GlobeNewswire Inc | Oct 18, 2021 04:30PM EDT

October 18, 2021

LOS ANGELES, Oct. 18, 2021 (GLOBE NEWSWIRE) -- PacWest Bancorp (Nasdaq: PACW) -

THIRD QUARTER 2021 RESULTS

$140.0M $1.17 $167.8M 21.03%Net Earnings Diluted Earnings PPNR ROATE per Share

THIRD QUARTER 2021 HIGHLIGHTS

-- Net Earnings of $140.0 Million or $1.17 Per Diluted Share -- Core Deposits Up $1.1 Billion or 4.1% in 3Q21; Represents 92% of Total Deposits -- Loan Growth of $1.0 Billion or 5.2%; Excluding PPP Loan Activity, Loan Growth of $1.3 Billion or 7.1% -- Civic Loan Production of $481 Million in 3Q21, Compared to $423 Million in 2Q21 -- PPNR of $167.8 Million, Up 8.3% Compared to 2Q21 -- Provision for Credit Losses Benefit of $20.0 Million in 3Q21 Compared to Benefit of $88.0 Million in 2Q21 -- Net Interest Income (TE) of $279.8 Million in 3Q21, Compared to $270.1 Million in 2Q21 -- Noninterest Income of $51.3 Million in 3Q21, Compared to $40.4 Million in 2Q21, With Continued Strength in Warrant Income -- Noninterest Expense of $159.4 Million in 3Q21, Up 5% From 2Q21, Driven Mainly By Higher Compensation Expense -- Classified and Special Mention Loans Fell $5.7 Million and $39.7 Million, Respectively, From 2Q21 -- ACL Ratio of 1.36% and ALLL Ratio of 0.99%; Excluding PPP Loans, ACL Ratio of 1.38% and ALLL Ratio of 1.01% -- Net Charge-offs of $0.4 Million (1 bp of Average Loans and Leases) -- Cost of Deposits Decreased 2 bps to 8 bps -- Loan and Lease Production of $2.4 Billion, Up From $1.7 Billion in 2Q21; WAC of 4.24% vs. 4.55% in 2Q21 -- Strong Capital Position CET1 Ratio of 10.15% and Total Capital Ratio of 14.36% at 3Q21 -- Tangible Book Value Per Share Increased From $21.95 at 2Q21 to $22.57 at 3Q21

CEO COMMENTARY

Matt Wagner, President and CEO, commented, For the second consecutive quarter, we experienced significant loan growth as loans grew $1.0 billion to an all-time high of $20.5 billion. Deploying approximately $3 billion of excess liquidity into higher-yielding securities and loans during the third quarter resulted in a $9.5 million increase in net interest income and helped drive a $12.8 million increase in our pre-tax pre-provision net revenue compared to the second quarter.

We continued to experience strong deposit growth as core deposits grew by $1.1 billion during the third quarter while our cost of average total deposits moved into the single digits at 8 basis points.

Credit quality continues to improve with net recoveries year-to-date and continued decreases in special mention and classified loans and leases, along with improved economic conditions related to the CECL forecast which resulted in a provision benefit for the third consecutive quarter.

We are excited about the acquisition of the Homeowners Association Services Division of MUFG Union Bank, N.A. which closed on October 8th. The approximately $4.1 billion of stable, low-cost deposits enhances our franchise value, further diversifies our deposit portfolio, and will become more valuable in a rising rate environment.

A photo accompanying this announcement is available at https://www.globenewswire.com/NewsRoom/AttachmentNg/60516d02-d69d-4910-aaa9-0d9ace006bd6

FINANCIAL HIGHLIGHTS

' At or For the At or For the Three Months Ended Nine Months Ended September 30, June 30, Increase September 30, IncreaseFinancial Highlights 2021 2021 (Decrease) 2021 2020 (Decrease)(1) (Dollars in thousands, except per share data)Net earnings (loss) $ 139,996 $ 180,512 $ (40,516) $ 470,914 $ (1,354,404) $ 1,825,318Diluted earnings (loss)

per share $ $ $ (0.35) $ $ $ 15.56 1.17 1.52 3.96 (11.60)Pre-provision, pre-goodwillimpairment, pre-tax net revenue ("PPNR") (2) $ 167,766 $ 154,929 $ 12,837 $ 478,657 $ 483,223 $ (4,566)Return on average 1.55% 2.11% (0.56) 1.86% (6.65)% 8.51assetsPPNR return on averageassets (2) 1.86% 1.81% 0.05 1.89% 2.37% (0.48)Return on average tangible equity (2) 21.03% 29.25% (8.22) 25.20% 7.16% 18.04 Yield on average loans andleases (tax equivalent) 5.01% 5.18% (0.17) 5.13% 5.18% (0.05)Cost of average total deposits 0.08% 0.10% (0.02) 0.10% 0.32% (0.22)Net interest margin ("NIM")(tax equivalent) 3.33% 3.40% (0.07) 3.46% 4.13% (0.67)Efficiency ratio 47.2% 47.9% (0.7) 47.2% 42.9% 4.3 Total assets $ 35,885,676 $ 34,867,987 $ 1,017,689 $ 35,885,676 $ 28,426,716 $ 7,458,960Loans and leases held for investment, net of deferred fees $ 20,511,020 $ 19,506,257 $ 1,004,763 $ 20,511,020 $ 19,026,200 $ 1,484,820Noninterest-bearing demand deposits $ 12,881,806 $ 11,252,286 $ 1,629,520 $ 12,881,806 $ 9,346,744 $ 3,535,062Core deposits $ 28,140,708 $ 27,038,161 $ 1,102,547 $ 28,140,708 $ 21,117,629 $ 7,023,079Total deposits $ 30,559,745 $ 29,647,034 $ 912,711 $ 30,559,745 $ 23,965,695 $ 6,594,050 As percentage of total deposits: Noninterest-bearing demand deposits 42% 38% 42% 39% 4 3Core deposits 92% 91% 92% 88% 1 4 Equity to assets 10.92% 11.03% (0.11) 10.92% 12.26% (1.34)ratioCommon equity tier 1 capital ratio 10.15% 10.41% (0.26) 10.15% 10.45% (0.30)Total capital ratio 14.36% 14.99% (0.63) 14.36% 13.74% 0.62Tangible common equityratio (2) 7.79% 7.80% (0.01) 7.79% 8.71% (0.92)Book value per share $ $ $ 0.60 $ $ $ 3.35 32.77 32.17 32.77 29.42Tangible book value pershare (2) $ $ $ 0.62 $ $ $ 2.48 22.57 21.95 22.57 20.09 (1) The operations of Civic are included from its February 1, 2021 acquisition date.(2) Non-GAAP measure.

