10-Q

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TABLE OF CONTENTS

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

ý	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2013
OR
o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                             to

Commission File Number: 00-30747

PACWEST BANCORP
(Exact name of registrant as specified in its charter)

DELAWARE (State or other jurisdiction of incorporation or organization)	33-0885320 (I.R.S. Employer Identification Number)
10250 Constellation Blvd., Suite 1640 Los Angeles, California (Address of principal executive offices)	90067 (Zip Code)

(310) 286-1144
(Registrant's telephone number, including area code)

        Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý    No o

        Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ý    No o

        Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of "large accelerated filer," "accelerated filer," and "smaller reporting company" in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer ý Accelerated filer o Non-accelerated filer o
(Do not check if a
smaller reporting company) Smaller reporting company o

        Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o    No ý

        As of November 4, 2013, there were 44,316,774 shares of the registrant's common stock outstanding, excluding 1,763,544 shares of unvested restricted stock.

PACWEST BANCORP AND SUBSIDIARIES

SEPTEMBER 30, 2013 FORM 10-Q

TABLE OF CONTENTS

		Page
PART I—FINANCIAL INFORMATION			3
ITEM 1.	Condensed Consolidated Financial Statements (Unaudited)		3
	Condensed Consolidated Balance Sheets (Unaudited)		3
	Condensed Consolidated Statements of Earnings (Unaudited)		4
	Condensed Consolidated Statements of Comprehensive Income (Unaudited)		5
	Condensed Consolidated Statement of Changes in Stockholders' Equity (Unaudited)		6
	Condensed Consolidated Statements of Cash Flows (Unaudited)		7
	Notes to Condensed Consolidated Financial Statements (Unaudited)		8
ITEM 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations		61
ITEM 3.	Quantitative and Qualitative Disclosures About Market Risk		116
ITEM 4.	Controls and Procedures		116
PART II—OTHER INFORMATION			117
ITEM 1.	Legal Proceedings		117
ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds		119
ITEM 6.	Exhibits		120
SIGNATURES			121

2

PART I—FINANCIAL INFORMATION

ITEM 1.    Condensed Consolidated Financial Statements (Unaudited)

PACWEST BANCORP AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Dollars in Thousands, Except Par Value and Share Data)

(Unaudited)

	September 30, 2013			December 31, 2012
ASSETS
Cash and due from banks	$	132,467		$	89,011
Interest-earning deposits in financial institutions		11,552			75,393
Total cash and cash equivalents		144,019			164,404
Securities available-for-sale, at fair value ($39,378 and $44,684 covered by FDIC loss sharing at September 30, 2013 and December 31, 2012)		1,512,147			1,355,385
Federal Home Loan Bank stock, at cost		34,095			37,126
Total investment securities		1,546,242			1,392,511
Loans and leases, net of unearned income ($510,924 and $543,327 covered by FDIC loss sharing at September 30, 2013 and December 31, 2012)		4,383,393			3,590,297
Allowance for loan and lease losses ($23,235 and $26,069 for loans covered by FDIC loss sharing at September 30, 2013 and December 31, 2012)		(83,786	)		(91,968	)
Total loans and leases, net		4,299,607			3,498,329
Other real estate owned, net ($12,014 and $22,842 covered by FDIC loss sharing at September 30, 2013 and December 31, 2012)		55,972			56,414
Premises and equipment, net		32,683			19,503
FDIC loss sharing asset		55,653			57,475
Cash surrender value of life insurance		77,512			68,326
Goodwill		215,862			79,866
Core deposit and customer relationship intangibles, net		18,678			14,723
Other assets		170,627			112,107
Total assets	$	6,616,855		$	5,463,658
LIABILITIES
Noninterest-bearing deposits	$	2,328,688		$	1,939,212
Interest-bearing deposits		3,104,456			2,769,909
Total deposits		5,433,144			4,709,121
Borrowings		8,243			12,591
Subordinated debentures		132,500			108,250
Discontinued operations		155,807			—
Accrued interest payable and other liabilities		70,872			44,575
Total liabilities		5,800,566			4,874,537
Commitments and contingencies
STOCKHOLDERS' EQUITY
Preferred stock, $0.01 par value; authorized 5,000,000 shares; none issued and outstanding		—			—
Common stock, $0.01 par value; authorized 75,000,000 shares; 46,528,290 shares issued at September 30, 2013 and 37,772,559 at December 31, 2012 (includes 1,791,462 and 1,698,281 shares of unvested restricted stock)		465			377
Additional paid-in capital		1,282,246			1,062,184
Accumulated deficit		(457,531	)		(499,537	)
Treasury stock, at cost; 437,548 and 351,650 shares at September 30, 2013 and December 31, 2012		(9,218	)		(6,803	)
Accumulated other comprehensive income		327			32,900
Total stockholders' equity		816,289			589,121
Total liabilities and stockholders' equity	$	6,616,855		$	5,463,658

See "Notes to Condensed Consolidated Financial Statements."

3

PACWEST BANCORP AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS

(Dollars in Thousands, Except Per Share Data)

(Unaudited)

	Three Months Ended									Nine Months Ended September 30,
	September 30, 2013			June 30, 2013			September 30, 2012
										2013			2012
Interest income:
Loans and leases	$	75,196		$	63,168		$	66,711		$	199,374		$	194,775
Investment securities		9,871			8,414			8,346			26,501			27,484
Deposits in financial institutions		91			49			66			183			154
Total interest income		85,158			71,631			75,123			226,058			222,413
Interest expense:
Deposits		1,692			2,077			3,292			6,418			10,232
Borrowings		108			199			210			451			2,428
Subordinated debentures		1,069			882			850			2,734			2,889
Total interest expense		2,869			3,158			4,352			9,603			15,549
Net interest income		82,289			68,473			70,771			216,455			206,864
Negative provision for credit losses		(4,167	)		(1,842	)		(2,141	)		(2,872	)		(8,486	)
Net interest income after negative provision for credit losses		86,456			70,315			72,912			219,327			215,350
Noninterest income:
Service charges on deposit accounts		2,938			2,767			3,108			8,568			9,789
Other commissions and fees		2,204			2,154			2,123			6,291			6,101
Gain on sale of leases		604			279			132			1,108			1,525
Gain on sale of securities		—			—			—			409			—
Acquisition-related securities gain		5,222			—			—			5,222			—
Other-than-temporary impairment loss on covered security		—			—			—			—			(1,115	)
Increase in cash surrender value of life insurance		62			221			304			716			964
FDIC loss sharing expense, net		(7,032	)		(5,410	)		(367	)		(15,579	)		(4,048	)
Other income		1,129			192			382			1,435			599
Total noninterest income		5,127			203			5,682			8,170			13,815
Noninterest expense:
Compensation		27,963			26,057			23,812			79,370			71,698
Occupancy		7,828			7,480			6,964			21,906			21,340
Data processing		2,590			2,455			2,310			7,278			6,848
Other professional services		2,830			2,240			2,019			7,167			6,167
Business development		756			798			635			2,290			1,854
Communications		828			622			652			2,063			1,886
Insurance and assessments		1,496			1,267			1,398			4,024			4,014
Non-covered other real estate owned, net		(88	)		80			1,883			305			3,834
Covered other real estate owned, net		(332	)		(94	)		4,290			(1,239	)		7,242
Intangible asset amortization		1,512			1,284			1,678			3,972			5,150
Acquisition and integration		5,450			17,997			2,101			24,139			2,997
Debt termination		—			—			—			—			22,598
Other expense		5,367			4,030			3,915			13,324			12,509
Total noninterest expense		56,200			64,216			51,657			164,599			168,137
Earnings from continuing operations before income taxes		35,383			6,302			26,937			62,898			61,028
Income tax expense		(11,243	)		(1,906	)		(10,849	)		(20,868	)		(24,119	)
Net earnings from continuing operations		24,140			4,396			16,088			42,030			36,909
Earnings (loss) from discontinued operations before income taxes		39			(81	)		—			(42	)		—
Income tax (expense) benefit		(16	)		34			—			18			—
Net earnings (loss) from discontinued operations		23			(47	)		—			(24	)		—
Net earnings	$	24,163		$	4,349		$	16,088		$	42,006		$	36,909
Basic earnings per share:
Net earnings from continuing operations	$	0.53		$	0.11		$	0.43		$	1.03		$	1.00
Net earnings	$	0.53		$	0.11		$	0.43		$	1.03		$	1.00
Diluted earnings per share:
Net earnings from continuing operations	$	0.53		$	0.11		$	0.43		$	1.03		$	1.00
Net earnings	$	0.53		$	0.11		$	0.43		$	1.03		$	1.00
Dividends declared per share	$	0.25		$	0.25		$	0.18		$	0.75		$	0.54

See "Notes to Condensed Consolidated Financial Statements."

