PacWest Bancorp(US:PACW)2022-11-07 23:58Financial Performance - Total assets increased to $41.40 billion as of September 30, 2022, compared to $40.44 billion at December 31, 2021, reflecting a growth of 2.36%[11] - Net interest income for the three months ended September 30, 2022, was $335.18 million, up 21.5% from $275.84 million in the same period of 2021[13] - Net earnings available to common stockholders decreased to $122.22 million for the three months ended September 30, 2022, down 12.7% from $139.99 million in the same period of 2021[13] - Comprehensive loss for the three months ended September 30, 2022, was $71.85 million, compared to a comprehensive income of $93.34 million in the same period of 2021[14] - Net earnings for the nine months ended September 30, 2022, were $374,104,000, compared to $150,406,000 for the same period in 2021, reflecting a significant increase[20] - The company reported a net earnings increase of approximately 148% from the previous year for the nine months ended September 30, 2022[20] - For the three months ended September 30, 2022, net earnings were $131,616,000, resulting in basic earnings per common share of $1.02, down from $1.17 in the same period of 2021[162] - Total revenue for the three months ended September 30, 2022, was $448,663,000, compared to $341,427,000 for the same period in 2021[166] Deposits and Loans - Total deposits decreased to $34.20 billion as of September 30, 2022, from $34.99 billion at December 31, 2021, a decline of 2.3%[11] - Total loans and leases held for investment as of September 30, 2022, amounted to $27,470,714,000, representing a 20% increase from $22,740,984,000 as of December 31, 2021[62] - The total amount of loans classified as "Special mention" across all segments was $68.6 million, suggesting some loans are under closer scrutiny[78] - The total amount of loans classified as special mention (5 rating) is $463.994 million, indicating potential credit quality concerns[80] - Total loans and leases amounted to $27.66 billion, with a gross charge-off of $10.685 million for the current year-to-date period[80] Interest and Noninterest Income - Total interest income on investment securities for the three months ended September 30, 2022, was $53,135,000, an increase of 30% from $40,780,000 in the same period of 2021[59] - Total interest income for the nine months ended September 30, 2022, was $1,083,466, an increase of 28.4% from $843,924 in 2021[169] - Noninterest income for the three months ended September 30, 2022, was $38,619,000, a decrease from $51,345,000 in the same period of 2021[166] - Total noninterest income decreased to $93,783 for the nine months ended September 30, 2022, from $136,545 in 2021, representing a decline of 31.2%[169] Credit Losses and Provisions - Provision for credit losses was $3.00 million for the three months ended September 30, 2022, compared to a reversal of $20.00 million in the same period of 2021[13] - The allowance for loan and lease losses was $189.33 million as of September 30, 2022, down from $200.56 million at December 31, 2021[11] - The allowance for credit losses increased to $284,398,000 as of September 30, 2022, from $273,635,000 at the beginning of the period, reflecting a provision of $3,000,000[105] - The company reported net charge-offs of $2,378,000 for the three months ended September 30, 2022[99] Securities and Investments - The total fair value of securities available-for-sale as of September 30, 2022, was $5.89 billion, with gross unrealized losses amounting to $878.7 million[44] - The company transferred $2.3 billion in fair value of debt securities from available-for-sale to held-to-maturity, impacting its investment strategy[30] - The total amortized cost of securities available-for-sale is $6,769,941,000, with a fair value of $5,891,328,000, indicating a decrease in value of approximately 13%[50] - The fair value of agency residential MBS as of September 30, 2022, was $2.29 billion, with gross unrealized losses of $469.4 million[48] Capital and Equity - As of September 30, 2022, the total stockholders' equity was $3,875,945,000, a decrease from $3,999,630,000 at the end of 2021[17] - The Series A preferred stock issuance in June 2022 generated net proceeds of $498.5 million, contributing to the increase in consolidated Tier 1 capital ratio to 10.46%[202][204] - The consolidated common equity Tier 1 capital ratio decreased to 8.56% due to risk-weighted assets growing at a higher percentage than Tier 1 capital[202] Risk Management - The company has noted potential risks including weaker than expected economic conditions and the impact of interest rate changes on net interest margin[196] - The company emphasizes maintaining strict credit standards to achieve net loan growth while managing portfolio concentrations through loan purchases[208] - The company actively seeks new lending opportunities across various products, including real estate mortgage loans and commercial loans, emphasizing credit quality in its loan origination process[207][208]