GlobeNewswire Inc | Apr 20, 2021 04:30PM EDT

April 20, 2021

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

FIRST QUARTER 2021 RESULTS

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

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/03fbe6a3-20e1-45c9-905b-ab7513e2ee6b

FINANCIAL HIGHLIGHTS

At or For the At or For the Three Months Ended Three Months Ended March 31, December 31, Increase March 31, IncreaseFinancial 2021 2020 (Decrease) 2021 2020 (Decrease)Highlights (1) (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-goodwillimpairment, pre-tax netrevenue ("PPNR") $ 155,962 $ 163,376 $ (7,414 ) $ 155,962 $ 160,877 $ (4,915 )(2)Return on average 1.94 % 1.58 % 0.36 1.94 % (21.27 )% 23.21 assetsPPNR return on averageassets (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 andleases (tax 5.20 % 5.15 % 0.05 5.20 % 5.54 % (0.34 )equivalent)Cost of average totaldeposits 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 heldfor investment, net of deferred $ 18,979,228 $ 19,083,377 $ (104,149 ) $ 18,979,228 $ 19,745,305 $ (766,077 )feesNoninterest-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 totaldeposits: Noninterest-bearing demand deposits 39 % 37 % 2 39 % 38 % 1 Core deposits 91 % 89 % 2 91 % 82 % 9 Equity to assets 11.12 % 12.19 % (1.07 ) 11.12 % 12.97 % (1.85 )ratioCommon equity tier 1capital 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 equityratio (2) 7.68 % 8.78 % (1.10 ) 7.68 % 9.10 % (1.42 )Book value per $ 30.68 $ 30.36 $ 0.32 $ 30.68 $ 28.75 $ 1.93 shareTangible book value pershare (2) $ 20.39 $ 21.05 $ (0.66 ) $ 20.39 $ 19.31 $ 1.08 (1) The operationsof Civic areincluded from its February 1, 2021acquisition 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, IncreaseProvision for Credit Losses 2021 2020 (Decrease) (In thousands)(Reduction in) addition to allowance for loanand lease losses $ (53,000 ) $ 21,000 $ (74,000 )Addition to (reduction in) reserve forunfunded loan commitments 5,000 (11,000 ) 16,000 Total provision for credit $ (48,000 ) $ 10,000 $ (58,000 )losses

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, IncreaseNoninterest 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 10,904 5,064 5,840 investmentsWarrant 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, IncreaseNoninterest 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) 1 (272 ) 273 expense, netAcquisition, integration and 3,425 1,060 2,365 reorganization costsCustomer 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, Civics 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 Banks 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 % ofDeposit Composition Balance Total Balance Total Balance Total (Dollars in thousands)Noninterest-bearing $ 11,017,462 39 % $ 9,193,827 37 % $ 7,510,218 38 %demandInterest 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-corenon-maturity 1,162,590 4 % 1,149,467 5 % 836,157 4 %depositsTotal non-maturity 26,738,938 95 % 23,413,947 94 % 16,886,679 86 %depositsTime deposits 940,340 3 % 994,197 4 % 2,086,188 11 %$250,000 and underTime deposits over 544,013 2 % 532,573 2 % 602,970 3 %$250,000Total 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 EndedRoll 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 butexcludes equipment leased to others under operating leases.(2) The weighted average rate on production presents contractual rates on ataxequivalent basis and excludes amortized fees. Amortized fees addedapproximately43 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 % ofLoan andLease Balance Total Balance Total Balance TotalPortfolio (In thousands) Real estate mortgage:Commercial $ 3,941,610 21 % $ 4,096,671 21 % $ 4,220,649 21 %Incomeproducing and otherresidential 4,045,603 21 % 3,803,265 20 % 3,788,295 19 %Total realestate 7,987,213 42 % 7,899,936 41 % 8,008,944 40 %mortgageReal estateconstruction 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 realestate constructionand land 3,565,823 19 % 3,360,281 18 % 2,880,253 15 %Total real 11,553,036 61 % 11,260,217 59 % 10,889,197 55 %estateCommercial: Asset-based 3,383,403 18 % 3,429,283 18 % 3,938,402 20 %Venture 1,495,798 8 % 1,698,508 9 % 2,715,837 14 %capitalOther 2,206,639 11 % 2,375,114 12 % 1,771,985 9 %commercialTotal 7,085,840 37 % 7,502,905 39 % 8,426,224 43 %commercialConsumer 340,352 2 % 320,255 2 % 429,884 2 %Total loansand leases held forinvestment,net of $ 18,979,228 100 % $ 19,083,377 100 % $ 19,745,305 100 %deferredfees Totalunfunded $ 8,127,999 $ 7,601,390 $ 7,697,724 loancommitments