4

PACWEST BANCORP AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In Thousands)

(Unaudited)

	Three Months Ended									Nine Months Ended September 30,
	September 30, 2013			June 30, 2013			September 30, 2012
										2013			2012
Net earnings	$	24,163		$	4,349		$	16,088		$	42,006		$	36,909
Other comprehensive income (loss) related to unrealized gains (losses) on securities available-for-sale:
Unrealized holding gains (losses) arising during the period		4,070			(48,189	)		12,966			(50,529	)		28,560
Income tax benefit (expense) related to unrealized holding (losses) gains arising during the period		483			20,240			(5,445	)		23,415			(11,995	)
Reclassification adjustment for (gain) loss included in net earnings		(5,222	)		—			—			(5,631	)		1,115
Income tax (benefit) expense related to reclassification adjustment		—			—			—			172			(468	)
Other comprehensive income (loss)		(669	)		(27,949	)		7,521			(32,573	)		17,212
Comprehensive income (loss)	$	23,494		$	(23,600	)	$	23,609		$	9,433		$	54,121

See "Notes to Condensed Consolidated Financial Statements."

5

PACWEST BANCORP AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY

(Dollars in Thousands, Except Share Data)

(Unaudited)

	Nine Months Ended September 30, 2013
	Common Stock
															Accumulated Other Comprehensive Income
	Shares			Par Value		Additional Paid-in Capital			Accumulated Deficit			Treasury Stock						Total
Balance, December 31, 2012		37,420,909		$	377	$	1,062,184		$	(499,537	)	$	(6,803	)	$	32,900		$	589,121
Net earnings		—			—		—			42,006			—			—			42,006
Other comprehensive loss—net unrealized loss on securities available-for-sale, net of tax		—			—		—			—			—			(32,573	)		(32,573	)
Issuance of common stock for acquisition of First California Financial Group, Inc.		8,403,119			84		242,184			—			—			—			242,268
Restricted stock awarded and earned stock compensation, net of shares forfeited		352,612			4		6,541			—			—			—			6,545
Restricted stock surrendered		(85,898	)		—		—			—			(2,415	)		—			(2,415	)
Tax effect from vesting of restricted stock		—			—		985			—			—			—			985
Cash dividends paid ($0.75 per share)		—			—		(29,648	)		—			—			—			(29,648	)
Balance, September 30, 2013		46,090,742		$	465	$	1,282,246		$	(457,531	)	$	(9,218	)	$	327		$	816,289

See "Notes to Condensed Consolidated Financial Statements."

6

PACWEST BANCORP AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In Thousands)

(Unaudited)

	Nine Months Ended September 30,
	2013			2012
Cash flows from operating activities:
Net earnings	$	42,006		$	36,909
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization		23,768			18,349
Negative provision for credit losses		(2,872	)		(8,486	)
Gain on sale of other real estate owned		(4,006	)		(4,542	)
Provision for losses on other real estate owned		2,094			13,566
Gain on sale of leases		(1,108	)		(1,525	)
(Gain) loss on sale of premises and equipment		(15	)		158
Gain on branch sale		—			(297	)
Gain on sale of securities		(409	)		—
Acquisition-related securities gain		(5,222	)		—
Other-than-temporary impairment loss on covered security		—			1,115
Earned stock compensation		6,545			4,631
Tax effect included in stockholders' equity of restricted stock vesting		(985	)		(224	)
Decrease in accrued and deferred income taxes, net		4,267			6,423
Decrease in FDIC loss sharing asset		19,063			22,547
Decrease in other assets		6,254			3,262
Decrease in accrued interest payable and other liabilities		(22,952	)		(19,156	)
Net cash provided by operating activities		66,428			72,730
Cash flows from investing activities:
Net cash and cash equivalents acquired (used) in acquisitions		273,013			(86,931	)
Net cash used in branch sale		—			(119,756	)
Net decrease in loans and leases		221,779			200,080
Proceeds from sale of loans and leases		18,812			42,128
Securities available-for-sale:
Proceeds from maturities and paydowns		264,654			310,273
Proceeds from sales		12,810			45,639
Purchases		(504,936	)		(320,936	)
Net redemptions of Federal Home Loan Bank stock		12,549			6,595
Proceeds from sales of other real estate owned		28,918			43,881
Purchases of premises and equipment, net		(2,246	)		(2,208	)
Proceeds from sales of premises and equipment		26			700
Net cash provided by investing activities		325,379			119,465
Cash flows from financing activities:
Net increase (decrease) in deposits:
Noninterest-bearing		28,310			339,718
Interest-bearing		(405,166	)		(224,165	)
Net decrease in borrowings		(4,258	)		(222,736	)
Redemption of subordinated debentures		—			(18,558	)
Repayment of acquired debt		—			(180,796	)
Restricted stock surrendered		(2,415	)		(1,424	)
Tax effect included in stockholders' equity of restricted stock vesting		985			224
Cash dividends paid		(29,648	)		(19,669	)
Net cash used in financing activities		(412,192	)		(327,406	)
Net decrease in cash and cash equivalents		(20,385	)		(135,211	)
Cash and cash equivalents, beginning of period		164,404			295,617
Cash and cash equivalents, end of period	$	144,019		$	160,406
Supplemental disclosures of cash flow information:
Cash paid for interest	$	10,604		$	17,457
Cash paid for income taxes		16,703			17,884
Loans transferred to other real estate owned		12,754			32,244
Common stock issued for First California Financial Group acquisition		242,268			—

See "Notes to Condensed Consolidated Financial Statements."

7

PACWEST BANCORP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(Unaudited)

NOTE 1—BASIS OF PRESENTATION

        PacWest Bancorp is a bank holding company registered under the Bank Holding Company Act of 1956, as amended. Our principal business is to serve as the holding company for our Los Angeles-based wholly-owned banking subsidiary, Pacific Western Bank, which we refer to as "Pacific Western" or the "Bank." When we say "we," "our," or the "Company," we mean the Company on a consolidated basis with the Bank. When we refer to "PacWest" or to the holding company, we are referring to the parent company on a stand-alone basis.

        Pacific Western is a full-service commercial bank offering a broad range of banking products and services including: accepting demand, money market, and time deposits; originating loans and leases, including commercial, real estate construction, equipment finance leases, SBA guaranteed and consumer loans; and providing other business-oriented products. Our operations are primarily located in Southern California extending from San Diego County to California's Central Coast; we also operate three banking offices in the San Francisco Bay area, a leasing operation based in Utah, and asset-based lending operations based in Arizona as well as San Jose and Santa Monica, California. The Bank focuses on conducting business with small to medium sized businesses in our marketplace and the owners and employees of those businesses. The majority of our loans are secured by the real estate collateral of such businesses. Our asset-based lending function operates in Arizona, California, Texas, Colorado, Minnesota, and the Pacific Northwest. Our equipment leasing function has lease receivables in 45 states.

        We generate our revenue primarily from interest received on loans and leases and, to a lesser extent, from interest received on investment securities, and fees received in connection with deposit services, extending credit and other services offered, including foreign exchange services. Our major operating expenses are the interest paid by the Bank on deposits and borrowings, compensation and general operating expenses. The Bank relies on a foundation of locally generated and relationship-based deposits, with 73 branches located across 10 California counties. The Bank has a relatively low cost of funds due to a high percentage of noninterest-bearing and low cost deposits.

        We have completed 26 acquisitions from May 2000 through September 30, 2013, including the acquisition of First California Financial Group, Inc. ("FCAL") on May 31, 2013. Since 2000, our acquisitions have been accounted for using the acquisition method of accounting and accordingly, the operating results of the acquired entities have been included in the condensed consolidated financial statements from their respective acquisition dates. See Note 3, Acquisitions, for more information about the FCAL acquisition and the acquisitions that we made in 2012, and Note 18, Subsequent Events, for information regarding the announcement of the CapitalSource, Inc. merger.

Basis of Presentation

        The accounting and reporting policies of the Company are in accordance with U.S. generally accepted accounting principles, which we may refer to as GAAP. All significant intercompany balances and transactions have been eliminated.

        Our financial statements reflect all adjustments that are, in the opinion of management, necessary to present a fair statement of the results for the interim periods presented. Certain information and note disclosures normally included in consolidated financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to the rules and regulations of the Securities and

8

PACWEST BANCORP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Continued)

(Unaudited)

NOTE 1—BASIS OF PRESENTATION (Continued)

Exchange Commission. The interim operating results are not necessarily indicative of operating results for the full year.

Use of Estimates

        Management of the Company has made a number of estimates and assumptions relating to the reporting of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenue and expenses during the reporting period to prepare these condensed consolidated financial statements in conformity with GAAP. Actual results could differ from those estimates. Material estimates subject to change in the near term include, among other items, the allowance for credit losses, the carrying value of intangible assets, the carrying value of the FDIC loss sharing asset, and the realization of deferred tax assets.

        As described in Note 3 below, we completed the acquisition of FCAL on May 31, 2013. The acquired assets and liabilities of FCAL were measured at their estimated fair values. Management made significant estimates and exercised significant judgment in estimating fair values and accounting for the acquired assets and assumed liabilities of FCAL.

Reclassifications

        Certain prior period amounts have been reclassified to conform to the current period's presentation format. Starting with the June 30, 2013 quarter-end, loan tables presented non-purchased credit impaired ("Non-PCI") and purchased credit impaired ("PCI") loan categories in addition to covered and non-covered loan information. Previously the loan tables only presented covered and non-covered loan categories.

