PACWEST BANCORP (PACW, Financial) filed Annual Report for the period ended 2011-12-31.
Pacwest Bancorp has a market cap of $802.2 million; its shares were traded at around $23.62 with a P/E ratio of 16.4 and P/S ratio of 2.5. The dividend yield of Pacwest Bancorp stocks is 3.2%.
We recorded net earnings of $13.9 million for the fourth quarter of 2011 compared to net earnings of $13.3 million for the third quarter of 2011. The $579,000 increase in net earnings for the linked quarters was due to lower covered OREO costs of $4.6 million ($2.7 million after tax) and higher FDIC loss sharing income of $1.7 million ($1.0 million after tax), offset by a higher provision for credit losses on covered loans of $3.8 million ($2.2 million after tax) and lower net interest income of $668,000 ($387,000 after tax).
accelerated accretion of discounts on covered loan payoffs. Average interest-earning assets increased $91.1 million for the linked quarters including a $141.1 million increase in average investment securities. The yield on average loans was 6.87% for the fourth and third quarters of 2011. The yield on average non-covered loans was 6.49% and 6.53% for the fourth and third quarters, respectively, while the yield on average covered loans was 8.35% and 8.13%, respectively. The combination of accelerated accretion of discounts on covered loan payoffs and nonaccrual loan interest positively impacted the loan yield for the fourth quarter by 4 basis points and the third quarter by 17 basis points. The cost of interest-bearing deposits declined 12 basis points to 0.57% due to lower rates on interest-bearing deposits and lower average time deposits, and all-in deposit cost declined 8 basis points to 0.36%.
Noninterest expense decreased $5.1 million to $43.5 million during the fourth quarter of 2011 compared to $48.6 million for the third quarter of 2011. This change was due mostly to lower covered OREO costs. Covered OREO costs decreased by $4.6 million due to lower write-downs of $7.7 million and lower gains on sales of $3.1 million. The fourth quarter included an $885,000 charge to compensation related to a staff reduction, which is expected to result in annual savings of approximately $2.4 million, and $600,000 in acquisition costs related to the Marquette Equipment Finance transaction; there were no similar items in the prior quarter. Other professional services declined $293,000 due mostly to internal audit transition costs recognized in the third quarter and a recovery of $368,000 in legal costs from an insurance claim in the fourth quarter. Occupancy costs declined $286,000 due mostly to third quarter leasing commissions and a lease buyout.
declined $5.3 million due to lower write-downs of $7.2 million, offset by lower gains on sales of $1.8 million. Insurance and assessment costs decreased $2.5 million due to a reduction in FDIC deposit insurance costs. Other expense declined $2.3 million due mostly to $2.7 million in penalties for early repayment of $175 million in FHLB advances in 2010; there were no FHLB prepayment penalties in 2011. Intangible asset amortization decreased $1.2 million due mainly to $9.2 million of core deposit and customer relationship intangibles becoming fully amortized in 2011. Compensation expense declined $683,000 due primarily to a decrease in amortization of restricted stock. Included in compensation expense for 2011 was an $885,000 charge in the fourth quarter for a staff reduction, which is expected to result in annual savings of $2.4 million. Covered OREO costs increased by $1.2 million due to higher write-downs, which were offset by higher gains on sales. The increase in other professional services was due to higher legal costs for ongoing credit work-outs. For acquisitions completed after January 1, 2009, acquisition related costs, such as legal, accounting valuation and other professional fees, necessary to effect a business combination, are charged to earnings in periods in which the costs are incurred. We incurred and charged to expense approximately $600,000 and $732,000 of such costs in 2011 and 2010, respectively. Occupancy costs grew $1.0 million due to lease renewal activity and the inclusion for a full year of occupancy costs related to the branches added in the Los Padres acquisition, which was completed in August 2010. Initially we acquired 14 branches, and through branch consolidations, ended 2011 with eight former Los Padres branches.
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Pacwest Bancorp has a market cap of $802.2 million; its shares were traded at around $23.62 with a P/E ratio of 16.4 and P/S ratio of 2.5. The dividend yield of Pacwest Bancorp stocks is 3.2%.
