Fourth Quarter 2017 Highlights
  • CU Bancorp ("CUB") Acquisition Closed October 20, 2017
  • Sold $1.5 Billion of Cash Flow Loans
  • Net Earnings of $84.0 Million, or $0.66 Per Diluted Share
  • New Loan and Lease Production of $1.6 Billion and Annualized Growth Excluding Acquired and Sold Loans of 17%
  • Classified Loans and Leases Reduced by 19%
  • Tax Benefit of $1.2 Million from Enactment of Tax Cuts and Jobs Act

Full Year 2017 Highlights
  • Net Earnings of $357.8 Million, or $2.91 Per Diluted Share
  • New Loan and Lease Production of $4.7 Billion and Growth Excluding Acquired and Sold Loans of 7%
  • Core Deposits Growth of $3.4 Billion, Including $2.7 Billion from CUB Acquisition
  • Tax Equivalent Net Interest Margin of 5.10%
  • Classified Loans and Leases Reduced by 32%

LOS ANGELES, Jan. 18, 2018 (GLOBE NEWSWIRE) -- PacWest Bancorp (Nasdaq:PACW) today announced net earnings for the fourth quarter of 2017 of $84.0 million, or $0.66 per diluted share, compared to net earnings for the third quarter of 2017 of $101.5 million, or $0.84 per diluted share.  Net earnings for the full year 2017 were $357.8 million, or $2.91 per diluted share, compared to net earnings for the full year 2016 of $352.2 million, or $2.90 per diluted share.

The decrease in net earnings from the prior quarter was due primarily to higher noninterest expense, higher income tax expense and lower noninterest income offset by higher net interest income and a lower provision for credit losses.  Noninterest expense for the fourth quarter of 2017 was higher mainly due to an increase in acquisition, integration and reorganization costs of $14.6 million related to the CUB acquisition and integration. Income tax expense for the fourth quarter of 2017 was higher as the third quarter of 2017 reflected a $13.6 million reversal of a valuation allowance related to tax credits, while the fourth quarter reflected a $2.0 million increase in the valuation allowance. Noninterest income for the fourth quarter of 2017 declined mainly due to the tax-related decision to sell certain securities resulting in a loss for the quarter of $3.3 million.

Matt Wagner, President and CEO, commented, "Although the fourth quarter included several significant items, the benefits of the CUB acquisition for our future profitability were apparent in our fourth quarter results. Interest income on loans and leases increased 10% over the prior quarter, core deposits increased to 85% of total deposits, and the CUB integration as well as the vast majority of cost save initiatives were achieved in December. We are on track to achieve the remainder of our targeted expense savings during the first quarter of 2018."

Mr. Wagner continued, "Our organic loan growth of $684 million in the fourth quarter was the strongest of the year. The fourth quarter sale of $1.5 billion in cash flow loans and the exit from the CapitalSource Division origination operations related to general, technology, and healthcare cash flow loans allows us to focus on profitably growing our other businesses."

Mr. Wagner added, "The strong fourth quarter capped a year of profitable growth and continued our solid operating performance resulting in a 2017 return on assets of 1.58% and return on tangible equity of 15.15%. These outstanding operating results allowed us to return $347 million to our stockholders in 2017 through stock repurchases and dividends, including $100 million of stock repurchases in the fourth quarter."

FINANCIAL HIGHLIGHTS
                         
    At or For the Three Months Ended   At or For the Year Ended
    December 31,   September 30,       December 31,    
Financial Highlights (1)   2017       2017     Change       2017       2016     Change
    (Dollars in thousands, except per share data)
Net earnings $ 84,037     $ 101,466     $ (17,429 )   $ 357,818     $ 352,166     $ 5,652  
Diluted earnings per share $ 0.66     $ 0.84     $ (0.18 )   $ 2.91     $ 2.90     $ 0.01  
Return on average assets   1.34 %     1.82 %     (0.48 )     1.58 %     1.66 %     (0.08 )
Return on average                      
tangible equity (2)   13.75 %     16.85 %     (3.10 )     15.15 %     15.52 %     (0.37 )
                         
Net interest margin                      
(tax equivalent)   4.97 %     5.08 %     (0.11 )     5.10 %     5.40 %     (0.30 )
Efficiency ratio   41.0 %     40.4 %     0.6       40.8 %     39.8 %     1.0  
                         
Total assets   $ 24,994,876     $ 22,242,932     $ 2,751,944     $ 24,994,876     $ 21,869,767     $ 3,125,109  
Loans and leases held                          
for investment, net of                          
deferred fees $ 16,972,743     $ 15,690,517     $ 1,282,226     $ 16,972,743     $ 15,455,954     $ 1,516,789  
Noninterest-bearing                          
deposits   $ 8,508,044     $ 6,911,874     $ 1,596,170     $ 8,508,044     $ 6,659,016     $ 1,849,028  
Core deposits $ 15,937,012     $ 13,531,300     $ 2,405,712     $ 15,937,012     $ 12,523,834     $ 3,413,178  
Total deposits $ 18,865,536     $ 16,773,245     $ 2,092,291     $ 18,865,536     $ 15,870,611     $ 2,994,925  
                             
Noninterest-bearing                          
deposits as percentage                          
of total deposits   45 %     41 %     4       45 %     42 %     3  
Core deposits as                      
percentage of total                      
deposits     85 %     81 %     4       85 %     79 %     6  
                         
Equity to assets ratio   19.91 %     20.73 %     (0.82 )     19.91 %     20.48 %     (0.57 )
Tangible common equity                      
ratio (2)     10.50 %     12.02 %     (1.52 )     10.50 %     11.54 %     (1.04 )
Book value per share $ 38.65     $ 37.96     $ 0.69     $ 38.65     $ 36.93     $ 1.72  
Tangible book value per                      
share (2)   $ 18.24     $ 19.84     $ (1.60 )   $ 18.24     $ 18.71     $ (0.47 )
                                                                                                   
(1) The operations of CU Bancorp are included from its October 20, 2017 acquisition date.                
(2) Non-GAAP measure.                      
                       

INCOME STATEMENT HIGHLIGHTS

Net Interest Income

Net interest income increased by $21.3 million to $263.0 million for the fourth quarter of 2017 compared to $241.7 million for the third quarter of 2017 due mainly to higher average loan and lease balances primarily from the CUB acquisition. The loan and lease yield was 5.89% for the fourth quarter of 2017 compared to 6.01% for the third quarter of 2017.  The decrease in the loan and lease yield was principally due to a lower yield on the acquired CUB loans, offset partially by an increase in discount accretion on acquired loans.  Total discount accretion on acquired loans was $6.8 million for the fourth quarter of 2017 (15 basis points on the loan and lease yield) compared to $5.5 million for the third quarter of 2017 (14 basis points on the loan and lease yield). A total discount of $37.0 million was recorded in connection with the acquired CUB loan portfolio, of which $2.9 million was accreted during the fourth quarter. The total remaining acquired loan discount as of December 31, 2017 was $56.9 million.

