Market Overview

KBRA Assigns Senior Unsecured Debt Rating of BBB+ for PacWest Bancorp


Kroll Bond Rating Agency (KBRA) assigns a senior unsecured debt rating
of BBB+, subordinated debt rating of BBB, and short-term debt rating of
K2 for Los Angeles, California based PacWest Bancorp (NASDAQ:PACW)
("PacWest" or "the Company"). In addition, KBRA assigns deposit and
senior unsecured debt ratings of A-, a subordinated debt rating of BBB+,
and short-term deposit and debt ratings of K2 for its subsidiary,
Pacific Western Bank ("PWB"). The Outlook for all long-term ratings is

The ratings are supported by PACW's consistently strong profitability
post-crisis, driven by the Company's above-peer risk-adjusted margin,
stable credit quality, and favorable efficiency metrics gained, in part,
through acquisitions. The Company benefits from a comparatively strong
core deposit funding base and diversified loan book, owing to its
national platform businesses and solid market share in its California
markets. The ratings also benefit from the Company's solid core capital
levels as well as the strength and expertise of PACW's management team.
The ratings are primarily constrained by PACW's potentially elevated
credit risk profile, particularly when viewed in conjunction with the
Company's poor financial performance through the financial crisis. In
this regard, both PacWest and CapitalSource (a national middle market
lending platform acquired in 2014 with operations conducted through PWB)
incurred large credit-driven losses. With that said, KBRA considers the
Company's current risk management infrastructure and capabilities
favorably and does not expect similar performance thorough the next
credit downturn. Also limiting the ratings is PACW's reliance upon
spread revenue, noting that a sizable portion of fees are derivative of
loan and lease volumes.

The ratings are based on KBRA's Global
Bank and Bank Holding Company Rating Methodology
published on
February 19, 2016.

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About KBRA and KBRA Europe

KBRA is a full service credit rating agency registered with the U.S.
Securities and Exchange Commission as an NRSRO. In addition, KBRA is
designated as a designated rating organization by the Ontario Securities
Commission for issuers of asset-backed securities to file a short form
prospectus or shelf prospectus, is recognized by the National
Association of Insurance Commissioners as a Credit Rating Provider, and
is a certified Credit Rating Agency (CRA) by the European Securities and
Markets Authority (ESMA). Kroll Bond Rating Agency Europe Limited is
registered with ESMA as a CRA.

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