PacWest Bancorp Announces Results for the First Quarter of 2021

LOS ANGELES, April 20, 2021 (GLOBE NEWSWIRE) --

FIRST QUARTER 2021 RESULTS

$150.4M	$1.27		$156.0M	25.67%
Net Earnings	Diluted Earnings per Share		PPNR	ROATE

FIRST QUARTER 2021 HIGHLIGHTS

• Net Earnings of $150.4 Million or $1.27 Per Diluted Share
• Core Deposits Up $3.3 Billion or 15% in 1Q21; Represents 91% of Total Deposits
• Provision for Credit Losses Benefit of $48.0 Million in 1Q21 Compared to Provision of $10.0 Million in 4Q20
• Net Interest Income (TE) of $264.6 Million, Compared With $262.1 Million in 4Q20
• Noninterest Income of $44.8 Million, Up 12% From 4Q20, With Continued Strength in Warrant Income As Well As a $10.1 Million Gain on an Equity Investment
• Noninterest Expense of $150.1 Million, Up 11% From 4Q20, Driven By Two Months of Civic Financial Services (“Civic”) Operations, Higher Acquisition Costs, and a Legal Settlement
• Classified and Special Mention Loans Fell $102.1 Million and $88.3 Million, Respectively, From 4Q20
• ACL Ratio of 2.02% and ALLL Ratio of 1.54%; Excluding PPP Loans, ACL Ratio of 2.14% and ALLL Ratio of 1.63%
• Net Charge-offs to Average Loans/Leases of 6 bps
• Cost of Deposits Decreased 3 bps to 11 bps
• Loan and Lease Production of $1.6 Billion Up From $1.1 Billion in 4Q20; WAC of 5.39% (Excluding PPP Loans) vs. 4.41% in 4Q20
• Net Loans and Leases of $19.0 Billion, Down Slightly From 4Q20 As Production Was Offset With Payoffs and Paydowns As Well As Further Reduction in the Security Monitoring Portfolio
• Originated $381 Million of PPP Loans in 1Q21
• Strong Capital Position – CET1 Ratio of 10.41%
• Civic Acquisition Completed on February 1, 2021
• On March 31, 2021, Signed Agreement to Purchase the Homeowners Association Business from MUFG Union Bank, N.A. With Approximately $4.0 Billion of Deposits With a Cost of 8 bps; Close Expected in 4Q21

CEO COMMENTARY
Matt Wagner, President and CEO, commented, “Our continued focus on growing net interest income produced strong first quarter earnings boosted by continued deposit driven balance sheet growth and improved credit costs as a result of improved economic conditions. Our first quarter results produced a return on assets of 1.94% and a return on tangible equity of 25.67%.”

“We experienced strong deposit growth again in the first quarter driven by outstanding growth from our venture banking clients as well as our commercial bank. This increasing liquidity has expanded our average balance of deposits at the Fed, which grew to $4.8 billion in the first quarter with a yield of 13 basis points. While our focus is on managing net interest income, this excess liquidity continues to be a drag on our net interest margin, which had a negative impact of 61 basis points in the first quarter.”

“Credit quality continued to improve as we experienced decreases in nonaccrual, special mention, and classified loans and leases in the first quarter, while net charge-offs were $2.7 million.”

“We closed the Civic acquisition on February 1, 2021 and in two months Civic originated $231 million of loans. We expect Civic loan production to remain strong and, as their loan portfolio continues to grow, it will help sustain our loan yields and drive loan growth.” 

A chart accompanying this announcement is available at https://www.globenewswire.com/NewsRoom/AttachmentNg/03fbe6a3-20e1-45c9 ...

FINANCIAL HIGHLIGHTS

	At or For the												At or For the
	Three Months Ended												Three Months Ended
	March 31,				December 31,				Increase				March 31,								Increase
Financial Highlights (1)		2021				2020			(Decrease)					2021				2020			(Decrease)
	(Dollars in thousands, except per share data)
Net earnings (loss)	$	150,406			$	116,830			$	33,576			$	150,406			$	(1,433,111	)		$	1,583,517
Diluted earnings (loss)
per share	$	1.27			$	0.99			$	0.28			$	1.27			$	(12.23	)		$	13.50
Pre-provision, pre-goodwill
impairment, pre-tax net
revenue ("PPNR") (2)	$	155,962			$	163,376			$	(7,414	)		$	155,962			$	160,877			$	(4,915	)
Return on average assets		1.94	%			1.58	%			0.36				1.94	%			(21.27	)%			23.21
PPNR return on average
assets (2)		2.01	%			2.22	%			(0.21	)			2.01	%			2.39	%			(0.38	)
Return on average
tangible equity (2)		25.67	%			19.63	%			6.04				25.67	%			6.88	%			18.79
Yield on average loans and
leases (tax equivalent)		5.20	%			5.15	%			0.05				5.20	%			5.54	%			(0.34	)
Cost of average total
deposits		0.11	%			0.14	%			(0.03	)			0.11	%			0.59	%			(0.48	)
Net interest margin ("NIM")
(tax equivalent)		3.69	%			3.83	%			(0.14	)			3.69	%			4.31	%			(0.62	)
Efficiency ratio		46.4	%			43.6	%			2.8				46.4	%			40.6	%			5.8
Total assets	$	32,856,533			$	29,498,442			$	3,358,091			$	32,856,533			$	26,143,267			$	6,713,266
Loans and leases held
for investment,
net of deferred fees	$	18,979,228			$	19,083,377			$	(104,149	)		$	18,979,228			$	19,745,305			$	(766,077	)
Noninterest-bearing
demand deposits	$	11,017,462			$	9,193,827			$	1,823,635			$	11,017,462			$	7,510,218			$	3,507,244
Core deposits	$	25,576,348			$	22,264,480			$	3,311,868			$	25,576,348			$	16,050,522			$	9,525,826
Total deposits	$	28,223,291			$	24,940,717			$	3,282,574			$	28,223,291			$	19,575,837			$	8,647,454
As percentage of total
deposits:
Noninterest-bearing
demand deposits		39	%			37	%			2				39	%			38	%			1
Core deposits		91	%			89	%			2				91	%			82	%			9
Equity to assets ratio		11.12	%			12.19	%			(1.07	)			11.12	%			12.97	%			(1.85	)
Common equity tier 1
capital ratio		10.41	%			10.53	%			(0.12	)			10.41	%			9.22	%			1.19
Total capital ratio		13.63	%			13.76	%			(0.13	)			13.63	%			12.07	%			1.56
Tangible common equity
ratio (2)		7.68	%			8.78	%			(1.10	)			7.68	%			9.10	%			(1.42	)
Book value per share	$	30.68			$	30.36			$	0.32			$	30.68			$	28.75			$	1.93
Tangible book value per
share (2)	$	20.39			$	21.05			$	(0.66	)		$	20.39			$	19.31			$	1.08
(1) The operations of Civic are included from its February 1, 2021 acquisition date.
(2) Non-GAAP measure.