The tax equivalent NIM was 4.97% for the fourth quarter of 2017 compared to 5.08% for the third quarter of 2017.  The decrease in the NIM was mostly due to the lower yield on the CUB loans and securities and a higher cost of average interest-bearing liabilities, offset partially by the increase in discount accretion on acquired loans.  Total discount accretion on acquired loans contributed 13 basis points to the NIM for the fourth quarter of 2017 and 11 basis points for the third quarter of 2017.

The cost of average total deposits decreased to 0.30% for the fourth quarter of 2017 from 0.31% for the third quarter of 2017 due to the lower cost of the deposits acquired from CUB.

Noninterest Income

Noninterest income decreased by $4.6 million to $26.8 million for the fourth quarter of 2017 compared to $31.4 million for the third quarter of 2017 due mainly to a $4.6 million decrease in the gain on sale of securities. In light of the reduction in the statutory federal income tax rate effective January 1, 2018, we sold approximately $173 million of securities during the fourth quarter of 2017 resulting in a realized loss for the quarter of $3.3 million. The proceeds will be reinvested into higher yielding securities that are expected to recoup the realized loss in approximately one year. In addition, dividends and gains on equity investments decreased by $1.5 million and service charges on deposit accounts increased by $1.1 million primarily due to the increased number of accounts from the CUB acquisition.

The following table presents details of noninterest income for the periods indicated:
  Three Months Ended
  December 31,   September 30,   Increase
Noninterest Income   2017       2017   (Decrease)
  (In thousands)        
Service charges on deposit accounts $ 4,574     $ 3,465   $ 1,109  
Other commissions and fees   10,505       9,944     561  
Leased equipment income   8,258       8,332     (74 )
Gain on sale of loans and leases   1,988       2,848     (860 )
(Loss) gain on sale of securities   (3,329 )     1,236     (4,565 )
FDIC loss sharing expense, net   -       -     -  
Other income:          
Dividends and realized gains on equity investments   342       1,845     (1,503 )
Warrant income   831       731     100  
Other   3,626       2,981     645  
Total noninterest income $ 26,795     $ 31,382   $ (4,587 )
 

Noninterest Expense

Noninterest expense increased by $24.3 million to $142.9 million for the fourth quarter of 2017 compared to $118.5 million for the third quarter of 2017 due mostly to an increase in acquisition, integration and reorganization costs of $14.6 million related to the CUB acquisition and integration.  Almost all operating expense categories were higher quarter over quarter due mainly to the CUB acquisition. Compensation expense also includes $2.9 million for separation costs in connection with exiting the origination operations related to general, technology, and healthcare cash flow loans. Intangible asset amortization increased $2.0 million as a result of the CUB acquisition partially offset by scheduled reductions in amortization for previous acquisitions. The intangible asset amortization for 2018 is expected to be approximately $24 million. During the fourth quarter of 2017, a foreclosed property that represented approximately 90% of the total foreclosed property balance was sold for a nominal gain. This property was subject to a valuation write-down of $2.1 million in the third quarter of 2017.

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

  Three Months Ended
  December 31,   September 30,   Increase
Noninterest Expense   2017     2017   (Decrease)
  (In thousands)        
Compensation $ 71,986     $ 64,413   $ 7,573  
Occupancy   12,715       12,729     (14 )
Data processing   6,764       6,459     305  
Other professional services   5,786       4,213     1,573  
Insurance and assessments   5,384       4,702     682  
Intangible asset amortization   5,062       3,049     2,013  
Leased equipment depreciation   5,048       4,862     186  
Foreclosed assets (income) expense, net   (475 )     2,191     (2,666 )
Acquisition, integration and reorganization costs   16,085       1,450     14,635  
Loan expense   3,140       3,421     (281 )
Other   11,373       11,053     320  
Total noninterest expense $ 142,868     $ 118,542   $ 24,326  
 

Income Taxes

The overall effective income tax rate was 40.2% for the fourth quarter of 2017 and 27.2% for the third quarter of 2017.  The effective tax rate for the fourth quarter of 2017 was higher mainly due to the fourth quarter tax provision including a $2.0 million increase in the foreign tax credit valuation allowance due to the sale of certain foreign loans, whereas the prior quarter included a $13.6 million reversal of a valuation allowance related to foreign tax credits which were deemed more likely than not to be utilized before they expire. The fourth quarter tax provision also included $2.4 million of income tax expense related to non-deductible merger costs and other adjustments offset by a $1.2 million benefit from remeasuring the deferred federal tax assets and liabilities as a result of the Tax Cuts and Jobs Act. This adjustment to deferred federal tax liabilities is management's best estimate based on the information available as of this earnings release and is subject to change as final tax calculations are completed in conjunction with the filing of the Form 10-K. The effective tax rate for the full year 2017 was 35.5%. While the analysis on the impact of the Tax Cuts and Jobs Act is still ongoing at this time, we expect the 2018 effective tax rate to be in the range of 27% to 29%.

BALANCE SHEET HIGHLIGHTS

Loans and Leases

Total loans and leases held for investment, net of deferred fees, increased by $1.3 billion in the fourth quarter of 2017 to $17.0 billion at December 31, 2017.  The net increase was driven mainly by the acquisition of CUB loans of $2.1 billion, fourth quarter new production of $1.6 billion, and disbursements of $724 million, partially offset by loan sales of $1.0 billion, payoffs of $729 million, paydowns of $813 million, and transfers to loans held for sale of $481 million.  For the year ended December 31, 2017, loans and leases held for investment, net of deferred fees, increased by $1.5 billion. Excluding the effect of the acquired CUB loans and the two portfolio sales in 2017, the annualized loan growth rate for the fourth quarter of 2017 was 17% and the growth rate for the full year 2017 was 7%.

