Market Overview

PacWest Bancorp Announces Results for the Fourth Quarter and Full Year 2018

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Fourth Quarter 2018 Highlights

  • Net Earnings of $115.0 Million, or $0.93 Per Diluted Share
  • Tax Equivalent Net Interest Margin of 4.91%
  • Loan and Lease Production of $1.6 Billion; $728 Million of Net Loan Growth
  • Core Deposits Increase of $834 Million and Represent 87% of Total Deposits

Full Year 2018 Highlights

  • Net Earnings of $465.3 Million, or $3.72 Per Diluted Share
  • Tax Equivalent Net Interest Margin of 5.05%
  • Loan and Lease Production of $4.9 Billion; $985 Million of Net Loan Growth
  • Net Charge-offs 36% Lower for 2018 Compared to 2017
  • Core Deposits Growth of $410 Million

LOS ANGELES, Jan. 17, 2019 (GLOBE NEWSWIRE) -- PacWest Bancorp (NASDAQ:PACW) today announced net earnings for the fourth quarter of 2018 of $115.0 million, or $0.93 per diluted share, compared to net earnings for the third quarter of 2018 of $116.3 million, or $0.94 per diluted share.  Net earnings for the full year 2018 were $465.3 million, or $3.72 per diluted share, compared to net earnings for the full year 2017 of $357.8 million, or $2.91 per diluted share.

Matt Wagner, President and CEO, commented, "We finished the year with strong growth in both loans and deposits and continued improvement in our credit quality metrics. Our fourth quarter results produced a return on assets of 1.84% and a return on tangible equity of 21.23%."

Mr. Wagner continued, "Our net earnings for the full year 2018 increased 30% over the prior year to $465.3 million. The increase was driven largely by the benefits of tax reform and lower credit costs, while revenue growth significantly outpaced noninterest expense growth.  Our tax equivalent net interest margin remained above 5% for the full year 2018 and continued cost controls resulted in our efficiency ratio being unchanged from the prior year at 41%."

Mr. Wagner continued, "We are pleased with the fourth quarter's organic loan and core deposit growth and will work to carry that momentum into 2019. We will also retire the division names and branding of CapitalSource and Square 1 Bank and replace them with the National Lending and Venture Banking groups under one brand as Pacific Western Bank." 

FINANCIAL HIGHLIGHTS

  At or For the
        At or For the
     
  Three Months Ended
        Year Ended
     
  December 31,     September 30,     Increase     December 31,
  Increase  
Financial Highlights  2018     2018     (Decrease)     2018     2017     (Decrease)  
  (Dollars in thousands, except per share data)
Net earnings $ 115,041     $ 116,287     $ (1,246 )   $ 465,339     $ 357,818     $ 107,521  
Diluted earnings per share $ 0.93     $ 0.94     $ (0.01 )   $ 3.72     $ 2.91     $ 0.81  
Return on average assets 1.84 %   1.89 %   (0.05 )   1.91 %   1.58 %   0.33  
Return on average                                  
tangible equity (1) 21.23 %   21.61 %   (0.38 )   21.22 %   15.15 %   6.07  
                                   
Net interest margin ("NIM")                                  
(tax equivalent) 4.91 %   4.99 %   (0.08 )   5.05 %   5.10 %   (0.05 )
Yield on average loans and                                  
leases (tax equivalent) 6.27 %   6.20 %   0.07     6.22 %   5.97 %   0.25  
Cost of average total deposits 0.62 %   0.46 %   0.16     0.44 %   0.27 %   0.17  
Efficiency ratio 41.7 %   40.9 %   0.8     41.0 %   40.8 %   0.2  
                                   
Total assets $ 25,731,354     $ 24,782,126     $ 949,228     $ 25,731,354     $ 24,994,876     $ 736,478  
Loans and leases held                                  
for investment,                                  
net of deferred fees $ 17,957,713     $ 17,230,146     $ 727,567     $ 17,957,713     $ 16,972,743     $ 984,970  
Noninterest-bearing deposits $ 7,888,915     $ 7,834,480     $ 54,435     $ 7,888,915     $ 8,508,044     $ (619,129 )
Core deposits $ 16,346,671     $ 15,512,742     $ 833,929     $ 16,346,671     $ 15,937,012     $ 409,659  
Total deposits $ 18,870,501     $ 17,879,543     $ 990,958     $ 18,870,501     $ 18,865,536     $ 4,965  
                                   
Noninterest-bearing                                  
deposits as percentage                                  
of total deposits 42 %   44 %   (2 )   42 %   45 %   (3 )
Core deposits as                                  
percentage of total                                  
deposits 87 %   87 %   (0 )   87 %   85 %   2  
                                   
Equity to assets ratio 18.75 %   19.13 %   (0.38 )   18.75 %   19.91 %   (1.16 )
Tangible common equity                                  
ratio (1) 9.60 %   9.61 %   (0.01 )   9.60 %   10.50 %   (0.90 )
Book value per share $ 39.17     $ 38.46     $ 0.71     $ 39.17     $ 38.65     $ 0.52  
Tangible book value per                                  
share (1) $ 18.02     $ 17.28     $ 0.74     $ 18.02     $ 18.24     $ (0.22 )
                                   
(1) Non-GAAP measure.                                  

INCOME STATEMENT HIGHLIGHTS

Net Interest Income

Net interest income increased by $1.4 million to $261.8 million for the fourth quarter of 2018 compared to $260.3 million for the third quarter of 2018 due to a higher yield on average loans and leases and a higher balance of average loans and leases, offset partially by higher deposit costs.  The tax equivalent yield on average loans and leases was 6.27% for the fourth quarter of 2018 compared to 6.20% for the third quarter of 2018. The increase in the yield on average loans and leases was due principally to higher coupon interest.    

The tax equivalent NIM was 4.91% in the fourth quarter of 2018 compared to 4.99% for the third quarter of 2018. The decrease in the NIM was due mainly to higher deposit and borrowing costs, partially offset by a higher yield on average loans and leases and a higher yield on investment securities.          

The cost of average total deposits increased to 0.62% for the fourth quarter of 2018 from 0.46% for the third quarter of 2018 due to higher rates paid on deposits in conjunction with increased market interest rates.  

