Fourth Quarter 2015 Highlights
  • Square 1 Acquisition Closed October 6, 2015
  • Net Earnings of $71.8 Million, or $0.60 Per Diluted Share; Adjusted Net Earnings of $83.9 Million, or $0.70 Per Diluted Share
  • New Loan and Lease Production of $1.4 Billion for the Quarter
  • Core Deposits Increased $3.8 Billion for the Quarter and Represented 67% of Total Deposits
  • Core Tax Equivalent Net Interest Margin of 5.10%

Full Year 2015 Highlights
  • Net Earnings of $299.6 Million, or $2.79 Per Diluted Share; Adjusted Net Earnings of $287.4 Million, or $2.68 Per Diluted Share
  • New Loan and Lease Production of $4.2 Billion for the Year; Organic Growth Rate of 9%
  • Core Deposits Increased $4.4 Billion for the Year, Including $3.8 Billion From the Square 1 Acquisition
  • Core Tax Equivalent Net Interest Margin of 5.25%

LOS ANGELES, Jan. 21, 2016 (GLOBE NEWSWIRE) -- PacWest Bancorp (Nasdaq:PACW) today announced net earnings for the fourth quarter of 2015 of $71.8 million, or $0.60 per diluted share, compared to net earnings for the third quarter of 2015 of $69.6 million, or $0.68 per diluted share.  Net earnings for the full year 2015 were $299.6 million, or $2.79 per diluted share, compared to net earnings of $168.9 million for the full year 2014, or $1.92 per diluted share.  The increase in annual net earnings was due mostly to including the operations of CapitalSource for all of 2015 compared to including its operations in 2014 only from the April 7, 2014 merger date.

When certain income and expense items described below are excluded, adjusted net earnings were $83.9 million, or $0.70 per diluted share, for the fourth quarter of 2015 compared to $65.1 million, or $0.63 per diluted share, for the third quarter of 2015.  Adjusted net earnings were $287.4 million, or $2.68 per diluted share, for the full year 2015 compared to $219.7 million, or $2.49 per diluted share, for the full year 2014.

Matt Wagner, President and CEO, commented, "Our strong fourth quarter results capped a year of profitable growth and continued solid operating performance.  Our full year 2015 diluted EPS increased 45%, driving our return on assets of 1.70% and return on tangible equity of 15.76%. These exceptional operating results allowed us to distribute more than $215 million of cash dividends to our stockholders in 2015."

Mr. Wagner continued, "Our entry into the venture capital banking space as a result of the Square 1 acquisition combined with the recent expansion of new commercial construction and multi-family  lending groups will help to diversify our loan and lease portfolio along product and geographical lines and contribute toward our targeted upper single-digit portfolio growth. With our strong capital levels and overall sound asset quality metrics we are well positioned for continued success. Our achievements were recently recognized in Forbes magazine's 2016 List of America's Best Banks where PacWest was named the second best performing of the 100 largest publicly-traded U.S. banks."

Patrick Rusnak, Executive Vice President and CFO stated, "Our fourth quarter tax equivalent net interest margin on a core basis of 5.10% reflects proactive steps taken during the third and fourth quarters in connection with the Square 1 acquisition.  These actions included a further reduction in time deposits and a restructuring of the acquired investment securities portfolio.  Further, Square 1's core deposits substantially improved our core deposit base driving core deposits as a percentage of total deposits up to 67%, nearly a 20% increase.  Our total organic loan and lease portfolio growth for 2015, which excludes merger related and bulk acquisitions, totaled over $800 million, or 7%, driven by growth in cash flow, asset-based and construction lending."

Mr. Rusnak continued, "Our total oil and gas related credit exposure at year end was $137 million, or less than one percent of total loans and leases, reflecting a reduction of 10% from principal payments received during the fourth quarter. The reserves related to this credit exposure total approximately 8%. We continue to control operating expenses as shown by our efficiency ratio, which declined to 39.3% in the fourth quarter. We are excited about our prospects for 2016 and believe our talented teams will continue to deliver strong results."

FINANCIAL HIGHLIGHTS

                         
  At or For the Three Months Ended   At or For the Year Ended  
  December 31,   September 30,       December 31,      
    2015       2015     Change     2015       2014     Change  
  (Dollars in thousands, except per share data)  
Financial Highlights (1):                        
Net Earnings $   71,841     $   69,616     $   2,225     $   299,619     $   168,905     $   130,714    
Diluted Earnings Per Share $   0.60     $   0.68     $   (0.08 )   $   2.79     $   1.92     $   0.87    
Return on Average Assets   1.37 %     1.65 %       (0.28 )     1.70 %     1.27 %       0.43    
Return on Average                        
Tangible Equity (2)   13.14 %     15.09 %       (1.95 )     15.76 %     11.88 %       3.88    
                         
Adjusted Net Earnings (2) $   83,927     $   65,063     $   18,864     $   287,422     $   219,701     $   67,721    
Adjusted Diluted Earnings                        
Per Share (2) $   0.70     $   0.63     $   0.07     $   2.68     $   2.49     $   0.19    
Adjusted Return on Average                        
Assets (2)   1.60 %     1.55 %       0.05       1.64 %     1.65 %       (0.01 )  
Adjusted Return on Average                        
Tangible Equity (2)   15.35 %     14.10 %       1.25       15.12 %     15.46 %       (0.34 )  
                         
Net Interest Margin                        
(tax equivalent)   5.22 %     5.46 %       (0.24 )     5.60 %     6.01 %       (0.41 )  
Core Net Interest Margin                        
(tax equivalent) (2)   5.10 %     5.19 %       (0.09 )     5.25 %     5.66 %       (0.41 )  
Efficiency Ratio   39.3 %     39.6 %       (0.3 )     38.5 %     41.6 %       (3.1 )  
                         
Total Assets $   21,288,490     $   16,814,105     $   4,474,385     $   21,288,490     $   16,234,605     $   5,053,885    
Loans and Leases, Net of                                                
Deferred Fees $   14,478,254     $   12,452,205     $   2,026,049     $   14,478,254     $   11,882,432     $   2,595,822    
Total Deposits $   15,666,182     $   12,115,763     $   3,550,419     $   15,666,182     $   11,755,128     $   3,911,054    
                         
Noninterest-Bearing Deposits                      
as Percentage of Total                        
Deposits   39 %     29 %       10       39 %     25 %       14    
Core Deposits as Percentage                        
of Total Deposits   67 %     56 %       11       67 %     52 %       15    
Tangible Common Equity                        
Ratio (2)   11.38 %     12.21 %       (0.83 )     11.38 %     12.20 %       (0.82 )  
Tangible Book Value Per                        
Share (2) $   17.86     $   17.86     $   -      $   17.86     $   17.17     $   0.69    
________________________                        
(1) The operations of Square 1 Financial, Inc. are included from its October 6, 2015, acquisition date.   
(2) Non-GAAP measure.   

