Market Overview

Pacwest Bancorp Announces Results for the First Quarter 2018

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Highlights

  • Net Earnings of $118.3 Million, or $0.93 Per Diluted Share
  • Tax Equivalent Net Interest Margin of 5.11%
  • Nonaccrual Loans and Leases Reduced by $52.1 million, or 33% in Q1'18
  • Classified Loans and Leases Reduced by $70.4 million, or 25% in Q1'18
  • Core Deposits at 87% of Total Deposits
  • New Loan and Lease Production of $788.5 Million

LOS ANGELES, April 17, 2018 (GLOBE NEWSWIRE) -- PacWest Bancorp (NASDAQ:PACW) today announced net earnings for the first quarter of 2018 of $118.3 million, or $0.93 per diluted share, compared to net earnings for the fourth quarter of 2017 of $84.0 million, or $0.66 per diluted share.  The increase in net earnings from the prior quarter was primarily due to lower noninterest expense, lower income tax expense, higher noninterest income, and a lower provision for credit losses, offset partially by lower net interest income. 

Noninterest expense for the first quarter of 2018 was lower due mainly to a decrease in acquisition, integration and reorganization costs of $16.1 million related to the CUB acquisition and integration completed in the fourth quarter of 2017.  Income tax expense for the first quarter of 2018 was lower mainly due to the enactment of the Tax Cuts and Jobs Act which reduced our effective tax rate to 27.7% in the first quarter of 2018 from 40.2% in the fourth quarter of 2017.  Noninterest income for the first quarter of 2018 increased by $11.8 million mainly due to a $9.6 million increase in the gain on sale of securities.  In the first quarter of 2018 we sold certain securities for a net gain of $6.3 million, whereas in the fourth quarter of 2017, we made a tax-related decision to sell certain securities resulting in a net loss of $3.3 million.  Net interest income declined by $6.5 million due mostly to two fewer days in the current quarter and a lower average loan and lease balance.

Matt Wagner, President and CEO, commented, "Our performance in the first quarter was highlighted by significant earnings growth, solid margin expansion, and notable decreases in nonaccrual and classified loans and leases. Our de-risking activities have resulted in lower credit costs, improved credit quality metrics and a reduced reliance on higher-cost deposits and borrowings. Our first quarter results produced a return on assets of 1.99% and a return on tangible equity of 21.08%."

Mr. Wagner continued, "Our first quarter tax equivalent NIM increased 14 basis points to 5.11%, benefitting from the repricing of variable-rate loans, higher loan fee income and higher recapture of nonaccrual interest.  Our strong first quarter results make us optimistic that 2018 will be another positive year for the Company."

FINANCIAL HIGHLIGHTS

    At or For the Three Months Ended
    March 31,   December 31,    
Financial Highlights     2018       2017     Change
    (Dollars in thousands, except per share data)
Net earnings   $   118,276     $   84,037     $   34,239  
Diluted earnings per share   $   0.93     $    0.66     $   0.27  
Return on average assets     1.99 %     1.34 %       0.65  
Return on average tangible equity (1)   21.08 %     13.75 %       7.33  
             
Net interest margin (tax equivalent)   5.11 %     4.97 %        0.14  
Efficiency ratio     41.7 %     41.0 %       0.7  
             
Total assets   $   24,149,330     $   24,994,876     $   (845,546 )
Loans and leases held for investment,          
net of deferred fees   $   16,455,285     $   16,972,743     $   (517,458 )
Noninterest-bearing deposits $   8,232,140     $   8,508,044     $   (275,904 )
Core deposits   $   15,661,529     $   15,937,012     $   (275,483 )
Total deposits   $    18,078,788     $   18,865,536     $   (786,748 )
             
Noninterest-bearing deposits as percentage          
of total deposits     46 %     45 %       1  
Core deposits as percentage of total deposits   87 %     85 %        2  
             
Equity to assets ratio     20.16 %     19.91 %       0.25  
Tangible common equity ratio (1)   10.43 %     10.50 %       (0.07 )
Book value per share   $   38.47     $   38.65     $   (0.18 )
Tangible book value per share (1) $   17.75     $   18.24     $   (0.49 )
             
(1) Non-GAAP measure.            
             

INCOME STATEMENT HIGHLIGHTS

Net Interest Income

Net interest income decreased by $6.5 million to $256.5 million for the first quarter of 2018 compared to $263.0 million for the fourth quarter of 2017 due mainly to two fewer days in the first quarter and a lower average loan and lease balance.  The loan and lease yield was 6.11% for the first quarter of 2018 compared to 5.89% for the fourth quarter of 2017. The increase in the loan and lease yield was principally due to the repricing of variable-rate loans, higher loan fee income, and higher recapture of nonaccrual interest.    

The tax equivalent NIM was 5.11% for the first quarter of 2018 compared to 4.97% for the fourth quarter of 2017.  The increase in the NIM was due mainly to the higher loan yield resulting from the repricing of variable-rate loans and higher loan fee income, which was partially offset by a decrease of six basis points resulting from a smaller tax equivalent adjustment due to the lower statutory federal tax rate.          

The cost of average total deposits increased to 0.31% for the first quarter of 2018 from 0.30% for the fourth quarter of 2017.  

Noninterest Income

Noninterest income increased by $11.8 million to $38.6 million for the first quarter of 2018 compared to $26.8 million for the fourth quarter of 2017 due mainly to a $9.6 million increase in the gain on sale of securities and a $2.6 million increase in the gain on sale of loans.  During the first quarter of 2018, we sold $299.9 million of securities for a gain of $6.3 million.  These securities were sold primarily for reinvestment in higher quality liquid assets, yield and credit risk purposes. During the fourth quarter of 2017, we made a tax-related decision to sell $172.6 million of securities and recognized a loss of $3.3 million to take advantage of the higher statutory federal tax rate in 2017.   In addition, the gain on sale of loans increased by $2.6 million to $4.6 million for the first quarter of 2018 from $2.0 million for the fourth quarter of 2017. The first quarter of 2018 includes a $2.4 million gain resulting from the sale of our largest nonaccrual loan above our carrying value and $1.3 million related to the settlement of our December 31, 2017 loans held for sale of $481.1 million.     