Provision for Credit Losses

The provision for credit losses increased by $0.5 million to $12.0 million for the fourth quarter of 2018 compared to $11.5 million for the third quarter of 2018.    

The following table presents details of the provision for credit losses for the periods indicated:  

  Three Months Ended         Year Ended
  December 31,   September 30,   Increase     December 31,
Provision for Credit Losses 2018   2018   (Decrease)     2018
  (In thousands)    
Addition to allowance for loan                
and lease losses $   10,500   $   11,500   $   (1,000 )   $   36,774
Addition to reserve for unfunded                
loan commitments 1,500   -   1,500     8,226
Total provision for credit losses $   12,000   $   11,500   $   500     $   45,000

Noninterest Income

Noninterest income decreased by $3.4 million to $33.5 million for the fourth quarter of 2018 compared to $36.9 million for the third quarter of 2018 due mainly to a $4.2 million decrease in dividends and gains on equity investments, a $1.6 million decrease in warrant income, and a $1.3 million decrease in other commissions and fees, offset partially by a $3.4 million increase in other income.  Dividends and gains on equity investments decreased mainly due to lower realized gains on investments sold and decreased fair values of investments still held. Warrant income decreased due to lower realized gains on exercised warrants as the third quarter included a $3.1 million gain on a warrant in a company that completed an IPO. Other commissions and fees decreased mostly due to lower prepayment and other loan-related fees.  Other income increased primarily due to higher miscellaneous income from borrower settlements and higher BOLI income from a death benefit received.

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

  Three Months Ended      
  December 31,     September 30,   Increase  
Noninterest Income 2018     2018   (Decrease)  
  (In thousands)    
Service charges on deposit accounts $   4,091     $   3,979   $   112  
Other commissions and fees 11,114     12,397   (1,283 )
Leased equipment income 9,384     9,120   264  
Gain on sale of loans and leases -     -   -  
Gain on sale of securities 786     826   (40 )
Other income:              
Dividends and (losses) gains on equity investments (1,331 )   2,895   (4,226 )
Warrant income 2,187     3,818   (1,631 )
Other 7,295     3,877   3,418  
Total noninterest income $   33,526     $   36,912   $   (3,386 )

Noninterest Expense

Noninterest expense increased by $1.1 million to $129.2 million for the fourth quarter of 2018 compared to $128.1 million for the third quarter of 2018 attributable primarily to a $3.7 million increase in other expense, offset partially by a $3.0 million decrease in compensation expense. Other expense increased due to the $2.1 million write-off of the Square 1 trademark asset as a result of our plan to retire the Square 1 Bank name and increased employee expense due to executive relocation costs.  Compensation expense decreased due mostly to lower stock compensation expense, lower bonus expense, and lower commissions expense as a result of the decreased warrant income.

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

  Three Months Ended      
  December 31,     September 30,     Increase  
Noninterest Expense 2018     2018     (Decrease)  
  (In thousands)    
Compensation $   69,299     $   72,333     $   (3,034 )
Occupancy    13,356       13,069       287  
Data processing   6,930       6,740       190  
Other professional services   6,198       6,058       140  
Insurance and assessments   4,202       5,446       (1,244 )
Intangible asset amortization   4,986       5,587       (601 )
Leased equipment depreciation   5,758       5,001       757  
Foreclosed assets income, net   (311 )     (257 )     (54 )
Acquisition, integration and reorganization costs   970       800       170  
Loan expense   2,991       2,249       742  
Other   14,856       11,127       3,729  
Total noninterest expense $   129,235     $   128,153     $   1,082  

Income Taxes

The overall effective income tax rate was 25.3% for the fourth quarter of 2018 and 26.2% for the third quarter of 2018.  The decrease in the fourth quarter effective tax rate was due primarily to a change in the state apportionment method applied by the state of Maryland.  The effective tax rate for the year ended December 31, 2018 was 26.5% while the full year 2019 is estimated to be in the range of 27-28%.   

BALANCE SHEET HIGHLIGHTS

Loans and Leases

Loans and leases held for investment, net of deferred fees, increased by $727.6 million in the fourth quarter of 2018 to $18.0 billion at December 31, 2018.  The net increase was driven mainly by production of $1.6 billion and disbursements of $1.2 billion, offset partially by payoffs of $1.1 billion and paydowns of $920.6 million.  For the year ended December 31, 2018 loans and leases held for investment, net of deferred fees, increased by $985.0 million or 5.8%.

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   Year Ended  
Loans and Leases  December 31,      September 30,      December 31,   
Held for Investment Roll Forward (1) 2018     2018     2018  
  (Dollars in thousands)
Balance, beginning of period $   17,230,146     $   16,885,192     $   16,972,743  
Additions:                
Production   1,571,565       1,315,572       4,888,614  
Disbursements   1,186,351       966,668       4,104,335  
Total production and disbursements   2,757,916       2,282,240       8,992,949  
Reductions:                
Payoffs   (1,070,691 )     (1,133,233 )     (4,289,297 )
Paydowns   (920,633 )     (795,243 )     (3,480,997 )
Total payoffs and paydowns   (1,991,324 )     (1,928,476 )     (7,770,294 )
Sales    -       (3,326 )     (161,729 )
Transfers to foreclosed assets   (13,679 )     (2,176 )     (16,914 )
Charge-offs   (25,346 )     (3,308 )     (59,042 )
Total reductions   (2,030,349 )     (1,937,286 )     (8,007,979 )
Balance, end of period $   17,957,713     $   17,230,146     $   17,957,713  
                 
Weighted average rate on production (2) 5.38 %   5.17 %   5.23 %
                 
 
(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 31 basis points to loan yields in 2018.