ADJUSTED NET EARNINGS

In evaluating our earnings, certain items are excluded to arrive at adjusted net earnings and adjusted diluted earnings per share, as detailed below:
                       
    Three Months Ended   Year Ended  
    December 31,   September 30,   December 31,   December 31,  
      2015       2015       2014       2015       2014    
    (Dollars in thousands)  
                       
Net earnings $ 71,841     $ 69,616     $ 70,999     $ 299,619     $ 168,905    
Less: Tax benefit on discontinued operations   -       -       (47 )     -       (1,114 )  
Add: Tax expense on continuing operations   49,380       39,777       43,261       180,517       117,005    
Pre-tax earnings   121,221       109,393       114,213       480,136       284,796    
Add: Acquisition, integration, and                    
  reorganization costs   17,600       747       7,381       21,247       101,016    
Less: FDIC loss sharing expense, net   (4,291 )     (4,449 )     (4,360 )     (18,246 )     (31,730 )  
  Gain on sale of loans and leases   183       27       7       373       601    
  Gain on securities   -       655       -       3,744       4,841    
  Covered OREO income (expense), net   2,920       (20 )     (176 )     2,931       1,172    
  Gain on sale of owned office building   -       -       -       -       1,570    
Adjusted pre-tax earnings before accelerated                    
discount accretion   140,009       113,927       126,123       512,581       409,358    
Less: Accelerated discount accretion from                    
  early payoffs of acquired loans   5,511       9,659       11,421       51,969       38,867    
Adjusted pre-tax earnings   134,498       104,268       114,702       460,612       370,491    
  Tax expense (1)   (50,571 )     (39,205 )     (46,684 )     (173,190 )     (150,790 )  
Adjusted net earnings $ 83,927     $ 65,063     $ 68,018     $ 287,422     $ 219,701    
                       
Adjusted diluted earnings per share $ 0.70     $ 0.63     $ 0.66     $ 2.68     $ 2.49    
Adjusted return on average assets   1.60 %     1.55 %     1.70 %     1.64 %     1.65 %  
___________________________________                    
(1) Full-year actual effective tax rates of 37.6 % used for 2015 periods and 40.7% used for 2014 periods.   

INCOME STATEMENT HIGHLIGHTS

Net Interest Income

Net interest income increased by $36.7 million to $229.2 million for the fourth quarter of 2015 compared to $192.5 million for the third quarter of 2015 due to higher average investment and loan balances offset by lower discount accretion on acquired loans.  The loan and lease yield for the fourth quarter of 2015 was 6.21% compared to 6.34% for the third quarter of 2015.  The decrease in the loan and lease yield was due to lower discount accretion on acquired loans and the yield on new originations being lower than the current portfolio yield. Total discount accretion on acquired loans was $16.1 million in the fourth quarter of 2015 (46 basis points on the loan and lease yield) compared to $17.1 million in the third quarter of 2015 (57 basis points on the loan and lease yield). The decrease in discount accretion was due primarily to lower accelerated accretion from early payoffs.

The tax equivalent net interest margin ("NIM") for the fourth quarter of 2015 was 5.22% compared to 5.46% for the third quarter of 2015. The decrease in the NIM was due to lower discount accretion on acquired loans and a higher percentage of average lower-yielding assets in the mix. Discount accretion on acquired loans contributed 36 basis points to the NIM in the fourth quarter of 2015 and 48 basis points in the third quarter of 2015.    

The cost of total deposits decreased to 0.24% in the fourth quarter from 0.33% in the third quarter due to the increased balance of noninterest-bearing deposits and a lower level of higher-cost time deposits.

Net interest margin information is presented in the following table for the periods indicated:
       
  Three Months Ended
  December 31,   September 30,
    2015       2015  
  (Dollars in thousands)
Average Assets:      
Loans and leases $   14,031,102     $   12,112,881  
Investment securities     3,492,124         1,806,628  
Deposits in financial institutions     254,308         278,973  
Interest-earning assets     17,777,534         14,198,482  
Other assets     3,047,714         2,491,695  
Total assets $   20,825,248     $   16,690,177  
       
Average Liabilities and Stockholders' Equity:      
Interest-bearing deposits $   9,633,393     $   8,993,681  
Borrowings     206,236         70,171  
Subordinated debentures     435,293         434,420  
Interest-bearing liabilities     10,274,922         9,498,272  
Noninterest-bearing demand deposits     6,043,900         3,486,780  
Other liabilities     160,264         132,360  
Total liabilities     16,479,086         13,117,412  
Stockholders' equity     4,346,162         3,572,765  
Liabilities and stockholders' equity $   20,825,248     $   16,690,177  
       
Time deposits $   4,439,940     $   5,042,768  
Total deposits $   15,677,293     $   12,480,461  
Funding sources $   16,318,822     $   12,985,052  
       
Yields on Average Assets:      
Loans and leases   6.21 %     6.34 %
Investment securities (1)   3.23 %     3.67 %
Interest-earning assets (1)   5.54 %     5.88 %
       
Costs of Average Liabilities:      
Total deposits   0.24 %     0.33 %
Time deposits   0.63 %     0.66 %
Interest-bearing deposits   0.39 %     0.46 %
Borrowings   0.31 %     0.41 %
Subordinated debentures   4.33 %     4.27 %
Interest-bearing liabilities   0.55 %     0.63 %
Funding sources   0.35 %     0.46 %
       
Net interest rate spread (1)   4.99 %     5.25 %
Net interest margin (1)   5.22 %     5.46 %
       
(1) Tax equivalent      

The tax equivalent NIM and loan and lease yield are impacted by volatility in accelerated accretion of acquisition discounts due to the prepayment of acquired loans and leases. The effects of this item are shown in the following table for the periods indicated:
    Three Months Ended   Three Months Ended
    December 31, 2015   September 30, 2015
      Loan and     Loan and
    NIM Lease Yield   NIM Lease Yield
Reported   5.22 %   6.21 %     5.46 %   6.34 %
Less: Accelerated accretion of acquisition discounts              
  from early payoffs of acquired loans   (0.12 )%   (0.16 )%     (0.27 )%   (0.32 )%
Core     5.10 %   6.05 %     5.19 %   6.02 %
             

