PacWest Bancorp (PACW) Barclays 23rd Annual Global Financial Services Conference summary

Business overview and market position

• Operates as a $35 billion commercial bank, the third largest headquartered in California and the largest independent in Los Angeles.

• Business model includes commercial/community banking, specialty verticals (e.g., lender finance, entertainment, SBA, venture), and payments/treasury management.

• Recent PacWest acquisition completed in late 2023, with integration and restructuring largely finished by early 2024.

• Achieved double-digit quarter-over-quarter earnings growth post-integration.

• Loan production and growth have outpaced the market, leveraging opportunities from industry consolidation.

Growth drivers and market dynamics

• Growth fueled by strong California economy, niche focus, and reduced competition in specialty lending.

• Industry consolidation has led to customer migration from larger acquirers, benefiting relationship-focused banks.

• Southern California remains a major economic engine, with job creation, venture capital, and upcoming global events (World Cup, Super Bowl, Olympics) supporting momentum.

• Specialty lending (warehouse, fund finance, lender finance) and mid-market fund finance are key growth areas.

• Community banking is regaining momentum after leadership and team restructuring.

Profitability and margin expansion

• Margin expansion driven by maturing, low-yield legacy loans and new production at higher rates.

• Deposit repricing efforts have outpaced peers, with a beta of 55%.

• HOA deposit business is driven more by service suite than pricing, with $4 billion in deposits.

• Loan growth is expected to be flat this quarter due to higher payoffs, but production remains strong and earnings are set to grow.