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

  December 31,   September 30,   June 30,   December 31,
Loan and Lease Portfolio 2018   2018   2018   2017
  (In thousands)
Real estate mortgage:              
Commercial $   4,824,298   $   4,932,823   $   5,010,680   $   5,385,740
Residential   3,093,843     2,745,837     2,555,695     2,466,894
Total real estate mortgage   7,918,141     7,678,660     7,566,375     7,852,634
Real estate construction and land:              
Commercial   912,583     854,346     831,462     769,075
Residential   1,321,073     1,146,611     1,042,564     822,154
Total real estate construction and land   2,233,656     2,000,957     1,874,026     1,591,229
Total real estate    10,151,797     9,679,617     9,440,401     9,443,863
Commercial:              
Asset-based   3,305,421     3,222,311     3,184,300     2,924,950
Venture capital   2,038,748     2,031,895     2,008,205     2,122,735
Other commercial   2,060,426     1,897,852     1,873,607     2,071,394
Total commercial   7,404,595     7,152,058     7,066,112     7,119,079
Consumer   401,321     398,471     378,679     409,801
Total loans and leases held for               
investment, net of deferred fees $   17,957,713   $   17,230,146   $   16,885,192   $   16,972,743
               
Total unfunded loan commitments $   7,528,248   $   7,055,833   $   6,429,587   $   6,234,061

Allowance for Credit Losses

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

  Three Months Ended December 31, 2018
  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 $ 141,920     $ 35,361   $ 177,281  
Charge-offs (25,346 )   -   (25,346 )
Recoveries 5,398     -   5,398  
Net charge-offs (19,948 )   -   (19,948 )
Provision 10,500     1,500   12,000  
Ending balance $ 132,472     $ 36,861   $ 169,333  


  Three Months Ended September 30, 2018
  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 $ 132,139     $ 35,361   $ 167,500  
Charge-offs (3,308 )   -   (3,308 )
Recoveries 1,589     -   1,589  
Net charge-offs (1,719 )   -   (1,719 )
Provision 11,500     -   11,500  
Ending balance $ 141,920     $ 35,361   $ 177,281  

The allowance for credit losses as a percentage of loans and leases held for investment decreased to 0.94% at December 31, 2018 from 1.03% at September 30, 2018 as certain specific reserves in place at September 30, 2018 were charged off during the fourth quarter, lowering the specific reserves on impaired loans at December 31, 2018 compared to September 30, 2018.

Gross charge-offs for the fourth quarter of 2018 were $25.3 million and included $23.4 million for venture capital loans, of which $20.0 million related to two loans, and $1.7 million for other commercial loans.  Gross charge-offs for the third quarter of 2018 were $3.3 million and included $1.1 million for venture capital loans, $0.7 million for real estate mortgage loans, and $0.7 million for asset-based loans. Recoveries for the fourth quarter of 2018 were $5.4 million and included $3.1 million for venture capital loans and $1.7 million for other commercial loans. Recoveries for the third quarter of 2018 were $1.6 million and included $1.0 million for venture capital loans.  

For the full year 2018, net charge-offs were $43.8 million and included $24.2 million for venture capital loans, a decrease from the full year 2017 net charge-offs of $68.7 million that included $36.0 million for venture capital loans.  This resulted in a decrease in net charge-offs to average loans for the venture capital portfolio from 1.77% in 2017 to 1.17% in 2018.

For the fourth quarter of 2018 and third quarter of 2018, annualized net charge-offs to average loans and leases were 0.46% and 0.04%.  For the full years 2018 and 2017, net charge-offs to average loans and leases were 0.26% and 0.43%.

Deposits and Client Investment Funds

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

  December 31,     September 30,     June 30,     December 31,  
Deposit Category 2018     2018     2018     2017  
  (Dollars in thousands)
Noninterest-bearing demand deposits $ 7,888,915     $ 7,834,480     $ 8,126,153     $ 8,508,044  
Interest checking deposits 2,842,463     2,277,537     2,184,785     2,226,885  
Money market deposits 5,043,871     4,782,724     4,631,658     4,511,730  
Savings deposits 571,422     618,001     643,642     690,353  
Total core deposits 16,346,671     15,512,742     15,586,238     15,937,012  
Non-core non-maturity deposits 518,192     483,528     607,388     863,202  
Total non-maturity deposits 16,864,863     15,996,270     16,193,626     16,800,214  
Time deposits $250,000 and under 1,593,453     1,509,214     1,394,117     1,709,980  
Time deposits over $250,000 412,185     374,059     341,449     355,342  
Total time deposits 2,005,638     1,883,273     1,735,566     2,065,322  
Total deposits $ 18,870,501     $ 17,879,543     $ 17,929,192     $ 18,865,536  
                       
Noninterest-bearing demand deposits                      
as percentage of total deposits 42 %   44 %   45 %   45 %
Core deposits as percentage of total deposits 87 %   87 %   87 %   85 %

At December 31, 2018, core deposits totaled $16.3 billion, or 87% of total deposits, including $7.9 billion of noninterest-bearing demand deposits, or 42% of total 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 December 31, 2018 were $1.9 billion, of which $1.5 billion was managed by S1AM.

CREDIT QUALITY  

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

  December 31,     September 30,     Increase  
Credit Quality Metrics  2018     2018     (Decrease)  
  (Dollars in thousands)
Nonaccrual loans and leases held for investment (1) $ 79,333     $ 112,972     $ (33,639 )
Accruing loans contractually past due 90 days or more -     -     -  
Foreclosed assets, net 5,299     4,407     892  
Total nonperforming assets $ 84,632     $ 117,379     $ (32,747 )
                 
Nonaccrual loans and leases held for investment (1) $ 79,333     $ 112,972     $ (33,639 )
Performing troubled debt restructured loans                
held for investment 17,701     22,106     (4,405 )
Total impaired loans and leases $ 97,034     $ 135,078     $ (38,044 )
                 
Nonaccrual loans and leases held for investment                
to loans and leases held for investment 0.44 %   0.66 %      
Nonperforming assets to loans and leases                
held for investment and foreclosed assets 0.47 %   0.68 %      
                 
Pass $ 17,459,205     $ 16,609,629     $ 849,576  
Special mention 261,398     360,058     (98,660 )
Classified 237,110     260,459     (23,349 )
Total loans and leases held for investment,                
net of deferred fees $ 17,957,713     $ 17,230,146     $ 727,567  
                 
Classified loans and leases held for investment                
to loans and leases held for investment 1.32 %   1.51 %      
                 
Allowance for credit losses $ 169,333     $ 177,281     $ (7,948 )
Provision for credit losses (for the quarter) $ 12,000     $ 11,500     $ 500  
Net charge-offs (for the quarter) $ 19,948     $ 1,719     $ 18,229  
Net charge-offs to average loans and leases                
(for the quarter) 0.46 %   0.04 %      
Allowance for credit losses to loans and leases                
held for investment 0.94 %   1.03 %      
Allowance for credit losses to nonaccrual loans                
and leases held for investment 213.5 %   156.9 %      
                 
(1) Nonaccrual loans include guaranteed amounts of $11.2 million at December 31, 2018 and $13.5 million 
at September 30, 2018.