The impact on the tax equivalent net interest income and NIM from all purchase accounting items is set forth in the table below for the periods indicated:
             
    Three Months Ended   Three Months Ended
    December 31, 2015   September 30, 2015
      Impact on     Impact on
    Amount NIM   Amount NIM
    (Dollars in thousands)
             
Net interest income/NIM $ 233,959     5.22 %   $ 195,274     5.46 %
Less: Accelerated accretion of acquisition discounts          
  from early payoffs of acquired loans   (5,511 )   (0.12 )%     (9,659 )   (0.27 )%
  Remaining accretion of Non-PCI loan          
  acquisition discounts   (10,553 )   (0.24 )%     (7,485 )   (0.21 )%
  Total accretion of loan acquisition discounts   (16,064 )   (0.36 )%     (17,144 )   (0.48 )%
  Amortization of TruPS discount   1,397     0.03 %     1,399     0.04 %
  Accretion of time deposits premium   (384 )   (0.01 )%     (576 )   (0.02 )%
      (15,051 )   (0.34 )%     (16,321 )   (0.46 )%
Net interest income/NIM - excluding purchase          
accounting $ 218,908     4.88 %   $ 178,953     5.00 %

Noninterest Income

Noninterest income increased by $12.3 million to $28.1 million for the fourth quarter of 2015 compared to $15.8 million for the third quarter of 2015 due mostly to higher other commissions and fees of $6.3 million, higher leased equipment income of $2.3 million, higher other income of $2.7 million and higher service charges on deposit accounts of $1.3 million. The increase in other commissions and fees was comprised of $3.3 million from loan prepayment fees, $1.7 million from foreign exchange fees and $0.7 million from credit card fee income. The last two items are new revenue streams acquired in the Square 1 acquisition. Leased equipment income increased due to higher average balances and other income increased due to gains from early lease terminations, dividends received on other investments, a miscellaneous recovery and warrant gains. We acquired a portfolio of equity warrants in the Square 1 acquisition, and we continue to receive warrants in connection with extending loan commitments to certain of our customers. Warrants potentially provide gains in the case of a future customer liquidity event. The increase in deposit service charges was due to the acquired Square 1 deposits. 

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

           
  Three Months Ended
  December 31,   September 30,   Increase
Noninterest Income   2015       2015     (Decrease)
  (In thousands)
           
Service charges on deposit accounts $   3,901     $   2,601     $   1,300  
Other commissions and fees     12,691         6,376         6,315  
Leased equipment income     7,791         5,475         2,316  
Gain on sale of loans and leases     183         27         156  
Gain on securities     -         655         (655 )
FDIC loss sharing expense, net     (4,291 )       (4,449 )       158  
Other income:          
Dividends and realized gains on equity investments     4,886         4,357         529  
Foreign currency translation net losses     (661 )       (373 )       (288 )
Income recognized on early repayment of leases     802         12         790  
Other     2,756         1,077         1,679  
Total noninterest income $   28,058     $   15,758     $   12,300  

Noninterest Expense

Noninterest expense increased by $32.1 million to $122.3 million for the fourth quarter of 2015 compared to $90.1 million for the third quarter of 2015.  The increase was due mostly to higher acquisition, integration and reorganization costs of $16.9 million related to the Square 1 acquisition and integration. All operating expense categories were higher quarter over quarter due mostly to the Square 1 acquisition. Foreclosed assets expense is lower by $7.7 million due to gains of $3.0 million on foreclosed asset sales in the fourth quarter, while the third quarter included a write-down of $4.6 million on an existing foreclosed property.

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

  Three Months Ended
  December 31,   September 30,   Increase
Noninterest Expense   2015       2015     (Decrease)
  (In thousands)
           
Compensation $   58,992     $   48,152     $   10,840  
Occupancy      12,194         10,762         1,432  
Data processing     5,585         4,322         1,263  
Other professional services     3,811         3,396         415  
Insurance and assessments     5,450         3,805         1,645  
Intangible asset amortization     4,910         1,497         3,413  
Leased equipment depreciation     4,235         3,162         1,073  
Foreclosed assets (income) expense, net     (3,185 )       4,521         (7,706 )
Acquisition, integration and reorganization costs     17,600         747         16,853  
Other expense:          
Loan expense     2,745         1,494         1,251  
Other     9,927         8,281         1,646  
Total noninterest expense $   122,264     $   90,139     $   32,125  

Income Taxes

Our overall effective income tax rate was 40.7% for the fourth quarter of 2015 and 36.4% for the third quarter of 2015.  The effective tax rate for the full year 2015 was 37.6%. 

BALANCE SHEET HIGHLIGHTS

Loans and Leases

Total loans and leases increased $2.0 billion in the fourth quarter to $14.5 billion at December 31, 2015.   The net increase was driven by the acquisition of Square 1 loans of $1.6 billion and fourth quarter originations and purchases of $1.4 billion, offset partially by principal repayments of $910.4 million.   For the year ended December 31, 2015, total loans and leases increased $2.6 billion, or approximately 22%. Fourth quarter new production included $96 million of purchased multi-family loans and the third quarter included $132 million of purchased multi-family and student loans.

The following table presents a roll forward of the loan and lease portfolio for the periods indicated:
  Three Months Ended   Year Ended
  December 31,   September 30,   December 31,
Loan and Lease Roll Forward (1)   2015       2015       2015  
  (In thousands)
           
Beginning balance $   12,452,205     $   12,034,189     $   11,882,432  
New production     1,403,611         1,070,986         4,171,172  
Existing loans and leases:          
Principal repayments, net (2)     (910,445 )       (630,292 )       (3,067,733 )
Loan and lease sales     (19,610 )       (6,864 )       (30,095 )
Transfers to foreclosed assets     -         (10,383 )       (13,471 )
Charge-offs     (1,227 )       (5,431 )       (17,771 )
Loans acquired through Square 1 acquisition     1,553,720         -         1,553,720  
Ending balance $   14,478,254     $   12,452,205     $   14,478,254  
           
Weighted average yields on new production    5.29 %     5.16 %     5.47 %
___________________________________          
(1) Includes direct financing leases but excludes equipment leased to others under operating leases.
(2) Includes principal repayments on existing loans, changes in revolving lines of credit (repayments and draws), loan participation sales and other changes within the loan portfolio.