NOTE 2—DISCONTINUED OPERATIONS

        In connection with the acquisition of FCAL, we acquired Electronic Payment Services ("EPS"), a division of the Bank that is being discontinued. Accordingly, all income and expense related to EPS have been removed from continuing operations and are included in the condensed consolidated statements of earnings under the caption "Earnings (loss) from discontinued operations." For the three months ended September 30, 2013, revenues (net interest income plus noninterest income) and pre-tax income for the EPS division were $1.1 million and $39,000, respectively. For the period from acquisition date to September 30, 2013, revenues and pre-tax loss for the EPS division were $1.6 million and $42,000, respectively. Liabilities of the EPS division, which consist primarily of noninterest-bearing deposits, are included in the condensed consolidated balance sheets under the caption "Discontinued operations." Included in the EPS noninterest-bearing deposits are $104.8 million of brokered deposits. For segment reporting purposes, the EPS division is included in our Banking Segment.

NOTE 3—ACQUISITIONS

        We completed the following acquisitions during the time period of January 1, 2012 to September 30, 2013, using the acquisition method of accounting, and accordingly, the operating results of the acquired entities have been included in our condensed consolidated financial statements from their respective dates of acquisition.

9

PACWEST BANCORP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Continued)

(Unaudited)

NOTE 3—ACQUISITIONS (Continued)

        The following balance sheets of the acquired entities are presented at estimated fair value as of their respective acquisition dates:

	Acquisition and Date Acquired
	First California Financial Group		American Perspective Bank		Celtic Capital Corporation		Pacific Western Equipment Finance
	May 31, 2013		August 1, 2012		April 3, 2012		January 3, 2012
	(In thousands)
Assets Acquired:
Cash and due from banks	$	6,124	$	3,370	$	3,435	$	7,092
Interest-earning deposits in financial institutions		266,889		10,081		—		—
Investment securities available-for-sale		4,444		48,887		—		—
FHLB stock		9,518		1,412		—		—
Loans and leases		1,049,613		197,279		54,963		140,959
Other real estate owned		13,772		1,561		—		—
Premises and equipment		15,322		—		—		—
FDIC loss sharing asset		17,241		—		—		—
Cash surrender value of life insurance		13,265		—		—		—
Goodwill		136,189		15,047		6,645		19,033
Core deposit and customer relationship intangibles		7,927		1,924		1,300		1,700
Other intangible assets		—		—		670		1,420
Leases in process		—		—		—		19,162
Other assets		40,192		4,234		69		467
Total assets acquired	$	1,580,496	$	283,795	$	67,082	$	189,833
Liabilities Assumed:
Noninterest-bearing deposits	$	361,166	$	40,673	$	—	$	—
Interest-bearing deposits		739,713		178,891		—		—
Borrowings from parent		—		—		—		128,677
Other borrowings		—		5,315		46,804		15,839
Subordinated debentures		24,061		—		—		—
Discontinued operations		184,619		—		—		—
Accrued interest payable and other liabilities		19,369		840		2,278		10,317
Total liabilities assumed	$	1,328,928	$	225,719	$	49,082	$	154,833
Total consideration paid	$	251,568	$	58,076	$	18,000	$	35,000
Summary of consideration:
Cash paid	$	—	$	58,076	$	18,000	$	35,000
PacWest common stock issued		242,268		—		—		—
Cancellation of FCAL common stock owned by
PacWest (at acquisition date fair value)		9,300		—		—		—
Total	$	251,568	$	58,076	$	18,000	$	35,000

10

PACWEST BANCORP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Continued)

(Unaudited)

NOTE 3—ACQUISITIONS (Continued)

First California Financial Group Acquisition

        On May 31, 2013, PacWest Bancorp ("PacWest") completed the acquisition of First California Financial Group, Inc. ("FCAL"). As part of the acquisition, First California Bank ("FCB"), a wholly-owned subsidiary of FCAL, merged with and into Pacific Western. The acquisition, which was first announced on November 6, 2012, was concluded following receipt of shareholder approval from both institutions and all required regulatory approvals.

        In the FCAL acquisition, each share of FCAL common stock was converted into the right to receive 0.2966 of a share of PacWest common stock. The exchange ratio was calculated based on the volume-weighted average share price of PacWest common stock for the 20 consecutive trading days ending on the second full trading day prior to the receipt of the last of the regulatory approvals required under the merger agreement. PacWest issued an aggregate of approximately 8.4 million shares of PacWest common stock to FCAL stockholders. In addition, approximately one million shares of FCAL common stock previously owned by PacWest were cancelled in the transaction. Based on the closing price of PacWest's common stock on May 31, 2013 of $28.83 per share, the aggregate consideration paid to FCAL common stockholders, plus the acquisition date fair value of the FCAL shares of common stock cancelled in the merger, was $251.6 million.

        The integration of FCB systems and the conversion of FCB's branches to PWB's operating platform were completed in June 2013. FCB had 15 branches, eight of which overlapped with existing PWB branches. Six of the FCB branches and two PWB branches were closed as part of the integration and consolidation plan. As a result PWB added seven locations to its branch network.

        FCB was a full-service commercial bank headquartered in Westlake Village, California. FCB provided a full range of banking services, including revolving lines of credit, term loans, commercial real estate loans, construction loans, consumer loans and home equity loans to individuals, professionals, and small to mid-sized businesses. FCB operated throughout Southern California in the Los Angeles, Orange, Riverside, San Bernardino, San Diego, Ventura, and San Luis Obispo Counties. We made this acquisition to expand our presence in Southern California.

        The FCAL acquisition has been accounted for under the acquisition method of accounting. The assets and liabilities, both tangible and intangible, were recorded at their estimated fair values as of the May 31, 2013 acquisition date. Such fair values are preliminary estimates and are subject to adjustment for up to one year after the acquisition date or when additional information relative to the closing date fair values becomes available and such information is considered final, whichever is earlier. While the fair values are preliminary we believe there will not be material adjustments to the amounts recorded with the exception of the acquired tax assets, which will be finalized once the final tax returns have been filed. The application of the acquisition method of accounting resulted in goodwill of $136.2 million. All of the recognized goodwill is expected to be non-deductible for tax purposes.

        During the third quarter of 2013, we recorded a $5.2 million non-taxable securities gain in earnings related to the FCAL acquisition. Prior to the closing of the FCAL acquisition, we acquired 1,094,000 shares of FCAL common stock at a cost of $4.1 million. These shares were carried in our securities available-for-sale portfolio at their estimated market value with their unrealized gain of $5.2 million included in stockholders' equity at May 31, 2013. Our accounting for the FCAL acquisition included these shares at their historical cost. We should have included these shares at their estimated fair value

11

PACWEST BANCORP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Continued)

(Unaudited)

NOTE 3—ACQUISITIONS (Continued)

and recognized an acquisition-related securities gain of $5.2 million at May 31, 2013. We corrected for this in the third quarter of 2013 by recognizing the gain with an offset to goodwill.

American Perspective Bank Acquisition

        On August 1, 2012, Pacific Western completed the acquisition of American Perspective Bank, or APB, previously headquartered in San Luis Obispo, California. Pacific Western acquired all of the outstanding common stock of APB for $58.1 million in cash and APB was merged with and into Pacific Western; we refer to this transaction as the APB acquisition. APB operated two branches located in San Luis Obispo and Santa Maria, California, and a loan production office located in Paso Robles, California, which has since been converted to a full-service branch. The APB acquisition strengthened our presence in the Central Coast region.

Celtic Capital Corporation Acquisition

        On April 3, 2012, Pacific Western completed the acquisition of Celtic Capital Corporation, or Celtic, an asset-based lending company based in Santa Monica, California. Pacific Western acquired all of the capital stock of Celtic for $18 million in cash and Celtic became a wholly-owned subsidiary of Pacific Western; we refer to this transaction as the Celtic acquisition. Celtic focuses on providing asset-based loans to borrowers across the United States for amounts generally up to $5 million. The Celtic acquisition diversified our loan portfolio, expanded our product lines, and deployed excess liquidity into higher yielding assets.

Pacific Western Equipment Finance Acquisition

        On January 3, 2012, Pacific Western completed the acquisition of Pacific Western Equipment Finance (formerly known as Marquette Equipment Finance, and which we refer to as EQF), an equipment leasing company based in Midvale, Utah. Pacific Western acquired all of the capital stock of EQF for $35 million in cash and EQF became a division of Pacific Western; we refer to this transaction as the EQF acquisition. The EQF acquisition diversified our lending portfolio, expanded our product lines, and deployed excess liquidity into higher yielding assets.

Unaudited Pro Forma Results of Operations

        The following table presents our unaudited pro forma results of operations for the periods presented as if the FCAL acquisition had been completed on January 1, 2012. The unaudited pro forma results of operations include the historical accounts of the Company and FCAL and pro forma adjustments as may be required, including the amortization of intangibles with definite lives and the amortization or accretion of any premiums or discounts arising from fair value adjustments for assets acquired and liabilities assumed. The unaudited pro forma information is intended for informational purposes only and is not necessarily indicative of our future operating results or operating results that would have occurred had the FCAL acquisition been completed at the beginning of 2012. No assumptions have been applied to the pro forma results of operations regarding possible revenue enhancements, expense efficiencies or asset dispositions.

12

PACWEST BANCORP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Continued)

(Unaudited)

NOTE 3—ACQUISITIONS (Continued)

        No pro forma results of operations information have been provided for the three months ended September 30, 2013 as FCAL was acquired on May 31, 2013 and the actual results of FCAL and the Company are included together for this three-month period in the condensed consolidated statements of earnings.