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 L eases   December 31,   September 30,   December 31,
Held for Inv estment Roll Forward (1) 2017   2017     2017
  (Dollars in thousands)
Balance, beginning of period $ 15,690,517     $ 15,543,457     $ 15,455,954  
New production   1,556,257       1,002,887       4,685,763  
Existing loans and leases:        
Payoffs   (728,628 )     (903,395 )     (3,801,592 )
Paydowns   (812,726 )     (637,674 )     (2,769,309 )
Disbursements   723,914       722,777       3,203,796  
Sales (2)   (1,026,660 )     (31,528 )     (1,140,625 )
Transfers to foreclosed assets   -       -       (580 )
Charge-offs   (24,721 )     (6,007 )     (80,296 )
Transfers to loans held for sale   (481,100 )     -       (656,258 )
Loans acquired through CUB acquisition   2,075,890       -       2,075,890  
Balance, end of period $ 16,972,743     $ 15,690,517     $ 16,972,743  
           
Weighted average rate on new production (3)   4.95 %     5.04 %     4.96 %
                                                                             
(1) Includes direct financing leases but excludes equipment leased to others under operating leases. 
(2) Sales for the three months ended December 31, 2017 exclude loans held for sale of $481.1 million at December 31, 2017.    
Sales for the three months ended September 30, 2017 exclude sales of loans that were transferred to loans held for sale    
of $175.2 million at June 30, 2017.        
(3) The weighted average rate on new production presents contractual rates and does not include amortized fees.    
Amortized fees added approximately 30 basis points to loan yields in 2017.    
     

Cash Flow Loan Sale

During the fourth quarter of 2017, the Company sold $1.5 billion of cash flow loans, of which none were on nonaccrual and $4.7 million were classified, and exited its CapitalSource Division origination operations related to general, technology, and healthcare cash flow loans.  These actions were taken to lower the Company's credit risk profile and improve its funding mix by allowing the majority of our wholesale deposits to run off. As of December 31, 2017, $1.0 billion of the loans sold had settled while $481 million were classified as held for sale. As of January 17, 2018, 99% of the year-end loans held for sale balance was settled.

The impact of the loan sale and decision to exit the above-mentioned origination operations affected various components of our statement of earnings as follows: 

    Three Months Ended
    December 31,
      2017  
                                            (In thousands)
Gain on sale of loans   $   1,988  
Negative provision for credit losses       14,132  
Other commissions and fees       (1,155 )
Other income       (113 )
Compensation expense       (2,854 )
Other expense       (586 )
Total increase in pre-tax earnings   $                                 11,412  
 

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 2017   2017     2017     2016
  (In thousands)
Real estate mortgage:              
Commercial $ 5,385,724   $ 4,338,933   $ 4,418,463   $ 4,396,696
Residential   2,466,894     1,850,324     1,719,269     1,314,036
Total real estate mortgage   7,852,618     6,189,257     6,137,732     5,710,732
Real estate construction and land:              
Commercial   769,075     680,950     691,828     581,246
Residential   822,154     568,273     473,282     384,001
Total real estate construction and land   1,591,229     1,249,223     1,165,110     965,247
  Total real estate   9,443,847     7,438,480     7,302,842     6,675,979
Commercial:              
Asset-based   3,011,770     2,577,470     2,392,203     2,611,796
Venture capital   2,122,735     1,959,489     2,001,427     1,987,900
Cash flow   1,327,595     2,734,454     2,834,966     3,112,890
Equipment finance   656,995     594,473     613,550     691,967
Total commercial   7,119,095     7,865,886     7,842,146     8,404,553
Consumer   409,801     386,151     398,469     375,422
Total loans and leases held for              
  investment, net of deferred fees (1) $ 16,972,743   $ 15,690,517   $ 15,543,457   $ 15,455,954
               
Total unfunded loan commitments $ 6,234,061   $ 5,037,084   $ 4,926,743   $ 4,166,703
                                                                                           
(1) Excludes loans held for sale carried at lower of cost or fair value at December 31, 2017 and June 30, 2017.          
               

Included in total loans as of December 31, 2017 were $2.0 billion acquired from CUB, of which $1.3 billion were real estate mortgage loans, $518 million were commercial loans, and $210 million were real estate construction and land loans. In addition, the total unfunded loan commitments as of December 31, 2017 included $914 million associated with loans acquired from CUB.

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 2017   2017     2017   2016
  (Dollars in thousands)
Noninterest-bearing demand deposits $ 8,508,044     $ 6,911,874     $ 6,701,039     $ 6,659,016  
Interest checking deposits   2,226,885       1,957,485       1,762,016       1,448,394  
Money market deposits   4,511,730       3,967,224       4,033,471       3,705,385  
Savings deposits   690,353       694,717       721,048       711,039  
Total core deposits   15,937,012       13,531,300       13,217,574       12,523,834  
Non-core non-maturity deposits   863,202       1,118,694       1,329,324       1,174,487  
Total non-maturity deposits   16,800,214       14,649,994       14,546,898       13,698,321  
Time deposits $250,000 and under   1,709,980       1,770,439       1,940,872       1,758,434  
Time deposits over $250,000   355,342       352,812       387,207       413,856  
Total time deposits   2,065,322       2,123,251       2,328,079       2,172,290  
 Total deposits $ 18,865,536     $ 16,773,245     $ 16,874,977     $ 15,870,611  
               
Noninterest-bearing demand deposits              
as percentage of total deposits   45 %     41 %     40 %     42 %
Core deposits as percentage of total deposits   85 %     81 %     78 %     79 %
               

At December 31, 2017, core deposits totaled $15.9 billion, or 85% of total deposits, including $8.5 billion of noninterest-bearing demand deposits, or 45% of total deposits. Core deposits obtained in the CUB acquisition totaled $2.7 billion.

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, 2017 were $2.1 billion, of which $1.7 billion was managed by S1AM.

PROVISION AND ALLOWANCE FOR CREDIT LOSSES

A provision for credit losses of $6.4 million was recorded in the fourth quarter of 2017 compared to $15.1 million in the third quarter of 2017. The fourth quarter provision consisted of $6.5 million for non-purchased credit impaired ("Non-PCI") loans and leases and a $0.1 million negative provision for PCI loans; this compares to a third quarter provision of $15.5 million and a $0.4 million negative provision, respectively.  The lower provision for the fourth quarter of 2017 was due mainly to releasing $14.1 million in general reserves relating to the cash flow loan sale. The allowance for Non-PCI credit losses to Non-PCI loans and leases held for investment coverage ratio declined to 0.95% at December 31, 2017 from 1.11% at September 30, 2017. The lower coverage ratio was principally due to the purchase accounting for the CUB acquired loan portfolio, which was not subject to the allowance for credit losses at the time of acquisition.