During the fourth quarter of 2018, nonaccrual loans decreased by $33.6 million and classified loans decreased by $23.3 million.  These decreases were primarily due to the foreclosure and sale during the quarter of a $12.2 million commercial real estate loan (which was our only exposure to traditional malls) and the charge-off of two venture capital loans carried at $22.5 million that were classified and on nonaccrual status at September 30, 2018.

Special mention loans and leases decreased by $98.7 million in the fourth quarter due primarily to the payoff of two loans totaling $50 million and a $36 million loan being upgraded to pass status.  

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    Accruing and
  December 31, 2018     September 30, 2018     30-89 Days Past Due 
    % of        % of      December 31,   September 30,
    Loan        Loan      2018   2018
  Amount Category     Amount Category     Amount   Amount
  (Dollars in thousands)
Real estate mortgage:                      
Commercial $ 15,321 0.3 %   $ 29,723 0.6 %   $ 3,276   $ 824
Residential 2,524 0.1 %   3,259 0.1 %   1,557   5,436
Total real estate mortgage 17,845 0.2 %   32,982 0.4 %   4,833   6,260
Real estate construction and land:                      
Commercial 442 0.0 %   - 0.0 %   -   -
Residential - 0.0 %   - 0.0 %   1,527   8,498
Total real estate                      
construction and land 442 0.0 %   - 0.0 %   1,527   8,498
Commercial:                      
Asset-based 32,324 1.0 %   34,619 1.1 %   47   -
Venture capital 20,299 1.0 %   35,520 1.7 %   1,028   1,028
Other commercial 7,380 0.4 %   9,579 0.5 %   2,467   222
Total commercial 60,003 0.8 %   79,718 1.1 %   3,542   1,250
Consumer 1,043 0.3 %   272 0.1 %   581   605
Total held for investment $ 79,333 0.4 %   $ 112,972 0.7 %   $ 10,483   $ 16,613

STOCK REPURCHASE PROGRAM

During the fourth quarter of 2018, no shares were repurchased.  For the year ended December 31, 2018, we repurchased 5,849,234 shares at an average price of $52.38 and a total cost of $306.4 million.  At December 31, 2018, the remaining amount that could be used to repurchase shares under the $350 million Stock Repurchase Program was $110.1 million.

ABOUT PACWEST BANCORP

PacWest Bancorp ("PacWest") is a bank holding company with over $25 billion in assets with one wholly-owned banking subsidiary, Pacific Western Bank (the "Bank"). The Bank has 74 full-service branches located throughout the state of California and one branch in Durham, North Carolina. Our Community Banking group provides lending and comprehensive deposit and treasury management services to small and medium-sized businesses conducted primarily through our California-based branch offices. We offer additional products and services through our National Lending and Venture Banking groups. National Lending provides asset-based, equipment, real estate and security cash flow loans and treasury management services to established middle-market businesses on a national basis. Venture Banking offers a comprehensive suite of financial services focused on entrepreneurial businesses and their venture capital and private equity investors, with offices located in key innovative hubs across the United States.  For more information about PacWest Bancorp, visit www.pacwestbancorp.com, or to learn more about Pacific Western Bank, visit www.pacificwesternbank.com.

FORWARD LOOKING STATEMENTS

This communication contains certain forward-looking information about PacWest that is intended to be covered by the safe harbor for "forward-looking statements" provided by the Private Securities Litigation Reform Act of 1995. Such statements include future financial and operating results, expectations, intentions and other statements that are not historical facts. Such statements are based on information available at the time of this communication and are based on current beliefs and expectations of the Company's management and are subject to significant risks, uncertainties and contingencies, many of which are beyond our control. Actual results may differ materially from those set forth in the forward-looking statements due to a variety of factors, including the risk factors described in documents filed by the Company with the Securities and Exchange Commission.

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

PACWEST BANCORP AND SUBSIDIARIES                
CONDENSED CONSOLIDATED BALANCE SHEET                
                 
  December 31,     September 30,     December 31,  
  2018     2018     2017  
  (Dollars in thousands, except per share data)
ASSETS:                
Cash and due from banks $ 175,830     $ 196,502     $ 233,215  
Interest-earning deposits in financial institutions 209,937     185,284     165,222  
Total cash and cash equivalents  385,767     381,786     398,437  
                 
Securities available-for-sale, at estimated fair value 4,009,431     3,820,333     3,774,431  
Federal Home Loan Bank stock, at cost 32,103     31,077     20,790  
Total investment securities 4,041,534     3,851,410     3,795,221  
                 
Loans held for sale -     -     481,100  
                 
Gross loans and leases held for investment 18,026,365     17,295,589     17,032,221  
Deferred fees, net (68,652 )   (65,443 )   (59,478 )
Total loans and leases held for investment,                
net of deferred fees 17,957,713     17,230,146     16,972,743  
Allowance for loan and lease losses (132,472 )   (141,920 )   (139,456 )
Total loans and leases held for investment, net 17,825,241     17,088,226     16,833,287  
                 
Equipment leased to others under operating leases 292,677     275,707     284,631  
Premises and equipment, net 34,661     34,012     31,852  
Foreclosed assets, net 5,299     4,407     1,329  
Deferred tax asset, net 17,489     41,280     -  
Goodwill 2,548,670     2,548,670     2,548,670  
Core deposit and customer relationship intangibles, net 57,120     62,106     79,626  
Other assets 522,896     494,522     540,723  
Total assets $ 25,731,354     $ 24,782,126     $ 24,994,876  
                 