			Nine Months Ended September 30,
	Three Months Ended September 30, 2012
			2013		2012
	(In thousands, except per share data)
Pro forma revenues (net interest income plus noninterest income)	$	95,441	$	250,155	$	278,182
Pro forma net earnings from continuing operations	$	19,880	$	49,692	$	47,039
Pro forma net earnings from continuing operations per share:
Basic	$	0.44	$	1.09	$	1.04
Diluted	$	0.44	$	1.09	$	1.04

NOTE 4—GOODWILL AND OTHER INTANGIBLE ASSETS

        Goodwill arises from the acquisition method of accounting for business combinations and represents the excess of the purchase price over the fair value of the net assets and other identifiable intangible assets acquired. Goodwill and other intangible assets deemed to have indefinite lives generated from purchase business combinations are not subject to amortization and are instead tested for impairment no less than annually. Impairment exists when the carrying value of goodwill exceeds its implied fair value. An impairment loss would be recognized in an amount equal to that excess and would be included in noninterest expense in the condensed consolidated statement of earnings.

        The following table presents the changes in the carrying amount of goodwill for the period indicated:

	Goodwill
	(In thousands)
Balance, December 31, 2012	$	79,866
Adjustment to APB goodwill		(193	)
Non-tax deductible addition from the FCAL acquisition		136,189
Balance, September 30, 2013	$	215,862

        Our intangible assets with definite lives are core deposit intangibles, or CDI, and customer relationship intangibles, or CRI. These intangible assets are amortized over their respective estimated useful lives to their estimated residual values and reviewed for impairment at least quarterly. The amortization expense represents the estimated decline in the value of the underlying deposits or loan customers acquired. The weighted average amortization period for the CDI addition from the FCAL acquisition is 3.1 years. The weighted average amortization period remaining for all of our CDI and CRI is 3.0 years. The aggregate CDI and CRI amortization expense is expected to be $5.4 million for 2013. The estimated aggregate amortization expense related to these intangible assets for each of the next five years is $5.3 million for 2014, $4.8 million for 2015, $3.0 million for 2016, $1.6 million for 2017, and $1.3 million for 2018.

13

PACWEST BANCORP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Continued)

(Unaudited)

NOTE 4—GOODWILL AND OTHER INTANGIBLE ASSETS (Continued)

        The following table presents the changes in CDI and CRI and the related accumulated amortization for the periods indicated:

	Three Months Ended									Nine Months Ended September 30,
	September 30, 2013			June 30, 2013			September 30, 2012
										2013			2012
	(In thousands)
Gross Amount of CDI and CRI:
Balance, beginning of period	$	53,339		$	45,412		$	62,272		$	45,412		$	67,100
Additions		—			7,927			1,924			7,927			4,924
Fully amortized portion		(4,376	)		—			(12,918	)		(4,376	)		(20,746	)
Removal due to branch sale		—			—			(5,866	)		—			(5,866	)
Balance, end of period		48,963			53,339			45,412			48,963			45,412
Accumulated Amortization:
Balance, beginning of period		(33,149	)		(31,865	)		(45,329	)		(30,689	)		(49,685	)
Amortization		(1,512	)		(1,284	)		(1,678	)		(3,972	)		(5,150	)
Fully amortized portion		4,376			—			12,918			4,376			20,746
Removal due to branch sale		—			—			4,576			—			4,576
Balance, end of period		(30,285	)		(33,149	)		(29,513	)		(30,285	)		(29,513	)
Net CDI and CRI, end of period	$	18,678		$	20,190		$	15,899		$	18,678		$	15,899

NOTE 5—INVESTMENT SECURITIES

Securities Available-for-Sale

        The following tables present amortized cost, gross unrealized gains and losses, and carrying value of securities available-for-sale as of the dates indicated:

	September 30, 2013
Security Type	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Carrying Value
	(In thousands)
Residential mortgage-backed securities:
Government agency and government-sponsored enterprise pass through securities	$	695,768	$	19,853	$	(1,659	)	$	713,962
Government agency and government-sponsored enterprise collateralized mortgage obligations		201,531		730		(2,901	)		199,360
Covered private label collateralized mortgage obligations		31,503		7,983		(108	)		39,378
Municipal securities		460,754		2,150		(23,269	)		439,635
Corporate debt securities		84,028		61		(1,983	)		82,106
Other securities		37,999		1		(294	)		37,706
Total securities available-for-sale	$	1,511,583	$	30,778	$	(30,214	)	$	1,512,147

14

PACWEST BANCORP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Continued)

(Unaudited)

NOTE 5—INVESTMENT SECURITIES (Continued)

	December 31, 2012
Security Type	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Carrying Value
	(In thousands)
Residential mortgage-backed securities:
Government agency and government-sponsored enterprise pass through securities	$	774,677	$	33,618	$	(453	)	$	807,842
Government agency and government-sponsored enterprise collateralized mortgage obligations		99,956		1,870		(132	)		101,694
Covered private label collateralized mortgage obligations		36,078		8,729		(123	)		44,684
Municipal securities		339,547		10,445		(1,951	)		348,041
Corporate debt securities		42,014		432		(81	)		42,365
Other securities		6,389		4,370		—			10,759
Total securities available-for-sale	$	1,298,661	$	59,464	$	(2,740	)	$	1,355,385

        The covered private label collateralized mortgage obligations ("CMO's") were acquired in the FDIC-assisted acquisition of Affinity Bank in August 2009 and are covered by an FDIC loss sharing agreement. The loss sharing provisions of this agreement expire in the third quarter of 2014 for non-single family covered assets such as these private label CMO's. Other securities consist primarily of asset backed securities and collateralized loan obligations. See Note 11, Fair Value Measurements, for information on fair value measurements and methodology.

        The following table presents the contractual maturity distribution of our available-for-sale securities portfolio based on amortized cost and carrying value as of the date indicated:

	September 30, 2013
Maturity	Amortized Cost		Carrying Value
	(In thousands)
Due in one year or less	$	3,774	$	3,775
Due after one year through five years		24,449		24,707
Due after five years through ten years		124,905		124,317
Due after ten years		1,358,455		1,359,348
Total securities available-for-sale	$	1,511,583	$	1,512,147

        Mortgage-backed securities have contractual terms to maturity, but require periodic payments to reduce principal. In addition, expected maturities may differ from contractual maturities because obligors and/or issuers may have the right to call or prepay obligations with or without call or prepayment penalties.

15

PACWEST BANCORP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Continued)

(Unaudited)

NOTE 5—INVESTMENT SECURITIES (Continued)

        At September 30, 2013, the estimated fair value of residential mortgage-backed debt securities issued by the Federal National Mortgage Association ("Fannie Mae") and the Federal Home Loan Mortgage Corporation ("Freddie Mac") that were held in our portfolio was approximately $774.8 million. We do not own any equity securities issued by Fannie Mae or Freddie Mac.

        As of September 30, 2013, securities available-for-sale with a carrying value of $201.9 million were pledged as collateral for borrowings, public deposits and other purposes as required by various statutes and agreements.

        There were no securities sold during the three months ended September 30, 2013. However, we recorded a $5.2 million non-taxable gain to recognize our previously-held equity interest in FCAL common stock at its fair value as of the acquisition date rather than at its historical cost. During the three months ended March 31, 2013, we sold $12.4 million in corporate debt securities for which we realized a $409,000 gross gain. These securities were sold as part of our investment portfolio risk management activities to reduce price volatility and duration.

        The following tables present, for those securities that were in a gross unrealized loss position, the carrying values and the gross unrealized losses on securities by length of time the securities were in an unrealized loss position as of the dates indicated:

	September 30, 2013
	Less Than 12 Months					12 months or Longer					Total
Security Type	Carrying Value		Gross Unrealized Losses			Carrying Value		Gross Unrealized Losses			Carrying Value		Gross Unrealized Losses
	(In thousands)
Residential mortgage-backed securities:
Government agency and government-sponsored enterprise pass through securities	$	124,088	$	(1,658	)	$	43	$	(1	)	$	124,131	$	(1,659	)
Government agency and government-sponsored enterprise collateralized mortgage obligations		139,846		(2,856	)		4,610		(45	)		144,456		(2,901	)
Covered private label collateralized mortgage obligations		543		(19	)		636		(89	)		1,179		(108	)
Municipal securities		323,419		(23,269	)		—		—			323,419		(23,269	)
Corporate debt securities		61,831		(1,983	)		—		—			61,831		(1,983	)
Other securities		33,942		(294	)		—		—			33,942		(294	)
Total	$	683,669	$	(30,079	)	$	5,289	$	(135	)	$	688,958	$	(30,214	)

16

PACWEST BANCORP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Continued)

(Unaudited)

NOTE 5—INVESTMENT SECURITIES (Continued)

	December 31, 2012
	Less Than 12 Months					12 months or Longer					Total
Security Type	Carrying Value		Gross Unrealized Losses			Carrying Value		Gross Unrealized Losses			Carrying Value		Gross Unrealized Losses
	(In thousands)
Residential mortgage-backed securities:
Government agency and government-sponsored enterprise pass through securities	$	67,299	$	(452	)	$	60	$	(1	)	$	67,359	$	(453	)
Government agency and government-sponsored enterprise collateralized mortgage obligations		18,317		(132	)		—		—			18,317		(132	)
Covered private label collateralized mortgage obligations		—		—			1,692		(123	)		1,692		(123	)
Municipal securities		90,303		(1,951	)		—		—			90,303		(1,951	)
Corporate debt securities		16,819		(81	)		—		—			16,819		(81	)
Total	$	192,738	$	(2,616	)	$	1,752	$	(124	)	$	194,490	$	(2,740	)

        We reviewed the securities that were in a continuous loss position less than 12 months and longer than 12 months at September 30, 2013, and concluded that their losses were a result of the level of market interest rates relative to the types of securities and not a result of the underlying issuers' ability to repay. Accordingly, we determined that the securities were temporarily impaired and we did not recognize such impairment in the condensed consolidated statements of earnings. Additionally, we have no plans to sell these securities and believe that it is more likely than not we would not be required to sell these securities before recovery of their amortized cost.