Highlight of Business Operations:
Over the last year, the Company's assets have essentially remained flat, declining $784,000 to $5.5 billion at December 31, 2011. The change was due primarily to decreases of $353.3 million, $205.6 million, $50.2 million, and $21.2 million in gross non-covered loans, covered loans, other assets, and FDIC loss sharing asset, respectively. These decreases were offset partially by increases of $452.3 million in securities available-for-sale attributable to purchases using excess liquidity and $176.9 million in interest-earning deposits in financial institutions attributable mostly to principal payments received on loans and investment securities. At December 31, 2011, gross non-covered loans, securities available-for-sale, and covered loans totaled $2.8 billion, $1.3 billion, and $703 million, respectively, or 51%, 24%, and 13% of total assets, respectively.We recorded net earnings of $13.9 million for the fourth quarter of 2011 compared to net earnings of $13.3 million for the third quarter of 2011. The $579,000 increase in net earnings for the linked quarters was due to lower covered OREO costs of $4.6 million ($2.7 million after tax) and higher FDIC loss sharing income of $1.7 million ($1.0 million after tax), offset by a higher provision for credit losses on covered loans of $3.8 million ($2.2 million after tax) and lower net interest income of $668,000 ($387,000 after tax).
accelerated accretion of discounts on covered loan payoffs. Average interest-earning assets increased $91.1 million for the linked quarters including a $141.1 million increase in average investment securities. The yield on average loans was 6.87% for the fourth and third quarters of 2011. The yield on average non-covered loans was 6.49% and 6.53% for the fourth and third quarters, respectively, while the yield on average covered loans was 8.35% and 8.13%, respectively. The combination of accelerated accretion of discounts on covered loan payoffs and nonaccrual loan interest positively impacted the loan yield for the fourth quarter by 4 basis points and the third quarter by 17 basis points. The cost of interest-bearing deposits declined 12 basis points to 0.57% due to lower rates on interest-bearing deposits and lower average time deposits, and all-in deposit cost declined 8 basis points to 0.36%.
Noninterest expense decreased $5.1 million to $43.5 million during the fourth quarter of 2011 compared to $48.6 million for the third quarter of 2011. This change was due mostly to lower covered OREO costs. Covered OREO costs decreased by $4.6 million due to lower write-downs of $7.7 million and lower gains on sales of $3.1 million. The fourth quarter included an $885,000 charge to compensation related to a staff reduction, which is expected to result in annual savings of approximately $2.4 million, and $600,000 in acquisition costs related to the Marquette Equipment Finance transaction; there were no similar items in the prior quarter. Other professional services declined $293,000 due mostly to internal audit transition costs recognized in the third quarter and a recovery of $368,000 in legal costs from an insurance claim in the fourth quarter. Occupancy costs declined $286,000 due mostly to third quarter leasing commissions and a lease buyout.
declined $5.3 million due to lower write-downs of $7.2 million, offset by lower gains on sales of $1.8 million. Insurance and assessment costs decreased $2.5 million due to a reduction in FDIC deposit insurance costs. Other expense declined $2.3 million due mostly to $2.7 million in penalties for early repayment of $175 million in FHLB advances in 2010; there were no FHLB prepayment penalties in 2011. Intangible asset amortization decreased $1.2 million due mainly to $9.2 million of core deposit and customer relationship intangibles becoming fully amortized in 2011. Compensation expense declined $683,000 due primarily to a decrease in amortization of restricted stock. Included in compensation expense for 2011 was an $885,000 charge in the fourth quarter for a staff reduction, which is expected to result in annual savings of $2.4 million. Covered OREO costs increased by $1.2 million due to higher write-downs, which were offset by higher gains on sales. The increase in other professional services was due to higher legal costs for ongoing credit work-outs. For acquisitions completed after January 1, 2009, acquisition related costs, such as legal, accounting valuation and other professional fees, necessary to effect a business combination, are charged to earnings in periods in which the costs are incurred. We incurred and charged to expense approximately $600,000 and $732,000 of such costs in 2011 and 2010, respectively. Occupancy costs grew $1.0 million due to lease renewal activity and the inclusion for a full year of occupancy costs related to the branches added in the Los Padres acquisition, which was completed in August 2010. Initially we acquired 14 branches, and through branch consolidations, ended 2011 with eight former Los Padres branches.
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