INCOME STATEMENT HIGHLIGHTS

NET INTEREST INCOME

Net interest income increased by $2.1 million to $261.3 million for the first quarter of 2021 compared to $259.2 million for the fourth quarter of 2020 due mainly to higher income on investment securities and lower interest expense, partially offset by lower income on loans and leases and the negative impact on net interest income due to the change in the earning assets mix. The tax equivalent yield on average loans and leases was 5.20% for the first quarter of 2021 compared to 5.15% for the fourth quarter of 2020. The increase in the tax equivalent yield on average loans and leases was primarily due to higher loan discount accretion of $1.5 million and higher amortized loan fee income of $2.9 million mainly from higher PPP loan forgiveness in the first quarter of 2021 as compared to the fourth quarter of 2020.

The tax equivalent NIM was 3.69% for the first quarter of 2021 compared to 3.83% for the fourth quarter of 2020. The decrease in the NIM was primarily due to the change in the earning assets mix. The average balance of deposits in financial institutions increased by $1.2 billion, the average balance of investment securities increased by $494.1 million, and the average balance of loans and leases increased by $158.1 million in the first quarter of 2021. This excess liquidity had a negative impact on the first quarter tax equivalent NIM of 61 basis points.          

The cost of average total deposits decreased to 0.11% in the first quarter of 2021 from 0.14% for the fourth quarter of 2020. The lower cost of average total deposits was due primarily to the repricing of maturing brokered time deposits and the increased average balance of noninterest-bearing deposits.

PROVISION FOR CREDIT LOSSES

The following table presents details of the provision for credit losses for the periods indicated:

	Three Months Ended
	March 31,				December 31,				Increase
Provision for Credit Losses		2021				2020			(Decrease)
					(In thousands)
(Reduction in) addition to allowance for loan
and lease losses	$	(53,000	)		$	21,000			$	(74,000	)
Addition to (reduction in) reserve for
unfunded loan commitments		5,000				(11,000	)			16,000
Total provision for credit losses	$	(48,000	)		$	10,000			$	(58,000	)

The provision for credit losses decreased by $58.0 million to a benefit of $48.0 million for the first quarter of 2021 compared to a $10.0 million provision for the fourth quarter of 2020. This reduction reflected improvement in certain key macro-economic forecast variables and decreased provisions for individually evaluated loans and leases, partially offset by a higher provision for unfunded commitments which grew by $526.6 million.

NONINTEREST INCOME

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

	Three Months Ended
	March 31,			December 31,			Increase
Noninterest Income		2021			2020		(Decrease)
					(In thousands)
Service charges on deposit accounts	$	2,934		$	3,119		$	(185	)
Other commissions and fees		9,158			9,974			(816	)
Leased equipment income		11,354			9,440			1,914
Gain on sale of loans and leases		139			1,671			(1,532	)
Gain on sale of securities		101			4			97
Other income:
Dividends and gains on equity investments		10,904			5,064			5,840
Warrant income		6,123			7,299			(1,176	)
Other		4,116			3,279			837
Total noninterest income	$	44,829		$	39,850		$	4,979

Noninterest income increased by $5.0 million to $44.8 million for the first quarter of 2021 compared to $39.9 million for the fourth quarter of 2020 due primarily to an increase of $5.8 million in dividends and gains on equity investments and a $1.9 million increase in leased equipment income, offset partially by decreases of $1.5 million in gain on sale of loans and leases and $1.2 million in warrant income. The increase in dividends and gains on equity investments was due primarily to a $10.1 million gain on one equity investment, offset partially by lower net fair value gains on equity investments still held. The increase in leased equipment income was due primarily to a higher average balance of equipment leased to others under operating leases. The decrease in the gain on sale of loans and leases resulted from the sales of $72.6 million of loans for gains of $0.1 million in the first quarter of 2021 compared to sales of $119.9 million for gains of $1.7 million in the fourth quarter of 2020. The decrease in warrant income was primarily attributable to lower gains from exercised warrants after record gains in the fourth quarter of 2020.

NONINTEREST EXPENSE

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

	Three Months Ended
	March 31,			December 31,				Increase
Noninterest Expense		2021			2020			(Decrease)
					(In thousands)
Compensation	$	79,882		$	73,171			$	6,711
Occupancy		14,054			14,083				(29	)
Data processing		6,957			6,718				239
Other professional services		5,126			6,800				(1,674	)
Insurance and assessments		4,903			5,064				(161	)
Intangible asset amortization		3,079			3,172				(93	)
Leased equipment depreciation		8,969			7,501				1,468
Foreclosed assets (income) expense, net		1			(272	)			273
Acquisition, integration and reorganization costs		3,425			1,060				2,365
Customer related expense		4,818			4,430				388
Loan expense		3,193			3,926				(733	)
Other		15,729			10,029				5,700
Total operating expense		150,136			135,682				14,454
Goodwill impairment		-			-				-
Total noninterest expense	$	150,136		$	135,682			$	14,454

Noninterest expense increased by $14.5 million to $150.1 million for the first quarter of 2021 compared to $135.7 million for the fourth quarter of 2020 due primarily to increases of $6.7 million in compensation expense, $5.7 million in other expense, $2.4 million in acquisition, integration and reorganization costs, and $1.5 million in leased equipment depreciation, offset partially by a decrease of $1.7 million in other professional expense. The increase in compensation expense was mostly due to compensation expense related to the Civic operations, while, in total, Civic’s noninterest expenses added $10.8 million to total noninterest expense. The increase in other expense was largely due to a legal settlement in excess of amounts previously accrued. The increase in acquisition, integration and reorganization costs was due to advisory services and integration expenses related to the closed Civic acquisition and the pending acquisition of MUFG Union Bank’s Homeowners Association Services Division. The increase in leased equipment depreciation was due primarily to an increase in the average balance of equipment leased to others under operating leases. The decrease in other professional expense was due primarily to lower consulting expense.

INCOME TAXES

The effective income tax rate was 26.3% in the first quarter of 2021 compared to 23.8% for the fourth quarter of 2020. The increase was primarily due to higher pre-tax income in relation to discrete items for the quarter. The effective income tax rate for the full year 2021 is currently estimated to be in the range of 25% to 27%.

BALANCE SHEET HIGHLIGHTS

DEPOSITS AND CLIENT INVESTMENT FUNDS

The following table presents the composition of our deposit portfolio as of the dates indicated:

	March 31, 2021					December 31, 2020					March 31, 2020
			% of					% of					% of
Deposit Composition	Balance		Total			Balance		Total			Balance		Total
							(Dollars in thousands)
Noninterest-bearing demand	$	11,017,462	39	%		$	9,193,827	37	%		$	7,510,218	38	%
Interest checking		6,862,398	25	%			5,974,910	24	%			3,333,147	17	%
Money market		7,112,610	25	%			6,532,917	26	%			4,712,118	24	%
Savings		583,878	2	%			562,826	2	%			495,039	3	%
Total core deposits		25,576,348	91	%			22,264,480	89	%			16,050,522	82	%
Non-core non-maturity deposits		1,162,590	4	%			1,149,467	5	%			836,157	4	%
Total non-maturity deposits		26,738,938	95	%			23,413,947	94	%			16,886,679	86	%
Time deposits $250,000 and under		940,340	3	%			994,197	4	%			2,086,188	11	%
Time deposits over $250,000		544,013	2	%			532,573	2	%			602,970	3	%
Total time deposits		1,484,353	5	%			1,526,770	6	%			2,689,158	14	%
Total deposits	$	28,223,291	100	%		$	24,940,717	100	%		$	19,575,837	100	%

At March 31, 2021, core deposits totaled $25.6 billion or 91% of total deposits, including $11.0 billion of noninterest-bearing demand deposits or 39% of total deposits. Core deposits increased by $3.3 billion or 15% in the first quarter of 2021 driven by continued strong deposit growth from our venture banking clients.