LIABILITIES:                
Noninterest-bearing deposits $ 7,888,915     $ 7,834,480     $ 8,508,044  
Interest-bearing deposits 10,981,586     10,045,063     10,357,492  
Total deposits 18,870,501     17,879,543     18,865,536  
Borrowings 1,371,114     1,513,166     467,342  
Subordinated debentures 453,846     452,944     462,437  
Accrued interest payable and other liabilities 210,305     194,788     221,963  
Total liabilities 20,905,766     20,040,441     20,017,278  
STOCKHOLDERS' EQUITY (1) 4,825,588     4,741,685     4,977,598  
Total liabilities and stockholders' equity $ 25,731,354     $ 24,782,126     $ 24,994,876  
                 
Book value per share $ 39.17     $ 38.46     $ 38.65  
Tangible book value per share (2) $ 18.02     $ 17.28     $ 18.24  
Shares outstanding 123,189,833     123,283,450     128,782,878  
                 
(1) Includes net unrealized (loss) gain on securities                
available-for-sale, net $ (6,075 )   $ (43,854 )   $ 31,171  
(2) Non-GAAP measure.                


PACWEST BANCORP AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF EARNINGS
                             
  Three Months Ended
  Year Ended
  December 31,     September 30,     December 31,     December 31,
  2018     2018     2017     2018     2017  
  (Dollars in thousands, except per share data)
Interest income:                            
Loans and leases $ 272,522     $ 264,062     $ 258,309     $ 1,047,969     $ 952,771  
Investment securities 29,690     28,061     25,712     111,619     98,202  
Deposits in financial institutions 527     519     576     2,082     1,543  
Total interest income 302,739     292,642     284,597     1,161,670     1,052,516  
                             
Interest expense:                            
Deposits 28,834     21,121     14,041     80,140     45,694  
Borrowings 4,602     3,814     1,366     11,985     3,638  
Subordinated debentures 7,538     7,390     6,234     28,631     23,613  
Total interest expense 40,974     32,325     21,641     120,756     72,945  
                             
Net interest income 261,765     260,317     262,956     1,040,914     979,571  
Provision for credit losses 12,000     11,500     6,406     45,000     57,752  
Net interest income after                             
provision for credit losses 249,765     248,817     256,550     995,914     921,819  
                             
Noninterest income:                            
Service charges on deposit accounts 4,091     3,979     4,574     16,509     15,307  
Other commissions and fees 11,114     12,397     10,505     45,543     41,422  
Leased equipment income 9,384     9,120     8,258     37,881     37,700  
Gain on sale of loans and leases -     -     1,988     4,675     6,197  
Gain (loss) on sale of securities 786     826     (3,329 )   8,176     (541 )
Other income 8,151     10,590     4,799     35,851     28,488  
Total noninterest income 33,526     36,912     26,795     148,635     128,573  
                             
Noninterest expense:                            
Compensation 69,299     72,333     71,986     282,568     266,567  
Occupancy 13,356     13,069     12,715     53,223     48,863  
Data processing 6,930     6,740     6,764     27,225     26,575  
Other professional services 6,198     6,058     5,786     21,952     17,353  
Insurance and assessments 4,202     5,446     5,384     20,705     19,733  
Intangible asset amortization 4,986     5,587     5,062     22,506     14,240  
Leased equipment depreciation 5,758     5,001     5,048     21,371     20,767  
Foreclosed assets (income) expense, net (311 )   (257 )   (475 )   (751 )   1,702  
Acquisition, integration and                            
reorganization costs 970     800     16,085     1,770     19,735  
Loan expense 2,991     2,249     3,140     10,569     13,832  
Other expense 14,856     11,127     11,373     50,094     46,294  
Total noninterest expense 129,235     128,153     142,868     511,232     495,661  
                             
Earnings before income taxes 154,056     157,576     140,477     633,317     554,731  
Income tax expense (39,015 )   (41,289 )   (56,440 )   (167,978 )   (196,913 )
Net earnings  $ 115,041     $ 116,287     $ 84,037     $ 465,339     $ 357,818  
                             
Basic and diluted earnings per share $ 0.93     $ 0.94     $ 0.66     $ 3.72     $ 2.91  
Dividends declared and paid per share $ 0.60     $ 0.60     $ 0.50     $ 2.30     $ 2.00  


PACWEST BANCORP AND SUBSIDIARIES
NET EARNINGS PER SHARE CALCULATIONS
                             
  Three Months Ended
  Year Ended
  December 31,     September 30,     December 31,     December 31,
  2018     2018     2017     2018     2017  
  (In thousands, except per share data)
Basic Earnings Per Share:                            
Net earnings $ 115,041     $ 116,287     $ 84,037     $ 465,339     $ 357,818  
Less: earnings allocated to unvested                            
restricted stock (1) (1,219 )   (1,428 )   (951 )   (5,119 )   (4,184 )
Net earnings allocated to common                            
shares $ 113,822     $ 114,859     $ 83,086     $ 460,220     $ 353,634  
                             
Weighted-average basic shares and                            
unvested restricted stock outstanding 123,238     123,657     127,971     125,100     123,060  
Less: weighted-average unvested                            
restricted stock outstanding (1,426 )   (1,537 )   (1,440 )   (1,460 )   (1,447 )
Weighted-average basic shares                            
outstanding 121,812     122,120     126,531     123,640     121,613  
                             
Basic earnings per share $ 0.93     $ 0.94     $ 0.66     $ 3.72     $ 2.91  
                             
Diluted Earnings Per Share:                            
Net earnings allocated to common                            
shares $ 113,822     $ 114,859     $ 83,086     $ 460,220     $ 353,634  
                             
Weighted-average basic shares                            
outstanding 121,812     122,120     126,531     123,640     121,613  
                             
Diluted earnings per share $ 0.93     $ 0.94     $ 0.66     $ 3.72     $ 2.91  
                             
 
(1) Represents cash dividends paid to holders of unvested stock, net of forfeitures, plus 
undistributed earnings amounts available to holders of unvested restricted stock, if any.
     