        The following table presents the composition of our interest income on investment securities:

	Three Months Ended						Nine Months Ended September 30,
	September 30, 2013		June 30, 2013		September 30, 2012
Securities Interest by Type:							2013		2012
	(In thousands)
Taxable interest	$	6,028	$	5,388	$	6,832	$	16,979	$	23,716
Nontaxable interest		3,302		2,716		1,458		8,443		3,572
Dividend income		541		310		56		1,079		196
Total interest income on investment securities	$	9,871	$	8,414	$	8,346	$	26,501	$	27,484

17

PACWEST BANCORP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Continued)

(Unaudited)

NOTE 5—INVESTMENT SECURITIES (Continued)

FHLB Stock

        At September 30, 2013, the Company had a $34.1 million investment in Federal Home Loan Bank of San Francisco ("FHLB") stock carried at cost. During the third quarter of 2013, FHLB stock decreased $5.0 million due to redemptions by the FHLB. We evaluated the carrying value of our FHLB stock investment at September 30, 2013, and determined that it was not impaired. Our evaluation considered the long-term nature of the investment, the current financial and liquidity position of the FHLB, repurchase activity of excess stock by the FHLB at its carrying value, the return on the investment, and our intent and ability to hold this investment for a period of time sufficient to recover our recorded investment.

NOTE 6—LOANS AND LEASES

        The Company's loan portfolio consists of (1) purchased credit-impaired ("PCI") loans and (2) non-purchased credit-impaired ("Non-PCI") loans. PCI loans represent acquired loans for which there is, at the acquisition date, evidence of credit deterioration since their origination and it is probable that we would be unable to collect all contractually required payments. Such loans are accounted for in accordance with ASC Subtopic 310-30, "Loans and Debt Securities Acquired with Deteriorated Credit Quality." Non-PCI loans are comprised of originated loans and acquired non-impaired loans for which there is no evidence of credit deterioration at their acquisition date and it is probable that we would be able to collect all contractually required payments. Originated loans are carried at the principal amount outstanding, net of unearned income. Unearned income is recognized as an adjustment to interest income over the contractual life of the loans using the effective interest method or taken into income when the related loans are paid off or sold. The purchase discount on acquired non-impaired loans is recognized as an adjustment to interest income over the contractual life of such loans using the effective interest method or taken into income when the related loans are paid off or sold.

        We further present our loans by "covered" and "non-covered" loan categories. Covered loans represent loans covered by loss sharing agreements with the FDIC for which we will be reimbursed for a substantial portion of any future losses under the terms of the agreements. Covered loans also include a portion of the loans acquired in the FCAL acquisition as FCB had acquired two failed banks from the FDIC for which the loss sharing agreements with the FDIC remain in effect. Non-covered loans and leases represent loans and leases not covered by FDIC loss sharing agreements.

18

PACWEST BANCORP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Continued)

(Unaudited)

NOTE 6—LOANS AND LEASES (Continued)

        The following table summarizes the composition of our loan and lease portfolio as of the dates indicated:

	September 30, 2013									December 31, 2012
	Non-PCI Loans and Leases			PCI Loans			Total			Non-PCI Loans and Leases			PCI Loans			Total
	(In thousands)
Non-covered loans and leases	$	3,854,129		$	19,259		$	3,873,388		$	3,049,505		$	—		$	3,049,505
Covered loans		97,426			413,498			510,924			25,442			517,885			543,327
Total gross loans and leases		3,951,555			432,757			4,384,312			3,074,947			517,885			3,592,832
Unearned income		(919	)		—			(919	)		(2,535	)		—			(2,535	)
Total loans and leases, net of unearned income		3,950,636			432,757			4,383,393			3,072,412			517,885			3,590,297
Allowance for loan and lease losses:
Non-covered loans and leases		(60,551	)		—			(60,551	)		(65,899	)		—			(65,899	)
Covered loans		—			(23,235	)		(23,235	)		—			(26,069	)		(26,069	)
Total allowance for loan and lease losses		(60,551	)		(23,235	)		(83,786	)		(65,899	)		(26,069	)		(91,968	)
Total net loans and leases	$	3,890,085		$	409,522		$	4,299,607		$	3,006,513		$	491,816		$	3,498,329

19

PACWEST BANCORP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Continued)

(Unaudited)

NOTE 6—LOANS AND LEASES (Continued)

        The following table presents the composition of our gross loans and leases by portfolio segment as of the dates indicated:

	September 30, 2013						December 31, 2012
	Non-PCI Loans and Leases		PCI Loans		Total		Non-PCI Loans and Leases		PCI Loans		Total
	(In thousands)
Non-Covered Loans and Leases
Real estate mortgage	$	2,476,180	$	17,928	$	2,494,108	$	1,917,670	$	—	$	1,917,670
Real estate construction		180,697		1,296		181,993		129,959		—		129,959
Commercial		918,669		—		918,669		787,775		—		787,775
Leases		235,791		—		235,791		174,373		—		174,373
Consumer		30,763		35		30,798		22,487		—		22,487
Foreign		12,029		—		12,029		17,241		—		17,241
Total gross non-covered loans and leases	$	3,854,129	$	19,259	$	3,873,388	$	3,049,505	$	—	$	3,049,505
Covered Loans
Real estate mortgage	$	75,601	$	401,672	$	477,273	$	20,843	$	484,057	$	504,900
Real estate construction		9,260		10,271		19,531		—		24,645		24,645
Commercial		9,500		1,265		10,765		4,113		9,071		13,184
Consumer		3,065		290		3,355		486		112		598
Total gross covered loans	$	97,426	$	413,498	$	510,924	$	25,442	$	517,885	$	543,327
Total Loans and Leases
Real estate mortgage	$	2,551,781	$	419,600	$	2,971,381	$	1,938,513	$	484,057	$	2,422,570
Real estate construction		189,957		11,567		201,524		129,959		24,645		154,604
Commercial		928,169		1,265		929,434		791,888		9,071		800,959
Leases		235,791		—		235,791		174,373		—		174,373
Consumer		33,828		325		34,153		22,973		112		23,085
Foreign		12,029		—		12,029		17,241		—		17,241
Total gross loans and leases	$	3,951,555	$	432,757	$	4,384,312	$	3,074,947	$	517,885	$	3,592,832

20

PACWEST BANCORP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Continued)

(Unaudited)

NOTE 6—LOANS AND LEASES (Continued)

        The following tables present a summary of the activity in the allowance for loan and lease losses on Non-PCI loans and leases and PCI loans by portfolio segment for the periods indicated:

	Three Months Ended September 30, 2013
	Real Estate Mortgage			Real Estate Construction			Commercial			Leases		Consumer			Foreign			Total Non-PCI			Total PCI			Total
	(In thousands)
Allowance for Loan and Lease Losses:
Balance, beginning of period	$	31,804		$	3,432		$	24,165		$	2,096	$	1,667		$	82		$	63,246		$	27,397		$	90,643
Charge-offs		(281	)		—			(2,439	)		—		(75	)		—			(2,795	)		—			(2,795	)
Recoveries		152			179			321			—		15			3			670			5			675
Provision (negative provision)		(2,069	)		(66	)		1,022			240		332			(29	)		(570	)		(4,167	)		(4,737	)
Balance, end of period	$	29,606		$	3,545		$	23,069		$	2,336	$	1,939		$	56		$	60,551		$	23,235		$	83,786

	Nine Months Ended September 30, 2013
	Real Estate Mortgage			Real Estate Construction			Commercial			Leases			Consumer			Foreign			Total Non-PCI			Total PCI			Total
	(In thousands)
Allowance for Loan and Lease Losses:
Balance, beginning of period	$	38,700		$	3,221		$	20,661		$	1,493		$	1,726		$	98		$	65,899		$	26,069		$	91,968
Charge-offs		(3,840	)		—			(4,517	)		(114	)		(111	)		—			(8,582	)		—			(8,582	)
Recoveries		1,665			514			2,025			—			57			3			4,264			38			4,302
Provision (negative provision)		(6,919	)		(190	)		4,900			957			267			(45	)		(1,030	)		(2,872	)		(3,902	)
Balance, end of period	$	29,606		$	3,545		$	23,069		$	2,336		$	1,939		$	56		$	60,551		$	23,235		$	83,786
Amount of the allowance applicable to loans and leases:
Individually evaluated for impairment	$	3,225		$	103		$	6,147		$	—		$	240		$	—		$	9,715
Collectively evaluated for impairment	$	26,381		$	3,442		$	16,922		$	2,336		$	1,699		$	56		$	50,836
Acquired with deteriorated credit quality																						$	23,235
Loans and Leases:
Ending balance	$	2,551,781		$	189,957		$	928,169		$	235,791		$	33,828		$	12,029		$	3,951,555		$	432,757		$	4,384,312
The ending balance of the loan and lease portfolio is composed of loans and leases:
Individually evaluated for impairment	$	90,329		$	14,878		$	24,839		$	244		$	792		$	—		$	131,082
Collectively evaluated for impairment	$	2,461,452		$	175,079		$	903,330		$	235,547		$	33,036		$	12,029		$	3,820,473
Acquired with deteriorated credit quality																						$	432,757