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 TotalAllowance for Credit Loan and Unfunded Loan Allowance forLosses 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 TotalAllowance for Credit Loan and Unfunded Loan Allowance forLosses 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, IncreaseAllowance for Credit 2021 2020 (Decrease)Losses (Dollars in thousands)Allowance for loan and $ 292,445 $ 348,181 $ (55,736 )lease lossesReserve for unfunded loan 90,571 85,571 5,000 commitmentsAllowance for credit $ 383,016 $ 433,752 $ (50,736 )losses Provision for credit $ (48,000 ) $ 10,000 $ (58,000 )losses (for the quarter)Net charge-offs (for the $ 2,736 $ 18,785 $ (16,049 )quarter)Net charge-offs to average loans and leases(for the quarter) 0.06 % 0.40 % Allowance for loan and lease losses to loansand leases held for 1.54 % 1.82 % investmentAllowance for loan and lease losses to loansand leases held forinvestment, excluding PPP 1.63 % 1.93 % loansAllowance for credit losses to loans and leasesheld for investment 2.02 % 2.27 % Allowance for credit losses to loans and leasesheld for investment, 2.14 % 2.41 % excluding PPP loans

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, IncreaseCredit Quality Metrics 2021 2020 (Decrease) (Dollars in thousands)NPAs and Performing TDRs:Nonaccrual loans andleases held for $ 67,652 $ 91,163 $ (23,511 )investment (1)Accruing loanscontractually past due - - - 90 days or moreForeclosed assets, net 14,298 14,027 271 Totalnonperforming assets $ 81,950 $ 105,190 $ (23,240 )("NPAs") Performing TDRs held for $ 27,999 $ 14,254 $ 13,745 investment Nonaccrual loans andleases held for investmentto loans and leases held 0.36 % 0.48 % for investmentNonperforming assets to loans and leasesheld for investment and 0.43 % 0.55 % foreclosed assetsAllowance for creditlosses to nonaccrual loansand leases held for 566.2 % 475.8 % investment 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 andleases held for investmentto loans and leases held 0.86 % 1.39 % for investment (1) Nonaccrual loans include guaranteedamounts 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 and 30-89 30-89 Days Past Days Days Past 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 )Incomeproducing and otherresidential 2,471 6,339 1,826 600 645 5,739 Total realestate 48,907 6,344 45,557 4,236 3,350 2,108 mortgageReal estate construction and land:Commercial 302 - 315 - (13 ) - Residential 416 1,241 - 759 416 482 Total real estateconstruction 718 1,241 315 759 403 482 and landCommercial: Asset-based 2,379 - 2,679 - (300 ) - Venture 2,432 6,750 1,980 540 452 6,210 capitalOther 12,660 1,251 40,243 2,078 (27,583 ) (827 )commercialTotal 17,471 8,001 44,902 2,618 (27,431 ) 5,383 commercialConsumer 556 954 389 1,260 167 (306 )Total heldfor $ 67,652 $ 16,540 $ 91,163 $ 8,873 $ (23,511 ) $ 7,667 investment

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 Loans Actual (1) (1)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 totalassets 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 Companys 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 PacWests revenues and the values of its assets, including goodwill, and liabilities, lead to a tightening of credit, and increase stock price volatility. In addition, PacWests 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 SUBSIDIARIESCONDENSED 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 5,517,667 3,010,197 439,690 in financial institutionsTotal cash and cash 5,694,866 3,160,661 612,260 equivalents Securitiesavailable-for-sale, at 5,941,690 5,235,591 3,757,663 estimated fair valueFederal Home Loan Bank 17,250 17,250 54,244 stock, at costTotal investment securities 5,958,940 5,252,841 3,811,907 Loans held for sale 25,554 - - Gross loans and leases held 19,055,165 19,153,357 19,806,394 for investmentDeferred 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 (292,445 ) (348,181 ) (221,292 )lease lossesTotal loans and leases held 18,686,783 18,735,196 19,524,013 for investment, net Equipment leased to others 327,413 333,846 306,530 under operating leasesPremises 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 customerrelationship intangibles, 21,312 23,641 34,446 netOther assets 883,653 860,326 733,941 Total assets $ 32,856,533 $ 29,498,442 $ 26,143,267 LIABILITIES: Noninterest-bearing $ 11,017,462 $ 9,193,827 $ 7,510,218 depositsInterest-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 493,541 491,962 423,047 and other liabilitiesTotal 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 $ 32,856,533 $ 29,498,442 $ 26,143,267 stockholders? equity Book value per share $ 30.68 $ 30.36 $ 28.75 Tangible book value per $ 20.39 $ 21.05 $ 19.31 share (2)Shares outstanding 119,105,642 118,414,853 117,916,789 (1) Includes net unrealized gain on securitiesavailable-for-sale, net $ 106,381 $ 172,523 $ 90,916 (2) Non-GAAP measure.