     

 


PACWEST BANCORP AND SUBSIDIARIES
AVERAGE BALANCE SHEET AND YIELD ANALYSIS
                             
  Three Months Ended
  December 31, 2018
  September 30, 2018
  December 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)(2) $ 17,275,343 $ 272,824 6.27 %   $ 16,913,792 $ 264,371 6.20 %   $ 17,426,873 $ 258,586 5.89 %
Investment securities (3) 3,899,520 30,992 3.15 %   3,844,201 29,711 3.07 %   3,807,928 30,709 3.20 %
Deposits in financial                            
institutions 94,500 527 2.21 %   108,485 519 1.90 %   179,379 576 1.27 %
Total interest-earning                            
assets (1) 21,269,363 304,343 5.68 %   20,866,478 294,601 5.60 %   21,414,180 289,871 5.37 %
Other assets 3,515,099         3,491,293         3,375,656      
Total assets $ 24,784,462         $ 24,357,771         $ 24,789,836      
                             
Liabilities and                             
Stockholders' Equity:                            
Interest checking $ 2,785,702 7,932 1.13 %   $ 2,433,837 5,135 0.84 %   $ 2,340,166 2,891 0.49 %
Money market 5,107,468 13,621 1.06 %   5,270,297 10,689 0.80 %   5,415,630 7,214 0.53 %
Savings 597,259 273 0.18 %   629,241 233 0.15 %   702,023 279 0.16 %
Time 1,932,332 7,008 1.44 %   1,778,552 5,064 1.13 %   2,120,749 3,657 0.68 %
Total interest-bearing                            
deposits 10,422,761 28,834 1.10 %   10,111,927 21,121 0.83 %   10,578,568 14,041 0.53 %
Borrowings 764,039 4,602 2.39 %   720,449 3,814 2.10 %   445,106 1,366 1.22 %
Subordinated debentures 452,998 7,538 6.60 %   452,312 7,390 6.48 %   458,269 6,234 5.40 %
Total interest-bearing                            
liabilities 11,639,798 40,974 1.40 %   11,284,688 32,325 1.14 %   11,481,943 21,641 0.75 %
Noninterest-bearing                            
demand deposits 8,163,699         8,120,306         8,190,134      
Other liabilities 222,564         203,958         197,261      
Total liabilities 20,026,061         19,608,952         19,869,338      
Stockholders' equity 4,758,401         4,748,819         4,920,498      
Total liabilities and                            
stockholders' equity $ 24,784,462         $ 24,357,771         $ 24,789,836      
Net interest income (1)   $ 263,369         $ 262,276         $ 268,230    
Net interest spread (1)     4.28 %       4.46 %       4.62 %
Net interest margin (1)     4.91 %       4.99 %       4.97 %
                             
Total deposits (4) $ 18,586,460 $ 28,834 0.62 %   $ 18,232,233 $ 21,121 0.46 %   $ 18,768,702 $ 14,041 0.30 %
Funding sources (5) $ 19,803,497 $ 40,974 0.82 %   $ 19,404,994 $ 32,325 0.66 %   $ 19,672,077 $ 21,641 0.44 %
                             
                             
(1) Tax equivalent.
(2) Includes discount accretion on acquired loans of $6.9 million, $6.1 million, and $6.8 million for the three months ended December 31, 2018, September 30, 2018, and December 31, 2017, respectively. 
(3) Includes tax-equivalent adjustments of $1.1 million, $1.5 million, and $5.0 million for the three months ended December 31, 2018, September 30, 2018, and December 31, 2017 related to tax-exempt income on municipal securities.  The federal statutory tax-rate utilized was 21% for the 2018 periods and 35% for the 2017 period. 
(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                            
                             
  December 31,     September 30,     June 30,     March 31,     December 31,  
  2018     2018     2018     2018     2017  
  (Dollars in thousands, except per share data)
ASSETS:                            
Cash and due from banks $   175,830     $   196,502     $   245,998     $   235,061     $   233,215  
Interest-earning deposits in financial                            
institutions 209,937     185,284     205,567     312,735     165,222  
Total cash and cash equivalents  385,767     381,786     451,565     547,796     398,437  
                             
Securities available-for-sale 4,009,431     3,820,333     3,857,788     3,801,986     3,774,431  
Federal Home Loan Bank stock 32,103     31,077     26,271     17,250     20,790  
  Total investment securities 4,041,534     3,851,410     3,884,059     3,819,236     3,795,221  
                             
Loans held for sale -     -     -     -     481,100  
                             
Gross loans and leases held for investment 18,026,365     17,295,589     16,947,502     16,516,627     17,032,221  
Deferred fees, net (68,652 )   (65,443 )   (62,310 )   (61,342 )   (59,478 )
Total loans and leases held for                            
investment, net of deferred fees 17,957,713     17,230,146     16,885,192     16,455,285     16,972,743  
Allowance for loan and lease losses (132,472 )   (141,920 )   (132,139 )   (134,275 )   (139,456 )
Total loans and leases held for                            
investment, net 17,825,241     17,088,226     16,753,053     16,321,010     16,833,287  
                             
Equipment leased to others under                            
operating leases 292,677     275,707     266,576     280,648     284,631  
Premises and equipment, net 34,661     34,012     34,513     33,686     31,852  
Foreclosed assets, net 5,299     4,407     2,231     1,236     1,329  
Deferred tax asset, net 17,489     41,280     25,551     12,584     -  
Goodwill 2,548,670     2,548,670     2,548,670     2,548,670     2,548,670  
Core deposit and customer relationship                            
intangibles, net 57,120     62,106     67,693     73,280     79,626  
Other assets 522,896     494,522     495,646     511,184     540,723  
Total assets $   25,731,354     $   24,782,126     $   24,529,557     $   24,149,330     $   24,994,876  
                             
LIABILITIES:                            
Noninterest-bearing deposits $   7,888,915     $   7,834,480     $   8,126,153     $   8,232,140     $   8,508,044  
Interest-bearing deposits 10,981,586     10,045,063     9,803,039     9,846,648     10,357,492  
Total deposits 18,870,501     17,879,543     17,929,192     18,078,788     18,865,536  
Borrowings 1,371,114     1,513,166     1,187,226     575,284     467,342  
Subordinated debentures 453,846     452,944     451,878     452,223     462,437  
Accrued interest payable and other                            
liabilities 210,305     194,788     183,302     175,545     221,963  
Total liabilities 20,905,766     20,040,441     19,751,598     19,281,840     20,017,278  
STOCKHOLDERS' EQUITY (1) 4,825,588     4,741,685     4,777,959     4,867,490     4,977,598  
Total liabilities and stockholders'                             
equity $   25,731,354     $   24,782,126     $   24,529,557     $   24,149,330     $   24,994,876  
                             
