Business Combinations (Tables)

9 Months Ended

Sep. 30, 2013

Financial Pacific Holding Corp [Member]

Business Acquisition [Line Items]

Schedule of Net Assets Acquired and Estimated Fair Value Adjustments

A summary of the net assets acquired and the estimated fair value adjustments of FinPac are presented below:

(in thousands)

	FinPac
	July 1, 2013
Cost basis net assets	$	61,446
Cash payment paid	(156,110		)
Fair value adjustments:
Non-covered loans and leases, net	6,881
Other intangible assets	(8,516		)
Other assets	(1,650		)
Term debt	(400		)
Other liabilities	1,355
Goodwill	$	(96,994	)

Schedule of Assets Acquired and Liabilities Assumed at Estimated Fair Values

The statement of assets acquired and liabilities assumed at their fair values of FinPac are presented below. Additional adjustments to the purchase price allocation may be required, specifically to leases, other assets, other liabilities and taxes.

(in thousands)

	FinPac
	July 1, 2013
Assets Acquired:
Cash and equivalents	$	6,452
Non-covered loans and leases, net	264,336
Premises and equipment	491
Goodwill	96,994
Other assets	7,798
Total assets acquired	$	376,071
Liabilities Assumed:
Term debt	211,204
Other liabilities	8,757
Total liabilities assumed	219,961
Net Assets Acquired	$	156,110

Schedule of Loans Acquired

Non-covered leases acquired from FinPac that are not subject to the requirements of FASB ASC 310-30 Loans and Debt Securities Acquired with Deteriorated Credit Quality ("ASC 310-30") are presented below at acquisition:

(in thousands)

	FinPac
	July 1, 2013
Contractually required payments	$	350,403
Purchase adjustment for credit	$	(20,520	)
Balance of non-covered loans and leases, net	$	264,336

Pro Forma Results of Operations

The following tables present unaudited pro forma results of operations for the three and nine months ended September 30, 2013 and 2012 as if the acquisition of FinPac had occurred on January 1, 2012. The proforma results have been prepared for comparative purposes only and are not necessarily indicative of the results that would have been obtained had the acquisitions actually occurred on January 1, 2012.

(in thousands, except per share data)

	Three months ended September 30, 2013
						Pro Forma				Pro Forma
	Company			FinPac (a)		Adjustments				Combined
Net interest income	$	92,311		$	14,498	$	(1,121	)	(b)	$	105,688
Provision for non-covered loan and lease losses	1,228			1,780		1,524			(d)	4,532
Recapture of provision for covered loan losses	(1,904		)	—		—				(1,904		)
Non-interest income	25,815			329		—				26,144
Non-interest expense	92,108			3,496		(474		)	(c)	95,130
Income before provision for income taxes	26,694			9,551		(2,171		)		34,074
Provision for income taxes	9,169			3,599		(868		)	(e)	11,900
Net income	17,525			5,952		(1,303		)		22,174
Dividends and undistributed earnings allocated to participating securities	196			—		52				248
Net earnings available to common shareholders	$	17,329		$	5,952	$	(1,355	)		$	21,926
Earnings per share:
Basic	$	0.15								$	0.20
Diluted	$	0.15								$	0.20
Average shares outstanding:
Basic	111,912									111,912
Diluted	112,195									112,195

(a) FinPac amounts represent results from July 1, 2013 to September 30, 2013.

(b) Consists of change in yields due to fair value adjustments.

(c) Consists of merger related expenses of $629,000 at the Bank, additional expense related to restricted stock, and FinPac amortization of intangible assets, director compensation and travel, and management fees.

(d) Consists of adjustment to FinPac provision for credit losses due to purchase accounting adjustments.

(e) Income tax effect of pro forma adjustments at 40%.

(in thousands, except per share data)

	Nine months ended September 30, 2013
						Pro Forma				Pro Forma
	Company			FinPac (a)		Adjustments				Combined
Net interest income	$	280,393		$	40,024	$	(1,513	)	(b)	$	318,904
Provision for non-covered loan and lease losses	11,209			5,052		4,565			(d)	20,826
Recapture of provision for covered loan losses	(4,744		)	—		—				(4,744		)
Non-interest income	94,327			1,641		—				95,968
Non-interest expense	265,801			11,784		(1,802		)	(c)	275,783
Income before provision for income taxes	102,454			24,829		(4,276		)		123,007
Provision for income taxes	35,315			9,434		(1,710		)	(e)	43,039
Net income	67,139			15,395		(2,566		)		79,968
Dividends and undistributed earnings allocated to participating securities	576			—		110				686
Net earnings available to common shareholders	$	66,563		$	15,395	$	(2,676	)		$	79,282
Earnings per share:
Basic	$	0.59								$	0.71
Diluted	$	0.59								$	0.71
Average shares outstanding:
Basic	111,934									111,934
Diluted	112,154									112,154

(a) FinPac amounts represent results from January 1, 2013 to September 30, 2013.

(b) Consists of interest expense benefit of FinPac utilizing Bank funding, and change in yields due to fair value adjustments.

(c) Consists of merger related expenses of $1.4 million at the Bank, additional expense related to restricted stock, and FinPac amortization of intangible assets, director compensation and travel, and management fees.

(d) Consists of adjustment to FinPac provision for credit losses due to purchase accounting adjustments.

