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PacWest Bancorp Announces Results For The First Quarter Of 2013

Highlights

  • Net Earnings of $13.5 Million or $0.37 Per Diluted Share
  • Net Interest Margin at 5.40%
  • Credit Loss Reserve at 2.43% of Net Non-Covered Loans and Leases and 172% of Non-Covered Nonaccrual Loans and Leases
  • Noninterest-Bearing Deposits at 43% and Core Deposits at 83% of Total Deposits

LOS ANGELES, April 17, 2013 (GLOBE NEWSWIRE) -- PacWest Bancorp (Nasdaq:PACW) today announced net earnings for the first quarter of 2013 of $13.5 million, or $0.37 per diluted share, compared to net earnings for the fourth quarter of 2012 of $19.9 million, or $0.54 per diluted share.

This press release contains certain non-GAAP financial disclosures for tangible common equity, return on average tangible equity, adjusted earnings before income taxes, and adjusted efficiency ratio. The Company uses certain 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. Given that the use of tangible common equity amounts and ratios and return on average tangible equity is prevalent among banking regulators, investors and analysts, we disclose our tangible common equity ratio in addition to equity-to-assets ratio, and our return on average tangible equity in addition to return on average equity. Also, as analysts and investors view adjusted earnings before income taxes as an indicator of the Company's ability to absorb credit losses, we disclose this amount in addition to pre-tax earnings. We disclose the adjusted efficiency ratio as it shows the trend in recurring overhead-related noninterest expense relative to recurring net revenues. Please refer to the tables at the end of this release for a presentation of performance ratios in accordance with GAAP and a reconciliation of the non-GAAP financial measures to the GAAP financial measures.

FIRST QUARTER RESULTS    
     
  Three Months Ended
  March 31, December 31,
  2013 2012
  (Dollars in thousands, except per share data)
Financial Highlights:    
Net earnings   $ 13,494  $ 19,892
Diluted earnings per share  $ 0.37  $ 0.54
Adjusted earnings before income taxes (1)  $ 27,270  $ 33,865
Annualized return on average assets 1.02% 1.44%
Annualized return on average equity 9.29% 13.51%
Annualized return on average tangible equity (2) 11.05% 16.12%
Net interest margin 5.40% 5.49%
Efficiency ratio 64.5% 60.7%
Adjusted efficiency ratio (3) 61.7% 55.7%
     
At Quarter End:    
Allowance for credit losses to non-covered loans and leases, net of unearned income (4) 2.43% 2.37%
Allowance for credit losses to non-covered nonaccrual loans and leases (4)  172% 184%
Equity to assets ratios:    
PacWest Bancorp Consolidated 11.13% 10.78%
Pacific Western Bank 12.32% 11.93%
Tangible common equity ratios:    
PacWest Bancorp Consolidated 9.54% 9.21%
Pacific Western Bank 10.74% 10.38%
     
(1) Represents pre-tax earnings excluding net credit costs, securities gains, and acquisition and integration costs. See GAAP to Non-GAAP Reconciliation table.
(2) Calculation reduces average equity by average intangible assets. See GAAP to Non-GAAP Reconciliation table.
(3) Excludes FDIC loss sharing income, securities gains, OREO expenses, and acquisition and integration costs. See GAAP to Non-GAAP Reconciliation table.
(4) Non-covered loans exclude loans covered by loss sharing agreements with the FDIC.

Quarter-over-quarter net earnings declined $6.4 million due mostly to four items: (a) the $2.6 million after tax decline in interest income on loans and leases; (b) the $2.5 million after tax increase in net credit costs; (c) the $1.1 million after tax decline in gain on asset sales; and (d) the $1.2 million after tax increase in compensation expense. 

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