The following table presents the composition of our loan and lease portfolio as of the dates indicated:
  December 31,   September 30,   December 31,
Loan and Lease Portfolio   2015       2015       2014  
  (In thousands)
Real estate mortgage:          
Commercial $   4,642,088     $   4,512,489     $   4,583,350  
Residential     1,211,209         1,177,302         1,010,022  
Total real estate mortgage     5,853,297         5,689,791         5,593,372  
Real estate construction and land:          
Commercial     349,436         229,904         220,927  
Residential     184,382         145,262         96,749  
Total real estate construction and land     533,818         375,166         317,676  
Total real estate loans     6,387,115         6,064,957         5,911,048  
Commercial:          
Cash flow     3,073,965         2,980,650         2,665,654  
Asset-based     2,547,665         2,381,706         2,234,474  
Equipment finance     890,349         894,777         969,489  
Venture capital     1,458,013         -         -  
Total commercial     7,969,992         6,257,133         5,869,617  
Consumer     121,147         130,115         101,767  
Total loans and leases, net of deferred fees $   14,478,254     $   12,452,205     $   11,882,432  
           
Total unfunded loan commitments $   3,580,655     $   2,022,046     $   1,921,067  

Production from our recently expanded construction lending team is ramping up resulting in the growth in construction loans in the fourth quarter from the combination of new loans originated and disbursements on previously booked loans. Venture capital loans and unfunded loan commitments showed large increases in the fourth quarter due to the acquired balances from Square 1.

Credit Exposure Affected by Low Oil Prices

At December 31, 2015, PacWest had 24 outstanding loan and lease relationships totaling $137.3 million to borrowers involved in the oil and gas services industry, down from $152.3 million at September 30, 2015.  The collateral for these loans and leases primarily includes equipment, such as drilling equipment and transportation vehicles.  At December 31, 2015, three relationships totaling $47.1 million were on nonaccrual status and were classified, down from $47.9 million at September 30, 2015.   The largest of these relationships had an aggregate outstanding balance of $40.1 million at December 31, 2015.  These nonaccrual loans had specific valuation allowances of $6.3 million at December 31, 2015 reflecting a $4.9 million increase during the fourth quarter of 2015. The total reserves related to our oil and gas services industry exposure was approximately 8% at year end.

Deposits and Client Investment Funds

The following table presents the composition of our deposit portfolio as of the dates indicated:
  December 31,   September 30,   December 31,
Deposit Category   2015       2015       2014  
  (Dollars in thousands)
           
Noninterest-bearing demand deposits $   6,171,455     $   3,508,682     $   2,931,352  
Interest checking deposits     874,349         693,632         732,196  
Money market deposits     2,782,974         1,860,983         1,709,068  
Savings deposits     742,795         751,955         762,961  
Total core deposits     10,571,573         6,815,252         6,135,577  
Brokered non-maturity deposits     942,253         713,215         120,613  
Total non-maturity deposits     11,513,826         7,528,467         6,256,190  
Time deposits under $100,000     1,656,227         1,951,938         2,467,338  
Time deposits of $100,000 and over     2,496,129         2,635,358         3,031,600  
Total time deposits     4,152,356         4,587,296         5,498,938  
Total deposits $   15,666,182     $   12,115,763     $   11,755,128  
           
Noninterest-bearing demand deposits as percentage of total deposits   39 %     29 %     25 %
Core deposits as percentage of total deposits   67 %     56 %     52 %

At December 31, 2015, core deposits totaled $10.6 billion, or 67% of total deposits, including $6.2 billion of noninterest-bearing demand deposits, or 39% of total deposits.  Core deposits obtained in the Square 1 acquisition totaled $3.8 billion.

The following table summarizes the maturities of our time deposits as of the date indicated:

  December 31, 2015  
  Time Deposits Time Deposits Total     Estimated  
  Under   $ 100,000     Time   Contractual Effective    
Time Deposit Maturities   $ 100,000     or More Deposits Rate Rate  
  (Dollars in thousands)  
             
Due in three months or less $     589,234     $     784,141     $   1,373,375     0.60 %   0.58 %  
Due in over three months through six months       453,763           821,581         1,275,344     0.73 %   0.72 %  
Due in over six months through twelve months       500,658           763,141         1,263,799     0.64 %   0.62 %  
Due in over 12 months through 24 months       82,459           100,050         182,509     0.63 %   0.51 %  
Due in over 24 months        30,113           27,216         57,329     1.03 %   0.84 %  
Total $     1,656,227     $     2,496,129     $   4,152,356     0.66 %   0.64 %  
             
At September 30, 2015 $     1,951,938     $     2,635,358     $   4,587,296     0.67 %   0.65 %  

In addition to deposit products, we also offer alternative non-depository cash investment options for select clients, including investments managed by Square 1 Asset Management, Inc. ("S1AM") our registered investment advisor subsidiary, and third-party sweep products.  Total client investment funds at December 31, 2015 were $2.0 billion, of which $1.6 billion was managed by S1AM.   In conjunction with the integration of Square 1 Bank, approximately $300 million of assets managed by S1AM were transferred into on-balance sheet deposit products during the fourth quarter of 2015.   

PROVISION AND ALLOWANCE FOR CREDIT LOSSES

A provision for credit losses of $13.8 million was recorded in the fourth quarter of 2015 compared to $8.7 million in the third quarter of 2015. The fourth quarter provision was comprised of a $15.1 million provision for Non-PCI loans and leases and a negative provision of $1.3 million for PCI loans. The allowance for Non-PCI credit losses to Non-PCI loans and leases coverage ratio increased to 0.85% at December 31, 2015 from 0.82% at September 30, 2015.  The increase in the reserve for unfunded commitments was due to higher levels of expected unfunded commitments utilization and a higher level of unfunded commitments, excluding any gained in the Square 1 acquisition.  The negative provision for PCI loans resulted from increases in actual and expected cash flows, mostly due to payoffs.