(e) Income tax effect of pro forma adjustments at 40%.

(in thousands, except per share data)

	Three months ended September 30, 2012
					Pro Forma				Pro Forma
	Company		FinPac (a)		Adjustments				Combined
Net interest income	$	102,040	$	12,030	$	1,167		(b)	$	115,237
Provision for non-covered loan and lease losses	7,078		2,516		1,361			(d)	10,955
Provision for covered loan losses	2,927		—		—				2,927
Non-interest income	33,679		749		—				34,428
Non-interest expense	86,974		3,836		(303		)	(c)	90,507
Income before provision for income taxes	38,740		6,427		109				45,276
Provision for income taxes	13,587		2,425		44			(e)	16,056
Net income	25,153		4,002		65				29,220
Dividends and undistributed earnings allocated to participating securities	170		—		27				197
Net earnings available to common shareholders	$	24,983	$	4,002	$	38			$	29,023
Earnings per share:
Basic	$	0.22							$	0.26
Diluted	$	0.22							$	0.26
Average shares outstanding:
Basic	111,899								111,899
Diluted	112,151								112,151

(a) FinPac amounts represent results from July 1, 2012 to September 30, 2012.

(b) Consists of interest expense benefit of FinPac utilizing Bank funding, and change in yields due to fair value adjustments.

(c) Consists of additional expense related to restricted stock, and FinPac amortization of intangible assets, director compensation and travel, and management fees.

(d) Consists of adjustment to FinPac provision for credit losses due to purchase accounting adjustments.

(e) Income tax effect of pro forma adjustments at 40%.

(in thousands, except per share data)

	Nine months ended September 30, 2012
					Pro Forma				Pro Forma
	Company		FinPac (a)		Adjustments				Combined
Net interest income	$	305,407	$	35,897	$	3,509		(b)	$	344,813
Provision for non-covered loan and lease losses	16,883		8,213		415			(d)	25,511
Provision for covered loan losses	4,302		—		—				4,302
Non-interest income	89,842		2,751		—				92,593
Non-interest expense	261,606		11,545		(910		)	(c)	272,241
Income before provision for income taxes	112,458		18,890		4,004				135,352
Provision for income taxes	38,525		7,131		1,601			(e)	47,257
Net income	73,933		11,759		2,403				88,095
Dividends and undistributed earnings allocated to participating securities	499		—		96				595
Net earnings available to common shareholders	$	73,434	$	11,759	$	2,307			$	87,500
Earnings per share:
Basic	$	0.66							$	0.78
Diluted	$	0.65							$	0.78
Average shares outstanding:
Basic	111,928								111,928
Diluted	112,159								112,159

(a) FinPac amounts represent results from January 1, 2012 to September 30, 2012.

(b) Consists of interest expense benefit of FinPac utilizing Bank funding, and change in yields due to fair value adjustments.

(c) Consists of additional expense related to restricted stock, and FinPac amortization of intangible assets, director compensation and travel, and management fees.

(d) Consists of adjustment to FinPac provision for credit losses due to purchase accounting adjustments.

(e) Income tax effect of pro forma adjustments at 40%.

Circle Bancorp [Member]

Business Acquisition [Line Items]

Schedule of Net Assets Acquired and Estimated Fair Value Adjustments

A summary of the net assets acquired and the estimated fair value adjustments of Circle are presented below:

(in thousands)

	Circle Bank
	November 14, 2012
Cost basis net assets	$	17,127
Cash payment paid	(24,860		)
Fair value adjustments:
Non-covered loans and leases, net	(2,622		)
Other intangible assets	830
Non-covered other real estate owned	(487		)
Deposits	(904		)
Term debt	(2,404		)
Other	1,398
Goodwill	$	(11,922	)

Schedule of Assets Acquired and Liabilities Assumed at Estimated Fair Values

The statement of assets acquired and liabilities assumed at their fair values of Circle are presented below:

(in thousands)

	Circle Bank
	November 14, 2012
Assets Acquired:
Cash and equivalents	$	39,328
Investment securities	793
Non-covered loans and leases, net	246,665
Premises and equipment	7,695
Restricted equity securities	2,491
Goodwill	11,922
Other intangible assets	830
Non-covered other real estate owned	1,602
Other assets	6,469
Total assets acquired	$	317,795
Liabilities Assumed:
Deposits	$	250,408
Junior subordinated debentures	8,764
Term debt	55,404
Other liabilities	3,219
Total liabilities assumed	$	317,795

Schedule of Loans Acquired

Non-covered loans acquired from Circle that are not subject to the requirements of FASB ASC 310-30 Loans and Debt Securities Acquired with Deteriorated Credit Quality ("ASC 310-30") are presented below at acquisition:

(in thousands)

	November 14,
	2012
Contractually required principal payments	$	242,999
Purchase adjustment for credit	(5,760		)
Balance of performing non-covered loans	$	240,850

Non-covered loans acquired from Circle that are subject to the requirements of ASC 310-30 are presented below at acquisition and as of September 30, 2013 and December 31, 2012: 

(in thousands)

	November 14,		December 31,		September 30,
	2012		2012		2013
Contractually required principal payments	$	12,252	$	12,231	$	5,606
Carrying balance of acquired purchase credit impaired non-covered loans	$	5,815	$	5,809	$	2,263