio (1) | 10.53 | % | 10.45 | % | 9.97 | % | 9.22 | % | 9.78 | % | |||||||||
Total capital ratio (1) | 13.76 | % | 13.74 | % | 13.18 | % | 12.07 | % | 12.41 | % | |||||||||
Risk-weighted assets (1) | $ | 22,837,693 | $ | 22,114,040 | $ | 22,781,836 | $ | 24,214,209 | $ | 23,582,495 | |||||||||
Equity to assets ratio | 12.19 | % | 12.26 | % | 12.62 | % | 12.97 | % | 18.51 | % | |||||||||
Tangible common equity ratio (2) | 8.78 | % | 8.71 | % | 8.93 | % | 9.10 | % | 9.79 | % | |||||||||
Book value per share | $ | 30.36 | $ | 29.42 | $ | 29.17 | $ | 28.75 | $ | 41.36 | |||||||||
Tangible book value per share (2) | $ | 21.05 | $ | 20.09 | $ | 19.80 | $ | 19.31 | $ | 19.77 | |||||||||
Tier 1 leverage capital ratio (1) | 9.53 | % | 9.70 | % | 10.03 | % | 9.71 | % | 10.95 | % | |||||||||
Common equity tier 1 capital ratio (1) | 11.73 | % | 11.70 | % | 11.18 | % | 10.38 | % | 11.00 | % | |||||||||
Tier 1 capital ratio (1) | 11.73 | % | 11.70 | % | 11.18 | % | 10.38 | % | 11.00 | % | |||||||||
Total capital ratio (1) | 12.99 | % | 12.95 | % | 12.44 | % | 11.39 | % | 11.74 | % | |||||||||
(1) Capital information for | |||||||||||||||||||
(2) Non-GAAP measure. | |||||||||||||||||||
GAAP TO NON-GAAP RECONCILIATIONS
This press release contains certain non-GAAP financial disclosures for: (1) 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 Ended | ||||||||||||||||||
PPNR and PPNR Return | |||||||||||||||||||
on Average Assets | 2020 | 2020 | 2019 | 2020 | 2019 | ||||||||||||||
(Dollars in thousands) | |||||||||||||||||||
Net earnings (loss) | $ | 116,830 | $ | 45,503 | $ | 117,881 | $ | (1,237,574 | ) | $ | 468,636 | ||||||||
Add: Provision for credit losses | 10,000 | 97,000 | 3,000 | 339,000 | 22,000 | ||||||||||||||
Add: | - | - | - | 1,470,000 | - | ||||||||||||||
Add: Income tax expense | 36,546 | 13,671 | 29,186 | 75,173 | 164,304 | ||||||||||||||
Pre-provision, pre-goodwill impairment, | |||||||||||||||||||
pre-tax net revenue ("PPNR") | $ | 163,376 | $ | 156,174 | $ | 150,067 | $ | 646,599 | $ | 654,940 | |||||||||
Average assets | $ | 29,334,789 | $ | 27,935,193 | $ | 26,380,739 | $ | 27,752,412 | $ | 26,105,608 | |||||||||
Return on average assets (1) | 1.58 | % | 0.65 | % | 1.77 | % | (4.46 | )% | 1.80 | % | |||||||||
PPNR return on average assets (2) | 2.22 | % | 2.22 | % | 2.26 | % | 2.33 | % | 2.51 | % | |||||||||
(1) Annualized net earnings (loss) divided by average assets. | |||||||||||||||||||
(2) Annualized PPNR divided by average assets. | |||||||||||||||||||
Three Months Ended | Year Ended | ||||||||||||||||||
Return on Average Tangible Equity | 2020 | 2020 | 2019 | 2020 | 2019 | ||||||||||||||
(Dollars in thousands) | |||||||||||||||||||
Net earnings (loss) | $ | 116,830 | $ | 45,503 | $ | 117,881 | $ | (1,237,574 | ) | $ | 468,636 | ||||||||
Add: Intangible asset amortization | 3,172 | 3,751 | 4,153 | 14,753 | 18,726 | ||||||||||||||
Add: | - | - | - | 1,470,000 | - | ||||||||||||||
Adjusted net earnings | $ | 120,002 | $ | 49,254 | $ | 122,034 | $ | 247,179 | $ | 487,362 | |||||||||
Average stockholders' equity | $ | 3,536,425 | $ | 3,497,869 | $ | 4,930,182 | $ | 3,857,610 | $ | 4,864,332 | |||||||||
Less: Average intangible assets | 1,103,945 | 1,107,548 | 2,589,217 | 1,470,989 | 2,596,389 | ||||||||||||||
Average tangible common equity | $ | 2,432,480 | $ | 2,390,321 | $ | 2,340,965 | $ | 2,386,621 | $ | 2,267,943 | |||||||||
Return on average equity (1) | 13.14 | % | 5.18 | % | 9.49 | % | (32.08 | )% | 9.63 | % | |||||||||
Return on average tangible equity (2) | 19.63 | % | 8.20 | % | 20.68 | % | 10.36 | % | 21.49 | % | |||||||||
(1) Annualized net earnings divided by average stockholders' equity. | |||||||||||||||||||
(2) Annualized adjusted net earnings divided by average tangible common equity. | |||||||||||||||||||
Tangible Common Equity Ratio/ | |||||||||||||||||||
Tangible Book Value Per Share | 2020 | 2020 | 2020 | 2020 | 2019 | ||||||||||||||
(Dollars in thousands, except per share data) | |||||||||||||||||||
Stockholders' equity | $ | 3,594,951 | $ | 3,486,231 | $ | 3,452,898 | $ | 3,390,389 | $ | 4,954,697 | |||||||||
Less: Intangible assets | 1,102,311 | 1,105,483 | 1,109,234 | 1,113,116 | 2,587,064 | ||||||||||||||
Tangible common equity | $ | 2,492,640 | $ | 2,380,748 | $ | 2,343,664 | $ | 2,277,273 | $ | 2,367,633 | |||||||||
Total assets | $ | 29,498,442 | $ | 28,426,716 | $ | 27,365,738 | $ | 26,143,267 | $ | 26,770,806 | |||||||||
Less: Intangible assets | 1,102,311 | 1,105,483 | 1,109,234 | 1,113,116 | 2,587,064 | ||||||||||||||
Tangible assets | $ | 28,396,131 | $ | 27,321,233 | $ | 26,256,504 | $ | 25,030,151 | $ | 24,183,742 | |||||||||
Equity to assets ratio | 12.19 | % | 12.26 | % | 12.62 | % | 12.97 | % | 18.51 | % | |||||||||
Tangible common equity ratio (1) | 8.78 | % | 8.71 | % | 8.93 | % | 9.10 | % | 9.79 | % | |||||||||
Book value per share | $ | 30.36 | $ | 29.42 | $ | 29.17 | $ | 28.75 | $ | 41.36 | |||||||||
Tangible book value per share (2) | $ | 21.05 | $ | 20.09 | $ | 19.80 | $ | 19.31 | $ | 19.77 | |||||||||
Shares outstanding | 118,414,853 | 118,489,927 | 118,374,603 | 117,916,789 | 119,781,605 | ||||||||||||||
(1) Tangible common equity divided by tangible assets. | |||||||||||||||||||
(2) Tangible common equity divided by shares outstanding. | |||||||||||||||||||
Contact: | |||
President and CEO | Executive Vice President and CFO | ||
Phone: | 303-802-8900 | 714-989-4149 | |
Contact: | |||
Executive Vice President | |||
Strategy and Corporate Development | |||
Phone: | 919-597-7466 |
Source:
2021 GlobeNewswire, Inc., source