INCOME STATEMENT HIGHLIGHTS

NET INTEREST INCOME

Net interest income increased by $9.5 million to $275.8 million for the third quarter of 2021 compared to $266.3 million for the second quarter of 2021 due mainly to higher income on investment securities and loans and leases primarily resulting from higher average balances as we deploy our excess liquidity. Income on investment securities increased by $6.8 million in the third quarter of 2021 due to a $1.6 billion increase in the average balance of investment securities, partially offset by an 11 basis point decrease in the yield on average investment securities. Income on loans and leases increased $2.2 million in the third quarter of 2021 due to a $613.3 million increase in the average balance of loans and leases, partially offset by a 17 basis point decrease in the yield on average loans and leases. The tax equivalent yield on average loans and leases was 5.01% for the third quarter of 2021 compared to 5.18% for the second quarter of 2021. The decrease in the tax equivalent yield on average loans and leases was due primarily to lower nonaccrual interest recapture of $2.6 million, lower loan prepayment fees of $1.7 million, and higher loan premium amortization of $0.8 million.

The tax equivalent NIM was 3.33% for the third quarter of 2021 compared to 3.40% for the second quarter of 2021. The decrease in the NIM was due primarily to the change in the earning assets mix driven by the increase in the investment portfolio as a percentage of earning assets. The average balance of investment securities increased by $1.6 billion to $8.0 billion, the average balance of deposits in financial institutions decreased by $690.0 million to $5.7 billion, and the average balance of loans and leases increased by $613.3 million in the third quarter of 2021. The increase in average balances of investment securities and loans and leases was the result of prudently deploying some of our excess liquidity ahead of the closing of the acquisition of the HOA Services Division of MUFG Union Bank that added approximately $4.1 billion of deposits on October 8th. Excess liquidity continues to negatively impact the tax equivalent NIM, however, we saw the impact decrease from approximately 73 basis points in the second quarter of 2021 to approximately 57 basis points in the third quarter of 2021.

The cost of average total deposits decreased to 0.08% in the third quarter of 2021 from 0.10% in the second quarter of 2021. The lower cost of average total deposits was due primarily to the $894 million increase in the 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 September 30, June 30, IncreaseProvisionfor Credit 2021 2021 (Decrease)Losses (In thousands)(Reductionin)addition to allowancefor loanand lease $ $ $ losses (21,500) (72,000) 50,500Addition to(reduction in) reserveforunfundedloan 1,500 (16,000) 17,500commitmentsTotalprovision $ $ $ for credit (20,000) (88,000) 68,000losses

The provision for credit losses benefit was $20.0 million for the third quarter of 2021 compared to a benefit of $88.0 million for the second quarter of 2021. The third quarter benefit reflected improvement in both macro-economic forecast variables and loan portfolio credit quality metrics, partially offset by increased provisions for unfunded commitments and loan growth.

Noninterest Income

The following table presents details of noninterest income for the periods indicated:

Three Months Ended September 30, June 30, IncreaseNoninterest 2021 2021 (Decrease)Income (In thousands)Servicecharges on $ 3,407 $ 3,452 $ (45)depositaccountsOthercommissions 11,792 10,704 1,088and feesLeased equipment 10,943 10,847 96incomeGain onsale of 1,422 (1,422)loans and -leasesGain on sale of 515 - 515securitiesOther income:Dividendsand gains 8,387 5,394 2,993on equityinvestmentsWarrant 13,578 5,650 7,928incomeOther 2,723 2,902 (179)Totalnoninterest $ 51,345 $ 40,371 $ 10,974income

Noninterest income increased by $11.0 million to $51.3 million for the third quarter of 2021 compared to $40.4 million for the second quarter of 2021 due primarily to increases of $7.9 million in warrant income and $3.0 million in dividends and gains on equity investments. Warrant income increased due to a higher number of and dollar amount of gains on warrant exercises given the active capital markets. Dividends and gains on equity investments increased due primarily to higher gains on sales of equity investments and higher income distributions on SBIC investments, offset partially by lower net fair value gains on equity investments still held.

Noninterest Expense

The following table presents details of noninterest expense for the periods indicated:

Three Months Ended September 30, June 30, IncreaseNoninterest 2021 2021 (Decrease)Expense (In thousands)Compensation $ 98,061 $ 90,807 $ 7,254Occupancy 14,928 14,784 144Data 7,391 7,758 (367)processingOtherprofessional 5,164 5,256 (92)servicesInsurance and 3,685 3,745 (60)assessmentsIntangibleasset 2,890 2,889 1amortizationLeasedequipment 8,603 8,614 (11)depreciationForeclosed assets expense 165 (119) 284(income), netAcquisition,integration and 200 200 -reorganizationcostsCustomerrelated 4,538 4,973 (435)expenseLoan expense 4,180 4,031 149Other 9,616 8,812 804Totalnoninterest $ 159,421 $ 151,750 $ 7,671expense

Noninterest expense increased by $7.7 million to $159.4 million for the third quarter of 2021 compared to $151.8 million for the second quarter of 2021 due primarily to an increase of $7.3 million in compensation expense attributable mainly to higher bonus and incentives expense related to increased warrant income, the growth in loans and deposits in the third quarter of 2021, and overall year-to-date performance.

