SUBSEQUENT EVENTS

3 Months Ended

Mar. 31, 2012

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS

NOTE 14—SUBSEQUENT EVENTS

• Celtic Capital Corporation Acquisition

        On April 3, 2012, Pacific Western Bank completed the acquisition of Celtic Capital Corporation, or Celtic, an asset-based lending company based in Santa Monica, CA. Celtic focuses on providing asset-based loans to borrowers in the $5 million and under loan market in the United States. Pacific Western Bank acquired all of the capital stock of Celtic for $18 million in cash. Celtic's tangible net assets at March 31, 2012 on a pro forma basis totaled approximately $9 million and is subject to finalization of our fair value determination. The acquisition diversifies the Company's loan portfolio, expands the Company's product lines, and deploys excess liquidity into higher yielding assets.

        At April 3, 2012, Celtic had approximately $56 million in gross loans outstanding, with no loans on nonaccrual status. In addition, Pacific Western Bank assumed $47 million in outstanding debt, which was repaid on the closing date. The weighted average yield on Celtic's loan portfolio as of the acquisition date was approximately 18% and its weighted average remaining maturity was seven months.

        Celtic will operate under the name Celtic Capital Corporation as a subsidiary of Pacific Western Bank. Pacific Western has retained all 26 of Celtic's employees.

• American Perspective Bank Acquisition Announcement

        On April 30, 2012, the Company announced that Pacific Western Bank had entered into a definitive agreement and plan of merger to acquire all of the outstanding common stock and restricted stock of American Perspective Bank ("American Perspective") for $58.1 million in cash, or $13.00 per share for each share of common stock of American Perspective. The purchase price represented a multiple of 1.32 times American Perspective's tangible book value at March 31, 2012.

        At March 31, 2012, American Perspective had $264 million in assets, two operating branches located in San Luis Obispo and Santa Maria, California, and a loan production office located in Paso Robles, California. American Perspective serves small-to-medium sized businesses and professionals through those locations. The addition of the two branches strengthens the Company's presence in the Central Coast region and the loan production office provides opportunity for expansion and additional growth in that region.

        For the first quarter of 2012, American Perspective earned $462,000, had a net interest margin of 4.16%, and an efficiency ratio of 60.7%. It had $185 million in average loans which yielded 6.13% and its interest-bearing deposit cost was 0.92%, with total cost of deposits of 0.76%.

        The board of directors of each company has approved this transaction. The acquisition of American Perspective by Pacific Western Bank is subject to customary conditions, including the approval of American Perspective's shareholders and bank regulatory authorities, and is expected to close in the third quarter of 2012. Immediately following the completion of the acquisition, it is anticipated that American Perspective will be merged with and into Pacific Western Bank.

• Dividend Approval

        On May 10, 2012, the Company announced that the Board of Directors had declared a quarterly cash dividend of $0.18 per common share payable on May 31, 2012, to stockholders of record at the close of business on May 21, 2012.

        We have evaluated events that have occurred subsequent to March 31, 2012 and have concluded there are no subsequent events that would require recognition or disclosure in the accompanying condensed consolidated financial statements.