In addition to deposit products, we also offer alternative, non-depository cash investment options for select clients. These alternative options include investments managed by Pacific Western Asset Management Inc. (“PWAM”), our registered investment advisor subsidiary, and third-party sweep products. Total off-balance sheet client investment funds at March 31, 2021 were $1.4 billion, of which $0.9 billion was managed by PWAM.

LOANS AND LEASES

The following table presents roll forwards of loans and leases held for investment, net of deferred fees, for the periods indicated:

	Three Months Ended
Roll Forward of Loans and Leases Held	March 31,				December 31,
for Investment, Net of Deferred Fees (1)		2021				2020
		(Dollars in thousands)
Balance, beginning of period	$	19,083,377			$	19,026,200
Additions:
Production		1,612,777				1,131,165
Disbursements		1,022,986				1,354,038
Total production and disbursements		2,635,763				2,485,203
Reductions:
Payoffs		(1,635,264	)			(1,330,321	)
Paydowns		(1,067,418	)			(957,075	)
Total payoffs and paydowns		(2,702,682	)			(2,287,396	)
Sales		(72,641	)			(119,931	)
Transfers to foreclosed assets		(647	)			(385	)
Charge-offs		(3,988	)			(20,314	)
Transfers to loans held for sale		(25,554	)			-
Total reductions		(2,805,512	)			(2,428,026	)
Loans acquired through Civic acquisition		65,600				-
Net increase (decrease)		(104,149	)			57,177
Balance, end of period	$	18,979,228			$	19,083,377
Weighted average rate on production (2)		4.36	%			4.41	%
(1) Includes direct financing leases but excludes equipment leased to others under operating leases.
(2) The weighted average rate on production presents contractual rates on a tax equivalent basis and excludes amortized fees. Amortized fees added approximately 43 basis points to loan yields in 2021.

Loans and leases held for investment, net of deferred fees, decreased by $104.1 million in the first quarter of 2021 to $19.0 billion at March 31, 2021. The decrease in the loans and leases balance for the first quarter of 2021 was primarily due to a $123.5 million decrease in the security monitoring portfolio, for which new originations have been discontinued since the fourth quarter of 2019. The weighted average rate on first quarter of 2021 production decreased to 4.36% due to first quarter production including $381 million of PPP loans at a coupon rate of 1%, while the fourth quarter of 2020 included no PPP loan production. Excluding PPP loans, the weighted average rate on new production for the first quarter of 2021 was 5.39%.

The following table presents the composition of loans and leases held for investment by loan portfolio segment and class, net of deferred fees, as of the dates indicated:

	March 31, 2021					December 31, 2020					March 31, 2020
			% of					% of					% of
Loan and Lease Portfolio	Balance		Total			Balance		Total			Balance		Total
						(In thousands)
Real estate mortgage:
Commercial	$	3,941,610	21	%		$	4,096,671	21	%		$	4,220,649	21	%
Income producing and other
residential		4,045,603	21	%			3,803,265	20	%			3,788,295	19	%
Total real estate mortgage		7,987,213	42	%			7,899,936	41	%			8,008,944	40	%
Real estate construction and land:
Commercial		990,035	5	%			1,117,121	6	%			1,087,505	6	%
Residential		2,575,788	14	%			2,243,160	12	%			1,792,748	9	%
Total real estate construction
and land		3,565,823	19	%			3,360,281	18	%			2,880,253	15	%
Total real estate		11,553,036	61	%			11,260,217	59	%			10,889,197	55	%
Commercial:
Asset-based		3,383,403	18	%			3,429,283	18	%			3,938,402	20	%
Venture capital		1,495,798	8	%			1,698,508	9	%			2,715,837	14	%
Other commercial		2,206,639	11	%			2,375,114	12	%			1,771,985	9	%
Total commercial		7,085,840	37	%			7,502,905	39	%			8,426,224	43	%
Consumer		340,352	2	%			320,255	2	%			429,884	2	%
Total loans and leases held for
investment, net of deferred fees	$	18,979,228	100	%		$	19,083,377	100	%		$	19,745,305	100	%
Total unfunded loan commitments	$	8,127,999				$	7,601,390				$	7,697,724

ALLOWANCE FOR CREDIT LOSSES

The following tables present roll forwards of the allowance for credit losses for the periods indicated:

	Three Months Ended March 31, 2021
	Allowance for				Reserve for				Total
Allowance for Credit	Loan and				Unfunded Loan				Allowance for
Losses Rollforward	Lease Losses				Commitments				Credit Losses
						(In thousands)
Beginning balance	$	348,181			$	85,571			$	433,752
Charge-offs		(3,988	)			-				(3,988	)
Recoveries		1,252				-				1,252
Net charge-offs		(2,736	)			-				(2,736	)
Provision		(53,000	)			5,000				(48,000	)
Ending balance	$	292,445			$	90,571			$	383,016
	Three Months Ended December 31, 2020
	Allowance for				Reserve for				Total
Allowance for Credit	Loan and				Unfunded Loan				Allowance for
Losses Rollforward	Lease Losses				Commitments				Credit Losses
						(In thousands)
Beginning balance	$	345,966			$	96,571			$	442,537
Charge-offs		(20,314	)			-				(20,314	)
Recoveries		1,529				-				1,529
Net charge-offs		(18,785	)			-				(18,785	)
Provision		21,000				(11,000	)			10,000
Ending balance	$	348,181			$	85,571			$	433,752

The following table presents allowance for credit losses information as of and for the dates and periods indicated:

	March 31,				December 31,				Increase
Allowance for Credit Losses		2021				2020			(Decrease)
						(Dollars in thousands)
Allowance for loan and lease losses	$	292,445			$	348,181			$	(55,736	)
Reserve for unfunded loan commitments		90,571				85,571				5,000
Allowance for credit losses	$	383,016			$	433,752			$	(50,736	)
Provision for credit losses (for the quarter)	$	(48,000	)		$	10,000			$	(58,000	)
Net charge-offs (for the quarter)	$	2,736			$	18,785			$	(16,049	)
Net charge-offs to average loans and leases
(for the quarter)		0.06	%			0.40	%
Allowance for loan and lease losses to loans
and leases held for investment		1.54	%			1.82	%
Allowance for loan and lease losses to loans
and leases held for investment, excluding PPP loans		1.63	%			1.93	%
Allowance for credit losses to loans and leases
held for investment		2.02	%			2.27	%
Allowance for credit losses to loans and leases
held for investment, excluding PPP loans		2.14	%			2.41	%

The allowance for credit losses decreased by $50.7 million in the first quarter of 2021 to $383.0 million at March 31, 2021. The decrease in the allowance for credit losses during the first quarter of 2021 was attributable to a provision for credit losses benefit of $48.0 million and $2.7 million in net charge-offs.  