Income Taxes

The effective income tax rate was 25.4% in the third quarter of 2021 compared to 25.7% in the second quarter of 2021. The effective income tax rate for the full year 2021 is 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:

September 30, 2021 June 30, 2021 September 30, 2020 % % % of of ofDeposit Composition Balance Total Balance Total Balance Total (Dollars in thousands)Noninterest-bearing $ 42% $ 38% $ 39%demand 12,881,806 11,252,286 9,346,744Interest checking 7,168,472 24% 7,394,472 25% 4,657,511 20%Money market 7,463,261 24% 7,777,199 26% 6,539,313 27%Savings 627,169 2% 614,204 2% 574,061 2%Total core deposits 28,140,708 92% 27,038,161 91% 21,117,629 88%Non-corenon-maturity 960,438 3% 1,122,971 4% 1,123,909 5%depositsTotal non-maturity 29,101,146 95% 28,161,132 95% 22,241,538 93%depositsTime deposits 882,551 3% 913,371 3% 1,047,621 4%$250,000 and underTime deposits over 576,048 2% 572,531 2% 676,536 3%$250,000Total time deposits 1,458,599 5% 1,485,902 5% 1,724,157 7%Total deposits $ 100% $ 100% $ 100% 30,559,745 29,647,034 23,965,695

At September 30, 2021, core deposits totaled $28.1 billion or 92% of total deposits, including $12.9 billion of noninterest-bearing demand deposits or 42% of total deposits. Core deposits increased by $1.1 billion or 4.1% in the third quarter of 2021 driven by continued strong deposit growth from our venture banking and community 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 September 30, 2021 were $1.4 billion, of which $1.0 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 Ended Nine Months EndedRoll Forwardof Loans and September 30, June 30, September 30,Leases HeldforInvestment,Net of 2021 2021 2021Deferred Fees(1) (Dollars in thousands)Balance, beginning of $ 19,506,257 $ 18,979,228 $ 19,083,377periodAdditions: Production 2,406,024 1,663,151 5,681,952Disbursements 1,349,333 1,662,644 4,034,963Totalproduction and 3,755,357 3,325,795 9,716,915disbursementsReductions: Payoffs (1,732,621) (1,969,118) (5,337,003)Paydowns (1,013,867) (802,222) (2,883,507)Total payoffs (2,746,488) (2,771,340) (8,220,510)and paydownsSales (2,175) (26,610) (101,426)Transfers toforeclosed (415) - (1,062)assetsCharge-offs (1,516) (816) (6,320)Transfers toloans held for - - (25,554)saleTotal (2,750,594) (2,798,766) (8,354,872)reductionsLoans acquiredthrough Civic - - 65,600acquisitionNet increase 1,004,763 527,029 1,427,643(decrease)Balance, end $ $ $ of period 20,511,020 19,506,257 20,511,020 Weightedaverage rate 4.24% 4.55% 4.37%on production(2) (1) Includes direct financing leases but excludes equipment leased to others underoperating leases.(2) The weighted average rate on production presents contractual rates on ataxequivalent basis and excludes amortized fees. Amortized fees addedapproximately40 basis points to loan yields in 2021.

Loans and leases held for investment, net of deferred fees, increased by $1.0 billion or 5.2% in the third quarter of 2021 to $20.5 billion at September 30, 2021. Excluding PPP loan activity, loans grew by $1.3 billion or 7.1%. The overall increase in the loans and leases balance for the third quarter of 2021 was primarily due to increases in the income producing and other residential, real estate construction and land and asset-based portfolios partially offset by a reduction in the venture capital portfolio and other commercial portfolio due to PPP loan forgiveness. The PPP forgiveness in the third quarter of 2021 was $338 million, down from $506 million in the second quarter of 2021. Net fees for PPP loans were $7.9 million in the third quarter of 2021 down slightly from the $8.8 million in the second quarter of 2021. Remaining PPP loans totaled $272 million as of September 30, 2021 with $7.7 million of net fees to amortize over the remaining life of the loans. The weighted average rate on the $2.4 billion of new production for the third quarter of 2021 decreased to 4.24% from 4.55% in the second quarter of 2021 due to the loan mix.

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:

September 30, 2021 June 30, 2021 September 30, 2020 % % % of of ofLoan and Lease Balance Total Balance Total Balance TotalPortfolio (In thousands)Real estate mortgage:Commercial $ 18% $ 19% $ 22% 3,694,597 3,792,198 4,192,466Incomeproducing and otherresidential 29% 24% 19% 5,886,360 4,620,822 3,684,579Total real estate 9,580,957 47% 8,413,020 43% 7,877,045 41%mortgageReal estateconstruction and land:Commercial 5% 5% 7% 992,003 930,785 1,241,647Residential 13% 13% 11% 2,659,870 2,574,799 2,182,100Total realestate constructionand land 18% 18% 18% 3,651,873 3,505,584 3,423,747Total real 65% 61% 59%estate 13,232,830 11,918,604 11,300,792Commercial: Asset-based 18% 18% 17% 3,661,769 3,550,903 3,153,048Venture 8% 9% 9%capital 1,632,861 1,749,432 1,637,132Other 7% 10% 13%commercial 1,577,592 1,921,909 2,572,994Total 33% 37% 39%commercial 6,872,222 7,222,244 7,363,174Consumer 2% 2% 2% 405,968 365,409 362,234Total loansand leases held forinvestment,net of $ 20,511,020 100% $ 19,506,257 100% $ 19,026,200 100%deferred fees Total unfunded loan $ 8,480,599 $ 7,891,875 $ 7,178,506 commitments

Allowance for Credit Losses

The following tables present roll forwards of the allowance for credit losses for the periods indicated:

Three Months Ended September 30, 2021 Allowance for Reserve for TotalAllowancefor Loan and Unfunded Loan Allowance forCreditLosses Lease Losses Commitments Credit LossesRollforward (In thousands)Beginning $ $ $ balance 225,600 74,571 300,171Charge-offs (1,516) - (1,516)Recoveries 1,149 - 1,149Net (367) - (367)charge-offsProvision (21,500) 1,500 (20,000)Ending $ $ $ balance 203,733 76,071 279,804 Net recoveries Three Months Ended June 30, 2021 Allowance for Reserve for TotalAllowancefor Loan and Unfunded Loan Allowance forCreditLosses Lease Losses Commitments Credit LossesRollforward (In thousands)Beginning $ $ $ balance 292,445 90,571 383,016Charge-offs (816) - (816)Recoveries 5,971 - 5,971Net 5,155 - 5,155recoveriesProvision (72,000) (16,000) (88,000)Ending $ $ $ balance 225,600 74,571 300,171

The following table presents allowance for credit losses information as of and for the dates and periods indicated:

