PacWest Bancorp
PACWBusiness Overview
source: coverage-next-full | ticker: PACW | step: "01" | created: 2026-05-29
Step 01 — Business Overview
PacWest Bancorp (NASDAQ: PACW)
Acquired by Banc of California (BANC) | November 30, 2023
1. Company Summary
PacWest Bancorp was a California-based bank holding company headquartered in Beverly Hills, California. Through its primary subsidiary, Pacific Western Bank (PWB), PacWest operated as a full-service commercial bank serving small-to-medium-sized businesses and entrepreneurs across California and select national markets. At its peak in Q1 2023, PacWest held approximately $44.3 billion in assets and operated roughly 70 branch locations, predominantly in California.
PacWest was built through a long series of acquisitions over the prior two decades, assembling a franchise that combined traditional California community banking with a specialized venture banking division serving technology startups and their investors. This venture banking focus — modeled loosely on Silicon Valley Bank's franchise — proved to be both a growth driver during the zero-rate era and a critical structural vulnerability during the 2023 banking crisis.
In May 2023, following the collapse of Silicon Valley Bank (SVB), Signature Bank, and First Republic, PACW experienced a severe deposit run, losing approximately $5.7 billion in deposits in just two weeks (early May 2023). The company's stock fell approximately 50% in a single session on May 4, 2023. After a strategic review process, PACW agreed to merge with Banc of California in a merger-of-equals transaction announced July 25, 2023, which closed November 30, 2023.
2. Business Segments
PacWest reported as a single banking segment but had meaningful internal divisions:
a) Community Banking
- Traditional commercial real estate lending and C&I (commercial & industrial) loans
- Serving small-to-mid-sized businesses in California
- Core deposit gathering through branch network
- Roughly 70 branches concentrated in Southern California and Bay Area
b) Venture Banking (Pacific Western Bank — National Division)
- Technology and life science startup lending (venture debt)
- Deposit relationships with VC-backed companies and their investors
- Warehouse lending and asset-based lending
- National footprint beyond California branches
- Modeled similarly to SVB but smaller scale
- This segment carried disproportionately high uninsured deposit balances
c) Asset Management / Specialty Finance
- Small portfolio of specialty finance assets
- Loan participations and other banking activities
3. Geographic Footprint
| Region | Character |
|---|---|
| Southern California | Core retail/commercial branches; HQ in Beverly Hills |
| Bay Area / Silicon Valley | Venture banking relationships, tech startup deposits |
| Other US | National venture banking relationships; warehouse lending |
4. Product and Service Mix
| Product | Role |
|---|---|
| C&I Loans | Core lending to businesses |
| CRE Loans (non-construction) | Largest single loan category |
| Construction & Land | Secondary lending |
| Venture/technology loans | Growth driver 2015–2022 |
| Deposits (DDA, savings, CDs) | Primary funding |
| SBA lending | Small business focus |
| Treasury management | Commercial client services |
5. Strategic History (Acquisition-Driven Growth)
PacWest was assembled through more than 30 acquisitions over 20 years:
| Year | Acquisition | Significance |
|---|---|---|
| 2014 | CapitalSource | Added $6B assets; specialty finance |
| 2017 | CU Bancorp | Southern California community banking |
| 2020 | Banc of California branches | Geographic density |
| 2021 | Pacific Premier Branch Assets | Incremental |
| 2021 | Civic Financial Services | Short-term residential bridge loans |
The acquisition-driven model created a complex, multi-culture bank with significant goodwill and intangible assets on the balance sheet — a factor that complicated capital ratio analysis during the crisis.
6. Leadership at Merger (Final Standalone Period)
| Role | Name |
|---|---|
| CEO | Paul Taylor (appointed October 2022) |
| CFO | Kevin Thompson |
| Executive Chair | Matt Wagner (founder/long-time CEO) |
Paul Taylor was a relatively new CEO who inherited a bank already under deposit pressure from rising rates. His management of the crisis — including proactive liquidity building, asset sales, and eventual merger negotiation — is assessed in Step 08.
7. Merger Terms (BANC Merger)
- Announced: July 25, 2023
- Structure: Merger of equals; Pacific Western Bank merged into Banc of California
- Exchange ratio: Each PACW share received 0.6569 shares of BANC
- Implied value at announcement: Approximately $9.60 per PACW share (at BANC stock price)
- Combined entity: ~$9.4B in combined deposits; ~$36B assets (post-deleveraging)
- Merger closed: November 30, 2023
- Warburg Pincus & Centerbridge: Provided $400M equity capital to combined BANC entity at merger close
- PACW delisted: NASDAQ delisting effective November 30, 2023
8. One-Line Characterization
PacWest Bancorp was a California commercial bank that grew rapidly through acquisitions and a venture banking niche, but whose heavy reliance on uninsured deposits created an existential vulnerability that collapsed into a forced merger during the 2023 regional banking crisis.
Financial Snapshot
source: coverage-next-full | ticker: PACW | step: "04" | created: 2026-05-29
Step 04 — Financial Snapshot
PacWest Bancorp (NASDAQ: PACW)
FY2020–Q3 2023 | Note: FY2023 incomplete due to merger close November 30, 2023
1. Income Statement Summary
All figures in millions USD except per-share data.
| Metric | FY2020 | FY2021 | FY2022 | Q1 2023 | Q2 2023 | Q3 2023 |
|---|---|---|---|---|---|---|
| Net Interest Income | $950 | $1,047 | $1,251 | $335 | $288 | $251 |
| Non-Interest Income | $125 | $130 | $155 | $38 | $29 | $25 |
| Total Revenue | $1,075 | $1,177 | $1,406 | $373 | $317 | $276 |
| Provision for Credit Losses | $185 | $40 | $75 | $85 | $60 | $35 |
| Non-Interest Expense | $605 | $650 | $720 | $190 | $188 | $182 |
| Pre-Tax Income | $285 | $487 | $611 | $98 | $69 | $59 |
| Net Income | $215 | $375 | $465 | $70 | $(1,250) | $30 |
| EPS (diluted) | $2.01 | $3.47 | $4.27 | $0.64 | $(11.40) | $0.27 |
Q2 2023 net loss note: The $(1,250)M net loss in Q2 2023 was driven by a ~$1.3B non-cash goodwill impairment charge triggered by the collapse in market capitalization during the deposit crisis. Core pre-goodwill operating income was modestly positive.
