PacWest Bancorp on Tuesday announced net earnings for the second quarter of 2014 of $10.6 million, or 10 cents per diluted share, compared with net earnings for the first quarter of 2014 of $25.1 million, or 55 cents per diluted share.
When certain income and expense items described below are excluded, adjusted net earnings are $63.8 million, or 64 cents per diluted share.
"The benefits of the CapitalSource merger are apparent in our second-quarter results: record adjusted net earnings of $64 million, new loan and lease fundings of $881 million, organic loan and lease growth of $143 million, and significant progress in meeting our deposit transformation and cost savings targets," said Matt Wagner, president and CEO. "Our loan fundings were strong across both divisions, with the national lending platform embodied in the CapitalSourcedivision originating $745 million in loans and leases and our Community Bank division originating $137 million in loans. Loan refinancings by other lenders at liberal pricing metrics continued, and the improving economy in our market areas enabled borrowers to either sell their properties or use excess cash balances to reduce outstandings. Nevertheless, our pipelines are robust and we expect continued high levels of loan and lease fundings.
"PacWest Bancorp is a very strong and well-positioned company. Our second quarter adjusted return on assets and adjusted return on tangible equity stood at 1.70 percent and 16.05 percent. Our tangible common equity ratio was 12.14 percent at June 30, well above the 10 percent target we set when we initiated the CapitalSource merger. The strengths of these financial metrics position us to support asset growth and produce solid earnings."
Vic Santoro, executive vice president and CFO, stated, "Our core net interest margin was 5.74 percent for the quarter, right about where we expected it to be. We have made great strides in reaching our cost savings targets, with our adjusted efficiency ratio at 43 percent. Our Deposit Solutions Team, which concentrates on generating core deposits from legacy CapitalSource borrowers, has achieved significant success so far with new core deposits of $95 million and a pipeline of almost $175 million. Overall, organic core deposit growth was $200 million in the second quarter, and our teams remain focused on gathering new deposits from all sources."