Exhibit 99.1
PRESS RELEASE
PacWest Bancorp
(NASDAQ: PACW)
Contact: | Matthew P. Wagner |
| Victor R. Santoro |
| Chief Executive Officer |
| Executive VP and CFO |
| PacWest Bancorp |
| PacWest Bancorp |
| 10250 Constellation Blvd. |
| 10250 Constellation Blvd. |
| Suite 1640 |
| Suite 1640 |
| Los Angeles, CA 90067 |
| Los Angeles, CA 90067 |
Phone: | 310-728-1020 |
| 310-728-1021 |
Fax: | 310-201-0498 |
| 310-201-0498 |
FOR IMMEDIATE RELEASE | February 24, 2010 |
PACWEST BANCORP ANNOUNCES THE SALE OF $323.6 MILLION OF NON-COVERED ADVERSELY CLASSIFIED LOANS, INCLUDING $107.6 MILLION OF NONACCRUAL LOANS
CAPITAL POSITION ALLOWS PACWEST TO CLEAR BALANCE SHEET FOR FUTURE GROWTH
San Diego, California . . . PacWest Bancorp (Nasdaq: PACW) today announced that on Tuesday, February 23, 2010, its wholly-owned bank subsidiary, Pacific Western Bank, completed the sale of 61 non-covered adversely classified loans totaling $323.6 million, which includes $107.6 million of nonaccrual loans, to an institutional buyer for $200.6 million in cash. The sale was on a servicing-released basis and without recourse to Pacific Western Bank. The loans sold represent over one-half of the Bank’s non-covered adversely classified loans. All loans sold were legacy Pacific Western Bank loans and none were “covered loans” acquired in the Affinity Bank acquisition.
Matt Wagner, Chief Executive Officer commented, “Removing almost $324 million of problem loans from our portfolio in a single transaction creates tremendous opportunity for the Company.”
Mr. Wagner continued, “We remain cautious and vigilant with respect to credit, and our existing loan portfolio is subject to uncertainty and volatility given the fragile economic environment. Without these problem loans, however, and given the significant earnings power of our Company, we believe PacWest is well-positioned to grow, both organically and through acquisition.”
Vic Santoro, Executive Vice President and Chief Financial Officer, stated, “The expected after tax loss from the disposition of these classified and non-accrual loans is estimated to be $41 million. Our significant capital base gives us the flexibility to not only absorb this loss now, but also to remain above the well-capitalized regulatory capital requirements.”
Actual and pro forma unaudited credit-related financial information as of December 31, 2009 is shown below. The pro forma amounts reflect the sale of the adversely classified loans as of year-end 2009. The amounts shown in the columns headed “Loans Sold” represent the balances of the loans on December 31, 2009; the balances of such loans on the date sold totaled $323.6 million.
The following table shows our non-covered loan portfolio concentration and credit quality data as of December 31, 2009 and on a pro forma basis giving effect to the loan sale.
|
| At December 31, 2009 |
| |||||||
|
| Actual |
| Loans Sold |
| Pro Forma |
| |||
|
| (Dollars in thousands) |
| |||||||
Commercial |
| $ | 815,527 |
| $ | (9,948 | ) | $ | 805,579 |
|
Real estate - construction |
| 440,286 |
| (143,955 | ) | 296,331 |
| |||
Commercial real estate -mortgage |
| 2,425,328 |
| (171,931 | ) | 2,253,397 |
| |||
Consumer |
| 32,241 |
| — |
| 32,241 |
| |||
Total non-covered loans |
| 3,713,382 |
| (325,834 | ) | 3,387,548 |
| |||
Unearned income, net |
| (5,999 | ) | (825 | ) | (5,174 | ) | |||
Total non-covered loans, net of unearned income, net |
| $ | 3,707,383 |
| $ | (325,009 | ) | $ | 3,382,374 |
|
|
|
|
|
|
|
|
|
| ||
Non-covered nonaccrual loans |
| $ | 240,167 |
| $ | (110,536 | ) | $ | 129,631 |
|
|
|
|
|
|
|
|
|
| ||
Non-covered nonaccrual loans to total non-covered loans, net of unearned income |
| 6.48 | % |
|
| 3.83 | % |