The following tables show roll forwards of the allowance for credit losses for the periods indicated:
  Three Months Ended December 31, 2017
  Non-PCI                  
Allowance for Credit   Loans and     Unfunded     Total     PCI    
Losses Rollforward Leases   Commitments   Non-PCI   Loans   Total
  (In thousands)
Beginning balance $ 152,770     $ 20,809   $ 173,579     $ 6,836     $ 180,415  
Charge-offs   (24,335 )     -     (24,335 )     (386 )     (24,721 )
Recoveries   1,577       -     1,577       88       1,665  
Net charge-offs   (22,758 )     -     (22,758 )     (298 )     (23,056 )
Provision   3,000       3,500     6,500       (94 )     6,406  
Fair value of acquired reserve                  
for unfunded commitments   -       4,326     4,326       -       4,326  
Ending balance $ 133,012     $ 28,635   $ 161,647     $ 6,444     $ 168,091  
                   
                   
                   
  Three Months Ended September 30, 2017
  Non-PCI                  
Allowance for Credit   Loans and     Unfunded     Total     PCI    
Losses Rollforward Leases   Commitments   Non-PCI   Loans   Total
  (In thousands)
Beginning balance $ 138,879     $ 20,263   $ 159,142     $ 7,079     $ 166,221  
Charge-offs   (5,928 )     -     (5,928 )     (79 )     (6,007 )
Recoveries   4,865       -     4,865       217       5,082  
Net charge-offs   (1,063 )     -     (1,063 )     138       (925 )
Provision   14,954       546     15,500       (381 )     15,119  
Ending balance $ 152,770     $ 20,809   $ 173,579     $ 6,836     $ 180,415  
                   

Gross charge-offs for the fourth quarter of 2017 included $20.1 million for venture capital loans while gross charge-offs for the third quarter of 2017 included $3.4 million for venture capital loans.

Mr. Wagner remarked, "We have taken action to remedy the unacceptably high level of venture capital credit losses during 2017, including adjustments to delegated lending authorities and portfolio management. In addition, significant progress has been made on our initiative to grow the lower-risk capital call line segment of the venture capital loan portfolio."

The annualized ratio of total net charge-offs to total average loans was 0.52% for the quarter ended December 31, 2017 and 0.43% for the year ended December 31, 2017.

CREDIT QUALITY

Despite the elevated charge-offs on venture capital loans, the Company's credit quality metrics showed significant improvement during the fourth quarter of 2017.

The following table presents Non-PCI loan and lease credit quality metrics as of the dates indicated:
           
  December 31,   September 30,   Increase
Non-PCI Credit Quality Metrics   2017       2017     (Decrease)
  (Dollars in thousands)
Nonaccrual loans and leases held for investment (1)(2) $ 155,784     $ 157,697     $ (1,913 )
Classified loans and leases held for investment (1)(3)   278,405       344,777       (66,372 )
Performing troubled debt restructured loans          
held for investment   56,838       56,552       286  
Allowance for credit losses   161,647       173,579       (11,932 )
Provision for credit losses (for the quarter)   6,500       15,500       (9,000 )
Net charge-offs (for the quarter)   22,758       1,063       21,695  
Net charge-offs to average loans and leases          
(for the quarter)   0.52 %     0.03 %    
Allowance for credit losses to loans and leases          
held for investment   0.95 %     1.11 %    
Allowance for credit losses to nonaccrual loans          
and leases held for investment   103.8 %     110.1 %    
Nonaccrual loans and leases held for investment          
to loans and leases held for investment   0.92 %     1.00 %    
Nonperforming assets to loans and leases          
held for investment and foreclosed assets   0.93 %     1.08 %    
Classified loans and leases held for investment          
to loans and leases held for investment   1.64 %     2.20 %    
                                                                                     
(1) Excludes loans held for sale carried at lower of cost or fair value at December 31, 2017.        
(2) Nonaccrual loans include guaranteed amounts of $11.6 million and $9.1 million at December 31, 2017      
and September 30, 2017.          
(3) Classified loans include guaranteed amounts of $11.6 million and $9.1 million at December 31, 2017      
and September 30, 2017.          
           

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:
  Non-PCI Nonaccrual Loans and Leases     Non-PCI Accruing and
  December 31, 2017   September 30, 2017   30-89 Days Past Due  
    % of       % of       December 31,     September 30,
    Loan       Loan     2017   2017
  Amount Category   Amount Category   Amount   Amount
  (Dollars in thousands)
Real estate mortgage:                  
Commercial $ 65,563 1.2 %   $ 63,096 1.5 %   $ 27,234   $ 1,446
Residential   3,350 0.1 %     3,186 0.2 %     6,629     282
Total real estate mortgage   68,913 0.9 %     66,282 1.1 %     33,863     1,728
Real estate construction and land:                  
Commercial   - 0.0 %     - 0.0 %     -     -
Residential   - 0.0 %     - 0.0 %     2,081     -
Total real estate                  
  construction and land   - 0.0 %     - 0.0 %     2,081     -
Commercial:                  
Asset-based   3,174 0.1 %     3,977 0.2 %     1,512     -
Venture capital   29,424 1.4 %     22,686 1.2 %     5,959     2,720
Cash flow   23,315 1.8 %     33,514 1.2 %     924     72
Equipment finance   30,938 4.7 %     30,942 5.2 %     344     -
Total commercial   86,851 1.2 %     91,119 1.2 %     8,739     2,792
Consumer   20 0.0 %     296 0.1 %     562     286
Total held for investment (1) $ 155,784 0.9 %   $ 157,697 1.0 %   $ 45,245   $ 4,806
                                                                                             
(1) Excludes loans held for sale carried at lower of cost or fair value at December 31, 2017.            
                   

The majority of the loans representing the increase in Non-PCI accruing and 30-89 days past due loans have subsequently been brought current, renewed or are subject to guarantees.

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

  December 31,   September 30,   Increase
Nonperforming Assets   2017       2017     (Decrease)
  (Dollars in thousands)
Nonaccrual Non-PCI loans and leases           
held for investment (1) $   155,784     $   157,697     $   (1,913 )
Nonaccrual PCI loans held for investment     1,761         1,761         -  
  Total nonaccrual loans and leases     157,545         159,458         (1,913 )
Non-PCI accruing loan contractually past due           -  
90 days or more     -         -         -  
Foreclosed assets, net     1,329         11,630         (10,301 )
  Total nonperforming assets $   158,874     $   171,088     $   (12,214 )
           
Nonaccrual loans and leases held for investment         
to loans and leases held for investment   0.92 %     1.01 %    
Nonperforming assets to loans and leases         
held for investment and foreclosed assets   0.93 %     1.09 %    
                                                                                     
(1) Excludes loans held for sale carried at lower of cost or fair value at December 31, 2017.  
           

STOCK REPURCHASE PROGRAM

During the fourth quarter of 2017, the Company amended its existing stock repurchase program to reduce the authorized repurchase amount from $400 million to $150 million and extend the program maturity to December 31, 2018. The Company expects that, subject to market conditions and other factors, the current $150 million share repurchase authorization will be completed during the first quarter of 2018. The Company anticipates an additional repurchase program will be authorized by the Board of Directors in 2018. During the fourth quarter of 2017, we repurchased 2,081,227 shares at an average cost of $47.89 and a total cost of $99.7 million.

