PacWest Bancorp(US:PACW)2023-08-09 19:46Financial Performance - The company reported a net loss of $197.41 million for Q2 2023, compared to a net income of $122.36 million in Q2 2022[13]. - For the three months ended June 30, 2023, PACWEST BANCORP reported a net loss of $197,414 thousand compared to net earnings of $122,360 thousand for the same period in 2022, representing a significant decline[14]. - The comprehensive loss for the six months ended June 30, 2023, was $1,375,738 thousand, compared to a comprehensive loss of $468,230 thousand for the same period in 2022, indicating a worsening financial position[14]. - PACWEST BANCORP's net loss for the six months ended June 30, 2023, was $1,392,838 thousand, a stark contrast to net earnings of $242,488 thousand for the same period in 2022[14]. - The company incurred a goodwill impairment of $1.38 billion in Q2 2023, significantly impacting overall financial performance[13]. Asset and Deposit Changes - Total assets decreased to $38.34 billion as of June 30, 2023, down from $41.23 billion at the end of 2022, representing a decline of approximately 6.9%[11]. - Total deposits fell to $27.90 billion, a decrease of 17.8% from $33.94 billion at the end of 2022[11]. - Total stockholders' equity decreased to $2,533,195 thousand as of June 30, 2023, down from $3,950,531 thousand at the end of 2022, reflecting a decline in retained earnings and comprehensive income[17]. - The balance of common stock shares decreased to 120,169,012 as of June 30, 2023, from 120,244,214 shares at the end of the previous quarter[17]. Income and Expenses - Net interest income after provision for credit losses was $184.08 million for Q2 2023, down from $312.43 million in Q2 2022, reflecting a decline of 41.1%[13]. - Interest income from loans and leases increased to $408.97 million in Q2 2023, up 39.4% from $293.29 million in Q2 2022[13]. - Total interest expense surged to $353.81 million in Q2 2023, compared to $26.59 million in Q2 2022, indicating a significant increase due to rising interest rates[13]. - Noninterest expense rose to $320.44 million in Q2 2023, up from $183.65 million in Q2 2022, reflecting a year-over-year increase of 74.4%[13]. Loan and Lease Performance - The total gross loans and leases held for investment as of June 30, 2023, is $22,311,292,000, down from $28,726,016,000 as of December 31, 2022[71]. - The total performing loans and leases held for investment reached $22.15 billion as of June 30, 2023, compared to $28.51 billion at December 31, 2022[75]. - The total amount of loans and leases past due (90 days or more) was $62.3 million as of June 30, 2023[75]. - The total amount of loans and leases classified as substandard or doubtful was not specified, but the company continues to monitor credit risk closely[78]. Borrowings and Liquidity - Total borrowings as of June 30, 2023, reached $6,357,338,000, significantly higher than $1,764,030,000 at December 31, 2022[138]. - The Bank's participation in the FRBSF Bank Term Funding Program resulted in an outstanding balance of $4,910,000,000 as of June 30, 2023[142]. - The company aims to increase customer deposits to replace higher-cost brokered deposits and reduce operating expenses[44]. Merger and Strategic Initiatives - PacWest entered into a definitive merger agreement with Banc of California, Inc. on July 25, 2023[45]. - The merger is expected to close in Q4 2023 or Q1 2024, subject to regulatory approvals and stockholder approvals[203]. - The merger includes an investment of $400 million from Warburg Pincus LLC and Centerbridge Partners, which will also receive warrants for approximately 18.9 million shares of Banc[201]. Regulatory and Compliance - The company is evaluating the impact of recently issued accounting standards on its consolidated financial statements[201]. - The company anticipates potential risks related to the merger, including regulatory approval delays and impacts on business operations[209].