PacWest Bancorp(PACW) - 2022 Q2 - Quarterly Report

Financial Performance - Net earnings decreased to $122,360 thousand for the three months ended June 30, 2022, down 32.2% from $180,512 thousand in the same period of 2021[13]. - Net earnings for the six months ended June 30, 2022, were $242.5 million, a decrease from $330.9 million in the same period of 2021, representing a decline of approximately 26.6%[24]. - Basic earnings per common share for the three months ended June 30, 2022, were $1.02, down from $1.52 in the same period of 2021, reflecting a decline of 32.9%[163]. - Total revenue for the three months ended June 30, 2022, was $384,864 thousand, compared to $320,876 thousand for the same period in 2021, representing a growth of 20%[167]. - Total revenue for the six months ended June 30, 2022, was $728.586 million, an increase from $639.042 million in the same period of 2021, representing a growth of 14%[170]. Asset and Liability Management - Total assets increased to $40,950,723 thousand as of June 30, 2022, compared to $40,443,344 thousand at December 31, 2021, reflecting a growth of 1.25%[11]. - Total liabilities increased to $36,972,320 thousand as of June 30, 2022, from $36,443,714 thousand at December 31, 2021, an increase of 1.46%[11]. - The company had total stockholders' equity of $4.0 billion as of June 30, 2022, with a decrease of $21.2 million since year-end, mainly due to a $710.7 million decrease in accumulated other comprehensive income[203]. - Total borrowings as of June 30, 2022, amount to $1.592 billion, with a weighted average interest rate of 1.59%[125]. Income and Expenses - Net interest income for the three months ended June 30, 2022, was $323,925 thousand, up 21.6% from $266,308 thousand in the same period of 2021[13]. - Total noninterest expense increased to $183,645 thousand for the three months ended June 30, 2022, compared to $151,750 thousand in the same period of 2021, an increase of 21.0%[13]. - Total noninterest income for the three months ended June 30, 2022, was $34,346 thousand, a decrease from $40,371 thousand in the same period of 2021[167]. - Cash dividends paid during the six months ended June 30, 2022, totaled $59.998 million, slightly higher than $59.503 million in the same period of 2021[24]. Loan Portfolio and Credit Quality - Total loans and leases held for investment increased to $26,608,541 thousand as of June 30, 2022, up from $23,026,308 thousand as of December 31, 2021[63]. - The allowance for loan and lease losses was $188,705 thousand as of June 30, 2022, compared to $200,564 thousand at the end of 2021[63]. - Total past due loans as of June 30, 2022, were $104.6 million, with $66.6 million past due for 30-89 days and $38.1 million for 90 days or more[67]. - The total performing loans and leases held for investment were $26.4 billion as of June 30, 2022, compared to $22.9 billion as of December 31, 2021, reflecting a growth of approximately 15%[67]. Securities and Investments - The total fair value of available-for-sale securities was $6.78 billion, with gross unrealized losses amounting to $595.5 million[45]. - The company transferred $2.3 billion in fair value of securities from available-for-sale to held-to-maturity effective June 1, 2022, with $218.3 million of unrealized losses retained in accumulated other comprehensive income[44]. - The total amortized cost of the securities available-for-sale portfolio was $7,371,001,000, with a total fair value of $6,780,648,000 as of June 30, 2022[51]. - The company recognized total losses of $1.569 million on assets measured on a non-recurring basis for the three months ended June 30, 2022[155]. Capital and Funding - The company’s consolidated Tier 1 capital and total capital ratios increased to 10.15% and 13.12% at June 30, 2022, respectively, due to the Series A preferred stock issuance[203]. - The company issued 20,530,000 depositary shares of Series A preferred stock, generating gross proceeds of $513.3 million, with net proceeds of $498.5 million after offering costs[178]. - Loan commitments to extend credit total $11.866 billion as of June 30, 2022, compared to $9.006 billion as of December 31, 2021[138]. - The company has secured financing capacity with the FHLB of $5.4 billion, with an outstanding balance of $1.2 billion as of June 30, 2022[126]. Economic Outlook and Risks - The company anticipates potential risks from ongoing economic conditions, including the impact of the COVID-19 pandemic and changes in interest rates, which may affect loan and deposit growth[197]. - The company is evaluating the impact of new accounting standards related to troubled debt restructurings and fair value measurements, which are expected to have no material impact on consolidated financial statements[188][196]. - The company continues to monitor and manage its loan portfolio, with a focus on maintaining a healthy balance between risk and return[1].