ABOUT PACWEST BANCORP

PacWest Bancorp ("PacWest") is a bank holding company with approximately $25 billion in assets with one wholly-owned banking subsidiary, Pacific Western Bank (the "Bank"). The Bank has 76 full-service branches located throughout the state of California and one branch in Durham, North Carolina. We provide commercial banking services, including real estate, construction, and commercial loans, and comprehensive deposit and treasury management services to small and medium-sized businesses.  We offer additional products and services through our CapitalSource and Square 1 Bank divisions. Our CapitalSource Division provides asset-based, equipment, real estate and security cash flow loans and treasury management services to established middle market businesses on a national basis.  Our Square 1 Bank Division offers a comprehensive suite of financial services focused on entrepreneurial businesses and their venture capital and private equity investors, with offices located in key innovation hubs across the United States.  For more information about PacWest Bancorp, visit www.pacwestbancorp.com, or to learn more about Pacific Western Bank, visit www.pacificwesternbank.com.

FORWARD LOOKING STATEMENTS

This release contains certain "forward-looking statements" about the Company and its subsidiaries within the meaning of the Private Securities Litigation Reform Act of 1995, including forward-looking statements relating to the Company's current business plans and expectations regarding future operating results and metrics and including statements about our expectations regarding our future effective tax rate. All statements contained in this release that are not clearly historical in nature are forward-looking, and the words "anticipate," "assume," "intend," "believe," "forecast," "expect," "estimate," "plan," "continue," "will," "should," "look forward" and similar expressions are generally intended to identify forward-looking statements. All forward-looking statements (including statements regarding future financial and operating results and future transactions and their results) involve risks, uncertainties and contingencies, many of which are beyond our control, which may cause actual results, performance, or achievements to differ materially from anticipated results, performance or achievements. These risks and uncertainties include, but are not limited to, our ability to compete effectively against other financial institutions in our banking markets; the impact of changes in interest rates or levels of market activity, especially on our loan and investment portfolios; deterioration, weaker than expected improvement, or other changes in the state of the economy or the markets in which we conduct business (including the levels of IPOs and M&A activities); changes in credit quality and the effect of credit quality on our provision for loan and lease losses and allowance for loan and leases losses; our ability to attract deposits and other sources of funding or liquidity; our capital requirements and our ability to generate capital internally or raise capital on favorable terms; the costs and effects of legal, compliance and regulatory actions, changes and developments, including the impact of adverse judgments or settlements in litigation, the initiation and resolution of regulatory or other governmental inquiries or investigations, and/or the results of regulatory examinations or reviews; the Company's ability to complete future acquisitions and to successfully integrate such acquired entities or achieve expected beneficial synergies and/or operating efficiencies, in each case within expected timeframes or at all; the impact of the Tax Cuts and Jobs Act on our future effective tax rate and our success at managing the risks involved in the foregoing items and all other factors set forth in the Company's public reports, including the Annual Report on Form 10-K for the year ended December 31, 2016, and particularly the discussion of risk factors within that document.

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

               
PACWEST BANCORP AND SUBSIDIARIES          
CONDENSED CONSOLIDATED BALANCE SHEET          
           
  December 31,   September 30,   December 31,
    2017       2017       2016  
  (Dollars in thousands, except per share data)
ASSETS:          
Cash and due from banks $ 233,215     $ 147,579     $ 337,965  
Interest-earning deposits in financial institutions   165,222       122,439       81,705  
  Total cash and cash equivalents     398,437       270,018       419,670  
           
Securities available-for-sale, at estimated fair value   3,774,431       3,532,230       3,223,830  
Federal Home Loan Bank stock, at cost   20,790       17,250       21,870  
  Total investment securities   3,795,221       3,549,480       3,245,700  
           
Loans held for sale   481,100       -       -  
           
Non-PCI loans and leases   16,974,171       15,693,776       15,412,092  
PCI loans   58,050       62,509       108,445  
Total gross loans and leases held for investment   17,032,221       15,756,285       15,520,537  
Deferred fees, net   (59,478 )     (65,768 )     (64,583 )
Total loans and leases held for investment,          
net of deferred fees   16,972,743       15,690,517       15,455,954  
Allowance for loan and lease losses   (139,456 )     (159,606 )     (157,238 )
  Total loans and leases held for investment, net   16,833,287       15,530,911       15,298,716  
           
Equipment leased to others under operating leases   284,631       233,866       229,905  
Premises and equipment, net   31,852       28,910       38,594  
Foreclosed assets, net   1,329       11,630       12,976  
Deferred tax asset, net   -       65,321       94,112  
Goodwill   2,548,670       2,173,949       2,173,949  
Core deposit and customer relationship intangibles, net   79,626       27,188       36,366  
Other assets   540,723       351,659       319,779  
  Total assets $ 24,994,876     $ 22,242,932     $ 21,869,767  
           
LIABILITIES:          
Noninterest-bearing deposits $ 8,508,044     $ 6,911,874     $ 6,659,016  
Interest-bearing deposits   10,357,492       9,861,371       9,211,595  
  Total deposits   18,865,536       16,773,245       15,870,611  
Borrowings   467,342       250,399       905,812  
Subordinated debentures   462,437       448,126       440,744  
Accrued interest payable and other liabilities   221,963       160,494       173,545  
  Total liabilities   20,017,278       17,632,264       17,390,712  
STOCKHOLDERS' EQUITY (1)   4,977,598       4,610,668       4,479,055  
  Total liabilities and stockholders' equity $ 24,994,876     $ 22,242,932     $ 21,869,767  
           
Book value per share $ 38.65     $ 37.96     $ 36.93  
Tangible book value per share (2) $ 18.24     $ 19.84     $ 18.71  
Shares outstanding   128,782,878       121,449,794       121,283,669  
                                                                                     
(1) Includes net unrealized gain on securities          
available-for-sale, net $ 31,171     $ 33,613     $ 5,982  
(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,
    2017       2017       2016       2017       2016  
  (Dollars in thousands, except per share data)
Interest income:                  
Loans and leases $ 258,309     $ 235,666     $ 238,223     $ 952,771     $ 924,294  
Investment securities   25,712       24,762       23,403       98,202       90,557  
Deposits in financial institutions   576       538       147       1,543       1,061  
Total interest income   284,597       260,966       261,773       1,052,516       1,015,912  
                   
Interest expense:                  
Deposits   14,041       13,071       7,369       45,694       31,512  
Borrowings   1,366       188       631       3,638       2,259  
Subordinated debentures   6,234       6,017       5,468       23,613       20,850  
Total interest expense   21,641       19,276       13,468       72,945       54,621  
                   