The following tables show roll forwards of the allowance for credit losses for the periods indicated:
  Three Months Ended December 31, 2015
  Non-PCI                  
Allowance for Credit   Loans and     Unfunded     Total     PCI    
Losses Rollforward Leases   Commitments   Non-PCI   Loans   Total
  (In thousands)
                   
Beginning balance $   92,316     $   8,374     $   100,690     $   10,955     $   111,645  
Fair value of acquired reserve for unfunded commitments     -         4,746         4,746         -         4,746  
Charge-offs     (1,153 )       -         (1,153 )       (74 )       (1,227 )
Recoveries     2,871         -         2,871         38         2,909  
Net recoveries     1,718         -         1,718         (36 )       1,682  
Provision (negative provision)     11,500         3,614         15,114         (1,342 )       13,772  
Ending balance $   105,534     $   16,734     $   122,268     $   9,577     $   131,845  
                   
  Three Months Ended  September 30, 2015
Allowance for Credit   Non-PCI                  
Losses Rollforward Loans and     Unfunded     Total     PCI    
  Leases   Commitments   Non-PCI   Loans   Total
  (In thousands)  
     
Beginning balance $   85,047     $   7,874     $   92,921     $   14,328     $   107,249  
Charge-offs     (4,312 )       -         (4,312 )       (1,119 )       (5,431 )
Recoveries     1,081         -         1,081         -         1,081  
Net (charge-offs) recoveries     (3,231 )       -         (3,231 )       (1,119 )       (4,350 )
Provision (negative provision)     10,500         500         11,000         (2,254 )       8,746  
Ending balance $   92,316     $   8,374     $   100,690     $   10,955     $   111,645  

All acquired loans are recorded initially at their estimated fair value including an estimate of credit losses. The table below presents two alternative views of credit risk coverage ratios for Non-PCI loans reflecting adjustments for acquired loans and associated purchase accounting discounts:
  December 31, 2015   September 30, 2015  
  Non-PCI       Non-PCI      
  Loans and Allowance/ Coverage   Loans and Allowance/ Coverage  
Credit Risk Coverage Ratios Leases Discount Ratio   Leases Discount Ratio  
  (Dollars in thousands)  
                 
Ending balance $   14,339,070   $   122,268     0.85 %   $   12,300,057   $   100,690     0.82 %  
Acquired loans     (6,030,921 )     (19,127 ) (1 )         (5,180,808 )     (12,173 ) (1 )    
Adjusted balance $   8,308,149   $   103,141     1.24 %   $   7,119,249   $   88,517     1.24 %  
                 
Ending balance $   14,339,070   $   122,268     0.85 %   $   12,300,057   $   100,690     0.82 %  
Unamortized net discount     92,192       92,192   (2 )         88,690       88,690   (2 )    
Adjusted balance $   14,431,262   $   214,460     1.49 %   $   12,388,747   $   189,380     1.53 %  
___________________________                
(1) Allowance attributed to $6.0 billion and $5.2 billion of acquired Non-PCI loans at December 31, 2015 and September 30, 2015, based on the allowance calculation that includes an amount for credit deterioration on acquired loans and leases since their acquisition dates.  
(2) Unamortized net discount relates to $6.0 billion and $5.2 billion of acquired Non-PCI loans at December 31, 2015 and September 30, 2015, and is assigned specifically to those loans only.  Such discount represents the acquisition date fair value adjustment based on market, liquidity, interest rate risk and credit risk and is being accreted to interest income over the remaining life of the respective loans using the interest method.  Use of the interest method results in steadily declining amounts being taken into income in each reporting period.  The remaining discount of $92.2 million at December 31, 2015, is expected to be substantially accreted to income by the end of 2018.  

Non-PCI loans and leases at December 31, 2015 included $8.3 billion of originated loans and leases that were not obtained through acquisitions. The related allowance for loan and lease losses totaled $90.5 million, or 1.09% of the outstanding balance.

CREDIT QUALITY

The following table presents Non-PCI loan and lease credit quality metrics as of the dates indicated:
  December 31,   September 30,
Non-PCI Credit Quality Metrics   2015       2015  
  (Dollars in thousands)
       
Allowance for credit losses $   122,268     $   100,690  
Nonaccrual loans and leases (1)     129,019         107,190  
Classified loans and leases      391,754         328,038  
Performing restructured loans     40,182         39,956  
Net charge-offs (recoveries) (for the quarter)     (1,718 )       3,231  
Provision for credit losses (for the quarter)     15,114         11,000  
Allowance for credit losses to loans and leases   0.85 %     0.82 %
Allowance for credit losses to nonaccrual loans and leases (1)   94.8 %     93.9 %
Nonaccrual loans and leases to loans and leases    0.90 %     0.87 %
Nonperforming assets to loans and leases and foreclosed assets   1.06 %     1.14 %
Classified loans and leases to loans and leases   2.73 %     2.67 %
_________________________________________    
(1) The December 31, 2015 and September 30, 2015 amounts include $85.2 million and $54.9 million of acquired loans and leases with no allowance due to the effects of fair value accounting.

The following table presents Non-PCI 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, 2015   September 30, 2015   30-89 Days Past Due  
    % of       % of     December 31,   September 30,  
    Loan       Loan       2015       2015    
  Amount Category   Amount Category   Amount   Amount  
  (Dollars in thousands)  
Real estate mortgage:                    
Commercial $   52,363     1.2 %   $   25,899     0.6 %   $   1,498     $   1,191    
Residential     4,914     0.4 %       5,922     0.5 %       3,174         1,911    
Total real estate mortgage     57,277     1.0 %       31,821     0.6 %       4,672         3,102    
Real estate construction and land:                    
Commercial     -       -         -       -         -         -    
Residential     372     0.2 %       374     0.3 %       -         -    
Total real estate construction and land     372     0.1 %       374     0.1 %       -         -    
Commercial:                    
Cash flow     15,800     0.5 %       15,602     0.5 %       1,118         11    
Asset-based     2,505     0.1 %       2,861     0.1 %       1         82    
Equipment finance (1)     51,410     5.8 %       53,153     5.9 %       360         -    
Venture capital     124       -         -       -         250         -    
Total commercial     69,839     0.9 %       71,616     1.1 %       1,729         93    
Consumer     1,531     1.3 %       3,379     2.6 %       628         88    
Total Non-PCI loans and leases  $   129,019     0.9 %   $   107,190     0.9 %   $   7,029     $   3,283    
_________________________                    
(1) Includes nonaccrual leases and loans to companies involved in the oil and gas industries of $47.1 million and $47.9 million at December 31, 2015 and September 30, 2015, respectively.   