September 30, June 30, IncreaseAllowancefor Credit 2021 2021 (Decrease)Losses (Dollars in thousands)Allowance for loan and $ 203,733 $ 225,600 $ (21,867)lease lossesReserve forunfunded 76,071 loan 74,571 1,500commitmentsAllowance for credit $ 279,804 $ 300,171 $ (20,367)losses Provisionfor credit $ (20,000) $ $ losses (for (88,000) 68,000the quarter)Netcharge-offs (recoveries) $ 367 $ (5,155) $ 5,522(for thequarter)Netcharge-offs(recoveries) to averageloansand leases(for the 0.01% (0.11)% quarter)Allowancefor loan and lease lossesto loansand leasesheld for 0.99% 1.16% investmentAllowancefor loan and lease lossesto loansand leasesheld forinvestment, 1.01% 1.19% excludingPPP loansAllowancefor creditlosses to loans andleasesheld for 1.36% 1.54% investmentAllowancefor creditlosses to loans andleasesheld forinvestment, 1.38% 1.59% excludingPPP loans

The allowance for credit losses decreased by $20.4 million in the third quarter of 2021 to $279.8 million at September 30, 2021. The decrease in the allowance for credit losses during the third quarter of 2021 was attributable to a provision for credit losses benefit of $20.0 million and $0.4 million in net charge-offs. The allowance for credit losses ratio, excluding PPP loans, of 1.38% remains robust and significantly higher than the pre-pandemic level of 0.97% as of the January 1, 2020 CECL adoption date.

Net charge-offs were $0.4 million for the third quarter of 2021.Gross charge-offs of $1.5 million were reduced by recoveries of $1.1 million.

Net recoveries were $5.2 million for the second quarter of 2021.Gross charge-offs of $0.8 million were reduced by recoveries of $6.0 million.

On a year-to-date basis for the nine months ended September 30, 2021, net recoveries were $2.1 million. Gross charge-offs of $6.3 million were reduced by recoveries of $8.4 million.

CREDIT QUALITY

The following table presents loan and lease credit quality metrics as of the dates indicated:

September 30, June 30, IncreaseCreditQuality 2021 2021 (Decrease)Metrics (Dollars in thousands)NPAs andPerforming TDRs:Nonaccrualloans andleases held $ 64,507 $ 56,803 $ 7,704forinvestment(1)Accruingloans contractually - - -past due 90days or moreForeclosed 13,364 13,227 137assets, net Totalnonperforming $ 77,871 $ 70,030 $ 7,841assets("NPAs") PerformingTDRs held for $ 36,750 $ 40,129 $ (3,379)investment Nonaccrualloans andleases held forinvestmentto loans andleases held 0.31% 0.29% forinvestmentNonperformingassets to loans andleasesheld forinvestmentand 0.38% 0.36% foreclosedassetsAllowance forcredit losses to nonaccrualloansand leasesheld for 433.8% 528.4% investment Loan andLease Credit Risk Ratings:Pass $ 19,873,050 $ 18,822,938 $ 1,050,112Special 496,366 536,052 (39,686)mentionClassified 141,604 147,267 (5,663)Total loansand leases held forinvestment,net of $ 20,511,020 $ 19,506,257 $ 1,004,763deferred fees Classifiedloans andleases held forinvestmentto loans andleases held 0.69% 0.75% forinvestment (1) Nonaccrual loans include SBA guaranteed amounts of $20.1 million atSeptember 30, 2021 and $24.2 millionat June 30, 2021.

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 by $402.3 million from their peak in the first quarter of 2020, while classified loans and leases have decreased by $151.6 million from their peak in the second quarter of 2020, and each have continued a steady decline in the third quarter of 2021. Nonaccrual loans and leases increased by $7.7 million to $64.5 million in the third quarter of 2021 due primarily to an increase in nonaccrual short-term, single-family residential renovation loans, however $7.5 million of such nonaccrual loans paid off in the first week of October.

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:

September 30, 2021 June 30, 2021 Increase (Decrease) Accruing Accruing Accruing and 30-89 and 30-89 and 30-89 Days Past Days Past Days Past Nonaccrual Due Nonaccrual Due Nonaccrual Due (Dollars in thousands)Real estate mortgage:Commercial $ 25,615 $ 676 $ 32,065 $ - $ (6,450) $ 676Incomeproducing and otherresidential 7,547 3,760 6,133 2,179 1,414 1,581Total realestate 33,162 4,436 38,198 2,179 (5,036) 2,257mortgageReal estateconstruction and land:Commercial - - 284 - (284) -Residential 19,918 12,809 1,934 22,714 17,984 (9,905)Total real estateconstruction 19,918 12,809 2,218 22,714 17,700 (9,905)and landCommercial: Asset-based 1,605 1,973 - - (368) -Venture 2,348 1,670 2,717 1,670capital - (369)Other 6,979 340 11,337 270 (4,358) 70commercialTotal 10,932 2,010 16,027 270 (5,095) 1,740commercialConsumer 495 1,042 1,454 (412) 360 135Total heldfor $ 64,507 $ 20,297 $ 56,803 $ 26,617 $ 7,704 $ (6,320)investment

CAPITAL

The following table presents certain actual capital ratios and ratios excluding PPP loans:

September 30, 2021 Excluding June 30, PPP 2021 Actual (1) Loans (1) ActualPacWest Bancorp Consolidated: Tier 1 leverage capital ratio 8.05% (3) 8.15% (4) 7.67%Common equity tier 1 capital ratio 10.15% 10.15% 10.41%Tier 1 capital ratio 10.65% (3) 10.65% 10.41%Total capital ratio 14.36% 14.36% 14.99%Tangible common equity ratio (2) 7.79% 7.85% (4) 7.80% (1) Capital information for September 30, 2021 is preliminary.(2) Non-GAAP measure. (3) The increase in our consolidated Tier 1 capital ratio during the thirdquarter of 2021 was duein part to a reassessment of a Basel IIIimplementation rule that permitted the grandfathering of certaintrustpreferred securities as Tier 1 capital. As a result, $131 million of trustpreferred securitieswere reclassified from Tier 2 capital to Tier 1 capitalduring the third quarter of 2021. This changeincreased the Tier 1 leveragecapital ratio by approximately 38 basis points and increased theTier 1capital ratio by approximately 50 basis points.(4) PPP loans have been excluded from total assets in the denominator as theyare zero risk-weighted.