Book value per share $   39.17     $   38.46     $   38.36     $   38.47     $   38.65  
Tangible book value per share (2) $   18.02     $   17.28     $   17.35     $   17.75     $   18.24  
Shares outstanding 123,189,833     123,283,450     124,567,950     126,537,871     128,782,878  
                             
(1) Includes net unrealized (loss) gain on                            
securities available-for-sale, net $   (6,075 )   $   (43,854 )   $   (22,340 )   $   (11,936 )   $   31,171  
(2) Non-GAAP measure.                            


PACWEST BANCORP AND SUBSIDIARIES
FIVE QUARTER STATEMENT OF EARNINGS
                             
  Three Months Ended
  December 31,     September 30,     June 30,     March 31,     December 31,  
  2018     2018     2018     2018     2017  
  (Dollars in thousands, except per share data)
Interest income:                            
Loans and leases $   272,522     $   264,062     $   260,300     $   251,085     $   258,309  
Investment securities 29,690     28,061     27,730     26,138     25,712  
Deposits in financial institutions 527     519     484     552     576  
Total interest income 302,739     292,642     288,514     277,775     284,597  
                             
Interest expense:                            
Deposits 28,834     21,121     16,367     13,818     14,041  
Borrowings 4,602     3,814     2,649     920     1,366  
Subordinated debentures 7,538     7,390     7,166     6,537     6,234  
Total interest expense 40,974     32,325     26,182     21,275     21,641  
                             
Net interest income 261,765     260,317     262,332     256,500     262,956  
Provision for credit losses 12,000     11,500     17,500     4,000     6,406  
Net interest income after                             
provision for credit losses 249,765     248,817     244,832     252,500     256,550  
                             
Noninterest income:                            
Service charges on deposit accounts 4,091     3,979     4,265     4,174     4,574  
Other commissions and fees 11,114     12,397     11,767     10,265     10,505  
Leased equipment income 9,384     9,120     9,790     9,587     8,258  
Gain on sale of loans and leases -     -     106     4,569     1,988  
Gain (loss) on sale of securities 786     826     253     6,311     (3,329 )
Other income 8,151     10,590     13,457     3,653     4,799  
Total noninterest income 33,526     36,912     39,638     38,559     26,795  
                             
Noninterest expense:                            
Compensation 69,299     72,333     69,913     71,023     71,986  
Occupancy 13,356     13,069     13,575     13,223     12,715  
Data processing 6,930     6,740     6,896     6,659     6,764  
Other professional services 6,198     6,058     5,257     4,439     5,786  
Insurance and assessments 4,202     5,446     5,330     5,727     5,384  
Intangible asset amortization 4,986     5,587     5,587     6,346     5,062  
Leased equipment depreciation 5,758     5,001     5,237     5,375     5,048  
Foreclosed assets (income) expense, net (311 )   (257 )   (61 )   (122 )   (475 )
Acquisition, integration and                            
reorganization costs 970     800     -     -     16,085  
Loan expense 2,991     2,249     3,058     2,271     3,140  
Other expense 14,856     11,127     11,657     12,454     11,373  
Total noninterest expense 129,235     128,153     126,449     127,395     142,868  
                             
Earnings before income taxes 154,056     157,576     158,021     163,664     140,477  
Income tax expense (39,015 )   (41,289 )   (42,286 )   (45,388 )   (56,440 )
Net earnings  $   115,041     $   116,287     $   115,735     $   118,276     $   84,037  
                             
Basic and diluted earnings per share $   0.93     $   0.94     $   0.92     $   0.93     $   0.66  
Dividends declared and paid per share $   0.60     $   0.60     $   0.60     $   0.50     $   0.50  


PACWEST BANCORP AND SUBSIDIARIES
FIVE QUARTER SELECTED FINANCIAL DATA
                             
  At or For the Three Months Ended
  December 31,     September 30,     June 30,     March 31,     December 31,  
  2018     2018     2018     2018     2017  
  (Dollars in thousands)        
Performance Ratios:                            
Return on average assets (1) 1.84 %   1.89 %   1.93 %   1.99 %   1.34 %
Return on average equity (1) 9.59 %   9.72 %   9.61 %   9.79 %   6.78 %
Return on average tangible equity (1)(2) 21.23 %   21.61 %   20.98 %   21.08 %   13.75 %
                             
Yield on average loans and leases (1)(3) 6.27 %   6.20 %   6.30 %   6.11 %   5.89 %
Yield on average interest-earning                            
assets (1)(3) 5.68 %   5.60 %   5.70 %   5.53 %   5.37 %
Cost of average total deposits (1) 0.62 %   0.46 %   0.37 %   0.31 %   0.30 %
Cost of average time deposits (1) 1.44 %   1.13 %   0.92 %   0.78 %   0.62 %
Cost of average interest-bearing                            
liabilities (1) 1.40 %   1.14 %   0.98 %   0.81 %   0.75 %
Cost of average funding sources (1) 0.82 %   0.66 %   0.55 %   0.45 %   0.44 %
Net interest spread (1)(3) 4.28 %   4.46 %   4.72 %   4.72 %   4.62 %
Net interest margin (1)(3) 4.91 %   4.99 %   5.18 %   5.11 %   4.97 %
                             
Efficiency ratio 41.7 %   40.9 %   39.8 %   41.7 %   41.0 %
Noninterest expense as a percentage                            
of average assets (1) 2.07 %   2.09 %   2.11 %   2.15 %   2.29 %
                             