The following table presents nonperforming assets as of the dates indicated:
  December 31,   September 30,
Nonperforming Assets   2015       2015  
  (Dollars in thousands)
       
Nonaccrual Non-PCI loans and leases $   129,019     $   107,190  
Nonaccrual PCI Loans (1)     4,596         4,823  
Total nonaccrual loans and leases     133,615         112,013  
Non-PCI accruing loan contractually past due 90 days or more     700         -  
Foreclosed assets, net     22,120         33,216  
Total nonperforming assets $   156,435     $   145,229  
       
Nonaccrual loans and leases to loans and leases   0.92 %     0.90 %
Nonperforming assets to loans and leases and foreclosed assets   1.08 %     1.16 %
_________________________________________      
(1) Represents legacy CapitalSource borrowing relationships placed on nonaccrual status as of the acquisition date.

SQUARE 1 FINANCIAL, INC. ACQUISITION

On October 6, 2015, the acquisition of Square 1 Financial, Inc. ("Square 1") was consummated in a transaction valued at approximately $815 million.  PacWest Bancorp is the surviving company and Pacific Western Bank is the surviving subsidiary bank, with the banking operations of Square 1 conducted under the trade name of Square 1 Bank, a division of Pacific Western Bank.

Under the terms of the merger agreement, Square 1 stockholders received 0.5997 shares of PacWest common stock for each share of Square 1 common stock and holders of stock options and restricted stock units received cash consideration as described in the merger agreement. The total value of the per share merger consideration was $26.37, based on the closing price of PacWest common stock of $43.97 on October 6, 2015.

The following table shows the various purchase accounting adjustments at the acquisition date by category along with accretion/amortization periods: 
    Purchase    
    Accounting   Estimated Accretion/
Description   Adjustment   Amortization Method
    (In thousands)    
    Debit (Credit)    
             
Loan portfolio discount   $   (37,892 )   30 months using a level yield method
Reserve for unfunded commitments   $   (4,746 )   30 months based on commitment activity
Core deposit intangible   $   42,300     84 months using an accelerated method
Customer relationship intangible   $   3,126     84 months using an accelerated method
Other intangible assets with definite lives   $   1,500     Straight line over 18 months
Other intangible assets with indefinite lives     $   2,100         Not amortized

ABOUT PACWEST BANCORP

PacWest Bancorp ("PacWest") is a bank holding company with over $21 billion in assets with one wholly-owned banking subsidiary, Pacific Western Bank ("Pacific Western"). The Bank has 80 full-service branches located throughout the state of California and one branch in Durham, North Carolina. Pacific Western provides commercial banking services, including real estate, construction, and commercial loans, and comprehensive deposit and treasury management services to small and medium-sized businesses.  Pacific Western offers additional products and services under the brands of its business groups, CapitalSource and Square 1 Bank. CapitalSource provides cash flow, asset-based, equipment and real estate loans and treasury management services to established middle market businesses on a national basis.  Square 1 Bank 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 certain plans, strategies, goals, and projections and including statements about our expectations regarding our acquisition of Square 1, intentions to expand Pacific Western's lending business, credit loss exposure, profitability, and loan and lease portfolio growth. 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. Actual results could differ materially from those contained or implied by such forward-looking statements for a variety of factors, including without limitation:
  • changes in economic or competitive market conditions could negatively impact investment or lending opportunities or product pricing and services;
  • credit quality deterioration or pronounced and sustained reduction in market values or other economic factors which adversely affect our borrowers' ability to repay loans and leases;
  • higher than anticipated delinquencies, charge-offs, and loan losses;
  • compression of spreads on newly originated loans and leases; 
  • the impact of asset/liability repricing risk and liquidity risk on net interest margin and the value of investments;
  • higher than anticipated increases in operating expenses;
  • increased costs to manage and sell foreclosed assets;
  • reduced demand for our services due to strategic or regulatory reasons;
  • our inability to grow deposits or access wholesale funding sources;
  • legislative or regulatory requirements or changes could negatively impact our business including an increase to capital requirements;
  • loan repayments higher than expected;
  • our ability to complete future acquisitions and to successfully integrate such acquired entities, including Square 1, or achieve expected benefits, synergies and/or operating efficiencies within expected time frames or at all;
  • business disruption following the Square 1 acquisition;
  • changes in our stock price;
  • the reaction to the Square 1 acquisition of the Company's customers, employees and counterparties;
  • inability to attract qualified professionals;
  • the success and timing of other business strategies; and
  • other risk factors described in documents filed by PacWest with the U.S. Securities and Exchange Commission ("SEC").

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      
                 
  December 31,   September 30,   December 31,      
    2015       2015       2014        
  (Dollars in thousands, except per share data)      
ASSETS:                
Cash and due from banks $   161,020     $   154,652     $   164,757        
Interest-earning deposits in financial institutions     235,466         81,642         148,469        
Total cash and cash equivalents       396,486         236,294         313,226        
                 
Securities available-for-sale, at estimated fair value     3,559,437         1,809,364         1,567,177        
Federal Home Loan Bank stock, at cost     19,710         17,250         40,609        
Total investment securities     3,579,147         1,826,614         1,607,786        
                 
Non-PCI loans and leases     14,339,070         12,300,057         11,613,832        
PCI loans     189,095         193,340         290,852        
Total gross loans and leases     14,528,165         12,493,397         11,904,684        
Deferred fees and costs     (49,911 )       (41,192 )       (22,252 )      
Total loans and leases, net of deferred fees     14,478,254         12,452,205         11,882,432        
Allowance for loan and lease losses     (115,111 )       (103,271 )       (84,455 )      
Total loans and leases, net     14,363,143         12,348,934         11,797,977        
                 
Equipment leased to others under operating leases     197,452         161,508         122,506        
Premises and equipment, net     39,197         36,475         36,551        
Foreclosed assets, net     22,120         33,216         43,721        
Deferred tax asset, net     126,389         169,760         284,411        
Goodwill     2,176,291         1,728,380         1,720,479        
Core deposit and customer relationship intangibles, net     53,220         12,704         17,204        
Other assets     335,045         260,220         290,744        
Total assets $   21,288,490     $   16,814,105     $   16,234,605        
                 
LIABILITIES:                
Noninterest-bearing deposits $   6,171,455     $   3,508,682     $   2,931,352        
Interest-bearing deposits     9,494,727         8,607,081         8,823,776        
Total deposits     15,666,182         12,115,763         11,755,128        
Borrowings     621,914         552,497         383,402        
Subordinated debentures     436,000         435,417         433,583        
Accrued interest payable and other liabilities     166,703         128,724         156,262        
Total liabilities     16,890,799         13,232,401         12,728,375        
STOCKHOLDERS' EQUITY (1)     4,397,691         3,581,704         3,506,230        
Total liabilities and stockholders' equity $   21,288,490     $   16,814,105     $   16,234,605        
                 