ABOUT PACWEST BANCORP

PacWest Bancorp (PacWest) is a bank holding company with over $35 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 69 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 provides 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. The Bank also offers financing of non-owner-occupied investor properties through Civic Financial Services a wholly-owned subsidiary. The Bank also offers a specialized suite of services for the HOA industry. 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 ongoing COVID-19 pandemic has adversely affected 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 risks from the COVID-19 pandemic have decreased as the pandemic subsides, however, new variants may continue to impact key macro-economic indicators such as unemployment and GDP and 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 SUBSIDIARIESCONDENSEDCONSOLIDATED BALANCE SHEET September 30, June 30, September 30, 2021 2021 2020 (Dollars in thousands, except per share data)ASSETS: Cash and due from $ 174,585 $ 179,505 $ 187,176banksInterest-earningdeposits in 3,524,613 5,678,587 2,766,020financialinstitutionsTotal cash and cash 3,699,198 5,858,092 2,953,196equivalents Securitiesavailable-for-sale, 9,276,926 7,198,608 4,532,614at estimated fairvalueFederal Home Loan 17,250 17,250 17,250Bank stock, at costTotal investment 9,294,176 7,215,858 4,549,864securities Loans held for sale - - - Gross loans andleases held for 20,588,255 19,580,731 19,101,680investmentDeferred fees, net (77,235) (74,474) (75,480)Total loans andleases held for investment,net of deferred 20,511,020 19,506,257 19,026,200feesAllowance for loan (203,733) (225,600) (345,966)and lease lossesTotal loans andleases held for 20,307,287 19,280,657 18,680,234investment, net Equipment leased toothers under 334,275 313,574 286,425operating leasesPremises and 47,246 39,541 40,544equipment, netForeclosed assets, 13,364 13,227 13,747netGoodwill 1,204,118 1,204,118 1,078,670Core deposit andcustomer 15,533 18,423 26,813relationshipintangibles, netOther assets 970,479 924,497 797,223Total assets $ 35,885,676 $ 34,867,987 $ 28,426,716 LIABILITIES: Noninterest-bearing $ 12,881,806 $ 11,252,286 $ 9,346,744depositsInterest-bearing 17,677,939 18,394,748 14,618,951depositsTotal deposits 30,559,745 29,647,034 23,965,695Borrowings 6,625 60,000 -Subordinated debt 862,447 861,788 463,282Accrued interestpayable and other 545,050 505,859 451,508liabilitiesTotal liabilities 31,967,242 31,021,306 24,940,485STOCKHOLDERS' 3,918,434 3,846,681 3,486,231EQUITY (1)Total liabilitiesand stockholders? $ 35,885,676 $ 34,867,987 $ 28,426,716equity Book value per $ 32.77 $ 32.17 $ 29.42shareTangible book value $ 22.57 $ 21.95 $ 20.09per share (2)Shares outstanding 119,579,566 119,555,102 118,489,927 (1) Includes netunrealized gain on securities available-for-sale, $ 98,859 $ 145,516 $ 155,474net(2) Non-GAAP measure.



PACWESTBANCORP AND SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENT OF EARNINGS (LOSS) Three Months Ended Nine Months Ended September 30, June 30, September 30, September 30, 2021 2021 2020 2021 2020 (Dollars in thousands, except per share data)Interest income:Loans and $ 246,722 $ 244,529 $ 240,811 $ 732,795 $ 750,940leasesInvestment 40,780 33,954 24,443 104,999 77,927securitiesDeposits infinancial 2,580 2,022 654 6,130 2,448institutionsTotal interest 290,082 280,505 265,908 843,924 831,315income Interest expense:Deposits 6,417 7,269 9,887 21,186 51,209Borrowings 101 265 27 559 8,124Subordinated 7,722 6,663 4,670 18,760 16,632debtTotal interest 14,240 14,197 14,584 40,505 75,965expense Net interest 275,842 266,308 251,324 803,419 755,350incomeProvision for (20,000) (88,000) 97,000 (156,000) 329,000credit lossesNet interestincome after provisionfor credit 295,842 354,308 154,324 959,419 426,350losses Noninterest income:Servicecharges on 3,407 3,452 2,570 9,793 7,232depositaccountsOthercommissions 11,792 10,704 10,541 31,654 30,373and feesLeasedequipment 10,943 10,847 9,900 33,144 34,188incomeGain on sale of loans and - 1,422 35 1,561 468leasesGain on sale 515 5,270 616 13,167of securities -Other income 24,688 13,946 9,936 59,777 20,782Totalnoninterest 51,345 40,371 38,252 136,545 106,210income Noninterest expense:Compensation 98,061 90,807 75,131 268,750 198,323Occupancy 14,928 14,784 14,771 43,766 43,472Data 7,391 7,758 6,505 22,106 20,061processingOtherprofessional 5,164 5,256 4,713 15,546 13,117servicesInsurance and 3,685 3,745 3,939 12,333 17,561assessmentsIntangibleasset 2,890 2,889 3,751 8,858 11,581amortizationLeasedequipment 8,603 8,614 7,057 26,186 21,364depreciationForeclosedassets expense 165 (119) 335 47 255(income), netAcquisition,integration andreorganization 200 200 3,825 costs - -Customerrelated 4,538 4,973 4,762 14,329 13,102expenseLoan expense 4,180 4,031 3,499 11,404 9,528Goodwill 1,470,000impairment - - - -Other expense 9,616 8,812 8,939 34,157 29,973Totalnoninterest 159,421 151,750 133,402 461,307 1,848,337expense Earnings(loss) before 187,766 242,929 59,174 634,657 (1,315,777)income taxesIncome tax 47,770 62,417 13,671 163,743 38,627expenseNet earnings $ 139,996 $ 180,512 $ 45,503 $ 470,914 $ (1,354,404)(loss) Basic anddilutedearnings $ 1.17 $ 1.52 $ 0.38 $ 3.96 $ (11.60)(loss) pershareDividendsdeclared and $ 0.25 $ 0.25 $ 0.25 $ 0.75 $ 1.10paid per share