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

  Three Months Ended
  March 31,   December 31,   Increase
Noninterest Income  2018     2017     (Decrease)
  (In thousands)
Service charges on deposit accounts $   4,174   $   4,574     $   (400 )
Other commissions and fees     10,265       10,505         (240 )
Leased equipment income     9,587       8,258         1,329  
Gain on sale of loans and leases     4,569       1,988          2,581  
Gain (loss) on sale of securities     6,311       (3,329 )       9,640  
Other income:          
Dividends and realized gains on equity investments     251        342         (91 )
Warrant income     248       831         (583 )
Other     3,154       3,626         (472 )
Total noninterest income $   38,559   $   26,795     $   11,764  
                     

Noninterest Expense

Noninterest expense decreased by $15.5 million to $127.4 million for the first quarter of 2018 compared to $142.9 million for the fourth quarter of 2017 due mostly to a decrease in acquisition, integration and reorganization costs of $16.1 million related to the CUB acquisition.  Other professional services decreased by $1.3 million due mostly to lower legal fees and internal audit costs.  Compensation expense decreased by $1.0 million as the fourth quarter of 2017 included a charge of $2.9 million for separation costs in connection with exiting the origination operations related to general, technology, and healthcare cash flow loans partially offset by an increase in stock compensation expense and a seasonal increase in payroll tax expense.  Intangible asset amortization increased by $1.3 million as a result of a full quarter of expense for the intangible assets related to the CUB acquisition. Other expense increased by $1.1 million due primarily to an increase in Community Reinvestment Act-related and corporate donations.

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

  Three Months Ended
  March 31,   December 31,   Increase
Noninterest Expense   2018       2017     (Decrease)
  (In thousands)
Compensation $   71,023     $   71,986     $   (963 )
Occupancy      13,223         12,715          508  
Data processing     6,659         6,764         (105 )
Other professional services     4,439         5,786         (1,347 )
Insurance and assessments      5,727         5,384         343  
Intangible asset amortization     6,346         5,062         1,284  
Leased equipment depreciation     5,375          5,048         327  
Foreclosed assets income, net     (122 )       (475 )       353  
Acquisition, integration and reorganization costs     -          16,085         (16,085 )
Loan expense     2,271         3,140         (869 )
Other     12,454         11,373         1,081  
Total noninterest expense $    127,395     $   142,868     $   (15,473 )
                       

Income Taxes

The overall effective income tax rate was 27.7% for the first quarter of 2018 and 40.2% for the fourth quarter of 2017. The effective tax rate for the first quarter of 2018 was lower due to the enactment of the Tax Cuts and Jobs Act, which reduced the federal statutory corporate tax rate to 21% in the first quarter of 2018 from 35% in the fourth quarter of 2017. The effective tax rate for the full year 2018 is estimated to be approximately 28%.  

BALANCE SHEET HIGHLIGHTS

Loans and Leases

Loans and leases held for investment, net of deferred fees, decreased by $517.5 million in the first quarter of 2018 to $16.5 billion at March 31, 2018.  The net decrease was driven mainly by payoffs of $974.5 million, paydowns of $936.0 million, and sales of $130.6 million, offset partially by new production of $788.5 million and disbursements of $747.4 million.

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

  Three Months Ended
Loans and Leases March 31,   December 31,
Held for Investment Roll Forward (1)  2018    2017
  (Dollars in thousands)
Balance, beginning of period $   16,972,743     $   15,690,517  
New production     788,477         1,556,257  
Existing loans and leases:      
Payoffs     (974,532 )       (728,628 )
Paydowns     (936,002 )        (812,726 )
Disbursements     747,376         723,914  
Sales (2)     (130,624 )       (1,026,660 )
Charge-offs     (12,153 )       (24,721 )
Transfers to loans held for sale     -         (481,100 )
Loans acquired through CUB acquisition     -         2,075,890  
Balance, end of period $   16,455,285     $   16,972,743  
       
Weighted average rate on new production (3)   5.28 %     4.95 %
               
               
(1) Includes direct financing leases but excludes equipment leased to others under operating leases.
(2) Sales for the three months ended March 31, 2018 exclude loans held for sale of $481.1 million at December 31, 2017.
(3) The weighted average rate on new production presents contractual rates and does not include amortized fees.  Amortized fees added approximately 30 basis points to loan yields in 2017.
 

The following table presents the composition of loans and leases held for investment, net of deferred fees, as of the dates indicated:

  March 31,   December 31,   September 30,   March 31,
Loan and Lease Portfolio  2018    2017    2017    2017
  (In thousands)
Real estate mortgage:              
Commercial $   5,033,006   $   5,385,740   $   4,338,933   $   4,420,923
Residential     2,521,237       2,466,894       1,850,324       1,554,946
Total real estate mortgage     7,554,243       7,852,634       6,189,257       5,975,869
Real estate construction and land:              
Commercial     789,892       769,075       680,950       668,510
Residential     887,110       822,154       568,273       442,051
Total real estate construction and land     1,677,002       1,591,229       1,249,223       1,110,561
   Total real estate     9,231,245       9,443,863       7,438,480       7,086,430
Commercial:              
Asset-based     2,957,890       2,924,950       2,792,823       2,669,135
Venture capital     1,920,643       2,122,735       1,959,489       1,934,949
Other commercial     1,947,590       2,071,394        3,113,574       3,483,459
Total commercial     6,826,123       7,119,079       7,865,886       8,087,543
Consumer     397,917       409,801       386,151       382,716
Total loans and leases held for              
   investment, net of deferred fees (1) $   16,455,285   $   16,972,743   $   15,690,517   $   15,556,689
               
Total unfunded loan commitments $   6,352,803   $   6,234,061   $   5,037,084   $   4,497,373
                       
               
(1) Excludes loans held for sale carried at lower of cost or fair value at December 31, 2017.    
     