Net interest income   262,956       241,690       248,305       979,571       961,291  
Provision for credit losses   6,406       15,119       23,215       57,752       65,729  
Net interest income after provision                  
for credit losses   256,550       226,571       225,090       921,819       895,562  
                   
Noninterest income:                  
Service charges on deposit accounts   4,574       3,465       3,557       15,307       14,534  
Other commissions and fees   10,505       9,944       12,036       41,422       47,126  
Leased equipment income   8,258       8,332       8,614       37,700       33,919  
Gain on sale of loans and leases   1,988       2,848       119       6,197       909  
(Loss) gain on sale of securities   (3,329 )     1,236       515       (541 )     9,485  
FDIC loss sharing expense, net   -       -       -       -       (8,917 )
Other income   4,799       5,557       4,054       28,488       15,419  
Total noninterest income   26,795       31,382       28,895       128,573       112,475  
                   
Noninterest expense:                  
Compensation   71,986       64,413       66,013       266,567       251,913  
Occupancy   12,715       12,729       12,076       48,863       48,911  
Data processing   6,764       6,459       6,574       26,575       24,356  
Other professional services   5,786       4,213       4,880       17,353       16,478  
Insurance and assessments   5,384       4,702       4,124       19,733       18,364  
Intangible asset amortization   5,062       3,049       3,176       14,240       16,517  
Leased equipment depreciation   5,048       4,862       5,291       20,767       20,899  
Foreclosed assets (income) expense, net   (475 )     2,191       2,693       1,702       1,881  
Acquisition, integration and                  
reorganization costs   16,085       1,450       -       19,735       200  
Loan expense   3,140       3,421       3,140       13,832       9,371  
Other expense   11,373       11,053       10,655       46,294       41,211  
Total noninterest expense   142,868       118,542       118,622       495,661       450,101  
                   
Earnings before income taxes   140,477       139,411       135,363       554,731       557,936  
Income tax expense   (56,440 )     (37,945 )     (49,716 )     (196,913 )     (205,770 )
Net earnings   $ 84,037     $ 101,466     $ 85,647     $ 357,818     $ 352,166  
                   
Basic and diluted earnings per share $ 0.66     $ 0.84     $ 0.71     $ 2.91     $ 2.90  
                   

PACWEST BANCORP AND SUBSIDIARIES                
NET EARNINGS PER SHARE CALCULATIONS                    
                   
  Three Months Ended   Year Ended
  December 31,   September 30,   December 31,   December 31,
    2017       2017       2016       2017       2016  
  (In thousands, except per share data)
Basic Earnings Per Share:                  
Net earnings $ 84,037     $ 101,466     $ 85,647     $ 357,818     $ 352,166  
Less: earnings allocated to unvested                  
restricted stock (1)   (951 )     (1,149 )     (1,004 )     (4,184 )     (3,988 )
Net earnings allocated to common                  
shares $ 83,086     $ 100,317     $ 84,643     $ 353,634     $ 348,178  
                   
Weighted-average basic shares and                  
unvested restricted stock outstanding   127,971       121,447       121,464       123,060       121,670  
Less: weighted-average unvested                  
restricted stock outstanding   (1,440 )     (1,394 )     (1,450 )     (1,447 )     (1,431 )
Weighted-average basic shares                  
outstanding   126,531       120,053       120,014       121,613       120,239  
                   
Basic earnings per share $ 0.66     $ 0.84     $ 0.71     $ 2.91     $ 2.90  
                   
Diluted Earnings Per Share:                  
Net earnings allocated to common                  
shares $ 83,086     $ 100,317     $ 84,643     $ 353,634     $ 348,178  
                   
Weighted-average basic shares                  
outstanding   126,531       120,053       120,014       121,613       120,239  
                   
Diluted earnings per share $ 0.66     $ 0.84     $ 0.71     $ 2.91     $ 2.90  
                                                                                             
(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, 2017   September 30, 2017   December 31, 2016
    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 $ 52,782 $ 2,536   19.06 %   $ 60,126   $ 3,308   21.83 %   $ 104,234 $ 17,481   66.72 %
Non-PCI loans and leases   17,374,091   256,050 5.85 %     15,514,904    232,510 5.95 %     14,904,034   220,742 5.89 %
Total loans and leases (1)   17,426,873   258,586 5.89 %     15,575,030   235,818 6.01 %     15,008,268   238,223 6.31 %
Investment securities (2)   3,807,928   30,709 3.20 %     3,510,956   29,495 3.33 %     3,293,003   28,229 3.41 %
Deposits in financial                      
institutions   179,379   576 1.27 %     171,455   538 1.24 %     111,918   147 0.52 %
Total interest-earning                      
assets   21,414,180   289,871 5.37 %     19,257,441   265,851 5.48 %     18,413,189   266,599 5.76 %
Other assets   3,375,656         2,880,433         3,014,761    
Total assets $ 24,789,836       $ 22,137,874       $ 21,427,950    
                       
Liabilities and                        
Stockholders' Equity:                      
Interest checking $ 2,340,166   2,891 0.49 %   $ 2,146,125   2,960 0.55 %   $ 1,449,346   951 0.26 %
Money market   5,415,630   7,214 0.53 %     4,914,803   6,307 0.51 %     4,740,944   3,672 0.31 %
Savings   702,023   279 0.16 %     707,367   289 0.16 %     751,817   331 0.18 %
Time   2,120,749   3,657 0.68 %     2,256,259   3,515 0.62 %     2,384,973   2,415 0.40 %
Total interest-bearing                      
deposits   10,578,568   14,041 0.53 %     10,024,554   13,071 0.52 %     9,327,080   7,369 0.31 %
Borrowings   445,106   1,366 1.22 %     61,071   188 1.22 %     505,567   631 0.50 %
Subordinated debentures   458,269   6,234 5.40 %     447,012   6,017 5.34 %     440,907   5,468 4.93 %
Total interest-bearing                      
liabilities   11,481,943   21,641 0.75 %     10,532,637   19,276 0.73 %     10,273,554   13,468 0.52 %
Noninterest-bearing                      
demand deposits   8,190,134         6,858,816         6,496,221    
Discontinued operations   8,016         9,456         12,742    
Total other liabilities   189,245         144,476         143,485    
Other liabilities   197,261         153,932         156,227    
Total liabilities   19,869,338         17,545,385         16,926,002    
Stockholders' equity   4,920,498         4,592,489         4,501,948    
Total liabilities and                      
stockholders' equity $ 24,789,836       $ 22,137,874       $ 21,427,950    
Net interest income (3)   $ 268,230       $ 246,575       $ 253,131  
Net interest spread (3)     4.62 %       4.75 %       5.24 %
Net interest margin (3)     4.97 %       5.08 %       5.47 %
                       