The details of the construction loan portfolio as of December 31, 2009 and on a pro forma basis giving effect to the loan sale follow:
|
| At December 31, 2009 |
| |||||||
|
| Actual |
| Loans Sold |
| Pro Forma |
| |||
|
| (Dollars in thousands) |
| |||||||
Commercial construction: |
|
|
|
|
|
|
| |||
100% owner occupied |
| $ | 20,086 |
| $ | (6,756 | ) | $ | 13,330 |
|
Industrial/warehouse |
| 67,915 |
| (8,436 | ) | 59,479 |
| |||
Office building |
| 37,300 |
| (32,706 | ) | 4,594 |
| |||
Retail |
| 49,573 |
| (24,140 | ) | 25,433 |
| |||
Land acquisition |
| 38,905 |
| (6,775 | ) | 32,130 |
| |||
Unimproved commercial land |
| 25,709 |
| — |
| 25,709 |
| |||
Other |
| 28,860 |
| (4,459 | ) | 24,401 |
| |||
Total commercial construction |
| 268,348 |
| (83,272 | ) | 185,076 |
| |||
|
|
|
|
|
|
|
| |||
Residential construction: |
|
|
|
|
|
|
| |||
Land acquisition and development |
| $ | 52,458 |
| $ | (26,950 | ) | $ | 25,508 |
|
Nonowner-occupied single family |
| 30,103 |
| (9,925 | ) | 20,178 |
| |||
Unimproved residential land |
| 39,003 |
| — |
| 39,003 |
| |||
Multifamily |
| 38,825 |
| (20,690 | ) | 18,135 |
| |||
Owner occupied |
| 11,549 |
| (3,118 | ) | 8,431 |
| |||
Total residential construction |
| 171,938 |
| (60,683 | ) | 111,255 |
| |||
Total construction |
| $ | 440,286 |
| $ | (143,955 | ) | $ | 296,331 |
|
Our largest non-covered loan portfolio concentration is the real estate mortgage category, which includes loans secured by commercial and residential real estate. The loans sold reduce our non-covered real estate mortgage loan portfolio as indicated in the following table.
|
| At December 31, 2009 |
| |||||||
|
| Actual |
| Loans Sold |
| Pro Forma |
| |||
|
| (Dollars in thousands) |
| |||||||
Commercial real estate mortgage: |
|
|
|
|
|
|
| |||
Owner-occupied |
| $ | 377,057 |
| $ | (12,392 | ) | $ | 364,665 |
|
Retail |
| 479,370 |
| (32,088 | ) | 447,282 |
| |||
Office buildings |
| 343,746 |
| — |
| 343,746 |
| |||
Industrial/warehouse |
| 356,227 |
| — |
| 356,227 |
| |||
Hotels and other hospitality |
| 257,489 |
| (57,986 | ) | 199,503 |
| |||
Other |
| 381,167 |
| (14,593 | ) | 366,574 |
| |||
Total commercial real estate mortgage |
| 2,195,056 |
| (117,059 | ) | 2,077,997 |
| |||
|
|
|
|
|
|
|
| |||
Residential real estate mortgage: |
|
|
|
|
|
|
| |||
Multi-family |
| 105,276 |
| (25,216 | ) | 80,060 |
| |||
Single family owner-occupied |
| 84,591 |
| (9,667 | ) | 74,924 |
| |||
Single family nonowner-occupied |
| 40,405 |
| (19,989 | ) | 20,416 |
| |||
Total residential real estate mortgage |
| 230,272 |
| (54,872 | ) | 175,400 |
| |||
Total real estate mortgage |
| $ | 2,425,328 |
| $ | (171,931 | ) | $ | 2,253,397 |
|
ABOUT PACWEST BANCORP
PacWest Bancorp is a bank holding company with $5.3 billion in assets as of December 31, 2009, with one wholly-owned banking subsidiary, Pacific Western Bank. Through 68 full-service community banking branches, Pacific Western provides commercial banking services, including real estate, construction and commercial loans, to small and medium-sized businesses. Pacific Western’s branches are located in Los Angeles, Orange, Riverside, San Bernardino, San Diego, San Francisco, San Mateo and Ventura Counties. Through its subsidiary BFI Business Finance and its division First Community Financial, Pacific Western also provides working capital financing to growing companies located throughout the Southwest, primarily in the states of Arizona, California and Texas. Additional information regarding PacWest Bancorp is available on the Internet at www.pacwestbancorp.com. Information regarding Pacific Western Bank is also available on the Internet at www.pacificwesternbank.com.
Contact information:
Matt Wagner, Chief Executive Officer, (310) 728-1020
Vic Santoro, Executive Vice President and CFO, (310) 728-1021