Deposits and Client Investment Funds

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

  March 31,   December 31,   September 30,   March 31,
Deposit Category  2018    2017    2017    2017
  (Dollars in thousands)
Noninterest-bearing demand deposits $   8,232,140     $   8,508,044     $   6,911,874     $   6,789,808  
Interest checking deposits     2,076,152         2,226,885         1,957,485         1,509,902  
Money market deposits     4,676,734         4,511,730         3,967,224         3,758,962  
Savings deposits     676,503         690,353         694,717         710,401  
Total core deposits     15,661,529         15,937,012         13,531,300         12,769,073  
Non-core non-maturity deposits     585,399         863,202         1,118,694         1,154,070  
Total non-maturity deposits     16,246,928          16,800,214         14,649,994         13,923,143  
Time deposits $250,000 and under     1,482,118         1,709,980         1,770,439         1,998,597  
Time deposits over $250,000     349,742         355,342         352,812         409,268  
Total time deposits     1,831,860         2,065,322         2,123,251         2,407,865  
Total deposits $   18,078,788     $   18,865,536     $   16,773,245     $   16,331,008  
               
Noninterest-bearing demand deposits              
as percentage of total deposits   46 %     45 %     41 %     42 %
Core deposits as percentage of total deposits   87 %     85 %     81 %     78 %
                               

At March 31, 2018, core deposits totaled $15.7 billion, or 87% of total deposits, including $8.2 billion of noninterest-bearing demand deposits, or 46% of total deposits.  The proceeds from the cash flow loan sale in the fourth quarter of 2017 allowed us to improve our funding mix by reducing our balances of non-core non-maturity deposits and time deposits. 

In addition to deposit products, we also offer alternative non-depository cash investment options for select clients; these alternatives include investments managed by Square 1 Asset Management, Inc. ("S1AM"), our registered investment advisor subsidiary, and third-party sweep products.  Total off-balance sheet client investment funds at March 31, 2018 were $2.1 billion, of which $1.6 billion was managed by S1AM.

PROVISION AND ALLOWANCE FOR CREDIT LOSSES

A provision for credit losses of $4.0 million was recorded in the first quarter of 2018 compared to $6.4 million in the fourth quarter of 2017.  The lower provision for the first quarter of 2018 was due mainly to lower period-end loan and lease balances and recoveries of $7.2 million. The allowance for credit losses to loans and leases held for investment coverage ratio increased to 1.01% at March 31, 2018 from 0.95% at December 31, 2017.

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

  Three Months Ended March 31, 2018
  Total        
Allowance for Credit Loans and   Unfunded    
Losses Rollforward Leases   Commitments   Total
  (In thousands)
Beginning balance $   139,456     $   28,635   $   168,091  
Charge-offs     (12,153 )       -       (12,153 )
Recoveries     7,198         -       7,198  
Net charge-offs     (4,955 )       -       (4,955 )
Provision     (226 )       4,226       4,000  
Ending balance $   134,275     $   32,861   $   167,136  
                     


  Three Months Ended December 31, 2017
  Non-PCI                
Allowance for Credit Loans and   Unfunded   Total   PCI    
Losses Rollforward Leases   Commitments   Non-PCI   Loans   Total
  (In thousands)
Beginning balance $   152,770     $   20,809   $   173,579     $   6,836     $   180,415  
Charge-offs     (24,335 )       -       (24,335 )        (386 )       (24,721 )
Recoveries     1,577         -       1,577         88         1,665  
Net charge-offs     (22,758 )       -       (22,758 )       (298 )       (23,056 )
Provision     3,000         3,500       6,500         (94 )       6,406  
Fair value of acquired reserve                  
for unfunded commitments      -         4,326       4,326         -         4,326  
Ending balance $   133,012     $   28,635   $   161,647     $   6,444     $   168,091  
                                     

Gross charge-offs for the first quarter of 2018 were $12.2 million and included $6.8 million for other commercial loans and $2.3 million for venture capital loans, while gross charge-offs for the fourth quarter of 2017 were $24.7 million and included $20.1 million for venture capital loans. Recoveries in the first quarter of 2018 were $7.2 million and included $4.6 million for venture capital loans, the largest of which was a $4.0 million recovery on a venture capital loan partially charged off in the fourth quarter of 2017.    

The annualized ratio of net charge-offs to average loans was 0.12% for the first quarter of 2018 and 0.52% for the fourth quarter of 2017.    

CREDIT QUALITY  

The following table presents loan and lease credit quality metrics as of the dates indicated:

  March 31,   December 31,   Increase
Credit Quality Metrics (1)  2018    2017   (Decrease)
  (Dollars in thousands)
Nonaccrual loans and leases held for investment (2)(3) $   103,725     $   155,784     $   (52,059 )
Performing troubled debt restructured loans          
held for investment     60,173         56,838         3,335  
Total impaired loans and leases $   163,898     $   212,622     $   (48,724 )
           
Classified loans and leases held for investment (2) $   208,042     $   278,405     $   (70,363 )
Allowance for credit losses $   167,136     $   161,647     $   5,489  
Provision for credit losses (for the quarter) $   4,000     $   6,500     $   (2,500 )
Net charge-offs (for the quarter) $   4,955     $   22,758     $   (17,803 )
Net charge-offs to average loans and leases          
(for the quarter)   0.12 %     0.52 %    
Allowance for credit losses to loans and leases          
held for investment   1.01 %     0.95 %    
Allowance for credit losses to nonaccrual loans          
and leases held for investment   161.1 %     103.8 %    
Nonaccrual loans and leases held for investment          
to loans and leases held for investment   0.63 %     0.92 %    
Nonperforming assets to loans and leases          
held for investment and foreclosed assets   0.64 %     0.93 %    
Classified loans and leases held for investment          
to loans and leases held for investment   1.26 %     1.64 %    
                   
           
(1) Amounts and ratios related to March 31, 2018 are for total loans and leases.
      Amounts and ratios related to December 31, 2017 are for Non-PCI loans and leases.
   
(2) Excludes loans held for sale carried at lower of cost or fair value at December 31, 2017.    
(3) Nonaccrual loans include guaranteed amounts of $13.4 million and $11.6 million at March 31, 2018 and December 31, 2017.
           

In prior periods, our credit quality disclosures were only for Non-PCI loans. As our PCI loan portfolio reduced to less than 0.4% of total loans as of the end of 2017, beginning in 2018 the credit quality disclosures reflect our entire loan portfolio.

Nonaccrual loans and leases decreased by $52.1 million in the first quarter primarily due to the sale of our largest nonaccrual loan, a $44.6 million healthcare real estate loan. Classified loans and leases decreased by $70.3 million in the first quarter primarily due to the sale of the $44.6 million nonaccrual loan, the sale of a $9.8 million cash flow loan, and an $18.2 million decrease in classified venture capital loans.