Three Months Ended Nine Months Ended September 30, June 30, September 30, September 30, 2021 2021 2020 2021 2020 (In thousands, except per share data)BasicEarnings (Loss) PerShare:Netearnings $ 139,996 $ 180,512 $ 45,503 $ 470,914 $ (1,354,404)(loss)Less:earnings allocatedtounvested restricted (2,417) (3,172) (578) (7,930) (1,603)stock (1)Netearnings(loss) allocatedtocommon $ 137,579 $ 177,340 $ 44,925 $ 462,984 $ (1,356,007)shares Weightedaverage basicsharesandunvested restrictedstockoutstanding 119,569 119,386 118,438 119,272 118,469Less:weighted averageunvestedrestricted stock (2,340) (2,356) (1,684) (2,235) (1,596)outstandingWeightedaverage basicsharesoutstanding 117,229 117,030 116,754 117,037 116,873 Basicearnings $ $ $ $ $ (loss) per 1.17 1.52 0.38 3.96 (11.60)share DilutedEarnings (Loss) PerShare:Netearnings(loss) allocatedtocommon $ 137,579 $ 177,340 $ 44,925 $ 462,984 $ (1,356,007)shares Weightedaverage dilutedsharesoutstanding 117,229 117,030 116,754 117,037 116,873 Dilutedearnings $ $ $ $ $ (loss) per 1.17 1.52 0.38 3.96 (11.60)share (1) Represents cash dividends paid to holders of unvested stock, net offorfeitures, plusundistributed earnings amounts available to holders of unvested restricted stock, if any.



PACWEST BANCORP AND SUBSIDIARIES AVERAGE BALANCE SHEET AND YIELD ANALYSIS Three Months Ended September 30, 2021 June 30, 2021 September 30, 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 (1)(2) $ 19,670,671 $ 248,485 5.01% $ 19,057,420 $ 246,147 5.18% $ 19,195,737 $ 241,547 5.01%Investment securities 42,952 2.12% 36,111 2.23% 26,015 2.52%(3) 8,047,098 6,492,721 4,107,915Deposits in financial institutions 2,580 0.18% 2,022 0.13% 654 0.10% 5,657,768 6,347,764 2,554,349Total interest-earningassets (1) 294,017 3.50% 284,280 3.57% 268,216 4.13% 33,375,537 31,897,905 25,858,001Other assets 2,496,127 2,428,207 2,077,192Total assets $ 35,871,664 $ 34,326,112 $ 27,935,193 Liabilities and Stockholders' Equity: Interest checking $ 2,042 0.11% $ 2,394 0.13% $ 2,019 0.16% 7,372,859 7,235,726 4,904,614Money market 2,997 0.14% 3,318 0.16% 3,081 0.17% 8,662,449 8,484,933 7,170,842Savings 0.02% 0.02% 0.02% 620,079 38 598,225 36 565,395 35Time 1,340 0.36% 1,521 0.41% 4,752 1.01% 1,475,307 1,498,169 1,876,072Total interest-bearingdeposits 6,417 0.14% 7,269 0.16% 9,887 0.27% 18,130,694 17,817,053 14,516,923Borrowings 101 0.17% 265 0.47% 0.06% 238,335 225,446 181,315 27Subordinated debt 7,722 3.55% 6,663 3.63% 4,670 4.02% 862,272 735,725 462,375Total interest-bearingliabilities 14,240 0.29% 14,197 0.30% 14,584 0.38% 19,231,301 18,778,224 15,160,613Noninterest-bearing demand deposits 12,198,313 11,304,757 8,812,391Other liabilities 525,429 504,089 464,320Total liabilities 31,955,043 30,587,070 24,437,324Stockholders' equity 3,916,621 3,739,042 3,497,869Total liabilities and stockholders' equity $ 35,871,664 $ 34,326,112 $ 27,935,193 Net interest income (1) $ 279,777 $ 270,083 $ 253,632 Net interest spread (1) 3.21% 3.27% 3.75%Net interest margin (1) 3.33% 3.40% 3.90% Total deposits (4) $ 30,329,007 $ 6,417 0.08% $ 29,121,810 $ 7,269 0.10% $ 23,329,314 $ 9,887 0.17% (1) Tax equivalent. (2) Includes net loan premium amortization of $2.4 million and $1.5 million andnet loan discount accretion of $35,000 for the three monthsended September30, 2021, June 30, 2021, and September 30, 2020, respectively.(3) Includes tax-equivalent adjustments of $2.2 million, $2.2 million, and $1.6million for the three months ended September 30, 2021,June 30, 2021, andSeptember 30, 2020 related to tax-exempt income on investmentsecurities.The federal statutory tax rate utilized was 21%.(4) Total deposits is the sum of total interest-bearing deposits andnoninterest-bearing demand deposits. The cost of total depositsiscalculated as annualized interest expense on total deposits divided byaverage total deposits.

PACWEST BANCORP AND SUBSIDIARIESFIVE QUARTER BALANCE SHEET September 30, June 30, March 31, December 31, September 30, 2021 2021 2021 2020 2020 (Dollars in thousands, except per share data)ASSETS: Cash and due from $ 174,585 $ 179,505 $ $ 150,464 $ 187,176banks 177,199Interest-earningdeposits in financialinstitutions 3,524,613 5,678,587 3,010,197 2,766,020 5,517,667Total cash and cash 3,699,198 5,858,092 3,160,661 2,953,196equivalents 5,694,866 Securities 9,276,926 7,198,608 5,235,591 4,532,614available-for-sale 5,941,690Federal Home Loan 17,250 17,250 17,250 17,250Bank stock 17,250 Total investment 9,294,176 7,215,858 5,252,841 4,549,864securities 5,958,940 Loans held for sale - - 25,554 - - Gross loans and leases held for 20,588,255 19,580,731 19,055,165 19,153,357 19,101,680investmentDeferred fees, net (77,235) (74,474) (69,980) (75,480) (75,937)Total loans and leases held forinvestment, net of 20,511,020 19,506,257 19,083,377 19,026,200deferred fees 18,979,228Allowance for loan (203,733) (225,600) (348,181) (345,966)and lease losses (292,445)Total loans and leases held forinvestment, net 20,307,287 19,280,657 18,735,196 18,680,234 18,686,783 Equipment leased to others underoperating leases 334,275 313,574 333,846 286,425 327,413Premises and 47,246 39,541 39,234 40,544equipment, net 39,622Foreclosed assets, 13,364 13,227 14,027 13,747net 14,298Goodwill 1,204,118 1,204,118 1,078,670 1,078,670 1,204,092Core deposit andcustomer relationshipintangibles, net 15,533 18,423 23,641 26,813 21,312Other assets 970,479 924,497 860,326 797,223 883,653Total assets $ 35,885,676 $ 34,867,987 $ $ 29,498,442 $ 28,426,716 32,856,533 LIABILITIES: Noninterest-bearing $ 12,881,806 $ 11,252,286 $ $ 9,193,827 $ 9,346,744deposits 11,017,462Interest-bearing 17,677,939 18,394,748 15,746,890 14,618,951deposits 17,205,829Total deposits 30,559,745 29,647,034 24,940,717 23,965,695 28,223,291Borrowings 6,625 5,000 60,000 - 19,750Subordinated debt 862,447 861,788 465,812 463,282 465,814Accrued interest payable and otherliabilities 545,050 505,859 491,962 451,508 493,541Total liabilities 31,967,242 31,021,306 25,903,491 24,940,485 29,202,396STOCKHOLDERS' 3,918,434 3,846,681 3,594,951 3,486,231EQUITY (1) 3,654,137Total liabilities and stockholders?equity $ 35,885,676 $ 34,867,987 $ $ 29,498,442 $ 28,426,716 32,856,533 Book value per $ 32.77 $ 32.17 $ $ 30.36 $ 29.42share 30.68Tangible book value $ 22.57 $ 21.95 $ $ 21.05 $ 20.09per share (2) 20.39Shares outstanding 119,579,566 119,555,102 118,414,853 118,489,927 119,105,642 (1) Includes net unrealized gain onsecurities available-for-sale, $ 98,859 $ 145,516 $ 106,381 $ 172,523 $ 155,474net(2) Non-GAAP measure.