PACWEST BANCORP AND SUBSIDIARIESCONDENSED 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 1,528 1,135 1,608 institutionsTotal 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 provisionfor credit losses 309,269 249,208 137,747 Noninterest income: Service charges on deposit 2,934 3,119 2,658 accountsOther commissions and fees 9,158 9,974 9,721 Leased equipment income 11,354 9,440 12,251 Gain on sale of loans and 139 1,671 87 leasesGain 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 3,079 3,172 3,948 amortizationLeased equipment 8,969 7,501 7,205 depreciationForeclosed assets (income) 1 (272 ) 66 expense, netAcquisition, 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 203,962 153,376 (1,421,123 )income taxesIncome tax expense 53,556 36,546 11,988 Net earnings (loss) $ 150,406 $ 116,830 $ (1,433,111 ) Basic and diluted earnings $ 1.27 $ 0.99 $ (12.23 )(loss) per shareDividends declared and paid $ 0.25 $ 0.25 $ 0.60 per share

PACWEST BANCORP AND SUBSIDIARIESNET 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 $ 150,406 $ 116,830 $ 45,503 $ 33,204 $ (1,433,111 )(loss)Less: earnings allocated tounvestedrestricted stock (2,355 ) (1,398 ) (578 ) (362 ) (939 )(1)Net earnings(loss) allocated tocommon shares $ 148,051 $ 115,432 $ 44,925 $ 32,842 $ (1,434,050 ) Weighted-average basic sharesand unvested restricted stockoutstanding 118,852 118,446 118,438 118,192 118,775 Less:weighted-average unvestedrestricted stock (2,003 ) (1,652 ) (1,684 ) (1,606 ) (1,495 )outstandingWeighted-average basic sharesoutstanding 116,849 116,794 116,754 116,586 117,280 Basic earnings $ 1.27 $ 0.99 $ 0.38 $ 0.28 $ (12.23 )(loss) per share Diluted Earnings(Loss) Per Share:Net earnings(loss) allocated tocommon shares $ 148,051 $ 115,432 $ 44,925 $ 32,842 $ (1,434,050 ) Weighted-average diluted sharesoutstanding 116,849 116,794 116,754 116,586 117,280 Diluted earnings $ 1.27 $ 0.99 $ 0.38 $ 0.28 $ (12.23 )(loss) per share (1) Representscash dividendspaid to holdersof unvested stock, net offorfeitures,plusundistributedearnings amountsavailable toholders of unvestedrestrictedstock, if any.



PACWEST BANCORP AND SUBSIDIARIESAVERAGE BALANCESHEET 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 $ 18,927,314 $ 242,846 5.20 % $ 18,769,214 $ 243,188 5.15 % $ 19,065,035 $ 262,764 5.54 %(1)(2)Investment 5,383,140 32,329 2.44 % 4,888,993 30,757 2.50 % 3,853,217 28,641 2.99 %securities (3)Deposits in financialinstitutions 4,790,231 1,528 0.13 % 3,576,335 1,135 0.13 % 537,384 1,608 1.20 %Total interest-earningassets (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-bearingdeposits 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 466,101 4,375 3.81 % 463,951 4,477 3.84 % 458,399 6,560 5.76 %debenturesTotal interest-bearingliabilities 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 - - 1,583 operationsTotal other 488,930 462,075 401,034 liabilitiesOther liabilities 488,930 462,075 402,617 Total liabilities 27,798,634 25,798,364 22,142,262 Stockholders' 3,617,248 3,536,425 4,956,778 equityTotal liabilities andstockholders' $ 31,415,882 $ 29,334,789 $ 27,099,040 equityNet interest income $ 264,635 $ 262,112 $ 251,428 (1)Net interest spread 3.57 % 3.69 % 3.86 %(1)Net interest margin 3.69 % 3.83 % 4.31 %(1) 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 accretionon acquired loans of $5.4million, $3.8 million, and $4.8 million for the three monthsended March 31, 2021,December 31, 2020,and March 31, 2020, respectively.(3) Includestax-equivalentadjustments of $2.1million, $1.9 million, and $1.2million for thethree months endedMarch 31, 2021,December 31, 2020,and March 31, 2020related to tax-exempt incomeon investmentsecurities.The federalstatutory tax rate utilized was 21%.(4) Total depositsis the sum of totalinterest-bearingdeposits and noninterest-bearingdemand deposits.The cost of totaldeposits iscalculated asannualized interestexpense on total deposits divided byaverage totaldeposits.