Net charge-offs were $2.7 million for the first quarter of 2021. Gross charge-offs of $4.0 million were reduced by recoveries of $1.3 million.

Net charge-offs were $18.8 million for the fourth quarter of 2020. Gross charge-offs of $20.3 million were reduced by recoveries of $1.5 million. The most significant charge-off was $15.5 million related to a security monitoring loan.

Security monitoring loans decreased by 38% from $329.3 million as of December 31, 2020 to $205.8 million as of March 31, 2021, as the Company continues to actively reduce the remaining loans. As of March 31, 2021, $172.1 million or 84% of these security monitoring loans are performing and pass-rated, while $33.7 million are classified, of which $6.1 million are on nonaccrual.

CREDIT QUALITY  

The following table presents loan and lease credit quality metrics as of the dates indicated:

	March 31,				December 31,				Increase
Credit Quality Metrics		2021				2020			(Decrease)
					(Dollars in thousands)
NPAs and Performing TDRs:
Nonaccrual loans and leases held for investment (1)	$	67,652			$	91,163			$	(23,511	)
Accruing loans contractually past due 90 days or more		-				-				-
Foreclosed assets, net		14,298				14,027				271
Total nonperforming assets ("NPAs")	$	81,950			$	105,190			$	(23,240	)
Performing TDRs held for investment	$	27,999			$	14,254			$	13,745
Nonaccrual loans and leases held for investment
to loans and leases held for investment		0.36	%			0.48	%
Nonperforming assets to loans and leases
held for investment and foreclosed assets		0.43	%			0.55	%
Allowance for credit losses to nonaccrual loans
and leases held for investment		566.2	%			475.8	%
Loan and Lease Credit Risk Ratings:
Pass	$	18,183,114			$	18,096,830			$	86,284
Special mention		632,997				721,285				(88,288	)
Classified		163,117				265,262				(102,145	)
Total loans and leases held for investment,
net of deferred fees	$	18,979,228			$	19,083,377			$	(104,149	)
Classified loans and leases held for investment
to loans and leases held for investment		0.86	%			1.39	%
(1) Nonaccrual loans include guaranteed amounts of $18.4 million at March 31, 2021 and $13.9 million at December 31, 2020.

Since pro-actively downgrading certain loans at the onset of the pandemic in the first quarter of 2020, special mention loans and leases have decreased $265.7 million from their peak in the first quarter of 2020, while classified loans and leases have decreased $130.1 million from their peak in the second quarter of 2020, and each have continued their decline in the first quarter of 2021.

The following table presents nonaccrual loans and leases and accruing loans and leases past due between 30 and 89 days by loan portfolio segment and class as of the dates indicated:

	March 31, 2021						December 31, 2020						Increase (Decrease)
				Accruing						Accruing							Accruing
				and 30-89						and 30-89							and 30-89
				Days Past						Days Past							Days Past
	Nonaccrual			Due			Nonaccrual			Due			Nonaccrual				Due
				(Dollars in thousands)
Real estate mortgage:
Commercial	$	46,436		$	5		$	43,731		$	3,636		$	2,705			$	(3,631	)
Income producing and other
residential		2,471			6,339			1,826			600			645				5,739
Total real estate mortgage		48,907			6,344			45,557			4,236			3,350				2,108
Real estate construction and land:
Commercial		302			-			315			-			(13	)			-
Residential		416			1,241			-			759			416				482
Total real estate
construction and land		718			1,241			315			759			403				482
Commercial:
Asset-based		2,379			-			2,679			-			(300	)			-
Venture capital		2,432			6,750			1,980			540			452				6,210
Other commercial		12,660			1,251			40,243			2,078			(27,583	)			(827	)
Total commercial		17,471			8,001			44,902			2,618			(27,431	)			5,383
Consumer		556			954			389			1,260			167				(306	)
Total held for investment	$	67,652		$	16,540		$	91,163		$	8,873		$	(23,511	)		$	7,667

During the first quarter of 2021, nonaccrual loans and leases decreased by $23.5 million due primarily to one security monitoring loan for $25.6 million being moved to held for sale at March 31, 2021. The sale of this loan was completed in early April 2021 and resulted in a gain of $1.4 million.

CAPITAL

The following table presents certain actual capital ratios and ratios excluding PPP loans:

	March 31, 2021
				Excluding				December 31,
				PPP				2020
	Actual (1)			Loans (1)				Actual
PacWest Bancorp Consolidated:
Tier 1 leverage capital ratio	7.95	%		8.25	%	(3	)	8.55	%
Common equity tier 1 capital ratio	10.41	%		10.41	%			10.53	%
Total capital ratio	13.63	%		13.63	%			13.76	%
Tangible common equity ratio (2)	7.68	%		7.95	%	(3	)	8.78	%
(1) Capital information for March 31, 2021 is preliminary.
(2) Non-GAAP measure.
(3) PPP loans have been excluded from total assets in denominator as they are zero risk-weighted.

ABOUT PACWEST BANCORP

PacWest Bancorp (“PacWest”) is a bank holding company with over $32 billion in assets headquartered in Los Angeles, California, with an executive office in Denver, Colorado, with one wholly-owned banking subsidiary, Pacific Western Bank (the “Bank”). The Bank has 70 full-service branches located in California, one branch located in Durham, North Carolina, and one branch located in Denver, Colorado. The Bank provides community banking products including lending and comprehensive deposit and treasury management services to small and medium-sized businesses conducted primarily through our California-based branch offices and Denver, Colorado branch office. The Bank offers national lending products including asset-based, equipment, and real estate loans and treasury management services to established middle-market businesses on a national basis. The Bank also offers venture banking products including a comprehensive suite of financial services focused on entrepreneurial and venture-backed businesses and their venture capital and private equity investors, with offices located in key innovative hubs across the United States. For more information about PacWest Bancorp or Pacific Western Bank, visit www.pacwest.com.