Total deposits (4) $ 18,768,702   $ 14,041 0.30 %   $ 16,883,370 $ 13,071 0.31 %   $ 15,823,301 $ 7,369 0.19 %
Funding sources (5) $ 19,672,077 $ 21,641 0.44 %   $ 17,391,453 $ 19,276 0.44 %   $ 16,769,775 $ 13,468 0.32 %
                                                                                                 
(1) Starting with the third quarter of 2017, includes tax-equivalent adjustments related to tax-exempt interest on loans.
(2) Includes tax-equivalent adjustments of $5.0 million, $4.7 million, and $4.8 million for the three months ended December 31, 2017,
September 30, 2017, and December 31, 2016 related to tax-exempt income on municipal securities.  The federal statutory tax-rate utilized
was 35% for the periods.
(3) Tax equivalent.
(4) Total deposits is the sum of total interest-bearing deposits and noninterest-bearing demand deposits.  The cost of total deposits is calculated as
annualized interest expense on deposits divided by average total deposits.
(5) Funding sources is the sum of total interest-bearing liabilities and noninterest-bearing demand deposits. The cost of funding sources is calculated
as annualized total interest expense divided by average funding sources.
                     

                   
PACWEST BANCORP AND SUBSIDIARIES                  
FIVE QUARTER BALANCE SHEET                  
                   
  December 31,   September 30,   June 30,   March 31,   December 31,
    2017       2017       2017       2017       2016  
  (Dollars in thousands, except per share data)
ASSETS:                  
Cash and due from banks $ 233,215     $ 147,579     $ 180,330     $ 184,608     $ 337,965  
Interest-earning deposits in financial                  
institutions   165,222       122,439       107,150       111,892       81,705  
  Total cash and cash equivalents     398,437       270,018       287,480       296,500       419,670  
                   
Securities available-for-sale   3,774,431       3,532,230       3,474,560       3,336,992       3,223,830  
Federal Home Loan Bank stock   20,790       17,250       22,059       17,901       21,870  
  Total investment securities   3,795,221       3,549,480       3,496,619       3,354,893       3,245,700  
                   
Loans held for sale   481,100       -       175,158       -       -  
                   
Non-PCI loans and leases   16,974,171       15,693,776       15,536,735       15,526,518       15,412,092  
PCI loans   58,050       62,509       72,445       96,353       108,445  
Total gross loans and leases                  
held for investment   17,032,221       15,756,285       15,609,180       15,622,871       15,520,537  
Deferred fees, net   (59,478 )     (65,768 )     (65,723 )     (66,182 )     (64,583 )
Total loans and leases held for                  
investment, net of deferred fees   16,972,743       15,690,517       15,543,457       15,556,689       15,455,954  
Allowance for loan and lease losses   (139,456 )     (159,606 )     (145,958 )     (161,307 )     (157,238 )
  Total loans and leases held for                  
investment, net   16,833,287       15,530,911       15,397,499       15,395,382       15,298,716  
                   
Equipment leased to others under                  
operating leases   284,631       233,866       203,212       224,580   -   229,905  
Premises and equipment, net   31,852       28,910       29,108       28,908       38,594  
Foreclosed assets, net   1,329       11,630       13,278       12,842       12,976  
Deferred tax asset, net   -       65,321       70,354       88,765       94,112  
Goodwill   2,548,670       2,173,949       2,173,949       2,173,949       2,173,949  
Core deposit and customer                  
relationship intangibles, net   79,626       27,188       30,237       33,302       36,366  
Other assets   540,723       351,659       369,983       318,133       319,779  
  Total assets $ 24,994,876     $ 22,242,932     $ 22,246,877     $ 21,927,254     $ 21,869,767  
                   
LIABILITIES:                  
Noninterest-bearing deposits $ 8,508,044     $ 6,911,874     $ 6,701,039     $ 6,789,808     $ 6,659,016  
Interest-bearing deposits   10,357,492       9,861,371       10,173,938       9,541,200       9,211,595  
  Total deposits   18,865,536       16,773,245       16,874,977       16,331,008       15,870,611  
Borrowings   467,342       250,399       217,454       460,609       905,812  
Subordinated debentures   462,437       448,126       445,743       442,516       440,744  
Accrued interest payable and other                  
liabilities   221,963       160,494       148,798       185,015       173,545  
  Total liabilities   20,017,278       17,632,264       17,686,972       17,419,148       17,390,712  
STOCKHOLDERS' EQUITY (1)   4,977,598       4,610,668       4,559,905       4,508,106       4,479,055  
  Total liabilities and stockholders'                    
  equity $ 24,994,876     $ 22,242,932     $ 22,246,877     $ 21,927,254     $ 21,869,767  
                   
Book value per share $ 38.65     $ 37.96     $ 37.55     $ 37.13     $ 36.93  
Tangible book value per share (2) $ 18.24     $ 19.84     $ 19.40     $ 18.95     $ 18.71  
Shares outstanding   128,782,878       121,449,794       121,448,321       121,408,133       121,283,669  
                                                                                             
(1) Includes net unrealized gain on                  
securities available-for-sale, net $ 31,171     $ 33,613     $ 29,729     $ 12,718     $ 5,982  
(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,
    2017       2017       2017       2017       2016  
  (Dollars in thousands, except per share data)
Interest income:                  
Loans and leases $ 258,309     $ 235,666     $ 234,618     $ 224,178     $ 238,223  
Investment securities   25,712       24,762       24,689       23,039       23,403  
Deposits in financial institutions   576       538       237       192       147  
Total interest income   284,597       260,966       259,544       247,409       261,773  
                   
Interest expense:                  
Deposits   14,041       13,071       10,205       8,377       7,369  
Borrowings   1,366       188       1,066       1,018       631  
Subordinated debentures   6,234       6,017       5,800       5,562       5,468  
Total interest expense   21,641       19,276       17,071       14,957       13,468  
                   
Net interest income   262,956       241,690       242,473       232,452       248,305  
Provision for credit losses   6,406       15,119       11,499       24,728       23,215  
Net interest income after provision                    
for credit losses   256,550       226,571       230,974       207,724       225,090  
                   
Noninterest income:                  
Service charges on deposit accounts   4,574       3,465       3,510       3,758       3,557  
Other commissions and fees   10,505       9,944       10,583       10,390       12,036  
Leased equipment income   8,258       8,332       11,635       9,475       8,614  
Gain on sale of loans and leases   1,988       2,848       649       712       119  
(Loss) gain on sale of securities   (3,329 )     1,236       1,651       (99 )     515  
Other income   4,799       5,557       7,254       10,878       4,054  
Total noninterest income   26,795       31,382       35,282       35,114       28,895  
                   