The following table presents nonaccrual loans and leases and accruing loans and leases past due between 30 and 89 days by portfolio segment and class as of the dates indicated:

  Nonaccrual Loans and Leases (1)   Accruing and
  March 31, 2018   December 31, 2017   30-89 Days Past Due (1)
    % of     % of   March 31,   December 31,
    Loan     Loan   2018   2017
  Amount Category   Amount Category   Amount   Amount
  (Dollars in thousands)
Real estate mortgage:                  
Commercial $   19,116 0.4 %   $   65,563 1.2 %   $   23,505   $   27,234
Residential     5,225 0.2 %       3,350 0.1 %        708       6,629
Total real estate mortgage     24,341 0.3 %       68,913 0.9 %       24,213       33,863
Real estate construction and land:                  
Commercial     - 0.0 %        - 0.0 %       -       -
Residential     - 0.0 %       - 0.0 %       2,605       2,081
Total real estate                  
  construction and land      - 0.0 %       - 0.0 %       2,605       2,081
Commercial:                  
Asset-based     32,838 1.1 %       33,553 1.1 %       -       344
Venture capital     21,861 1.1 %       29,424 1.4 %       -       5,959
Other commercial     24,434 1.3 %       23,874 1.2 %       663       2,436
Total commercial     79,133 1.2 %       86,851 1.2 %       663       8,739
Consumer     251 0.1 %       20 0.0 %       1,000       562
Total held for investment (2) $   103,725 0.6 %   $   155,784 0.9 %   $   28,481   $   45,245
                               
                   
(1) Amounts and ratios related to March 31, 2018 are for total loans and leases.         
Amounts and ratios related to December 31, 2017 are for Non-PCI loans and leases.        
(2) Excludes loans held for sale carried at lower of cost or fair value at December 31, 2017.        
         

The following table presents nonperforming assets as of the dates indicated:

  March 31,   December 31,   Increase
Nonperforming Assets 2018   2017   (Decrease)
  (Dollars in thousands)
Nonaccrual loans and leases $   103,725     $   157,545     $   (53,820 )
Accruing loan contractually past due          
90 days or more     500         -          500  
Foreclosed assets, net     1,236         1,329         (93 )
  Total nonperforming assets $   105,461     $   158,874     $   (53,413 )
           
Nonaccrual loans and leases held for investment           
to loans and leases held for investment   0.63 %     0.92 %    
Nonperforming assets to loans and leases          
held for investment and foreclosed assets   0.64 %     0.93 %    
                   
           
(1) Excludes loans held for sale carried at lower of cost or fair value at December 31, 2017.    
     

STOCK REPURCHASE PROGRAM

During the first quarter of 2018, the Company amended its existing stock repurchase program to increase the authorized repurchase amount from $150 million to $350 million and extend the program maturity to February 28, 2019.  During the first quarter of 2018, we repurchased 2,285,855 shares at an average price of $52.41 and a total cost of $119.8 million.

ABOUT PACWEST BANCORP

PacWest Bancorp ("PacWest") is a bank holding company with approximately $24 billion in assets with one wholly-owned banking subsidiary, Pacific Western Bank (the "Bank"). The Bank has 75 full-service branches located throughout the state of California and one branch in Durham, North Carolina. We provide commercial banking services, including real estate, construction, and commercial loans, and comprehensive deposit and treasury management services to small and medium-sized businesses.  We offer additional products and services through our CapitalSource and Square 1 Bank divisions. Our CapitalSource Division provides asset-based, equipment, real estate, and security cash flow loans and treasury management services to established middle market businesses on a national basis.  Our Square 1 Bank Division offers a comprehensive suite of financial services focused on entrepreneurial businesses and their venture capital and private equity investors, with offices located in key innovation hubs across the United States.  For more information about PacWest Bancorp, visit www.pacwestbancorp.com, or to learn more about Pacific Western Bank, visit www.pacificwesternbank.com.

FORWARD LOOKING STATEMENTS

This release contains certain "forward-looking statements" about the Company and its subsidiaries within the meaning of the Private Securities Litigation Reform Act of 1995, including forward-looking statements relating to the Company's current business plans and expectations regarding future operating results and metrics and including statements about our expectations regarding our future effective tax rate. All statements contained in this release that are not clearly historical in nature are forward-looking, and the words "anticipate," "assume," "intend," "believe," "forecast," "expect," "estimate," "plan," "continue," "will," "should," "look forward" and similar expressions are generally intended to identify forward-looking statements. All forward-looking statements (including statements regarding future financial and operating results and future transactions and their results) involve risks, uncertainties and contingencies, many of which are beyond our control, which may cause actual results, performance, or achievements to differ materially from anticipated results, performance or achievements. These risks and uncertainties include, but are not limited to, our ability to compete effectively against other financial institutions in our banking markets; the impact of changes in interest rates or levels of market activity, especially on our loan and investment portfolios; deterioration, weaker than expected improvement, or other changes in the state of the economy or the markets in which we conduct business (including the state of real estate markets, debt markets and stock markets); changes in credit quality and the effect of credit quality on our provision for loan and lease losses and allowance for loan and leases losses; our ability to attract deposits and other sources of funding or liquidity; our capital requirements and our ability to generate capital internally or raise capital on favorable terms; the costs and effects of legal, compliance and regulatory actions, changes and developments, including the impact of adverse judgments or settlements in litigation, the initiation and resolution of regulatory or other governmental inquiries or investigations, and/or the results of regulatory examinations or reviews; the Company's ability to complete future acquisitions and to successfully integrate such acquired entities or achieve expected beneficial synergies and/or operating efficiencies, in each case within expected timeframes or at all; the impact of the Tax Cuts and Jobs Act on our future effective tax rate and our success at managing the risks involved in the foregoing items and all other factors set forth in the Company's public reports, including the Annual Report on Form 10-K for the year ended December 31, 2017, and particularly the discussion of risk factors within that document.

All forward-looking statements included in this release are based on information available at the time of the release. We are under no obligation to (and expressly disclaim any such obligation to) update or alter our forward-looking statements, whether as a result of new information, future events or otherwise except as required by law.