FORWARD LOOKING STATEMENTS

This communication contains certain forward-looking information about PacWest that is intended to be covered by the safe harbor for “forward-looking statements” provided by the Private Securities Litigation Reform Act of 1995. Statements that are not historical or current facts, including statements about future financial and operational results, expectations, or intentions are forward-looking statements. Such statements are based on information available at the time of the communication and are based on current beliefs and expectations of the Company’s management and are subject to significant risks, uncertainties and contingencies, many of which are beyond our control. The COVID-19 pandemic is adversely affecting PacWest, its employees, customers and third-party service providers, and the ultimate extent of the impacts on its business, financial position, results of operations, liquidity and prospects is uncertain. The length of the COVID-19 pandemic and the severity of its impact on key macro-economic indicators such as unemployment and GDP may have a material impact on our allowance for credit losses and related provision for credit losses. Continued deterioration in general business and economic conditions could adversely affect PacWest’s revenues and the values of its assets, including goodwill, and liabilities, lead to a tightening of credit, and increase stock price volatility. In addition, PacWest’s results could be adversely affected by changes in interest rates, sustained high unemployment rates, deterioration in the credit quality of its loan portfolio or in the value of the collateral securing those loans, deterioration in the value of its investment securities, the magnitude of individual loan losses on security monitoring loans, and legal and regulatory developments. Actual results may differ materially from those set forth or implied in the forward-looking statements due to a variety of factors, including the risk factors described in documents filed by PacWest with the U.S. Securities and Exchange Commission.

We are under no obligation (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
	March 31,				December 31,				March 31,
		2021				2020				2020
	(Dollars in thousands, except per share data)
ASSETS:
Cash and due from banks	$	177,199			$	150,464			$	172,570
Interest-earning deposits in financial institutions		5,517,667				3,010,197				439,690
Total cash and cash equivalents		5,694,866				3,160,661				612,260
Securities available-for-sale, at estimated fair value		5,941,690				5,235,591				3,757,663
Federal Home Loan Bank stock, at cost		17,250				17,250				54,244
Total investment securities		5,958,940				5,252,841				3,811,907
Loans held for sale		25,554				-				-
Gross loans and leases held for investment		19,055,165				19,153,357				19,806,394
Deferred fees, net		(75,937	)			(69,980	)			(61,089	)
Total loans and leases held for investment,
net of deferred fees		18,979,228				19,083,377				19,745,305
Allowance for loan and lease losses		(292,445	)			(348,181	)			(221,292	)
Total loans and leases held for investment, net		18,686,783				18,735,196				19,524,013
Equipment leased to others under operating leases		327,413				333,846				306,530
Premises and equipment, net		39,622				39,234				39,799
Foreclosed assets, net		14,298				14,027				1,701
Goodwill		1,204,092				1,078,670				1,078,670
Core deposit and customer relationship intangibles, net		21,312				23,641				34,446
Other assets		883,653				860,326				733,941
Total assets	$	32,856,533			$	29,498,442			$	26,143,267
LIABILITIES:
Noninterest-bearing deposits	$	11,017,462			$	9,193,827			$	7,510,218
Interest-bearing deposits		17,205,829				15,746,890				12,065,619
Total deposits		28,223,291				24,940,717				19,575,837
Borrowings		19,750				5,000				2,295,000
Subordinated debentures		465,814				465,812				458,994
Accrued interest payable and other liabilities		493,541				491,962				423,047
Total liabilities		29,202,396				25,903,491				22,752,878
STOCKHOLDERS' EQUITY (1)		3,654,137				3,594,951				3,390,389
Total liabilities and stockholders’ equity	$	32,856,533			$	29,498,442			$	26,143,267
Book value per share	$	30.68			$	30.36			$	28.75
Tangible book value per share (2)	$	20.39			$	21.05			$	19.31
Shares outstanding		119,105,642				118,414,853				117,916,789
(1) Includes net unrealized gain on securities
available-for-sale, net	$	106,381			$	172,523			$	90,916
(2) Non-GAAP measure.

PACWEST BANCORP AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF EARNINGS (LOSS)
	Three Months Ended
	March 31,				December 31,				March 31,
		2021				2020				2020
	(Dollars in thousands, except per share data)
Interest income:
Loans and leases	$	241,544			$	242,198			$	262,278
Investment securities		30,265				28,843				27,446
Deposits in financial institutions		1,528				1,135				1,608
Total interest income		273,337				272,176				291,332
Interest expense:
Deposits		7,500				8,454				28,247
Borrowings		193				37				6,778
Subordinated debentures		4,375				4,477				6,560
Total interest expense		12,068				12,968				41,585
Net interest income		261,269				259,208				249,747
Provision for credit losses		(48,000	)			10,000				112,000
Net interest income after provision
for credit losses		309,269				249,208				137,747
Noninterest income:
Service charges on deposit accounts		2,934				3,119				2,658
Other commissions and fees		9,158				9,974				9,721
Leased equipment income		11,354				9,440				12,251
Gain on sale of loans and leases		139				1,671				87
Gain on sale of securities		101				4				182
Other income		21,143				15,642				4,201
Total noninterest income		44,829				39,850				29,100
Noninterest expense:
Compensation		79,882				73,171				61,282
Occupancy		14,054				14,083				14,207
Data processing		6,957				6,718				6,454
Other professional services		5,126				6,800				4,258
Insurance and assessments		4,903				5,064				4,249
Intangible asset amortization		3,079				3,172				3,948
Leased equipment depreciation		8,969				7,501				7,205
Foreclosed assets (income) expense, net		1				(272	)			66
Acquisition, integration and
reorganization costs		3,425				1,060				-
Customer related expense		4,818				4,430				3,932
Loan expense		3,193				3,926				2,650
Goodwill impairment		-				-				1,470,000
Other expense		15,729				10,029				9,719
Total noninterest expense		150,136				135,682				1,587,970
Earnings (loss) before income taxes		203,962				153,376				(1,421,123	)
Income tax expense		53,556				36,546				11,988
Net earnings (loss)	$	150,406			$	116,830			$	(1,433,111	)
Basic and diluted earnings (loss) per share	$	1.27			$	0.99			$	(12.23	)
Dividends declared and paid per share	$	0.25			$	0.25			$	0.60