Average Balances:                            
Loans and leases, net of deferred fees $   17,275,343     $   16,913,792     $   16,576,361     $   16,682,124     $   17,426,873  
Interest-earning assets 21,269,363     20,866,478     20,492,121     20,514,936     21,414,180  
Total assets 24,784,462     24,357,771     23,999,637     24,071,148     24,789,836  
Noninterest-bearing deposits 8,163,699     8,120,306     8,253,413     8,311,104     8,190,134  
Interest-bearing deposits 10,422,761     10,111,927     9,703,611     9,959,243     10,578,568  
Total deposits 18,586,460     18,232,233     17,957,024     18,270,347     18,768,702  
Borrowings and subordinated                            
debentures 1,217,037     1,172,761     1,001,638     700,941     903,375  
Interest-bearing liabilities 11,639,798     11,284,688     10,705,249     10,660,184     11,481,943  
Funding sources 19,803,497     19,404,994     18,958,662     18,971,288     19,672,077  
Stockholders' equity 4,758,401     4,748,819     4,832,480     4,901,207     4,920,498  
                             
 
(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
  December 31,     September 30,     June 30,     March 31,     December 31,  
  2018     2018     2018     2018     2017  
   
   
  (Dollars in thousands)        
Credit Quality Ratios (1):                            
Nonaccrual loans and leases held for                            
investment to loans and leases held                            
for investment 0.44 %   0.66 %   0.67 %   0.63 %   0.92 %
Nonperforming assets to loans and                            
leases held for investment and                            
foreclosed assets 0.47 %   0.68 %   0.69 %   0.64 %   0.93 %
Classified loans and leases held for                            
investment to loans and leases held                            
for investment 1.32 %   1.51 %   1.40 %   1.26 %   1.65 %
Trailing 12 months net charge-offs                            
to average loans and leases                            
held for investment 0.26 %   0.28 %   0.28 %   0.31 %   0.40 %
Allowance for credit losses to loans                            
and leases held for investment 0.94 %   1.03 %   0.99 %   1.02 %   0.96 %
Allowance for credit losses to                            
nonaccrual loans and leases held                            
for investment 213.5 %   156.9 %   147.3 %   161.1 %   103.8 %
                             
PacWest Bancorp Consolidated                             
Capital:                            
Tier 1 leverage ratio (2) 10.13 %   10.10 %   10.33 %   10.66 %   10.66 %
Common equity tier 1 capital ratio (2) 10.01 %   10.18 %   10.59 %   11.16 %   10.91 %
Tier 1 capital ratio (2) 10.01 %   10.18 %   10.59 %   11.16 %   10.91 %
Total capital ratio (2) 12.72 %   13.03 %   13.48 %   14.11 %   13.75 %
Risk-weighted assets (2) $ 22,525,096     $ 21,650,542     $ 20,929,325     $ 20,523,487     $ 21,657,591  
                             
Equity to assets ratio 18.75 %   19.13 %   19.48 %   20.16 %   19.91 %
Tangible common equity ratio (3) 9.60 %   9.61 %   9.86 %   10.43 %   10.50 %
Book value per share $ 39.17     $ 38.46     $ 38.36     $ 38.47     $ 38.65  
Tangible book value per share (3) $ 18.02     $ 17.28     $ 17.35     $ 17.75     $ 18.24  
                             
Pacific Western Bank Capital:                            
Tier 1 leverage ratio (2) 10.80 %   10.78 %   11.11 %   11.33 %   11.75 %
Common equity tier 1 capital ratio (2) 10.68 %   10.87 %   11.40 %   11.86 %   11.91 %
Tier 1 capital ratio (2) 10.68 %   10.87 %   11.40 %   11.86 %   11.91 %
Total capital ratio (2) 11.44 %   11.69 %   12.21 %   12.67 %   12.69 %
                             
(1) Ratios related to 2018 periods are for total loans and leases.  Ratios related to the 2017 period are for Non-PCI loans and leases.
(2) Capital information for December 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
  Year Ended
  December 31,     September 30,     December 31,     December 31,
Return on Average Tangible Equity 2018     2018     2017     2018     2017  
  (Dollars in thousands)
Net earnings $   115,041     $   116,287     $   84,037     $   465,339     $   357,818  
                             
Average stockholders' equity $   4,758,401     $   4,748,819     $   4,920,498     $   4,809,667     $   4,641,495  
Less: Average intangible assets   2,608,497       2,614,055       2,495,876       2,616,820       2,279,010  
Average tangible common equity $   2,149,904     $   2,134,764     $   2,424,622     $   2,192,847     $   2,362,485  
                             
Return on average equity (1) 9.59 %   9.72 %   6.78 %   9.68 %   7.71 %
Return on average tangible equity (2) 21.23 %   21.61 %   13.75 %   21.22 %   15.15 %
                             
(1) Annualized net earnings divided by average stockholders' equity.
(2) Annualized net earnings divided by average tangible common equity.


Tangible Common Equity Ratio/ December 31,     September 30,     June 30,     March 31,     December 31,  
Tangible Book Value Per Share 2018     2018     2018     2018     2017  
  (Dollars in thousands, except per share data)        
Stockholders' equity $   4,825,588     $   4,741,685     $   4,777,959     $   4,867,490     $   4,977,598  
Less: Intangible assets   2,605,790       2,610,776       2,616,363       2,621,950       2,628,296  
Tangible common equity $   2,219,798     $   2,130,909     $   2,161,596     $   2,245,540     $   2,349,302  
                             
Total assets $   25,731,354     $   24,782,126     $   24,529,557     $   24,149,330     $   24,994,876  
Less: Intangible assets   2,605,790       2,610,776       2,616,363       2,621,950       2,628,296  
Tangible assets $   23,125,564     $   22,171,350     $   21,913,194     $   21,527,380     $   22,366,580  
                             
Equity to assets ratio 18.75 %   19.13 %   19.48 %   20.16 %   19.91 %
Tangible common equity ratio (1) 9.60 %   9.61 %   9.86 %   10.43 %   10.50 %
                             
Book value per share $   39.17     $   38.46     $   38.36     $   38.47     $   38.65  
Tangible book value per share (2) $   18.02     $   17.28     $   17.35     $   17.75     $   18.24  
Shares outstanding   123,189,833       123,283,450       124,567,950       126,537,871       128,782,878  
                             
(1) Tangible common equity divided by tangible assets.
(2) Tangible common equity divided by shares outstanding.


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

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