21

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Notes to Condensed Consolidated Financial Statements (Continued)

(Unaudited)

NOTE 6—LOANS AND LEASES (Continued)

	Three Months Ended September 30, 2012
	Real Estate Mortgage			Real Estate Construction			Commercial			Leases		Consumer			Foreign			Total Non-PCI			Total PCI			Total
	(In thousands)
Allowance for Loan and Lease Losses:
Balance, beginning of period	$	42,236		$	5,496		$	21,979		$	498	$	1,735		$	117		$	72,061		$	31,463		$	103,524
Charge-offs		(1,118	)		(492	)		(492	)		—		(25	)		—			(2,127	)		(618	)		(2,745	)
Recoveries		845			11			218			—		32			2			1,108			—			1,108
Provision (negative provision)		(3,226	)		1,582			(685	)		629		(188	)		(12	)		(1,900	)		(141	)		(2,041	)
Balance, end of period	$	38,737		$	6,597		$	21,020		$	1,127	$	1,554		$	107		$	69,142		$	30,704		$	99,846

	Nine Months Ended September 30, 2012
	Real Estate Mortgage			Real Estate Construction			Commercial			Leases		Consumer			Foreign			Total Non-PCI			Total PCI			Total
	(In thousands)
Allowance for Loan and Lease Losses:
Balance, beginning of period	$	50,205		$	8,697		$	23,308		$	—	$	2,768		$	335		$	85,313		$	31,275		$	116,588
Charge-offs		(5,891	)		(492	)		(2,715	)		—		(258	)		—			(9,356	)		(4,085	)		(13,441	)
Recoveries		1,217			35			1,232			—		79			22			2,585			—			2,585
Provision (negative provision)		(6,794	)		(1,643	)		(805	)		1,127		(1,035	)		(250	)		(9,400	)		3,514			(5,886	)
Balance, end of period	$	38,737		$	6,597		$	21,020		$	1,127	$	1,554		$	107		$	69,142		$	30,704		$	99,846
Amount of the allowance applicable to loans and leases:
Individually evaluated for impairment	$	5,568		$	2,468		$	6,051		$	—	$	265		$	—		$	14,352
Collectively evaluated for impairment	$	33,169		$	4,129		$	14,969		$	1,127	$	1,289		$	107		$	54,790
Acquired with deteriorated credit quality																					$	30,704
Loans and Leases:
Ending balance	$	1,950,777		$	152,748		$	777,365		$	161,934	$	21,118		$	16,126		$	3,080,068		$	571,113		$	3,651,181
The ending balance of the loan and lease portfolio is composed of loans and leases:
Individually evaluated for impairment	$	100,133		$	31,792		$	19,051		$	420	$	623		$	—		$	152,019
Collectively evaluated for impairment	$	1,850,644		$	120,956		$	758,314		$	161,514	$	20,495		$	16,126		$	2,928,049
Acquired with deteriorated credit quality																					$	571,113

22

PACWEST BANCORP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Continued)

(Unaudited)

NOTE 6—LOANS AND LEASES (Continued)

Loans and Leases, Excluding PCI Loans

        The following table presents the composition of loans and leases (excluding PCI loans), which we also refer to as Non-PCI loans and leases, by portfolio segment as of the dates indicated:

	September 30, 2013						December 31, 2012
	Amount			% of Total			Amount			% of Total
	(Dollars in thousands)
Real estate mortgage	$	2,551,781			65	%	$	1,938,513			63	%
Real estate construction		189,957			5			129,959			4
Commercial		928,169			23			791,888			25
Leases		235,791			6			174,373			6
Consumer		33,828			1			22,973			1
Foreign		12,029			—			17,241			1
Total gross Non-PCI loans and leases		3,951,555			100	%		3,074,947			100	%
Less:
Unearned income		(919	)					(2,535	)
Allowance for loan and lease losses		(60,551	)					(65,899	)
Total net Non-PCI loans and leases	$	3,890,085					$	3,006,513

        As of May 31, 2013, the fair value of the FCAL Non-PCI loans acquired was $1.0 billion, the related gross contractual amount was $1.3 billion, and the estimated contractual cash flows not expected to be collected was $34.4 million.

        The following table presents the credit risk rating categories for Non-PCI loans and leases by portfolio segment and class as of the dates indicated. Nonclassified loans and leases are those with a

23

PACWEST BANCORP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Continued)

(Unaudited)

NOTE 6—LOANS AND LEASES (Continued)

credit risk rating of either pass or special mention, while classified loans and leases are those with a credit risk rating of either substandard or doubtful.

	September 30, 2013						December 31, 2012
	Nonclassified		Classified		Total		Nonclassified		Classified		Total
	(In thousands)
Real estate mortgage:
Hospitality	$	182,419	$	5,654	$	188,073	$	168,489	$	12,655	$	181,144
SBA 504		42,621		5,505		48,126		48,372		5,786		54,158
Other		2,247,865		67,717		2,315,582		1,653,446		49,765		1,703,211
Total real estate mortgage		2,472,905		78,876		2,551,781		1,870,307		68,206		1,938,513
Real estate construction:
Residential		60,390		1,764		62,154		46,591		2,038		48,629
Commercial		121,221		6,582		127,803		77,503		3,827		81,330
Total real estate construction		181,611		8,346		189,957		124,094		5,865		129,959
Commercial:
Collateralized		538,101		24,392		562,493		442,293		14,802		457,095
Unsecured		104,608		1,618		106,226		67,133		2,905		70,038
Asset-based		225,110		6,788		231,898		235,075		4,355		239,430
SBA 7(a)		21,764		5,788		27,552		18,888		6,437		25,325
Total commercial		889,583		38,586		928,169		763,389		28,499		791,888
Leases		235,547		244		235,791		174,129		244		174,373
Consumer		29,089		4,739		33,828		21,733		1,240		22,973
Foreign		12,029		—		12,029		17,241		—		17,241
Total Non-PCI loans and leases	$	3,820,764	$	130,791	$	3,951,555	$	2,970,893	$	104,054	$	3,074,947

        In addition to our internal risk rating process, our federal and state banking regulators, as an integral part of their examination process, periodically review the Company's loan risk rating classifications. Our regulators may require the Company to recognize rating downgrades based on their judgments related to information available to them at the time of their examinations. Risk rating downgrades generally result in higher allowances for credit losses.

24

PACWEST BANCORP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Continued)

(Unaudited)

NOTE 6—LOANS AND LEASES (Continued)

        The following tables present an aging analysis of our Non-PCI loans and leases by portfolio segment and class as of the dates indicated:

	September 30, 2013
	30 - 59 Days Past Due		60 - 89 Days Past Due		Greater Than 90 Days Past Due		Total Past Due		Current		Total
	(In thousands)
Real estate mortgage:
Hospitality	$	—	$	—	$	—	$	—	$	188,073	$	188,073
SBA 504		—		—		120		120		48,006		48,126
Other		4,623		486		3,294		8,403		2,307,179		2,315,582
Total real estate mortgage		4,623		486		3,414		8,523		2,543,258		2,551,781
Real estate construction:
Residential		—		—		—		—		62,154		62,154
Commercial		571		—		—		571		127,232		127,803
Total real estate construction		571		—		—		571		189,386		189,957
Commercial:
Collateralized		2,250		426		6,004		8,680		553,813		562,493
Unsecured		82		1,348		225		1,655		104,571		106,226
Asset-based		1,490		—		—		1,490		230,408		231,898
SBA 7(a)		72		868		201		1,141		26,411		27,552
Total commercial		3,894		2,642		6,430		12,966		915,203		928,169
Leases		—		—		244		244		235,547		235,791
Consumer		163		5		178		346		33,482		33,828
Foreign		—		—		—		—		12,029		12,029
Total non-PCI loans and leases	$	9,251	$	3,133	$	10,266	$	22,650	$	3,928,905	$	3,951,555

        At September 30, 2013 and December 31, 2012, the Company had no loans and leases (excluding PCI loans) that were greater than 90 days past due and still accruing interest. It is the Company's policy to discontinue accruing interest when principal or interest payments are past due 90 days or when, in the opinion of management, there is a reasonable doubt as to the collectability of a loan or lease in the normal course of business. At September 30, 2013, nonaccrual loans and leases totaled $50.8 million. Nonaccrual loans and leases include $3.9 million of loans 30 to 89 days past due and $36.6 million of current loans which have been placed on nonaccrual status based on management's judgment regarding their collectability.