(1) Includes net unrealized gain on securities available-for-sale, net $   27,828     $   24,459     $   26,380        
                 
Book value per share $   36.22     $   34.76     $   34.03        
Tangible book value per share $   17.86     $   17.86     $   17.17        
                 
Shares outstanding (includes unvested restricted shares of 1,211,951 at December 31, 2015, 988,825 at September 30, 2015, and 1,108,505 at December 31, 2014)     121,413,727         103,053,694       103,022,017        

 
PACWEST BANCORP AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF EARNINGS
                   
  Three Months Ended   Year Ended
  December 31,   September 30,   December 31,   December 31,
    2015       2015       2014       2015       2014  
  (Dollars in thousands, except per share data)
Interest income:                  
Loans and leases $   219,677     $   193,539     $   197,472     $   819,094     $   657,097  
Investment securities     23,648         13,955         12,205         64,368         47,345  
Deposits in financial institutions     172         178         19         476         333  
Total interest income     243,497         207,672         209,696         883,938         704,775  
                   
Interest expense:                  
Deposits     9,391         10,400         9,972         41,503         27,332  
Borrowings     159         72         144         554         496  
Subordinated debentures     4,748         4,680         4,597         18,535         14,570  
Total interest expense     14,298         15,152         14,713         60,592         42,398  
                   
Net interest income     229,199         192,520         194,983         823,346         662,377  
Provision for credit losses     13,772         8,746         2,063         45,481         11,499  
Net interest income after provision for credit losses     215,427         183,774         192,920         777,865         650,878  
                   
Noninterest income:                  
Service charges on deposit accounts     3,901         2,601         2,787         11,688         11,233  
Other commissions and fees     12,691         6,376         4,556         31,586         18,602  
Leased equipment income     7,791         5,475         5,382         24,023         16,669  
Gain on sale of loans and leases     183         27         7         373         601  
Gain on securities     -         655         -         3,744         4,841  
FDIC loss sharing expense, net     (4,291 )       (4,449 )       (4,360 )       (18,246 )       (31,730 )
Other income     7,783         5,073         4,331         31,142         21,971  
Total noninterest income     28,058         15,758         12,703         84,310         42,187  
                   
Noninterest expense:                  
Compensation      58,992         48,152         45,930         203,914         165,499  
Occupancy     12,194         10,762         10,745         44,144         40,606  
Data processing     5,585         4,322         4,050         18,617         14,618  
Other professional services     3,811         3,396         3,181         13,760         11,234  
Insurance and assessments     5,450         3,805         3,115         16,996         10,907  
Intangible asset amortization     4,910         1,497         1,619         9,410         6,268  
Leased equipment depreciation     4,235         3,162         3,103         13,603         9,159  
Foreclosed assets (income) expense, net     (3,185 )       4,521         1,938         (668 )       5,401  
Acquisition, integration and reorganization costs     17,600         747         7,381         21,247         101,016  
Other expense     12,672         9,775         10,243         41,016         40,884  
Total noninterest expense     122,264         90,139         91,305         382,039         405,592  
                   
Earnings from continuing operations before taxes     121,221         109,393         114,318         480,136         287,473  
Income tax expense      (49,380 )       (39,777 )       (43,261 )       (180,517 )       (117,005 )
Net earnings from continuing operations       71,841         69,616         71,057         299,619         170,468  
                   
Loss from discontinued operations before taxes     -         -         (105 )       -         (2,677 )
Income tax benefit      -         -         47         -         1,114  
Net loss from discontinued operations     -         -         (58 )       -         (1,563 )
                   
Net earnings   $   71,841     $   69,616     $   70,999     $   299,619     $   168,905  
                   
Basic and diluted earnings per share:                  
Net earnings from continuing operations $   0.60     $   0.68     $   0.69     $   2.79     $   1.94  
Net earnings  $   0.60     $   0.68     $   0.69     $   2.79     $   1.92  

 
PACWEST BANCORP AND SUBSIDIARIES  
AVERAGE BALANCE SHEET AND YIELD ANALYSIS  
                         
  Three Months Ended  
  December 31, 2015   September 30, 2015   December 31, 2014  
    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:                        
PCI loans $   169,772   $   6,345     14.83 %   $   193,094   $   7,505     15.42 %   $   311,061   $   11,247     14.34 %  
Non-PCI loans and leases     13,861,330       213,332     6.11 %       11,919,787       186,034     6.19 %       11,275,512       186,225     6.55 %  
Total loans and leases     14,031,102       219,677     6.21 %       12,112,881       193,539     6.34 %       11,586,573       197,472     6.76 %  
Investment securities (1)     3,492,124       28,408     3.23 %       1,806,628       16,709     3.67 %       1,591,839       13,840     3.45 %  
Deposits in financial institutions     254,308       172     0.27 %       278,973       178     0.25 %       26,971       19     0.28 %  
Total interest-earning assets     17,777,534       248,257     5.54 %       14,198,482       210,426     5.88 %       13,205,383       211,331     6.35 %  
Other assets     3,047,714             2,491,695             2,687,378        
Total assets $   20,825,248         $   16,690,177         $   15,892,761        
                         
Liabilities and   Stockholders' Equity:                        
Interest checking $   889,035       345     0.15 %   $   787,271       300     0.15 %   $   702,498       194     0.11 %  
Money market     3,557,364       1,543     0.17 %       2,417,280       1,218     0.20 %       1,788,341       932     0.21 %  
Savings     747,054       445     0.24 %       746,362       449     0.24 %       761,073       572     0.30 %  
Time     4,439,940       7,058     0.63 %       5,042,768       8,433     0.66 %       5,427,687       8,274     0.60 %  
Total interest-bearing deposits     9,633,393       9,391     0.39 %       8,993,681       10,400     0.46 %       8,679,599       9,972     0.46 %  
Borrowings     206,236       159     0.31 %       70,171       72     0.41 %       214,053       144     0.27 %  
Subordinated debentures     435,293       4,748     4.33 %       434,420       4,680     4.27 %       433,859       4,597     4.20 %  
Total interest-bearing liabilities     10,274,922       14,298     0.55 %       9,498,272       15,152     0.63 %       9,327,511       14,713     0.63 %  
Noninterest-bearing demand deposits     6,043,900             3,486,780             2,900,388        
Other liabilities     160,264             132,360             164,571        
Total liabilities     16,479,086             13,117,412             12,392,470        
Stockholders' equity     4,346,162             3,572,765             3,500,291        
Total liabilities and stockholders' equity $   20,825,248         $   16,690,177         $   15,892,761        
Net interest income (2)   $   233,959         $   195,274         $   196,618      
Net interest spread (2)       4.99 %         5.25 %         5.72 %  
Net interest margin (2)       5.22 %         5.46 %         5.91 %  
                         
