PacWest Bancorp Announces Loan Portfolio Sale
11 Diciembre 2017 - 6:30AM
PacWest Bancorp (Nasdaq:PACW)
(“PacWest”) today announced it has agreed to sell
cash flow loans with an aggregate carrying value of $1.49 billion
as of November 30, 2017 and expects to recognize a pre-tax gain of
approximately $13 million. In connection with the sale of this
portfolio, PacWest is exiting its commercial lending origination
operations related to Healthcare, Technology and General Cash
Flows, while retaining and continuing to grow its Security Cash
Flow business. PacWest will consider options for redeploying
the liquidity generated by this transaction, including partially
offsetting the anticipated negative impact to earnings per share by
reducing the balance of wholesale deposits and potentially
replacing the current $150 million share repurchase program with a
larger authorization.
Matt Wagner, President and CEO, commented, “For both cyclical
and competitive reasons we have deemphasized growth in our cash
flow lending except for our Security Cash Flow business. Today’s
action substantially completes that process and allows management
to focus attention and resources on profitably growing our other
businesses. We believe the definitive nature of today’s action will
enhance shareholder value in a number of ways including lowering
our credit risk profile, decreasing earnings volatility and
significantly mitigating the margin and growth headwinds resulting
from incrementally shrinking the cash flow portfolio over time. We
anticipate this action will also improve our funding mix by
allowing the majority of our wholesale deposits to run off.”
The loan portfolio sale transaction, which was approved by
PacWest’s Board of Directors, is expected to close in the fourth
quarter of 2017. PacWest also expects to sell an additional
portfolio of performing Technology Cash Flow loans with an
aggregate principal balance of approximately $152 million prior to
year-end at pricing similar to the aforementioned transaction.
PacWest will retain nine non-Security related Cash Flow lending
relationships with an aggregate carrying value of approximately
$100 million, of which four relationships with an aggregate
carrying value of $39 million are classified. The classified
loan aggregate carrying value net of associated reserves represents
approximately 50% of the aggregate legal balance.
ABOUT PACWEST BANCORP
PacWest Bancorp (“PacWest”) is a bank holding company with over
$25 billion in assets with one wholly-owned banking subsidiary,
Pacific Western Bank (the “Bank”). The Bank has 76 full-service
branches located throughout the state of California and one branch
in Durham, North Carolina. We provide commercial banking services,
including real estate, construction, and commercial loans, and
comprehensive deposit and treasury management services to small and
medium-sized businesses. We offer additional products and
services through our CapitalSource and Square 1 Bank divisions. Our
CapitalSource Division provides cash flow, asset-based, equipment
and real estate loans and treasury management services to
established middle market businesses on a national basis. Our
Square 1 Bank Division offers a comprehensive suite of financial
services focused on entrepreneurial businesses and their venture
capital and private equity investors, with offices located in key
innovation hubs across the United States. For more
information about PacWest Bancorp, visit www.pacwestbancorp.com, or
to learn more about Pacific Western Bank, visit
www.pacificwesternbank.com.
FORWARD LOOKING STATEMENTS
This release contains certain “forward-looking statements” about
the Company and its subsidiaries within the meaning of the Private
Securities Litigation Reform Act of 1995, including forward-looking
statements relating to the Company’s current business plans and
expectations regarding future operating results and metrics and
including statements about the pending sale of our Healthcare,
Technology and General Cash Flow loan portfolios (“Sale”) and this
discontinuance of future loan originations in those categories. All
statements contained in this release that are not clearly
historical in nature are forward-looking, and the words
“anticipate,” “assume,” “intend,” “believe,” “forecast,” “expect,”
“estimate,” “plan,” “continue,” “will,” “should,” “look forward”
and similar expressions are generally intended to identify
forward-looking statements. All forward-looking statements
(including statements regarding future financial and operating
results and future transactions and their results) involve risks,
uncertainties and contingencies, many of which are beyond our
control, which may cause actual results, performance, or
achievements to differ materially from anticipated results,
performance or achievements. These risks and uncertainties include,
but are not limited to, our ability to complete the proposed Sale
subject to the terms of the definitive agreement, to generate
future loan growth in the Security Cash Flow other types of loans,
to improve the credit risk profile, to successfully implement
potential share repurchases to offset the reduction in EPS expected
as a result of the Sale and to reduce the amount of wholesale
deposits as well as our success at managing the risks involved in
the foregoing items and all other factors set forth in the
Company’s public reports, including the Annual Report on Form 10-K
for the year ended December 31, 2016, and particularly the
discussion of risk factors within that document.
All forward-looking statements included in this release are
based on information available at the time of the release. We are
under no obligation to (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.
Contact: Donald D. Destino Executive Vice PresidentCorporate
Development and Investor RelationsPhone: 310-887-8521
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