25

PACWEST BANCORP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Continued)

(Unaudited)

NOTE 6—LOANS AND LEASES (Continued)

	December 31, 2012
	30 - 59 Days Past Due		60 - 89 Days Past Due		Greater Than 90 Days Past Due		Total Past Due		Current		Total
	(In thousands)
Real estate mortgage:
Hospitality	$	—	$	—	$	—	$	—	$	181,144	$	181,144
SBA 504		955		—		1,727		2,682		51,476		54,158
Other		4,098		54		3,271		7,423		1,695,788		1,703,211
Total real estate mortgage		5,053		54		4,998		10,105		1,928,408		1,938,513
Real estate construction:
Residential		—		—		—		—		48,629		48,629
Commercial		—		—		1,245		1,245		80,085		81,330
Total real estate construction		—		—		1,245		1,245		128,714		129,959
Commercial:
Collateralized		964		161		872		1,997		455,098		457,095
Unsecured		3		135		230		368		69,670		70,038
Asset-based		—		—		176		176		239,254		239,430
SBA 7(a)		281		547		1,271		2,099		23,226		25,325
Total commercial		1,248		843		2,549		4,640		787,248		791,888
Leases		225		132		244		601		173,772		174,373
Consumer		23		1		—		24		22,949		22,973
Foreign		—		—		—		—		17,241		17,241
Total Non-PCI loans and leases	$	6,549	$	1,030	$	9,036	$	16,615	$	3,058,332	$	3,074,947

        Nonaccrual loans totaled $41.8 million at December 31, 2012, including $4.2 million of loans 30 to 89 days past due and $28.6 million of current loans.

26

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Notes to Condensed Consolidated Financial Statements (Continued)

(Unaudited)

NOTE 6—LOANS AND LEASES (Continued)

        The following table presents our nonaccrual and performing Non-PCI loans and leases by portfolio segment and class as of the dates indicated:

	September 30, 2013						December 31, 2012
	Nonaccrual		Performing		Total		Nonaccrual		Performing		Total
	(In thousands)
Real estate mortgage:
Hospitality	$	—	$	188,073	$	188,073	$	6,908	$	174,236	$	181,144
SBA 504		2,791		45,335		48,126		2,982		51,176		54,158
Other		21,628		2,293,954		2,315,582		16,585		1,686,626		1,703,211
Total real estate mortgage		24,419		2,527,362		2,551,781		26,475		1,912,038		1,938,513
Real estate construction:
Residential		826		61,328		62,154		1,057		47,572		48,629
Commercial		2,857		124,946		127,803		2,715		78,615		81,330
Total real estate construction		3,683		186,274		189,957		3,772		126,187		129,959
Commercial:
Collateralized		15,256		547,237		562,493		4,462		452,633		457,095
Unsecured		334		105,892		106,226		2,027		68,011		70,038
Asset-based		3,381		228,517		231,898		176		239,254		239,430
SBA 7(a)		2,934		24,618		27,552		4,181		21,144		25,325
Total commercial		21,905		906,264		928,169		10,846		781,042		791,888
Leases		244		235,547		235,791		244		174,129		174,373
Consumer		594		33,234		33,828		425		22,548		22,973
Foreign		—		12,029		12,029		—		17,241		17,241
Total Non-PCI loans and leases	$	50,845	$	3,900,710	$	3,951,555	$	41,762	$	3,033,185	$	3,074,947

27

PACWEST BANCORP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Continued)

(Unaudited)

NOTE 6—LOANS AND LEASES (Continued)

        Nonaccrual loans and leases and performing restructured loans are considered impaired for reporting purposes. The following table presents the composition of our impaired loans and leases as of the dates indicated:

	September 30, 2013						December 31, 2012
	Nonaccrual Loans/Leases		Performing Restructured Loans		Total Impaired Loans/Leases		Nonaccrual Loans/Leases		Performing Restructured Loans		Total Impaired Loans/Leases
	(In thousands)
Real estate mortgage	$	24,419	$	65,910	$	90,329	$	26,475	$	80,723	$	107,198
Real estate construction		3,683		11,195		14,878		3,772		21,678		25,450
Commercial		21,905		2,934		24,839		10,846		3,684		14,530
Leases		244		—		244		244		—		244
Consumer		594		198		792		425		203		628
Total	$	50,845	$	80,237	$	131,082	$	41,762	$	106,288	$	148,050

28

PACWEST BANCORP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Continued)

(Unaudited)

NOTE 6—LOANS AND LEASES (Continued)

        The following tables present information regarding our impaired loans and leases (excluding PCI loans) by portfolio segment and class for the dates indicated:

	September 30, 2013						December 31, 2012
	Recorded Investment		Unpaid Principal Balance		Related Allowance		Recorded Investment		Unpaid Principal Balance		Related Allowance
	(In thousands)
With An Allowance Recorded:
Real estate mortgage:
Hospitality	$	8,770	$	9,611	$	319	$	8,954	$	9,640	$	2,396
SBA 504		1,649		1,649		231		1,676		1,676		324
Other		50,029		50,164		2,675		58,364		60,262		5,107
Real estate construction:
Residential		391		391		82		1,303		1,330		165
Commercial		8,541		8,541		21		6,723		6,723		206
Commercial:
Collateralized		4,483		4,752		4,340		2,477		2,731		1,865
Unsecured		787		815		361		2,396		3,121		2,234
Asset-based		3,381		3,381		1,238		—		—		—
SBA 7(a)		1,278		1,351		208		2,871		3,616		426
Consumer		429		473		240		466		506		265
With No Related Allowance Recorded:
Real estate mortgage:
SBA 504	$	2,791	$	3,785	$	—	$	2,982	$	3,755	$	—
Other		27,090		40,693		—		35,222		39,503		—
Real estate construction:
Residential		435		471		—		—		—		—
Commercial		5,511		9,923		—		17,424		21,085		—
Commercial:
Collateralized		11,813		19,542		—		3,657		4,994		—
Unsecured		217		298		—		156		163		—
Asset-based		—		—		—		176		176		—
SBA 7(a)		2,880		4,645		—		2,797		4,057		—
Leases		244		244		—		244		244		—
Consumer		363		475		—		162		233		—
Total Non-PCI Loans and Leases With and Without An Allowance Recorded:
Real estate mortgage	$	90,329	$	105,902	$	3,225	$	107,198	$	114,836	$	7,827
Real estate construction		14,878		19,326		103		25,450		29,138		371
Commercial		24,839		34,784		6,147		14,530		18,858		4,525
Leases		244		244		—		244		244		—
Consumer		792		948		240		628		739		265
Total	$	131,082	$	161,204	$	9,715	$	148,050	$	163,815	$	12,988

29

PACWEST BANCORP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Continued)

(Unaudited)

NOTE 6—LOANS AND LEASES (Continued)

	Three Months Ended September 30,
	2013				2012
	Weighted Average Recorded Investment(1)		Interest Income Recognized		Weighted Average Recorded Investment(1)		Interest Income Recognized
	(In thousands)
With An Allowance Recorded:
Real estate mortgage:
Hospitality	$	8,770	$	109	$	9,049	$	21
SBA 504		1,649		23		927		25
Other		47,411		481		30,884		443
Real estate construction:
Residential		391		—		1,283		3
Commercial		8,541		88		18,408		146
Commercial:
Collateralized		4,467		7		4,199		17
Unsecured		787		8		2,309		5
Asset-based		2,377		—		—		—
SBA 7(a)		1,278		12		2,042		20
Consumer		429		3		474		3
With No Related Allowance Recorded:
Real estate mortgage:
SBA 504	$	2,791	$	—	$	1,330	$	—
Other		25,540		410		52,200		577
Real estate construction:
Residential		435		—		753		16
Commercial		5,511		98		11,348		97
Commercial:
Collateralized		8,989		15		4,972		7
Unsecured		217		—		156		—
Asset-based		—		—		176		—
SBA 7(a)		2,846		5		3,902		19
Leases		244		—		360		—
Consumer		248		—		149		—
Total Non-PCI Loans and Leases With and Without An Allowance Recorded:
Real estate mortgage	$	86,161	$	1,023	$	94,390	$	1,066
Real estate construction		14,878		186		31,792		262
Commercial		20,961		47		17,756		68
Leases		244		—		360		—
Consumer		677		3		623		3
Total	$	122,921	$	1,259	$	144,921	$	1,399

(1)

For the loans and leases (excluding PCI loans) reported as impaired at September 30, 2013 and September 30, 2012, amounts were calculated based on the period of time such loans and leases were impaired during the reporting period.

30

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Notes to Condensed Consolidated Financial Statements (Continued)

(Unaudited)

NOTE 6—LOANS AND LEASES (Continued)

	Nine Months Ended September 30,
	2013				2012
	Weighted Average Recorded Investment(1)		Interest Income Recognized		Weighted Average Recorded Investment(1)		Interest Income Recognized
	(In thousands)
With An Allowance Recorded:
Real estate mortgage:
Hospitality	$	8,770	$	355	$	9,049	$	57
SBA 504		1,649		67		545		17
Other		46,401		1,400		27,749		886
Real estate construction:
Residential		391		—		1,283		7
Commercial		8,541		268		18,408		407
Commercial:
Collateralized		3,000		22		3,773		45
Unsecured		787		25		2,302		16
Asset-based		870		—		—		—
SBA 7(a)		1,278		35		1,996		62
Consumer		429		8		370		4
With No Related Allowance Recorded:
Real estate mortgage:
SBA 504	$	2,727	$	—	$	1,330	$	—
Other		19,826		522		48,441		1,688
Real estate construction:
Residential		435		—		753		49
Commercial		4,679		69		10,598		276
Commercial:
Collateralized		4,861		15		4,796		20
Unsecured		170		—		156		—
Asset-based		—		—		117		—
SBA 7(a)		2,557		15		3,771		61
Leases		244		—		256		—
Consumer		182		—		149		—
Total Non-PCI Loans and Leases With and Without An Allowance Recorded:
Real estate mortgage	$	79,373	$	2,344	$	87,114	$	2,648
Real estate construction		14,046		337		31,042		739
Commercial		13,523		112		16,911		204
Leases		244		—		256		—
Consumer		611		8		519		4
Total	$	107,797	$	2,801	$	135,842	$	3,595

(1)

For the loans and leases (excluding PCI loans) reported as impaired at September 30, 2013 and September 30, 2012, amounts were calculated based on the period of time such loans and leases were impaired during the reporting period.