PACWEST BANCORP AND SUBSIDIARIES
NET EARNINGS (LOSS) PER SHARE CALCULATIONS
	Three Months Ended
	March 31,				December 31,				September 30,				June 30,				March 31,
		2021				2020				2020				2020				2020
	(In thousands, except per share data)
Basic Earnings (Loss) Per Share:
Net earnings (loss)	$	150,406			$	116,830			$	45,503			$	33,204			$	(1,433,111	)
Less: earnings allocated to
unvested restricted stock (1)		(2,355	)			(1,398	)			(578	)			(362	)			(939	)
Net earnings (loss) allocated to
common shares	$	148,051			$	115,432			$	44,925			$	32,842			$	(1,434,050	)
Weighted-average basic shares
and unvested restricted stock
outstanding		118,852				118,446				118,438				118,192				118,775
Less: weighted-average unvested
restricted stock outstanding		(2,003	)			(1,652	)			(1,684	)			(1,606	)			(1,495	)
Weighted-average basic shares
outstanding		116,849				116,794				116,754				116,586				117,280
Basic earnings (loss) per share	$	1.27			$	0.99			$	0.38			$	0.28			$	(12.23	)
Diluted Earnings (Loss) Per Share:
Net earnings (loss) allocated to
common shares	$	148,051			$	115,432			$	44,925			$	32,842			$	(1,434,050	)
Weighted-average diluted shares
outstanding		116,849				116,794				116,754				116,586				117,280
Diluted earnings (loss) per share	$	1.27			$	0.99			$	0.38			$	0.28			$	(12.23	)
(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
	March 31, 2021							December 31, 2020							March 31, 2020
			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:
Loans and leases (1)(2)	$	18,927,314	$	242,846	5.20	%		$	18,769,214	$	243,188	5.15	%		$	19,065,035	$	262,764	5.54	%
Investment securities (3)		5,383,140		32,329	2.44	%			4,888,993		30,757	2.50	%			3,853,217		28,641	2.99	%
Deposits in financial
institutions		4,790,231		1,528	0.13	%			3,576,335		1,135	0.13	%			537,384		1,608	1.20	%
Total interest-earning
assets (1)		29,100,685		276,703	3.86	%			27,234,542		275,080	4.02	%			23,455,636		293,013	5.02	%
Other assets		2,315,197							2,100,247							3,643,404
Total assets	$	31,415,882						$	29,334,789						$	27,099,040
Liabilities and
Stockholders' Equity:
Interest checking	$	6,401,869		2,232	0.14	%		$	5,191,435		2,064	0.16	%		$	3,466,812		7,135	0.83	%
Money market		7,975,996		3,278	0.17	%			7,636,220		3,225	0.17	%			5,247,866		10,016	0.77	%
Savings		572,959		35	0.02	%			567,646		35	0.02	%			497,959		160	0.13	%
Time		1,493,267		1,955	0.53	%			1,650,150		3,130	0.75	%			2,684,143		10,936	1.64	%
Total interest-bearing
deposits		16,444,091		7,500	0.18	%			15,045,451		8,454	0.22	%			11,896,780		28,247	0.95	%
Borrowings		226,053		193	0.35	%			237,098		37	0.06	%			2,026,749		6,778	1.35	%
Subordinated debentures		466,101		4,375	3.81	%			463,951		4,477	3.84	%			458,399		6,560	5.76	%
Total interest-bearing
liabilities		17,136,245		12,068	0.29	%			15,746,500		12,968	0.33	%			14,381,928		41,585	1.16	%
Noninterest-bearing
demand deposits		10,173,459							9,589,789							7,357,717
Discontinued operations		-							-							1,583
Total other liabilities		488,930							462,075							401,034
Other liabilities		488,930							462,075							402,617
Total liabilities		27,798,634							25,798,364							22,142,262
Stockholders' equity		3,617,248							3,536,425							4,956,778
Total liabilities and
stockholders' equity	$	31,415,882						$	29,334,789						$	27,099,040
Net interest income (1)			$	264,635						$	262,112						$	251,428
Net interest spread (1)					3.57	%						3.69	%						3.86	%
Net interest margin (1)					3.69	%						3.83	%						4.31	%
Total deposits (4)	$	26,617,550	$	7,500	0.11	%		$	24,635,240	$	8,454	0.14	%		$	19,254,497	$	28,247	0.59	%
(1) Tax equivalent.
(2) Includes discount accretion on acquired loans of $5.4 million, $3.8 million, and $4.8 million for the three months ended March 31, 2021,
December 31, 2020, and March 31, 2020, respectively.
(3) Includes tax-equivalent adjustments of $2.1 million, $1.9 million, and $1.2 million for the three months ended March 31, 2021,
December 31, 2020, and March 31, 2020 related to tax-exempt income on investment securities.
The federal statutory tax rate utilized was 21%.
(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 total deposits divided by average total deposits.

PACWEST BANCORP AND SUBSIDIARIES
FIVE QUARTER BALANCE SHEET
	March 31,				December 31,				September 30,				June 30,				March 31,
		2021				2020				2020				2020				2020
	(Dollars in thousands, except per share data)
ASSETS:
Cash and due from banks	$	177,199			$	150,464			$	187,176			$	174,059			$	172,570
Interest-earning deposits in financial
institutions		5,517,667				3,010,197				2,766,020				1,747,077				439,690
Total cash and cash equivalents		5,694,866				3,160,661				2,953,196				1,921,136				612,260
Securities available-for-sale		5,941,690				5,235,591				4,532,614				3,851,141				3,757,663
Federal Home Loan Bank stock		17,250				17,250				17,250				17,250				54,244
Total investment securities		5,958,940				5,252,841				4,549,864				3,868,391				3,811,907
Loans held for sale		25,554				-				-				-				-
Gross loans and leases held for investment		19,055,165				19,153,357				19,101,680				19,780,476				19,806,394
Deferred fees, net		(75,937	)			(69,980	)			(75,480	)			(85,845	)			(61,089	)
Total loans and leases held for
investment, net of deferred fees		18,979,228				19,083,377				19,026,200				19,694,631				19,745,305
Allowance for loan and lease losses		(292,445	)			(348,181	)			(345,966	)			(301,050	)			(221,292	)
Total loans and leases held for
investment, net		18,686,783				18,735,196				18,680,234				19,393,581				19,524,013
Equipment leased to others under
operating leases		327,413				333,846				286,425				295,191		-		306,530
Premises and equipment, net		39,622				39,234				40,544				42,299				39,799
Foreclosed assets, net		14,298				14,027				13,747				1,449				1,701
Goodwill		1,204,092				1,078,670				1,078,670				1,078,670				1,078,670
Core deposit and customer relationship
intangibles, net		21,312				23,641				26,813				30,564				34,446
Other assets		883,653				860,326				797,223				734,457				733,941
Total assets	$	32,856,533			$	29,498,442			$	28,426,716			$	27,365,738			$	26,143,267
LIABILITIES:
Noninterest-bearing deposits	$	11,017,462			$	9,193,827			$	9,346,744			$	8,629,543			$	7,510,218
Interest-bearing deposits		17,205,829				15,746,890				14,618,951				14,299,036				12,065,619
Total deposits		28,223,291				24,940,717				23,965,695				22,928,579				19,575,837
Borrowings		19,750				5,000				60,000				60,000				2,295,000
Subordinated debentures		465,814				465,812				463,282				460,772				458,994
Accrued interest payable and other
liabilities		493,541				491,962				451,508				463,489				423,047
Total liabilities		29,202,396				25,903,491				24,940,485				23,912,840				22,752,878
STOCKHOLDERS' EQUITY (1)		3,654,137				3,594,951				3,486,231				3,452,898				3,390,389
Total liabilities and stockholders’
equity	$	32,856,533			$	29,498,442			$	28,426,716			$	27,365,738			$	26,143,267
Book value per share	$	30.68			$	30.36			$	29.42			$	29.17			$	28.75
Tangible book value per share (2)	$	20.39			$	21.05			$	20.09			$	19.80			$	19.31
Shares outstanding		119,105,642				118,414,853				118,489,927				118,374,603				117,916,789
(1) Includes net unrealized gain on
securities available-for-sale, net	$	106,381			$	172,523			$	155,474			$	145,038			$	90,916
(2) Non-GAAP measure.

