PACWEST BANCORP (PACW, Financial) filed Quarterly Report for the period ended 2010-09-30.
Pacwest Bancorp has a market cap of $662.53 million; its shares were traded at around $18.75 with and P/S ratio of 1.76. The dividend yield of Pacwest Bancorp stocks is 0.21%. Pacwest Bancorp had an annual average earning growth of 0.4% over the past 10 years.PACW is in the portfolios of NWQ Managers of NWQ Investment Management Co.
On August 20, 2010, Pacific Western Bank acquired certain assets and liabilities of Los Padres Bank from the Federal Deposit Insurance Corporation ("FDIC") in an FDIC-assisted transaction. As of that date, we added $824.1 million in assets, consisting primarily of $440.2 million in loans, and $752.2 million in deposits. The acquisition enabled us to expand our presence in California's Central Coast. We added 14 branches, including 11 branches in California (three in Ventura County, four in Santa Barbara County, and four in San Luis Obispo County) and three branches in Arizona (in Maricopa County). We entered into a loss sharing agreement with the FDIC, whereby the FDIC will cover a substantial portion of any future losses on loans and other real estate owned. Under the terms of such loss sharing agreement, the FDIC will absorb 80% of losses and share in 80% of loss recoveries. The loss sharing arrangement for non-residential and residential loans is in effect for 5 years and 10 years from the August 20, 2010 acquisition date and the loss recovery provisions are in effect for 8 years and 10 years, respectively, from the acquisition date.
On July 1, 2010, we purchased a $234.1 million portfolio of 225 performing loans secured by Southern California real estate for a cash price of $228.3 million. Such loans had a weighted average coupon interest rate of 6.15% and a weighted average maturity of 4.6 years. These loans were part of the Foothill Independent Bank loan portfolio that we acquired when we completed the Foothill Independent Bancorp acquisition in May 2006. In March 2007, we sold a 95% participating interest in these loans for cash and continued to service them and maintain the borrower relationships. When the opportunity to purchase this loan portfolio presented itself, we concluded it would be in the best interests of the Company and the Bank to make this purchase as (a) we are familiar with the credit risk and (b) it would deploy excess liquidity and enhance interest income and the net interest margin.
On February 23, 2010, the Bank sold 61 non-covered adversely classified loans totaling $323.6 million to an institutional buyer for $200.6 million in cash. The difference between the amount of the loans sold and the cash selling price of $123.0 million was charged to the allowance for loan losses at the time of the sale. Such charge-off was offset by $51.6 million in allowance previously allocated to the loans sold. The sale was on a servicing-released basis and without recourse to Pacific Western Bank. All loans sold were legacy Pacific Western Bank loans and none were covered loans. The loans sold included $110.5 million in nonaccrual loans and $105.1 million in restructured loans. The loan sale was intended to reduce non-covered loan concentrations and improve credit quality measures.
We generally seek new lending opportunities in the $500,000 to $10 million range, try to limit loan maturities for commercial loans to one year, for construction loans up to 18 months, and for commercial real estate loans up to ten years, and to price lending products so as to preserve our interest spread and net interest margin. We sometimes encounter strong competition in pursuing lending opportunities such that potential borrowers obtain loans elsewhere at lower rates than those we
We stress credit quality in originating and monitoring the loans we make and measure our success by the levels of our nonperforming assets, net charge-offs and allowance for credit losses. Our allowance for credit losses is the sum of our allowance for loan losses and our reserve for unfunded loan commitments and relates only to our non-covered loans. Provisions for credit losses are charged to operations as and when needed for both on and off balance sheet credit exposure. Loans which are deemed uncollectible are charged off and deducted from the allowance for loan losses. Recoveries on loans previously charged off are added to the allowance for loan losses. During the three months ended September 30, 2010, we made a provision for credit losses totaling $24.5 million composed of $17.1 million on non-covered loans and $7.4 million on covered loans. The provision on the non-covered loan portfolio was based on our allowance methodology and reflected net charge-offs and the levels of nonaccrual and classified loans and the migration of loans into various risk classifications. The provision for credit losses on the covered loan portfolio reflected an increase in the covered loan allowance for credit losses resulting from lower expected cash flows on covered loans since the Affinity acquisition date.
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Pacwest Bancorp has a market cap of $662.53 million; its shares were traded at around $18.75 with and P/S ratio of 1.76. The dividend yield of Pacwest Bancorp stocks is 0.21%. Pacwest Bancorp had an annual average earning growth of 0.4% over the past 10 years.PACW is in the portfolios of NWQ Managers of NWQ Investment Management Co.