PACWEST BANCORP AND SUBSIDIARIES      
CONDENSED CONSOLIDATED BALANCE SHEET      
       
  March 31,   December 31,
    2018       2017  
  (Dollars in thousands, except per share data)
ASSETS:      
Cash and due from banks $   235,061     $   233,215  
Interest-earning deposits in financial institutions     312,735         165,222  
Total cash and cash equivalents     547,796         398,437  
       
Securities available-for-sale, at estimated fair value      3,802,967         3,774,431  
Federal Home Loan Bank stock, at cost     17,250         20,790  
Total investment securities     3,820,217         3,795,221  
       
Loans held for sale      -         481,100  
       
Gross loans and leases held for investment     16,516,627         17,032,221  
Deferred fees, net     (61,342 )       (59,478 )
Loans and leases held for investment,      
net of deferred fees     16,455,285         16,972,743  
Allowance for loan and lease losses     (134,275 )       (139,456 )
Total loans and leases held for investment, net     16,321,010         16,833,287  
       
Equipment leased to others under operating leases     280,648         284,631  
Premises and equipment, net     33,686         31,852  
Foreclosed assets, net     1,236         1,329  
Deferred tax asset, net     12,584         -  
Goodwill     2,548,670         2,548,670  
Core deposit and customer relationship intangibles, net     73,280         79,626  
Other assets     510,203         540,723  
Total assets $   24,149,330     $   24,994,876  
       
LIABILITIES:      
Noninterest-bearing deposits $   8,232,140     $   8,508,044  
Interest-bearing deposits     9,846,648         10,357,492  
Total deposits     18,078,788         18,865,536  
Borrowings     575,284         467,342  
Subordinated debentures     452,223         462,437  
Accrued interest payable and other liabilities     175,545         221,963  
Total liabilities     19,281,840         20,017,278  
STOCKHOLDERS' EQUITY (1)     4,867,490         4,977,598  
Total liabilities and stockholders' equity $   24,149,330     $   24,994,876  
       
Book value per share $   38.47     $   38.65  
Tangible book value per share (2) $   17.75     $   18.24  
Shares outstanding     126,537,871         128,782,878  
       
(1) Includes net unrealized (loss) gain on securities      
available-for-sale, net $   (11,936 )   $   31,171  
(2) Non-GAAP measure.      
       


PACWEST BANCORP AND SUBSIDIARIES        
CONDENSED CONSOLIDATED STATEMENT OF EARNINGS    
           
  Three Months Ended
  March 31,   December 31,   March 31,
    2018       2017       2017  
  (Dollars in thousands, except per share data)
Interest income:          
Loans and leases $   251,085     $   258,309     $   224,178  
Investment securities     26,138         25,712         23,039  
Deposits in financial institutions     552         576         192  
Total interest income     277,775         284,597         247,409  
           
Interest expense:          
Deposits     13,818         14,041         8,377  
Borrowings     920         1,366         1,018  
Subordinated debentures     6,537         6,234         5,562  
Total interest expense     21,275         21,641         14,957  
           
Net interest income     256,500         262,956         232,452  
Provision for credit losses     4,000         6,406         24,728  
Net interest income after provision          
for credit losses     252,500         256,550         207,724  
           
Noninterest income:          
Service charges on deposit accounts     4,174         4,574         3,758  
Other commissions and fees     10,265         10,505         10,390  
Leased equipment income     9,587         8,258          9,475  
Gain on sale of loans and leases     4,569         1,988         712  
Gain (loss) on sale of securities     6,311         (3,329 )       (99 )
Other income     3,653          4,799         10,878  
Total noninterest income     38,559         26,795         35,114  
           
Noninterest expense:          
Compensation     71,023         71,986         64,880  
Occupancy     13,223         12,715         11,608  
Data processing     6,659         6,764         7,015  
Other professional services     4,439         5,786         3,378  
Insurance and assessments     5,727         5,384         4,791  
Intangible asset amortization     6,346         5,062         3,064  
Leased equipment depreciation     5,375         5,048         5,625  
Foreclosed assets (income) expense, net     (122 )       (475 )       143  
Acquisition, integration and          
reorganization costs     -         16,085          500  
Loan expense     2,271         3,140         3,387  
Other expense     12,454         11,373         12,153  
Total noninterest expense     127,395         142,868          116,544  
           
Earnings before income taxes     163,664         140,477         126,294  
Income tax expense     (45,388 )       (56,440 )       (47,626 )
Net earnings $   118,276     $   84,037     $    78,668  
           
Basic and diluted earnings per share $   0.93     $   0.66     $   0.65  
                       


PACWEST BANCORP AND SUBSIDIARIES        
NET EARNINGS PER SHARE CALCULATIONS        
           
  Three Months Ended
  March 31,   December 31,   March 31,
    2018       2017       2017  
  (In thousands, except per share data)
Basic Earnings Per Share:          
Net earnings $   118,276     $   84,037     $   78,668  
Less: earnings allocated to unvested          
restricted stock (1)     (1,115 )       (951 )       (999 )
Net earnings allocated to common          
shares $   117,161     $   83,086     $   77,669  
           
Weighted-average basic shares and          
unvested restricted stock outstanding     127,487         127,971         121,346  
Less: weighted-average unvested          
restricted stock outstanding     (1,413 )       (1,440 )       (1,503 )
Weighted-average basic shares          
outstanding     126,074         126,531         119,843  
           
Basic earnings per share $   0.93     $   0.66     $   0.65  
           
Diluted Earnings Per Share:          
Net earnings allocated to common          
shares $   117,161     $   83,086     $   77,669  
           
Weighted-average basic shares          
outstanding     126,074         126,531          119,843  
           
Diluted earnings per share $   0.93     $   0.66     $   0.65  
           
(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
  March 31, 2018   December 31, 2017   March 31, 2017
    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) $  16,682,124 $  251,260 6.11 %   $  17,426,873 $  258,586 5.89 %   $  15,297,044 $  224,178 5.94 %
Investment securities (2)     3,682,138     27,935 3.08 %       3,807,928     30,709 3.20 %       3,257,448     27,822 3.46 %
Deposits in financial                      
institutions     150,674     552 1.49 %       179,379     576 1.27 %       100,751     192 0.77 %
Total interest-earning                    
assets     20,514,936     279,747 5.53 %       21,414,180     289,871 5.37 %       18,655,243     252,192 5.48 %
Other assets     3,556,212           3,375,656           2,990,291    
Total assets $  24,071,148       $  24,789,836       $  21,645,534    
                       