Noninterest expense:                  
Compensation   71,986       64,413       65,288       64,880       66,013  
Occupancy   12,715       12,729       11,811       11,608       12,076  
Data processing   6,764       6,459       6,337       7,015       6,574  
Other professional services   5,786       4,213       3,976       3,378       4,880  
Insurance and assessments   5,384       4,702       4,856       4,791       4,124  
Intangible asset amortization   5,062       3,049       3,065       3,064       3,176  
Leased equipment depreciation   5,048       4,862       5,232       5,625       5,291  
Foreclosed assets (income) expense, net   (475 )     2,191       (157 )     143       2,693  
Acquisition, integration and                  
reorganization costs   16,085       1,450       1,700       500       -  
Loan expense   3,140       3,421       3,884       3,387       3,140  
Other expense   11,373       11,053       11,715       12,153       10,655  
Total noninterest expense   142,868       118,542       117,707       116,544       118,622  
                   
Earnings before income taxes   140,477       139,411       148,549       126,294       135,363  
Income tax expense   (56,440 )     (37,945 )     (54,902 )     (47,626 )     (49,716 )
Net earnings   $ 84,037     $ 101,466     $ 93,647     $ 78,668     $ 85,647  
                   
Basic and diluted earnings per share $ 0.66     $ 0.84     $ 0.77     $ 0.65     $ 0.71  
                   

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,
    2017       2017       2017       2017       2016  
  (Dollars in thousands)
Performance Ratios:                  
Return on average assets (1)   1.34 %     1.82 %     1.71 %     1.47 %     1.59 %
Return on average equity (1)   6.78 %     8.77 %     8.26 %     7.08 %     7.57 %
Return on average tangible equity (1)(2)   13.75 %     16.85 %     16.06 %     13.90 %     14.88 %
                   
Yield on average loans and leases (1)(3)   5.89 %     6.01 %     6.07 %     5.94 %     6.31 %
Yield on average interest-earning                   
assets (1)(4)   5.37 %     5.48 %     5.57 %     5.48 %     5.76 %
Cost of average total deposits (1)   0.30 %     0.31 %     0.25 %     0.21 %     0.19 %
Cost of average time deposits (1)   0.68 %     0.62 %     0.55 %     0.45 %     0.40 %
Cost of average interest-bearing                   
liabilities (1)   0.75 %     0.73 %     0.65 %     0.59 %     0.52 %
Cost of average funding sources (1)   0.44 %     0.44 %     0.40 %     0.36 %     0.32 %
Net interest spread (1)(4)   4.62 %     4.75 %     4.92 %     4.89 %     5.24 %
Net interest margin (1)(4)   4.97 %     5.08 %     5.21 %     5.16 %     5.47 %
                   
Efficiency ratio   41.0 %     40.4 %     40.3 %     41.4 %     40.1 %
Noninterest expense as a percentage                  
of average assets (1)   2.29 %     2.12 %     2.15 %     2.18 %     2.20 %
                   
Average Balances:                  
Loans and leases, net of deferred fees $   17,426,873     $   15,575,030     $   15,497,921     $   15,297,044     $   15,008,268  
Interest-earning assets     21,414,180         19,257,441         19,030,793         18,655,243         18,413,189  
Total assets     24,789,836         22,137,874         21,936,602         21,645,534         21,427,950  
Noninterest-bearing deposits     8,190,134         6,858,816         6,646,349         6,595,346         6,496,221  
Interest-bearing deposits     10,578,568         10,024,554         9,692,352         9,330,235         9,327,080  
Total deposits     18,768,702         16,883,370         16,338,701         15,925,581         15,823,301  
Borrowings and subordinated                   
debentures     903,375         508,083         901,530         1,038,424         946,474  
Interest-bearing liabilities     11,481,943         10,532,637         10,593,882         10,368,659         10,273,554  
Funding sources     19,672,077         17,391,453         17,240,231         16,964,005         16,769,775  
Stockholders' equity     4,920,498         4,592,489         4,545,276         4,503,675         4,501,948  
                                                                                             
(1) Annualized.                  
(2) Non-GAAP measure.                  
(3) Tax equivalent starting with the third quarter of 2017.                  
(4) Tax equivalent.                  
                   

                   
PACWEST BANCORP AND SUBSIDIARIES                          
FIVE QUARTER SELECTED FINANCIAL DATA                  
                   
  At or For the Three Months Ended
  December 31,   September 30,   June 30,   March 31,   December 31,
    2017       2017       2017       2017       2016  
  (Dollars in thousands)
Non-PCI Credit Quality:                  
Allowance for credit losses to loans                  
and leases held for investment   0.95 %     1.11 %     1.02 %     1.08 %     1.05 %
Allowance for credit losses to                  
nonaccrual loans and leases held                  
for investment   103.8 %     110.1 %     92.2 %     96.9 %     94.5 %
Nonaccrual loans and leases held for                  
investment to loans and leases held                  
for investment   0.92 %     1.00 %     1.11 %     1.11 %     1.11 %
Nonperforming assets to loans and                  
leases held for investment and                  
foreclosed assets   0.93 %     1.08 %     1.20 %     1.20 %     1.19 %
Nonperforming assets to total assets   0.63 %     0.76 %     0.84 %     0.85 %     0.84 %
Trailing twelve month net charge-offs                  
to average loans and leases                  
held for investment   0.40 %     0.35 %     0.37 %     0.24 %     0.15 %
                   
PacWest Bancorp Consolidated                    
Capital:                  
Tier 1 leverage ratio (1)   10.66 %     12.02 %     11.90 %     11.87 %     11.91 %
Common equity tier 1 capital ratio (1)   10.92 %     12.52 %     12.28 %     12.31 %     12.31 %
Tier 1 capital ratio (1)   10.92 %     12.52 %     12.28 %     12.31 %     12.31 %
Total capital ratio (1)   13.77 %     15.74 %     15.42 %     15.56 %     15.56 %
Risk-weighted assets (1) $ 21,637,503     $ 19,086,798     $ 19,084,823     $ 18,732,723     $ 18,568,622  
                   
Equity to assets ratio   19.91 %     20.73 %     20.50 %     20.56 %     20.48 %
Tangible common equity ratio (2)   10.50 %     12.02 %     11.75 %     11.67 %     11.54 %
Book value per share $ 38.65     $ 37.96     $ 37.55     $ 37.13     $ 36.93  
Tangible book value per share (2) $ 18.24     $ 19.84     $ 19.40     $ 18.95     $ 18.71  
                   
Pacific Western Bank Capital:                  
Tier 1 leverage ratio (1)   11.75 %     11.46 %     11.41 %     11.36 %     11.40 %
Common equity ti