Highlight of Business Operations:
Pacific Western is a full-service community bank offering a broad range of banking products and services including: accepting time and demand deposits; originating loans, including commercial, real estate construction, SBA-guaranteed, consumer, and international loans; and providing other business-oriented products. Our operations are primarily located in Southern California and the Bank focuses on conducting business with small to medium-sized businesses and the owners and employees of those businesses in our marketplace. We acquired through two FDIC-assisted mergers three banking offices in the San Francisco Bay area and three offices in Arizona. Through our asset-based lending operation we also operate in Arizona, Northern California, and the Pacific Northwest. At September 30, 2010, our assets totaled $5.7 billion, of which loans totaled $4.3 billion, including $996.1 million of covered loans. At that date, the loan portfolio was broken down as follows: approximately 74% were real estate mortgage loans, 18% were commercial loans, 7% were real estate construction loans, and less than 1% were consumer and other loans. These percentages include some foreign loans, primarily to individuals or entities with business in Mexico, representing 1% of total non-covered loans. Our portfolio's value and credit quality is affected in large part by real estate trends in Southern California, which have been negative over the last several quarters.On August 20, 2010, Pacific Western Bank acquired certain assets and liabilities of Los Padres Bank from the Federal Deposit Insurance Corporation ("FDIC") in an FDIC-assisted transaction. As of that date, we added $824.1 million in assets, consisting primarily of $440.2 million in loans, and $752.2 million in deposits. The acquisition enabled us to expand our presence in California's Central Coast. We added 14 branches, including 11 branches in California (three in Ventura County, four in Santa Barbara County, and four in San Luis Obispo County) and three branches in Arizona (in Maricopa County). We entered into a loss sharing agreement with the FDIC, whereby the FDIC will cover a substantial portion of any future losses on loans and other real estate owned. Under the terms of such loss sharing agreement, the FDIC will absorb 80% of losses and share in 80% of loss recoveries. The loss sharing arrangement for non-residential and residential loans is in effect for 5 years and 10 years from the August 20, 2010 acquisition date and the loss recovery provisions are in effect for 8 years and 10 years, respectively, from the acquisition date.
On July 1, 2010, we purchased a $234.1 million portfolio of 225 performing loans secured by Southern California real estate for a cash price of $228.3 million. Such loans had a weighted average coupon interest rate of 6.15% and a weighted average maturity of 4.6 years. These loans were part of the Foothill Independent Bank loan portfolio that we acquired when we completed the Foothill Independent Bancorp acquisition in May 2006. In March 2007, we sold a 95% participating interest in these loans for cash and continued to service them and maintain the borrower relationships. When the opportunity to purchase this loan portfolio presented itself, we concluded it would be in the best interests of the Company and the Bank to make this purchase as (a) we are familiar with the credit risk and (b) it would deploy excess liquidity and enhance interest income and the net interest margin.
On February 23, 2010, the Bank sold 61 non-covered adversely classified loans totaling $323.6 million to an institutional buyer for $200.6 million in cash. The difference between the amount of the loans sold and the cash selling price of $123.0 million was charged to the allowance for loan losses at the time of the sale. Such charge-off was offset by $51.6 million in allowance previously allocated to the loans sold. The sale was on a servicing-released basis and without recourse to Pacific Western Bank. All loans sold were legacy Pacific Western Bank loans and none were covered loans. The loans sold included $110.5 million in nonaccrual loans and $105.1 million in restructured loans. The loan sale was intended to reduce non-covered loan concentrations and improve credit quality measures.
We generally seek new lending opportunities in the $500,000 to $10 million range, try to limit loan maturities for commercial loans to one year, for construction loans up to 18 months, and for commercial real estate loans up to ten years, and to price lending products so as to preserve our interest spread and net interest margin. We sometimes encounter strong competition in pursuing lending opportunities such that potential borrowers obtain loans elsewhere at lower rates than those we
We stress credit quality in originating and monitoring the loans we make and measure our success by the levels of our nonperforming assets, net charge-offs and allowance for credit losses. Our allowance for credit losses is the sum of our allowance for loan losses and our reserve for unfunded loan commitments and relates only to our non-covered loans. Provisions for credit losses are charged to operations as and when needed for both on and off balance sheet credit exposure. Loans which are deemed uncollectible are charged off and deducted from the allowance for loan losses. Recoveries on loans previously charged off are added to the allowance for loan losses. During the three months ended September 30, 2010, we made a provision for credit losses totaling $24.5 million composed of $17.1 million on non-covered loans and $7.4 million on covered loans. The provision on the non-covered loan portfolio was based on our allowance methodology and reflected net charge-offs and the levels of nonaccrual and classified loans and the migration of loans into various risk classifications. The provision for credit losses on the covered loan portfolio reflected an increase in the covered loan allowance for credit losses resulting from lower expected cash flows on covered loans since the Affinity acquisition date.
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