Liabilities and                      
Stockholders' Equity:                    
Interest checking $   2,311,988     3,050 0.54 %   $   2,340,166     2,891 0.49 %   $   1,505,439     1,167 0.31 %
Money market     5,038,119     6,812 0.55 %       5,415,630     7,214 0.53 %       4,866,720     4,410 0.37 %
Savings      685,173     258 0.15 %       702,023     279 0.16 %       711,529     298 0.17 %
Time     1,923,963     3,698 0.78 %       2,120,749     3,657 0.68 %       2,246,547     2,502 0.45 %
Total interest-bearing                    
deposits     9,959,243     13,818 0.56 %       10,578,568     14,041 0.53 %       9,330,235     8,377 0.36 %
Borrowings     239,293     920 1.56 %       445,106     1,366 1.22 %       596,903     1,018 0.69 %
Subordinated debentures     461,648     6,537 5.74 %       458,269     6,234 5.40 %       441,521     5,562 5.11 %
Total interest-bearing                    
liabilities     10,660,184     21,275 0.81 %       11,481,943     21,641 0.75 %       10,368,659     14,957 0.59 %
Noninterest-bearing                      
demand deposits     8,311,104           8,190,134           6,595,346    
Other liabilities     198,653           197,261           177,854    
Total liabilities     19,169,941           19,869,338           17,141,859    
Stockholders' equity     4,901,207           4,920,498           4,503,675    
Total liabilities and                      
stockholders' equity $  24,071,148       $  24,789,836       $  21,645,534    
Net interest income (3)   $  258,472       $  268,230       $  237,235  
Net interest spread (3)     4.72 %       4.62 %       4.89 %
Net interest margin (3)     5.11 %       4.97 %       5.16 %
                       
Total deposits (4) $  18,270,347 $   13,818 0.31 %   $  18,768,702 $   14,041 0.30 %   $  15,925,581 $   8,377 0.21 %
Funding sources (5) $  18,971,288 $   21,275 0.45 %   $  19,672,077 $   21,641 0.44 %   $  16,964,005 $   14,957 0.36 %
                                         


(1)   Starting with the third quarter of 2017, includes tax-equivalent adjustments related to tax-exempt interest on loans.
(2)   Includes tax-equivalent adjustments of $1.8 million, $5.0 million, and $4.8 million for the three months ended March 31, 2018, December 31, 2017, and March 31, 2017 related to tax-exempt income on municipal securities.  The federal statutory tax-rate utilized was 21% for the 2018 period and 35% for the 2017 periods.
(3)   Tax equivalent.
(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 deposits divided by average total deposits.
(5)   Funding sources is the sum of total interest-bearing liabilities and noninterest-bearing demand deposits. The cost of funding sources is calculated as annualized total interest expense divided by average funding sources.
     


PACWEST BANCORP AND SUBSIDIARIES                
FIVE QUARTER BALANCE SHEET                  
                   
  March 31,   December 31,   September 30,   June 30,   March 31,
    2018       2017       2017       2017       2017  
  (Dollars in thousands, except per share data)
ASSETS:                  
Cash and due from banks $   235,061     $   233,215     $   147,579     $   180,330     $   184,608  
Interest-earning deposits in financial                  
institutions      312,735         165,222         122,439         107,150         111,892  
Total cash and cash equivalents     547,796         398,437         270,018         287,480         296,500  
                   
Securities available-for-sale     3,802,967         3,774,431         3,532,230         3,474,560         3,336,992  
Federal Home Loan Bank stock     17,250         20,790         17,250         22,059         17,901  
  Total investment securities     3,820,217         3,795,221         3,549,480         3,496,619         3,354,893  
                   
Loans held for sale     -          481,100         -          175,158         -  
                   
Gross loans and leases held for                  
investment     16,516,627         17,032,221         15,756,285         15,609,180         15,622,871  
Deferred fees, net     (61,342 )       (59,478 )       (65,768 )       (65,723 )       (66,182 )
Loans and leases held for                  
investment, net of deferred fees     16,455,285         16,972,743         15,690,517         15,543,457         15,556,689  
Allowance for loan and lease losses     (134,275 )       (139,456 )       (159,606 )       (145,958 )       (161,307 )
Total loans and leases held for                  
investment, net     16,321,010         16,833,287         15,530,911         15,397,499          15,395,382  
                   
Equipment leased to others under                  
operating leases     280,648         284,631         233,866         203,212         224,580  
Premises and equipment, net     33,686          31,852         28,910         29,108         28,908  
Foreclosed assets, net     1,236         1,329         11,630         13,278         12,842  
Deferred tax asset, net     12,584         -         65,321         70,354         88,765  
Goodwill     2,548,670         2,548,670         2,173,949         2,173,949         2,173,949  
Core deposit and customer                  
relationship intangibles, net     73,280         79,626         27,188         30,237         33,302  
Other assets     510,203         540,723         351,659         369,983         318,133  
Total assets $   24,149,330     $   24,994,876     $   22,242,932     $   22,246,877     $   21,927,254  
                   
LIABILITIES:                  
Noninterest-bearing deposits $   8,232,140     $   8,508,044     $   6,911,874     $   6,701,039     $   6,789,808  
Interest-bearing deposits     9,846,648         10,357,492         9,861,371         10,173,938         9,541,200  
Total deposits     18,078,788         18,865,536         16,773,245         16,874,977         16,331,008  
Borrowings     575,284         467,342         250,399         217,454         460,609  
Subordinated debentures     452,223         462,437         448,126         445,743         442,516  
Accrued interest payable and other                  
liabilities     175,545         221,963         160,494         148,798         185,015  
Total liabilities     19,281,840         20,017,278         17,632,264         17,686,972         17,419,148  
STOCKHOLDERS' EQUITY (1)     4,867,490         4,977,598         4,610,668         4,559,905         4,508,106  
Total liabilities and stockholders'                  
equity $   24,149,330     $   24,994,876     $   22,242,932     $   22,246,877     $   21,927,254  
                   