PACWEST BANCORP AND SUBSIDIARIES
FIVE QUARTER STATEMENT OF EARNINGS (LOSS)
	Three Months Ended
	March 31,				December 31,				September 30,			June 30,				March 31,
		2021				2020				2020			2020				2020
	(Dollars in thousands, except per share data)
Interest income:
Loans and leases	$	241,544			$	242,198			$	240,811		$	247,851			$	262,278
Investment securities		30,265				28,843				24,443			26,038				27,446
Deposits in financial institutions		1,528				1,135				654			186				1,608
Total interest income		273,337				272,176				265,908			274,075				291,332
Interest expense:
Deposits		7,500				8,454				9,887			13,075				28,247
Borrowings		193				37				27			1,319				6,778
Subordinated debentures		4,375				4,477				4,670			5,402				6,560
Total interest expense		12,068				12,968				14,584			19,796				41,585
Net interest income		261,269				259,208				251,324			254,279				249,747
Provision for credit losses		(48,000	)			10,000				97,000			120,000				112,000
Net interest income after provision
for credit losses		309,269				249,208				154,324			134,279				137,747
Noninterest income:
Service charges on deposit accounts		2,934				3,119				2,570			2,004				2,658
Other commissions and fees		9,158				9,974				10,541			10,111				9,721
Leased equipment income		11,354				9,440				9,900			12,037				12,251
Gain on sale of loans and leases		139				1,671				35			346				87
Gain on sale of securities		101				4				5,270			7,715				182
Other income		21,143				15,642				9,936			6,645				4,201
Total noninterest income		44,829				39,850				38,252			38,858				29,100
Noninterest expense:
Compensation		79,882				73,171				75,131			61,910				61,282
Occupancy		14,054				14,083				14,771			14,494				14,207
Data processing		6,957				6,718				6,505			7,102				6,454
Other professional services		5,126				6,800				4,713			4,146				4,258
Insurance and assessments		4,903				5,064				3,939			9,373				4,249
Intangible asset amortization		3,079				3,172				3,751			3,882				3,948
Leased equipment depreciation		8,969				7,501				7,057			7,102				7,205
Foreclosed assets (income) expense, net		1				(272	)			335			(146	)			66
Acquisition, integration and
reorganization costs		3,425				1,060				-			-				-
Customer related expense		4,818				4,430				4,762			4,408				3,932
Loan expense		3,193				3,926				3,499			3,379				2,650
Goodwill impairment		-				-				-			-				1,470,000
Other expense		15,729				10,029				8,939			11,315				9,719
Total noninterest expense		150,136				135,682				133,402			126,965				1,587,970
Earnings (loss) before income taxes		203,962				153,376				59,174			46,172				(1,421,123	)
Income tax expense		53,556				36,546				13,671			12,968				11,988
Net earnings (loss)	$	150,406			$	116,830			$	45,503		$	33,204			$	(1,433,111	)
Basic and diluted earnings (loss) per share	$	1.27			$	0.99			$	0.38		$	0.28			$	(12.23	)
Dividends declared and paid per share	$	0.25			$	0.25			$	0.25		$	0.25			$	0.60

PACWEST BANCORP AND SUBSIDIARIES
FIVE QUARTER SELECTED FINANCIAL DATA
	At or For the Three Months Ended
	March 31,				December 31,				September 30,				June 30,				March 31,
		2021				2020				2020				2020				2020
									(Dollars in thousands)
Performance Ratios:
Return on average assets (1)		1.94	%			1.58	%			0.65	%			0.50	%			(21.27	)%
Pre-provision, pre-goodwill impairment,
pre-tax net revenue ("PPNR")
return on average assets (1)(2)		2.01	%			2.22	%			2.22	%			2.51	%			2.39	%
Return on average equity (1)		16.86	%			13.14	%			5.18	%			3.87	%			(116.28	)%
Return on average tangible equity (1)(2)		25.67	%			19.63	%			8.20	%			6.39	%			6.88	%
Efficiency ratio		46.4	%			43.6	%			45.1	%			42.9	%			40.6	%
Noninterest expense as a percentage
of average assets (1)		1.94	%			1.84	%			1.90	%			1.92	%			23.57	%
Average Yields/Costs (1):
Yield on:
Average loans and leases (3)		5.20	%			5.15	%			5.01	%			5.01	%			5.54	%
Average interest-earning assets (3)		3.86	%			4.02	%			4.13	%			4.53	%			5.02	%
Cost of:
Average interest-bearing deposits		0.18	%			0.22	%			0.27	%			0.40	%			0.95	%
Average total deposits		0.11	%			0.14	%			0.17	%			0.25	%			0.59	%
Average interest-bearing liabilities		0.29	%			0.33	%			0.38	%			0.55	%			1.16	%
Net interest spread (3)		3.57	%			3.69	%			3.75	%			3.98	%			3.86	%
Net interest margin (3)		3.69	%			3.83	%			3.90	%			4.20	%			4.31	%
Average Balances:
Assets:
Loans and leases, net of deferred fees	$	18,927,314			$	18,769,214			$	19,195,737			$	19,951,603			$	19,065,035
Interest-earning assets		29,100,685				27,234,542				25,858,001				24,531,204				23,455,636
Total assets		31,415,882				29,334,789				27,935,193				26,621,227				27,099,040
Liabilities:
Noninterest-bearing deposits		10,173,459				9,589,789				8,812,391				8,292,151				7,357,717
Interest-bearing deposits		16,444,091				15,045,451				14,516,923				13,116,297				11,896,780
Total deposits		26,617,550				24,635,240				23,329,314				21,408,448				19,254,497
Borrowings		226,053				237,098				181,315				871,110				2,026,749
Subordinated debentures		466,101				463,951				462,375				459,466				458,399
Interest-bearing liabilities		17,136,245				15,746,500				15,160,613				14,446,873				14,381,928
Stockholders' equity		3,617,248				3,536,425				3,497,869				3,446,850				4,956,778
(1) Annualized.
(2) Non-GAAP measure.
(3) Tax equivalent.