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 financialinstitutions 5,517,667 3,010,197 2,766,020 1,747,077 439,690 Total cash and cash 5,694,866 3,160,661 2,953,196 1,921,136 612,260 equivalents Securities 5,941,690 5,235,591 4,532,614 3,851,141 3,757,663 available-for-saleFederal Home Loan Bank stock 17,250 17,250 17,250 17,250 54,244 Total investment 5,958,940 5,252,841 4,549,864 3,868,391 3,811,907 securities Loans held for sale 25,554 - - - - Gross loans and leases held 19,055,165 19,153,357 19,101,680 19,780,476 19,806,394 for investmentDeferred fees, net (75,937 ) (69,980 ) (75,480 ) (85,845 ) (61,089 )Total loans and leases held forinvestment, net of deferred 18,979,228 19,083,377 19,026,200 19,694,631 19,745,305 feesAllowance for loan and lease (292,445 ) (348,181 ) (345,966 ) (301,050 ) (221,292 )lossesTotal loans and leases held forinvestment, net 18,686,783 18,735,196 18,680,234 19,393,581 19,524,013 Equipment leased to others underoperating 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 relationshipintangibles, 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 otherliabilities 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 $ 20.39 $ 21.05 $ 20.09 $ 19.80 $ 19.31 share (2)Shares outstanding 119,105,642 118,414,853 118,489,927 118,374,603 117,916,789 (1) Includes net unrealized gain onsecurities $ 106,381 $ 172,523 $ 155,474 $ 145,038 $ 90,916 available-for-sale, net(2) Non-GAAP measure.

PACWESTBANCORP AND SUBSIDIARIESFIVE QUARTER STATEMENT OF EARNINGS (LOSS) Three Months Ended March 31, December 31, September June 30, March 31, 30, 2021 2020 2020 2020 2020 (Dollars in thousands, except per share data)Interest income:Loans and $ 241,544 $ 242,198 $ 240,811 $ 247,851 $ 262,278 leasesInvestment 30,265 28,843 24,443 26,038 27,446 securitiesDeposits infinancial 1,528 1,135 654 186 1,608 institutionsTotal interest 273,337 272,176 265,908 274,075 291,332 income Interest expense:Deposits 7,500 8,454 9,887 13,075 28,247 Borrowings 193 37 27 1,319 6,778 Subordinated 4,375 4,477 4,670 5,402 6,560 debenturesTotal interest 12,068 12,968 14,584 19,796 41,585 expense Net interest 261,269 259,208 251,324 254,279 249,747 incomeProvision for (48,000 ) 10,000 97,000 120,000 112,000 credit lossesNet interestincome after provisionfor credit 309,269 249,208 154,324 134,279 137,747 losses Noninterest income:Servicecharges on 2,934 3,119 2,570 2,004 2,658 depositaccountsOthercommissions 9,158 9,974 10,541 10,111 9,721 and feesLeasedequipment 11,354 9,440 9,900 12,037 12,251 incomeGain on saleof loans and 139 1,671 35 346 87 leasesGain on sale 101 4 5,270 7,715 182 of securitiesOther income 21,143 15,642 9,936 6,645 4,201 Totalnoninterest 44,829 39,850 38,252 38,858 29,100 income 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 6,957 6,718 6,505 7,102 6,454 processingOtherprofessional 5,126 6,800 4,713 4,146 4,258 servicesInsurance and 4,903 5,064 3,939 9,373 4,249 assessmentsIntangibleasset 3,079 3,172 3,751 3,882 3,948 amortizationLeasedequipment 8,969 7,501 7,057 7,102 7,205 depreciationForeclosedassets 1 (272 ) 335 (146 ) 66 (income)expense, netAcquisition,integration andreorganization 3,425 1,060 - - - costsCustomerrelated 4,818 4,430 4,762 4,408 3,932 expenseLoan expense 3,193 3,926 3,499 3,379 2,650 Goodwill - - - - 1,470,000 impairmentOther expense 15,729 10,029 8,939 11,315 9,719 Totalnoninterest 150,136 135,682 133,402 126,965 1,587,970 expense Earnings(loss) before 203,962 153,376 59,174 46,172 (1,421,123 )income taxesIncome tax 53,556 36,546 13,671 12,968 11,988 expenseNet earnings $ 150,406 $ 116,830 $ 45,503 $ 33,204 $ (1,433,111 )(loss) Basic anddilutedearnings $ 1.27 $ 0.99 $ 0.38 $ 0.28 $ (12.23 )(loss) pershareDividendsdeclared and $ 0.25 $ 0.25 $ 0.25 $ 0.25 $ 0.60 paid per share