Book value per share $   38.47     $   38.65     $   37.96     $   37.55     $   37.13  
Tangible book value per share (2) $   17.75     $   18.24     $   19.84     $   19.40     $   18.95  
Shares outstanding     126,537,871         128,782,878         121,449,794         121,448,321         121,408,133  
                   
(1) Includes net unrealized (loss) gain on                  
securities available-for-sale, net $   (11,936 )   $    31,171     $   33,613     $   29,729     $   12,718  
(2) Non-GAAP measure.                  
                   


PACWEST BANCORP AND SUBSIDIARIES                
FIVE QUARTER STATEMENT OF EARNINGS                
                   
  Three Months Ended
  March 31,   December 31,   September 30,   June 30,   March 31,
    2018       2017       2017       2017       2017  
  (Dollars in thousands, except per share data)
Interest income:                  
Loans and leases $   251,085     $   258,309     $   235,666     $   234,618     $   224,178  
Investment securities     26,138         25,712         24,762         24,689         23,039  
Deposits in financial institutions     552         576         538          237         192  
Total interest income     277,775         284,597         260,966         259,544         247,409  
                   
Interest expense:                  
Deposits     13,818         14,041         13,071         10,205         8,377  
Borrowings     920         1,366         188         1,066         1,018  
Subordinated debentures     6,537          6,234         6,017         5,800         5,562  
Total interest expense     21,275         21,641         19,276         17,071         14,957  
                   
Net interest income     256,500         262,956         241,690         242,473         232,452  
Provision for credit losses     4,000         6,406         15,119         11,499         24,728  
Net interest income after provision                  
for credit losses     252,500         256,550         226,571         230,974         207,724  
                   
Noninterest income:                  
Service charges on deposit accounts     4,174          4,574         3,465         3,510         3,758  
Other commissions and fees     10,265         10,505         9,944         10,583         10,390  
Leased equipment income      9,587         8,258         8,332         11,635         9,475  
Gain on sale of loans and leases     4,569         1,988         2,848         649         712  
Gain (loss) on sale of securities     6,311         (3,329 )       1,236         1,651         (99 )
Other income     3,653         4,799         5,557         7,254          10,878  
Total noninterest income     38,559         26,795         31,382         35,282         35,114  
                   
Noninterest expense:                  
Compensation     71,023         71,986          64,413         65,288         64,880  
Occupancy     13,223         12,715         12,729         11,811         11,608  
Data processing     6,659         6,764          6,459         6,337         7,015  
Other professional services     4,439         5,786         4,213         3,976         3,378  
Insurance and assessments     5,727          5,384         4,702         4,856         4,791  
Intangible asset amortization     6,346         5,062         3,049         3,065         3,064  
Leased equipment depreciation     5,375         5,048         4,862         5,232         5,625  
Foreclosed assets (income) expense, net     (122 )       (475 )       2,191         (157 )       143  
Acquisition, integration and                  
reorganization costs     -         16,085         1,450         1,700         500  
Loan expense     2,271         3,140         3,421         3,884         3,387  
Other expense     12,454         11,373         11,053         11,715         12,153  
Total noninterest expense     127,395          142,868         118,542         117,707         116,544  
                   
Earnings before income taxes     163,664         140,477         139,411         148,549         126,294  
Income tax expense     (45,388 )       (56,440 )       (37,945 )       (54,902 )       (47,626 )
Net earnings $   118,276     $   84,037     $   101,466     $   93,647     $   78,668  
                   
Basic and diluted earnings per share $   0.93     $   0.66     $   0.84     $   0.77     $   0.65  
                                       


PACWEST BANCORP AND SUBSIDIARIES                
FIVE QUARTER SELECTED FINANCIAL DATA                
                   
  At or For the Three Months Ended
  March 31,   December 31,   September 30,   June 30,   March 31,
    2018       2017       2017       2017       2017  
  (Dollars in thousands)
Performance Ratios:                  
Return on average assets (1)   1.99 %     1.34 %     1.82 %     1.71 %     1.47 %
Return on average equity (1)   9.79 %     6.78 %     8.77 %     8.26 %     7.08 %
Return on average tangible equity (1)(2)   21.08 %     13.75 %     16.85 %     16.06 %     13.90 %
                   
Yield on average loans and leases (1)(3)   6.11 %     5.89 %     6.01 %     6.07 %     5.94 %
Yield on average interest-earning                  
assets (1)(4)   5.53 %     5.37 %     5.48 %     5.57 %     5.48 %
Cost of average total deposits (1)   0.31 %     0.30 %     0.31 %     0.25 %     0.21 %
Cost of average time deposits (1)   0.78 %     0.68 %     0.62 %     0.55 %     0.45 %
Cost of average interest-bearing                  
liabilities (1)   0.81 %     0.75 %     0.73 %     0.65 %     0.59 %
Cost of average funding sources (1)   0.45 %     0.44 %     0.44 %     0.40 %     0.36 %
Net interest spread (1)(4)   4.72 %     4.62 %     4.75 %     4.92 %     4.89 %
Net interest margin (1)(4)   5.11 %     4.97 %     5.08 %     5.21 %     5.16 %
                   
Efficiency ratio   41.7 %     41.0 %     40.4 %     40.3 %     41.4 %
Noninterest expense as a percentage                  
of average assets (1)   2.15 %     2.29 %     2.12 %     2.15 %     2.18 %
                   
Average Balances:                  
Loans and leases, net of deferred fees $   16,682,124     $   17,426,873     $   15,575,030     $   15,497,921     $   15,297,044  
Interest-earning assets     20,514,936         21,414,180         19,257,441         19,030,793         18,655,243  
Total assets     24,071,148         24,789,836         22,137,874         21,936,602         21,645,534  
Noninterest-bearing deposits     8,311,104         8,190,134         6,858,816         6,646,349         6,595,346  
Interest-bearing deposits     9,959,243         10,578,568         10,024,554         9,692,352         9,330,235  
Total deposits     18,270,347         18,768,702         16,883,370         16,338,701         15,925,581  
Borrowings and subordinated                  
debentures     700,941         903,375         508,083         901,530          1,038,424  
Interest-bearing liabilities     10,660,184         11,481,943         10,532,637         10,593,882         10,368,659  
Funding sources     18,971,288         19,672,077         17,391,453         17,240,231         16,964,005  
Stockholders' equity     4,901,207         4,920,498         4,592,489         4,545,276         4,503,675  
                   