PACWEST BANCORP AND SUBSIDIARIES
FIVE QUARTER SELECTED FINANCIAL DATA
	At or For the Three Months Ended
	March 31,				December 31,				September 30,				June 30,				March 31,
		2021				2020				2020				2020				2020
									(Dollars in thousands)
Credit Quality Ratios:
Nonaccrual loans and leases held for
investment to loans and leases
held for investment		0.36	%			0.48	%			0.45	%			0.84	%			0.48	%
Nonperforming assets to loans and
leases held for investment and
foreclosed assets		0.43	%			0.55	%			0.52	%			0.85	%			0.49	%
Classified loans and leases held for
investment to loans and leases
held for investment		0.86	%			1.39	%			1.44	%			1.49	%			0.75	%
Provision for credit losses (for the
quarter) to average loans and leases
held for investment (annualized)		(1.03	)%			0.21	%			2.01	%			2.42	%			2.36	%
Net charge-offs (for the quarter) to
average loans and leases held
for investment (annualized)		0.06	%			0.40	%			0.75	%			0.27	%			0.40	%
Trailing 12 months net charge-offs
to average loans and leases
held for investment		0.37	%			0.45	%			0.36	%			0.20	%			0.19	%
Allowance for loan and lease losses to
loans and leases held for investment		1.54	%			1.82	%			1.82	%			1.53	%			1.12	%
Allowance for credit losses to loans
and leases held for investment		2.02	%			2.27	%			2.33	%			1.94	%			1.39	%
Allowance for credit losses to
nonaccrual loans and leases
held for investment		566.2	%			475.8	%			516.9	%			229.7	%			287.5	%
PacWest Bancorp Consolidated:
Tier 1 leverage capital ratio (1)		7.95	%			8.55	%			8.66	%			8.93	%			8.63	%
Common equity tier 1 capital ratio (1)		10.41	%			10.53	%			10.45	%			9.97	%			9.22	%
Tier 1 capital ratio (1)		10.41	%			10.53	%			10.45	%			9.97	%			9.22	%
Total capital ratio (1)		13.63	%			13.76	%			13.74	%			13.18	%			12.07	%
Risk-weighted assets (1)	$	22,968,958			$	22,837,693			$	22,114,040			$	22,781,836			$	24,214,209
Equity to assets ratio		11.12	%			12.19	%			12.26	%			12.62	%			12.97	%
Tangible common equity ratio (2)		7.68	%			8.78	%			8.71	%			8.93	%			9.10	%
Book value per share	$	30.68			$	30.36			$	29.42			$	29.17			$	28.75
Tangible book value per share (2)	$	20.39			$	21.05			$	20.09			$	19.80			$	19.31
Pacific Western Bank:
Tier 1 leverage capital ratio (1)		8.83	%			9.53	%			9.70	%			10.03	%			9.71	%
Common equity tier 1 capital ratio (1)		11.57	%			11.73	%			11.70	%			11.18	%			10.38	%
Tier 1 capital ratio (1)		11.57	%			11.73	%			11.70	%			11.18	%			10.38	%
Total capital ratio (1)		12.82	%			12.99	%			12.95	%			12.44	%			11.39	%
(1) Capital information for March 31, 2021 is preliminary.
(2) Non-GAAP measure.

GAAP TO NON-GAAP RECONCILIATIONS

This press release contains certain non-GAAP financial disclosures for: (1) Pre-provision, pre-goodwill impairment, pre-tax net revenue (“PPNR”), (2) PPNR return on average assets (3) return on average tangible equity, (4) tangible common equity ratio, and (5) tangible book value per share. The Company uses these non-GAAP financial measures to provide meaningful supplemental information regarding the Company’s operational performance and to enhance investors’ overall understanding of such financial performance. In particular, the use of return on average tangible equity, tangible common equity ratio, tangible book value per share, and PPNR is prevalent among banking regulators, investors, and analysts. Accordingly, we disclose the non-GAAP measures in addition to the related GAAP measures of: (1) net earnings, (2) return on average assets, (3) return on average equity, (4) equity to assets ratio, and (5) book value per share.  

The tables below present the reconciliations of these GAAP financial measures to the related non-GAAP financial measures:

	Three Months Ended
PPNR and PPNR Return	March 31,				December 31,				September 30,				June 30,				March 31,
on Average Assets		2021				2020				2020				2020				2020
										(Dollars in thousands)
Net earnings (loss)	$	150,406			$	116,830			$	45,503			$	33,204			$	(1,433,111	)
Add: Provision for credit losses		(48,000	)			10,000				97,000				120,000				112,000
Add: Goodwill impairment		-				-				-				-				1,470,000
Add: Income tax expense		53,556				36,546				13,671				12,968				11,988
Pre-provision, pre-goodwill impairment,
pre-tax net revenue ("PPNR")	$	155,962			$	163,376			$	156,174			$	166,172			$	160,877
Average assets	$	31,415,882			$	29,334,789			$	27,935,193			$	26,621,227			$	27,099,040
Return on average assets (1)		1.94	%			1.58	%			0.65	%			0.50	%			(21.27	)%
PPNR return on average assets (2)		2.01	%			2.22	%			2.22	%			2.51	%			2.39	%
(1) Annualized net earnings (loss) divided by average assets.
(2) Annualized PPNR divided by average assets.

	Three Months Ended
	March 31,				December 31,				September 30,				June 30,				March 31,
Return on Average Tangible Equity		2021				2020				2020				2020				2020
										(Dollars in thousands)
Net earnings (loss)	$	150,406			$	116,830			$	45,503			$	33,204			$	(1,433,111	)
Add: Intangible asset amortization		3,079				3,172				3,751				3,882				3,948
Add: Goodwill impairment		-				-				-				-				1,470,000
Adjusted net earnings	$	153,485			$	120,002			$	49,254			$	37,086			$	40,837
Average stockholders' equity	$	3,617,248			$	3,536,425			$	3,497,869			$	3,446,850			$	4,956,778
Less: Average intangible assets		1,192,780				1,103,945				1,107,548				1,111,302				2,569,189
Average tangible common equity	$	2,424,468			$	2,432,480			$	2,390,321			$	2,335,548			$	2,387,589
Return on average equity (1)		16.86	%			13.14	%			5.18	%			3.87	%			(116.28	)%
Return on average tangible equity (2)		25.67	%			19.63	%			8.20	%			6.39	%			6.88	%
(1) Annualized net earnings divided by average stockholders' equity.
(2) Annualized adjusted net earnings divided by average tangible common equity.

Tangible Common Equity Ratio/	March 31,				December 31,				September 30,				June 30,				March 31,
Tangible Book Value Per Share		2021				2020				2020				2020				2020
		(Dollars in thousands, except per share data)
Stockholders' equity	$	3,654,137			$	3,594,951			$	3,486,231			$	3,452,898			$	3,390,389
Less: Intangible assets		1,225,404				1,102,311				1,105,483				1,109,234				1,113,116
Tangible common equity	$	2,428,733			$	2,492,640			$	2,380,748			$	2,343,664			$	2,277,273
Total assets	$	32,856,533			$	29,498,442			$	28,426,716			$	27,365,738			$	26,143,267
Less: Intangible assets		1,225,404				1,102,311				1,105,483				1,109,234				1,113,116
Tangible assets	$	31,631,129			$	28,396,131			$	27,321,233			$	26,256,504			$	25,030,151
Equity to assets ratio		11.12	%			12.19	%			12.26	%			12.62	%			12.97	%
Tangible common equity ratio (1)		7.68	%			8.78	%			8.71	%			8.93	%			9.10	%
Book value per share	$	30.68			$	30.36			$	29.42			$	29.17			$	28.75
Tangible book value per share (2)	$	20.39			$	21.05			$	20.09			$	19.80			$	19.31
Shares outstanding		119,105,642				118,414,853				118,489,927				118,374,603				117,916,789
(1) Tangible common equity divided by tangible assets.
(2) Tangible common equity divided by shares outstanding.

CONTACTS

Matthew P. Wagner President and CEO 303.802.8900

Bart R. Olson EVP and CFO 714.989.4149

William J. Black EVP Strategy and Corporate Development 919.597.7466