Three Months Ended September 30, June 30, March 31, December 31, September 30, 2021 2021 2021 2020 2020 (Dollars in thousands, except per share data)Interest income:Loans and $ 246,722 $ 244,529 $ 241,544 $ 242,198 $ 240,811leasesInvestment 40,780 33,954 30,265 28,843 24,443securitiesDeposits infinancial 2,580 2,022 1,528 1,135 654institutionsTotal interest 290,082 280,505 273,337 272,176 265,908income Interest expense:Deposits 6,417 7,269 7,500 8,454 9,887Borrowings 101 265 193 37 27Subordinated 7,722 6,663 4,375 4,477 4,670debtTotal interest 14,240 14,197 12,068 12,968 14,584expense Net interest 275,842 266,308 261,269 259,208 251,324incomeProvision for (20,000) (88,000) (48,000) 10,000 97,000credit lossesNet interestincome after provisionfor credit 295,842 354,308 309,269 249,208 154,324losses Noninterest income:Servicecharges on 3,407 3,452 2,934 3,119 2,570depositaccountsOthercommissions 11,792 10,704 9,158 9,974 10,541and feesLeasedequipment 10,943 10,847 11,354 9,440 9,900incomeGain on sale of loans and - 1,422 139 1,671 35leasesGain on sale 515 101 5,270of securities - 4Other income 24,688 13,946 21,143 15,642 9,936Totalnoninterest 51,345 40,371 44,829 39,850 38,252income Noninterest expense:Compensation 98,061 90,807 79,882 73,171 75,131Occupancy 14,928 14,784 14,054 14,083 14,771Data 7,391 7,758 6,957 6,718 6,505processingOtherprofessional 5,164 5,256 5,126 6,800 4,713servicesInsurance and 3,685 3,745 4,903 5,064 3,939assessmentsIntangibleasset 2,890 2,889 3,079 3,172 3,751amortizationLeasedequipment 8,603 8,614 8,969 7,501 7,057depreciationForeclosed assets expense 165 (119) 1 (272) 335(income), netAcquisition,integration andreorganization 200 200 3,425 1,060 costs -Customerrelated 4,538 4,973 4,818 4,430 4,762expenseLoan expense 4,180 4,031 3,193 3,926 3,499Other expense 9,616 8,812 15,729 10,029 8,939Totalnoninterest 159,421 151,750 150,136 135,682 133,402expense Earningsbefore income 187,766 242,929 203,962 153,376 59,174taxesIncome tax 47,770 62,417 53,556 36,546 13,671expenseNet earnings $ 139,996 $ 180,512 $ 150,406 $ 116,830 $ 45,503 Basic anddiluted $ 1.17 $ 1.52 $ 1.27 $ 0.99 $ 0.38earnings pershareDividendsdeclared and $ 0.25 $ 0.25 $ 0.25 $ 0.25 $ 0.25paid per share



PACWEST BANCORP AND SUBSIDIARIESFIVE QUARTER SELECTED FINANCIAL DATA At or For the Three Months Ended September 30, June 30, March 31, December 31, September 30, 2021 2021 2021 2020 2020 (Dollars in thousands)Performance Ratios: Return on average 1.55% 2.11% 1.94% 1.58% 0.65%assets (1)Pre-provision,pre-goodwill impairment,pre-tax net revenue ("PPNR")return on average 1.86% 1.81% 2.01% 2.22% 2.22%assets (1)(2)Return on average 14.18% 19.36% 16.86% 13.14% 5.18%equity (1)Return on averagetangible equity (1) 21.03% 29.25% 25.67% 19.63% 8.20%(2)Efficiency ratio 47.2% 47.9% 46.4% 43.6% 45.1%Noninterest expense as a percentageof average assets 1.76% 1.77% 1.94% 1.84% 1.90%(1) Average Yields/ Costs (1):Yield on: Average loans and 5.01% 5.18% 5.20% 5.15% 5.01%leases (3)Average investment 2.12% 2.23% 2.44% 2.50% 2.52%securities (3)Averageinterest-earning 3.50% 3.57% 3.86% 4.02% 4.13%assets (3)Cost of: Averageinterest-bearing 0.14% 0.16% 0.18% 0.22% 0.27%depositsAverage total 0.08% 0.10% 0.11% 0.14% 0.17%depositsAverageinterest-bearing 0.29% 0.30% 0.29% 0.33% 0.38%liabilitiesNet interest spread 3.21% 3.27% 3.57% 3.69% 3.75%(3)Net interest margin 3.33% 3.40% 3.69% 3.83% 3.90%(3) Average Balances: Assets: Loans and leases,net of deferred $ 19,670,671 $ 19,057,420 $ 18,927,314 $ 18,769,214 $ 19,195,737feesInvestment securities 8,047,098 6,492,721 5,383,140 4,888,993 4,107,915Deposits in financial 5,657,768 6,347,764 4,790,231 3,576,335 2,554,349institutionsInterest-earning assets 33,375,537 31,897,905 29,100,685 27,234,542 25,858,001Total assets 35,871,664 34,326,112 31,415,882 29,334,789 27,935,193Liabilities: Noninterest-bearing deposits 12,198,313 11,304,757 10,173,459 9,589,789 8,812,391Interest-bearing deposits 18,130,694 17,817,053 16,044,091 15,045,451 14,516,923Total deposits 30,329,007 29,121,810 26,217,550 24,635,240 23,329,314Borrowings 238,335 225,446 226,053 237,098 181,315Subordinated debt 862,272 735,725 466,101 463,951 462,375Interest-bearing liabilities 19,231,301 18,778,224 17,136,245 15,746,500 15,160,613Stockholders' equity 3,916,621 3,739,042 3,617,248 3,536,425 3,497,869 (1) Annualized. (2) Non-GAAP measure.(3) Tax equivalent.