(1) Annualized.                  
(2) Non-GAAP measure.                  
(3) Tax equivalent starting with the third quarter of 2017.                
(4) Tax equivalent.                  
                   


PACWEST BANCORP AND SUBSIDIARIES                
FIVE QUARTER SELECTED FINANCIAL DATA                
                   
  At or For the Three Months Ended
  March 31,   December 31,   September 30,   June 30,   March 31,
    2018       2017       2017       2017       2017  
  (Dollars in thousands)
Credit Quality Ratios (1):                  
Allowance for credit losses to loans                  
and leases held for investment   1.01 %     0.95 %     1.11 %     1.02 %     1.08 %
Allowance for credit losses to                  
nonaccrual loans and leases held                   
for investment   161.1 %     103.8 %     110.1 %     92.2 %     96.9 %
Nonaccrual loans and leases held for                  
investment to loans and leases held                  
for investment   0.63 %     0.92 %     1.00 %     1.11 %     1.11 %
Nonperforming assets to loans and                  
leases held for investment and                  
foreclosed assets   0.64 %     0.93 %     1.08 %     1.20 %     1.20 %
Nonperforming assets to total assets   0.44 %     0.63 %     0.76 %     0.84 %     0.85 %
Trailing twelve month net charge-offs                  
to average loans and leases                  
held for investment   0.31 %     0.40 %     0.35 %     0.37 %     0.24 %
                   
PacWest Bancorp Consolidated                  
Capital:                  
Tier 1 leverage ratio (2)   10.66 %     10.66 %     12.02 %     11.90 %     11.87 %
Common equity tier 1 capital ratio (2)   11.16 %     10.91 %     12.52 %     12.28 %     12.31 %
Tier 1 capital ratio (2)   11.16 %     10.91 %     12.52 %     12.28 %     12.31 %
Total capital ratio (2)   14.12 %     13.75 %     15.74 %     15.42 %     15.56 %
Risk-weighted assets (2) $   20,523,160     $   21,657,591     $   19,086,798     $   19,084,823     $   18,732,723  
                   
Equity to assets ratio   20.16 %     19.91 %     20.73 %     20.50 %     20.56 %
Tangible common equity ratio (3)   10.43 %     10.50 %     12.02 %     11.75 %     11.67 %
Book value per share $   38.47     $   38.65     $   37.96     $    37.55     $   37.13  
Tangible book value per share (3) $   17.75     $   18.24     $   19.84     $   19.40     $   18.95  
                   
Pacific Western Bank Capital:                  
Tier 1 leverage ratio (2)   11.33 %     11.75 %     11.46 %     11.41 %     11.36 %
Common equity tier 1 capital ratio (2)   11.86 %     11.91 %     11.95 %     11.79 %     11.79 %
Tier 1 capital ratio (2)   11.86 %     11.91 %     11.95 %     11.79 %     11.79 %
Total capital ratio (2)   12.67 %     12.69 %     12.89 %     12.66 %     12.74 %
                                       
                   
(1) Ratios related to March 31, 2018 are for total loans and leases.  Ratios related to prior periods are for Non-PCI loans and leases.
(2) Capital information for March 31, 2018 is preliminary.                
(3) Non-GAAP measure.                  
                   

GAAP TO NON-GAAP RECONCILIATIONS

This press release contains certain non-GAAP financial disclosures for: (1) return on average tangible equity, (2) tangible common equity ratio, and (3) 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, and tangible book value per share is prevalent among banking regulators, investors and analysts.  Accordingly, we disclose the non-GAAP measures in addition to the related GAAP measures of: (1) return on average equity, (2) equity to assets ratio, and (3) 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
  March 31,   December 31,   March 31,
Return on Average Tangible Equity  2018    2017    2017
  (Dollars in thousands)
Net earnings $   118,276     $   84,037     $   78,668  
           
Average stockholders' equity $   4,901,207     $   4,920,498     $   4,503,675  
Less: Average intangible assets      2,625,593         2,495,876         2,209,112  
Average tangible common equity $   2,275,614     $   2,424,622     $   2,294,563  
           
Return on average equity (1)   9.79 %     6.78 %     7.08 %
Return on average tangible equity (2)   21.08 %     13.75 %     13.90 %
                       
           
(1) Annualized net earnings divided by average stockholders' equity.    
(2) Annualized net earnings divided by average tangible common equity.    
     


Tangible Common Equity Ratio/ March 31,   December 31,   September 30,   June 30,   March 31,
Tangible Book Value Per Share   2018       2017       2017       2017       2017  
  (Dollars in thousands, except per share data)
Stockholders' equity $   4,867,490     $   4,977,598     $   4,610,668     $   4,559,905     $   4,508,106  
Less: Intangible assets     2,621,950         2,628,296         2,201,137         2,204,186         2,207,251  
Tangible common equity $   2,245,540     $   2,349,302     $   2,409,531     $   2,355,719     $   2,300,855  
                   
Total assets $   24,149,330     $   24,994,876     $   22,242,932     $   22,246,877     $   21,927,254  
Less: Intangible assets     2,621,950         2,628,296         2,201,137         2,204,186         2,207,251  
Tangible assets $    21,527,380     $   22,366,580     $   20,041,795     $   20,042,691     $   19,720,003  
                   
Equity to assets ratio   20.16 %     19.91 %     20.73 %     20.50 %     20.56 %
Tangible common equity ratio (1)   10.43 %     10.50 %     12.02 %     11.75 %     11.67 %
                   
Book value per share $   38.47     $   38.65     $   37.96     $   37.55     $   37.13  
Tangible book value per share (2) $   17.75     $   18.24     $   19.84     $   19.40     $   18.95  
Shares outstanding     126,537,871         128,782,878         121,449,794         121,448,321         121,408,133  
                                       
                   
(1) Tangible common equity divided by tangible assets.                
(2) Tangible common equity divided by shares outstanding.                
                 


Contact:

Phone:
  Matthew P. Wagner
President and CEO
310-887-8520
                                              Patrick J. Rusnak
Executive Vice President and CFO
714-989-4705
         
Contact:



Phone:
  Donald D. Destino
Executive Vice President
Corporate Development and Investor
Relations
310-887-8521
   
         

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