PACWEST BANCORP AND SUBSIDIARIESFIVE 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 1.94 % 1.58 % 0.65 % 0.50 % (21.27 )%assets (1)Pre-provision,pre-goodwill impairment,pre-tax net revenue ("PPNR")return on average 2.01 % 2.22 % 2.22 % 2.51 % 2.39 %assets (1)(2)Return on average 16.86 % 13.14 % 5.18 % 3.87 % (116.28 )%equity (1)Return on averagetangible equity (1) 25.67 % 19.63 % 8.20 % 6.39 % 6.88 %(2)Efficiency ratio 46.4 % 43.6 % 45.1 % 42.9 % 40.6 %Noninterest expense as a percentageof average assets 1.94 % 1.84 % 1.90 % 1.92 % 23.57 %(1) Average Yields/ Costs (1):Yield on: Average loans and 5.20 % 5.15 % 5.01 % 5.01 % 5.54 %leases (3)Averageinterest-earning 3.86 % 4.02 % 4.13 % 4.53 % 5.02 %assets (3)Cost of: Averageinterest-bearing 0.18 % 0.22 % 0.27 % 0.40 % 0.95 %depositsAverage total 0.11 % 0.14 % 0.17 % 0.25 % 0.59 %depositsAverageinterest-bearing 0.29 % 0.33 % 0.38 % 0.55 % 1.16 %liabilitiesNet interest spread 3.57 % 3.69 % 3.75 % 3.98 % 3.86 %(3)Net interest margin 3.69 % 3.83 % 3.90 % 4.20 % 4.31 %(3) Average Balances: Assets: Loans and leases,net of deferred $ 18,927,314 $ 18,769,214 $ 19,195,737 $ 19,951,603 $ 19,065,035 feesInterest-earning 29,100,685 27,234,542 25,858,001 24,531,204 23,455,636 assetsTotal assets 31,415,882 29,334,789 27,935,193 26,621,227 27,099,040 Liabilities: Noninterest-bearing 10,173,459 9,589,789 8,812,391 8,292,151 7,357,717 depositsInterest-bearing 16,444,091 15,045,451 14,516,923 13,116,297 11,896,780 depositsTotal 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 466,101 463,951 462,375 459,466 458,399 debenturesInterest-bearing 17,136,245 15,746,500 15,160,613 14,446,873 14,381,928 liabilitiesStockholders' 3,617,248 3,536,425 3,497,869 3,446,850 4,956,778 equity (1) Annualized. (2) Non-GAAP measure.(3) Tax equivalent.