Total deposits (3) $   15,677,293   $   9,391     0.24 %   $   12,480,461   $   10,400     0.33 %   $   11,579,987   $   9,972     0.34 %  
Funding sources (4) $   16,318,822   $   14,298     0.35 %   $   12,985,052   $   15,152     0.46 %   $   12,227,899   $   14,713     0.48 %  
___________________                        
(1) Includes tax equivalent adjustments of $4.8 million, $2.8 million, and $1.6 million for the three months ended December 31, 2015, September 30, 2015, and December 31, 2014 related to tax exempt income on municipal securities.  The federal statutory tax rate utilized was 35% for the periods.  
(2) Tax equivalent.  
(3) Total deposits is the sum of 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.  
(4) Funding sources is the sum of 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,  
    2015       2015       2015       2015       2014    
  (Dollars in thousands, except per share data)  
ASSETS:                    
Cash and due from banks $   161,020     $   154,652     $   207,598     $   140,873     $   164,757    
Interest-earning deposits in financial institutions     235,466         81,642         433,033         250,981         148,469    
Total cash and cash equivalents       396,486         236,294         640,631         391,854         313,226    
                     
Securities available-for-sale     3,559,437         1,809,364         1,698,158         1,595,409         1,567,177    
Federal Home Loan Bank stock, at cost     19,710         17,250         17,250         28,905         40,609    
Total investment securities     3,579,147         1,826,614         1,715,408         1,624,314         1,607,786    
                     
Non-PCI loans and leases     14,339,070         12,300,057         11,846,314         12,047,946         11,613,832    
PCI loans     189,095         193,340         222,691         254,346         290,852    
Total gross loans and leases     14,528,165         12,493,397         12,069,005         12,302,292         11,904,684    
Deferred fees and costs     (49,911 )       (41,192 )       (34,816 )       (30,126 )       (22,252 )  
Total loans and leases, net of deferred fees     14,478,254         12,452,205         12,034,189         12,272,166         11,882,432    
Allowance for loan and lease losses     (115,111 )       (103,271 )       (99,375 )       (92,378 )       (84,455 )  
Total loans and leases, net     14,363,143         12,348,934         11,934,814         12,179,788         11,797,977    
                     
Equipment leased to others under operating leases     197,452         161,508         117,182         119,959         122,506    
Premises and equipment, net     39,197         36,475         35,984         36,022         36,551    
Foreclosed assets, net     22,120         33,216         31,668         35,940         43,721    
Deferred tax asset, net     126,389         169,760         211,556         236,065         284,411    
Goodwill     2,176,291         1,728,380         1,728,380         1,728,380         1,720,479    
Core deposit and customer relationship intangibles, net     53,220         12,704         14,201         15,703         17,204    
Other assets     335,045         260,220         267,196         275,915         290,744    
Total assets $   21,288,490     $   16,814,105     $   16,697,020     $   16,643,940     $   16,234,605    
                     
LIABILITIES:                    
Noninterest-bearing deposits $   6,171,455     $   3,508,682     $   3,396,688     $   3,029,463     $   2,931,352    
Interest-bearing deposits     9,494,727         8,607,081         9,185,128         8,904,712         8,823,776    
Total deposits     15,666,182         12,115,763         12,581,816         11,934,175         11,755,128    
Borrowings     621,914         552,497         2,751         618,156         383,402    
Subordinated debentures     436,000         435,417         433,944         431,448         433,583    
Accrued interest payable and other liabilities     166,703         128,724         127,019         126,800         156,262    
Total liabilities     16,890,799         13,232,401         13,145,530         13,110,579         12,728,375    
STOCKHOLDERS' EQUITY (1)     4,397,691         3,581,704         3,551,490         3,533,361         3,506,230    
Total liabilities and stockholders' equity $   21,288,490     $   16,814,105     $   16,697,020     $   16,643,940     $   16,234,605    
                     
(1) Includes net unrealized gain on securities available-for-sale, net $   27,828     $   24,459     $   16,255     $   28,744     $   26,380    
                     
Book value per share $   36.22     $   34.76     $   34.46     $   34.29     $   34.03    
Tangible book value per share $   17.86     $   17.86     $   17.55     $   17.36     $   17.17    
                     
Shares outstanding (includes unvested restricted shares)     121,413,727         103,053,694         103,051,989       103,044,257         103,022,017    

 
PACWEST BANCORP AND SUBSIDIARIES
FIVE QUARTER STATEMENT OF EARNINGS
                   
  Three Months Ended
  December 31,   September 30,   June 30,   March 31,   December 31,
    2015       2015       2015       2015       2014  
  (Dollars in thousands, except per share data)
Interest income:                  
Loans and leases $   219,677     $   193,539     $   203,781     $   202,097     $   197,472  
Investment securities     23,648         13,955         14,570         12,195         12,205  
Deposits in financial institutions     172         178         104         22         19  
Total interest income     243,497         207,672         218,455         214,314         209,696  
                   
Interest expense:                  
Deposits     9,391         10,400         11,233         10,479         9,972  
Borrowings     159         72         88         235         144  
Subordinated debentures     4,748         4,680         4,582         4,525         4,597  
Total interest expense     14,298         15,152         15,903         15,239         14,713  
                   
Net interest income     229,199         192,520         202,552         199,075         194,983  
Provision for credit losses     13,772         8,746         6,529         16,434         2,063  
Net interest income after provision for credit losses     215,427         183,774         196,023         182,641         192,920  
                   
Noninterest income:                  
Service charges on deposit accounts     3,901         2,601         2,612         2,574         2,787  
Other commissions and fees     12,691         6,376         7,123         5,396         4,556  
Leased equipment income     7,791         5,475         5,375         5,382         5,382  
Gain on sale of loans and leases     183         27         163         -         7  
Gain (loss) on securities     -         655         (186 )       3,275         -  
FDIC loss sharing expense, net     (4,291 )       (4,449 )       (5,107 )       (4,399 )       (4,360 )
Other income     7,783         5,073         9,643         8,643         4,331  
Total noninterest income     28,058         15,758         19,623         20,871         12,703