PACWESTBANCORP AND SUBSIDIARIESFIVE QUARTER SELECTED FINANCIAL DATA At or For the Three Months Ended September 30, June 30, March 31, December 31, September 30, 2021 2021 2021 2020 2020 (Dollars in thousands)CreditQuality Ratios:Nonaccrualloans and leases heldforinvestment toloans and leasesheld for 0.31% 0.29% 0.36% 0.48% 0.45%investmentNonperformingassets to loans andleases heldfor investmentandforeclosed 0.38% 0.36% 0.43% 0.55% 0.52%assetsClassifiedloans and leases heldforinvestment toloans and leasesheld for 0.69% 0.75% 0.86% 1.39% 1.44%investmentProvision forcredit losses (for thequarter) toaverage loans and leasesheld forinvestment (0.40)% (1.85)% (1.03)% 0.21% 2.01%(annualized)Netcharge-offs (for thequarter) toaverage loansand leases heldforinvestment 0.01% (0.11)% 0.06% 0.40% 0.75%(annualized)Trailing 12months net charge-offsto averageloans and leasesheld for 0.09% 0.27% 0.37% 0.45% 0.36%investmentAllowance forloan and lease lossestoloans andleases held 0.99% 1.16% 1.54% 1.82% 1.82%forinvestmentAllowance forcredit losses to loansand leasesheld for 1.36% 1.54% 2.02% 2.27% 2.33%investmentAllowance forcredit losses tononaccrualloans and leasesheld for 433.8% 528.4% 566.2% 475.8% 516.9%investment PacWestBancorp Consolidated:Tier 1leverage 8.05% 7.67% 7.95% 8.55% 8.66%capital ratio(1)Common equitytier 1 10.15% 10.41% 10.39% 10.53% 10.45%capital ratio(1)Tier 1capital ratio 10.65% 10.41% 10.39% 10.53% 10.45%(1)Total capital 14.36% 14.99% 13.60% 13.76% 13.74%ratio (1)Risk-weighted $ 26,057,583 $ 24,274,256 $ 23,012,350 $ 22,837,693 $ 22,114,040assets (1) Equity toassets 10.92% 11.03% 11.12% 12.19% 12.26%ratioTangiblecommon equity 7.79% 7.80% 7.68% 8.78% 8.71%ratio (2)Book value $ $ $ $ $ per share 32.77 32.17 30.68 30.36 29.42Tangible book value per $ 22.57 $ 21.95 $ 20.39 $ 21.05 $ 20.09share (2) Pacific Western Bank:Tier 1leverage 8.40% 8.47% 8.83% 9.53% 9.70%capital ratio(1)Common equitytier 1 11.12% 11.51% 11.54% 11.73% 11.70%capital ratio(1)Tier 1capital ratio 11.12% 11.51% 11.54% 11.73% 11.70%(1)Total capital 13.59% 14.22% 12.80% 12.99% 12.95%ratio (1) (1) Capital information for September 30, 2021 is preliminary.(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 Ended Nine Months EndedPPNR and PPNR September 30, June 30, September 30, September 30,Returnon Average 2021 2021 2020 2021 2020Assets (Dollars in thousands)Net earnings $ 139,996 $ 180,512 $ 45,503 $ 470,914 $ (1,354,404)(loss)Add: Provision for credit (20,000) (88,000) 97,000 (156,000) 329,000lossesAdd: Goodwill 1,470,000impairment - - - -Add: Income 47,770 62,417 13,671 163,743 tax expense 38,627Pre-provision,pre-goodwill impairment,pre-tax net revenue $ 167,766 $ 154,929 $ 156,174 $ 478,657 $ 483,223("PPNR") Average assets $ 35,871,664 $ 34,326,112 $ 27,935,193 $ 33,887,541 $ 27,221,102 Return onaverage assets 1.55% 2.11% 0.65% 1.86% (6.65)%(1)PPNR return onaverage assets 1.86% 1.81% 2.22% 1.89% 2.37%(2) (1) Annualized net earnings (loss) divided by average assets. (2) Annualized PPNR divided by average assets.

Three Months Ended Nine Months Ended September 30, June 30, September 30, September 30,Return on Average Tangible 2021 2021 2020 2021 2020Equity (Dollars in thousands)Net earnings (loss) $ 139,996 $ 180,512 $ 45,503 $ 470,914 $ (1,354,404)Add: Intangible asset 2,890 2,889 3,751 8,858 amortization 11,581Add: Goodwill impairment 1,470,000 - - - -Adjusted net earnings $ 142,886 $ 183,401 $ 49,254 $ 479,772 $ 127,177 Average stockholders' $ 3,916,621 $ 3,739,042 $ 3,497,869 $ 3,758,733 $ 3,965,453equityLess: Average intangible 1,221,253 1,224,208 1,107,548 1,212,851 1,594,231assetsAverage tangible common $ 2,695,368 $ 2,514,834 $ 2,390,321 $ 2,545,882 $ 2,371,222equity Return on average equity 14.18% 19.36% 5.18% 16.75% (45.62)%(1)Return on average tangible 21.03% 29.25% 8.20% 25.20% 7.16%equity (2) (1) Annualized net earnings divided by average stockholders' equity. (2) Annualized adjusted net earnings divided by average tangible common equity.

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