PACWESTBANCORP AND SUBSIDIARIESFIVE QUARTERSELECTED FINANCIALDATA 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)CreditQuality Ratios:Nonaccrualloans and leases heldforinvestment toloans and leasesheld for 0.36 % 0.48 % 0.45 % 0.84 % 0.48 %investmentNonperformingassets to loans andleases heldfor investmentandforeclosed 0.43 % 0.55 % 0.52 % 0.85 % 0.49 %assetsClassifiedloans and leases heldforinvestment toloans and leasesheld for 0.86 % 1.39 % 1.44 % 1.49 % 0.75 %investmentProvision forcredit losses (for thequarter) toaverage loans and leasesheld forinvestment (1.03 )% 0.21 % 2.01 % 2.42 % 2.36 %(annualized)Netcharge-offs (for thequarter) toaverage loansand leases heldforinvestment 0.06 % 0.40 % 0.75 % 0.27 % 0.40 %(annualized)Trailing 12months net charge-offsto averageloans and leasesheld for 0.37 % 0.45 % 0.36 % 0.20 % 0.19 %investmentAllowance forloan and lease lossestoloans andleases held 1.54 % 1.82 % 1.82 % 1.53 % 1.12 %forinvestmentAllowance forcredit losses to loansand leasesheld for 2.02 % 2.27 % 2.33 % 1.94 % 1.39 %investmentAllowance forcredit losses tononaccrualloans and leasesheld for 566.2 % 475.8 % 516.9 % 229.7 % 287.5 %investment PacWestBancorp Consolidated:Tier 1leverage 7.95 % 8.55 % 8.66 % 8.93 % 8.63 %capital ratio(1)Common equitytier 1 10.41 % 10.53 % 10.45 % 9.97 % 9.22 %capital ratio(1)Tier 1capital ratio 10.41 % 10.53 % 10.45 % 9.97 % 9.22 %(1)Total capital 13.63 % 13.76 % 13.74 % 13.18 % 12.07 %ratio (1)Risk-weighted $ 22,968,958 $ 22,837,693 $ 22,114,040 $ 22,781,836 $ 24,214,209 assets (1) Equity to 11.12 % 12.19 % 12.26 % 12.62 % 12.97 %assets ratioTangiblecommon equity 7.68 % 8.78 % 8.71 % 8.93 % 9.10 %ratio (2)Book value $ 30.68 $ 30.36 $ 29.42 $ 29.17 $ 28.75 per shareTangible bookvalue per $ 20.39 $ 21.05 $ 20.09 $ 19.80 $ 19.31 share (2) Pacific Western Bank:Tier 1leverage 8.83 % 9.53 % 9.70 % 10.03 % 9.71 %capital ratio(1)Common equitytier 1 11.57 % 11.73 % 11.70 % 11.18 % 10.38 %capital ratio(1)Tier 1capital ratio 11.57 % 11.73 % 11.70 % 11.18 % 10.38 %(1)Total capital 12.82 % 12.99 % 12.95 % 12.44 % 11.39 %ratio (1) (1) Capitalinformationfor March 31, 2021 ispreliminary.(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 Companys 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 EndedPPNR and PPNR March 31, December 31, September 30, June 30, March 31,Returnon Average 2021 2020 2020 2020 2020 Assets (Dollars in thousands)Net earnings $ 150,406 $ 116,830 $ 45,503 $ 33,204 $ (1,433,111 )(loss)Add: Provisionfor credit (48,000 ) 10,000 97,000 120,000 112,000 lossesAdd: Goodwill - - - - 1,470,000 impairmentAdd: Income 53,556 36,546 13,671 12,968 11,988 tax expensePre-provision,pre-goodwill impairment,pre-tax netrevenue $ 155,962 $ 163,376 $ 156,174 $ 166,172 $ 160,877 ("PPNR") Average assets $ 31,415,882 $ 29,334,789 $ 27,935,193 $ 26,621,227 $ 27,099,040 Return onaverage assets 1.94 % 1.58 % 0.65 % 0.50 % (21.27 )%(1)PPNR return onaverage assets 2.01 % 2.22 % 2.22 % 2.51 % 2.39 %(2) (1) Annualizednet earnings(loss) divided by averageassets.(2) AnnualizedPPNR divided by averageassets.

Three Months Ended March 31, December 31, September 30, June 30, March 31,Return onAverage 2021 2020 2020 2020 2020 TangibleEquity (Dollars in thousands)Net earnings $ 150,406 $ 116,830 $ 45,503 $ 33,204 $ (1,433,111 )(loss)Add:Intangible 3,079 3,172 3,751 3,882 3,948 assetamortizationAdd: Goodwill - - - - 1,470,000 impairmentAdjusted net $ 153,485 $ 120,002 $ 49,254 $ 37,086 $ 40,837 earnings Averagestockholders' $ 3,617,248 $ 3,536,425 $ 3,497,869 $ 3,446,850 $ 4,956,778 equityLess: Averageintangible 1,192,780 1,103,945 1,107,548 1,111,302 2,569,189 assetsAveragetangible $ 2,424,468 $ 2,432,480 $ 2,390,321 $ 2,335,548 $ 2,387,589 common equity Return onaverage 16.86 % 13.14 % 5.18 % 3.87 % (116.28 )%equity (1)Return onaverage 25.67 % 19.63 % 8.20 % 6.39 % 6.88 %tangibleequity (2) (1)Annualizednet earningsdivided by averagestockholders'equity.(2)Annualizedadjusted netearningsdivided by averagetangiblecommonequity.

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

CONTACTS

Matthew P. Wagner Bart R. Olson William J. BlackPresident and CEO EVP and CFO EVP Strategy and Corporate Development303.802.8900 714.989.4149 919.597.7466