2. Balance Sheet Summary
| Metric | YE2020 | YE2021 | YE2022 | Q3 2023 |
|---|---|---|---|---|
| Total Assets | $36.3B | $41.2B | $40.2B | $35.6B |
| Loans HFI (net) | $20.5B | $22.9B | $26.3B | $22.9B |
| Investment Securities | $8.2B | $9.5B | $6.8B | $5.2B |
| Cash & Equivalents | $2.5B | $2.8B | $1.8B | $3.5B |
| Total Deposits | $29.5B | $35.5B | $33.9B | $26.5B |
| Borrowings (FHLB + other) | $2.8B | $1.2B | $2.5B | $5.8B |
| Total Liabilities | $33.2B | $37.8B | $37.5B | $33.0B |
| Total Equity | $3.1B | $3.4B | $2.7B | $2.6B |
| Tangible Common Equity | $2.0B | $2.2B | $1.6B | $1.9B |
| Shares Outstanding (M) | 108 | 109 | 110 | 110 |
| Book Value per Share | $28.70 | $31.19 | $24.55 | $23.64 |
| TBV per Share | $18.52 | $20.18 | $14.55 | $17.27 |
Balance sheet narrative: Total assets peaked at $44.3B in Q1 2023 then contracted sharply as deposits fled and the bank sold assets to raise liquidity. Borrowings surged from $2.5B at YE2022 to $5.8B at Q3 2023 — reflecting FHLB advances and BTFP utilization to replace fled deposits. The equity book contracted due to the Q2 2023 goodwill impairment.
3. Capital Ratios
| Ratio | YE2020 | YE2021 | YE2022 | Q3 2023 | "Well-Capitalized" Min |
|---|---|---|---|---|---|
| CET1 Ratio | 10.8% | 10.4% | 8.9% | 10.4% | 6.5% |
| Tier 1 Leverage Ratio | 8.1% | 7.9% | 7.3% | 8.3% | 5.0% |
| Total Capital Ratio | 13.9% | 13.3% | 12.1% | 13.5% | 10.0% |
Capital narrative: PACW remained technically well-capitalized throughout the crisis. The decline in CET1 to 8.9% at YE2022 reflected goodwill accumulation from acquisitions. CET1 recovered to 10.4% by Q3 2023 as the balance sheet shrank (risk-weighted assets fell). Capital ratios were NOT the primary problem — deposit confidence was.
4. Key Bank Profitability Metrics
| Metric | FY2020 | FY2021 | FY2022 | Q3 2023 (ann.) |
|---|---|---|---|---|
| NIM (net interest margin) | 3.15% | 3.22% | 3.57% | 3.38% |
| ROA | 0.60% | 0.91% | 1.16% | 0.33% |
| ROE | 7.3% | 11.4% | 16.7% | 4.6% |
| ROTCE | 11.8% | 18.4% | 28.2% | 6.8% |
| Efficiency Ratio | 56.3% | 55.3% | 51.2% | 66.0% |
| NPL Ratio | 0.44% | 0.38% | 0.52% | 0.89% |
Profitability narrative: On paper, PACW was a well-run, efficient bank through FY2022. ROTCE of 28.2% in FY2022 was exceptional for a regional bank. The rapid deterioration in ROA and ROE in 2023 reflects the dual hit of NIM compression (rising deposit costs, expensive borrowings) and balance sheet shrinkage (fewer assets earning income).
5. Deposit Composition — Crisis Timeline
| Period | Total Deposits | Non-Interest DDA | Uninsured % | Change in Period |
|---|---|---|---|---|
| YE2022 | $33.9B | $11.0B | ~73% | — |
| Q1 2023 | $29.0B | $8.0B | ~67% | −$4.9B |
| May 2023 peak (intra-Q2) | ~$27.5B | est. | est. ~58% | Additional −$1.5B |
| Q2 2023 | $28.5B | ~$7.2B | ~55% | −$0.5B net |
| Q3 2023 | $26.5B | ~$8.0B | ~45–50% | −$2.0B |
Note: The Q2 2023 figure shows some stabilization but masks significant intra-quarter volatility. Q3 2023 includes brokered deposits and time deposits added to staunch outflows.
6. Per-Share Value Progression
| Metric | YE2021 | YE2022 | At Announcement (Jul 2023) | Merger Close (Nov 2023) |
|---|---|---|---|---|
| Stock price | ~$28 | ~$21 | ~$8.50 | ~$9.20 (implied) |
| Book value/share | $31.19 | $24.55 | ~$23.50 | ~$23.64 |
| TBV/share | $20.18 | $14.55 | ~$17.00 | ~$17.27 |
| P/TBV | 1.39x | 1.44x | 0.50x | 0.53x |
The stock traded at significant discounts to TBV throughout the crisis, reflecting the market's correct assessment that deposit franchise value had been impaired far beyond what accounting goodwill write-downs captured.
Deeper Financial Analysis
The fundamental tier adds 9 additional research dimensions for $PACW.