31

PACWEST BANCORP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Continued)

(Unaudited)

NOTE 6—LOANS AND LEASES (Continued)

        The following tables present new troubled debt restructurings and defaulted troubled debt restructurings (excluding PCI loans) for the periods indicated:

	Three Months Ended September 30,
	2013						2012
	Number of Loans		Pre- Modification Outstanding Recorded Investment		Post- Modification Outstanding Recorded Investment		Number of Loans		Pre- Modification Outstanding Recorded Investment		Post- Modification Outstanding Recorded Investment
	(Dollars in thousands)
Troubled Debt Restructurings:
Real estate mortgage:
SBA 504		—	$	—	$	—		1	$	1,118	$	1,118
Other		8		4,824		4,824		4		10,119		10,119
Real estate construction:
Commercial		—		—		—		1		6,973		6,973
Commercial:
Collateralized		2		499		499		2		370		370
Unsecured		1		17		17		—		—		—
SBA 7(a)		—		—		—		2		70		70
Consumer		—		—		—		1		206		206
Total		11	$	5,340	$	5,340		11	$	18,856	$	18,856

	Nine Months Ended September 30,
	2013						2012
	Number of Loans		Pre- Modification Outstanding Recorded Investment		Post- Modification Outstanding Recorded Investment		Number of Loans		Pre- Modification Outstanding Recorded Investment		Post- Modification Outstanding Recorded Investment
	(Dollars in thousands)
Troubled Debt Restructurings:
Real estate mortgage:
SBA 504		—	$	—	$	—		2	$	1,680	$	1,680
Other		12		16,215		16,215		4		10,119		10,119
Real estate construction:
Commercial		—		—		—		2		8,419		8,419
Commercial:
Collateralized		7		4,553		4,553		7		1,545		1,545
Unsecured		5		502		502		3		38		38
Asset-based		1		2,032		2,032		—		—		—
SBA 7(a)		4		137		137		4		299		299
Consumer		—		—		—		1		206		206
Total		29	$	23,439	$	23,439		23	$	22,306	$	22,306

32

PACWEST BANCORP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Continued)

(Unaudited)

NOTE 6—LOANS AND LEASES (Continued)

	Three Months Ended September 30,
	2013				2012
	Number of Loans		Recorded Investment(1)		Number of Loans		Recorded Investment(2)
	(Dollars in thousands)
Troubled Debt Restructurings That Subsequently Defaulted(3):
Real estate mortgage:
Other		—	$	—		2	$	627
Commercial:
Unsecured		2		70		—		—
SBA 7(a)		—		—		2		118
Total		2	$	70		4	$	745

(1)

Represents the balance at September 30, 2013 and no charge-off.

(2)

Represents the balance at September 30, 2012 and is net of charge-offs of $82,000.

(3)

The population of defaulted restructured loans for the period indicated includes only those loans restructured during the preceding 12-month period. The table excludes defaulted troubled debt restructurings in those classes for which the recorded investment was zero at the end of the period.

	Nine Months Ended September 30,
	2013				2012
	Number of Loans		Recorded Investment(1)		Number of Loans		Recorded Investment(2)
	(Dollars in thousands)
Troubled Debt Restructurings That Subsequently Defaulted(3):
Real estate mortgage:
Other		1	$	1,327		2	$	627
Commercial:
Collateralized		1		427		7		828
Unsecured		2		70		2		93
SBA 7(a)		—		—		3		991
Total		4	$	1,824		14	$	2,539

(1)

Represents the balance at September 30, 2013 and is net of charge-offs of $1.1 million.

(2)

Represents the balance at September 30, 2012 and is net of charge-offs of $613,000.

(3)

The population of defaulted restructured loans for the period indicated includes only those loans restructured during the preceding 12-month period. The table excludes defaulted troubled debt restructurings in those classes for which the recorded investment was zero at the end of the period.

33

PACWEST BANCORP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Continued)

(Unaudited)

NOTE 6—LOANS AND LEASES (Continued)

Purchased Credit Impaired (PCI) Loans

        The following table reflects the PCI loans by portfolio segment as of the dates indicated:

	September 30, 2013						December 31, 2012
	Amount			% of Total			Amount			% of Total
	(Dollars in thousands)
Real estate mortgage	$	419,600			97	%	$	484,057			93	%
Real estate construction		11,567			3			24,645			5
Commercial		1,265			—			9,071			2
Consumer		325			—			112			—
Total gross PCI loans		432,757			100	%		517,885			100	%
Less:
Allowance for loan losses		(23,235	)					(26,069	)
Total net PCI loans	$	409,522					$	491,816

        The following table summarizes the accretable yield on the purchased credit impaired loans acquired in the FCAL acquisition as of May 31, 2013:

	May 31, 2013
	Accretable Yield
	Covered PCI Loans			Non-Covered PCI Loans			Total
	(In thousands)
Undiscounted contractual cash flows	$	42,881		$	41,936		$	84,817
Undiscounted cash flows not expected to be collected (nonaccretable difference)		(16,050	)		(16,337	)		(32,387	)
Undiscounted cash flows expected to be collected		26,831			25,599			52,430
Estimated fair value of loans acquired		(24,341	)		(19,805	)		(44,146	)
Acquired accrued interest receivable		(66	)		(122	)		(188	)
Accretable yield	$	2,424		$	5,672		$	8,096

34

PACWEST BANCORP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Continued)

(Unaudited)

NOTE 6—LOANS AND LEASES (Continued)

        The following table summarizes the changes in the carrying amount of PCI loans and accretable yield on those loans for the period indicated:

	Purchased Credit Impaired Loans
	Carrying Amount			Accretable Yield
	(In thousands)
Covered PCI Loans:
Balance, December 31, 2012	$	491,816		$	(196,022	)
Addition from the FCAL acquisition		24,341			(2,424	)
Accretion		33,057			33,057
Payments received		(161,823	)		—
Decrease in expected cash flows, net		—			12,521
Provision for credit losses		2,872			—
Balance, September 30, 2013	$	390,263		$	(152,868	)
Non-Covered PCI Loans:
Balance, December 31, 2012	$	—		$	—
Addition from the FCAL acquisition		19,805			(5,672	)
Accretion		899			899
Payments received		(1,445	)		—
Increase in expected cash flows, net		—			(1,808	)
Balance, September 30, 2013	$	19,259		$	(6,581	)

        The following table presents the credit risk rating categories for PCI loans by portfolio segment as of the dates indicated. Nonclassified loans are those with a credit risk rating of either pass or special mention, while classified loans are those with a credit risk rating of either substandard or doubtful.

	September 30, 2013						December 31, 2012
	Nonclassified		Classified		Total		Nonclassified		Classified		Total
	(In thousands)
Real estate mortgage	$	246,718	$	172,882	$	419,600	$	331,341	$	152,716	$	484,057
Real estate construction		4,303		7,264		11,567		6,311		18,334		24,645
Commercial		642		623		1,265		3,420		5,651		9,071
Consumer		—		325		325		—		112		112
Total PCI loans	$	251,663	$	181,094	$	432,757	$	341,072	$	176,813	$	517,885

        In addition to our internal risk rating process, our federal and state banking regulators, as an integral part of their examination process, periodically review the Company's loan risk rating classifications. Our regulators may require the Company to recognize rating downgrades based on their judgments related to information available to them at the time of their examinations.

35

PACWEST BANCORP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Continued)

(Unaudited)

NOTE 7—OTHER REAL ESTATE OWNED (OREO)

        The following tables summarize OREO by property type at the dates indicated:

	September 30, 2013						December 31, 2012
Property Type	Non-Covered OREO		Covered OREO		Total OREO		Non-Covered OREO		Covered OREO		Total OREO
	(In thousands)
Commercial real estate	$	11,914	$	6,912	$	18,826	$	1,684	$	11,635	$	13,319
Construction and land development		32,025		4,106		36,131		31,888		6,708		38,596
Multi-family		—		989		989		—		4,239		4,239
Single family residence		19		7		26		—		260		260
Total OREO, net	$	43,958	$	12,014	$	55,972	$	33,572	$	22,842	$	56,414

        The following table presents a rollforward of OREO, net of the valuation allowance, for the periods indicated:

	Non-Covered OREO			Covered OREO			Total OREO
	(In thousands)
OREO Activity:
Balance, December 31, 2012	$	33,572		$	22,842		$	56,414
Foreclosures		3,500			1,480			4,980
Provision for losses		(92	)		(1,093	)		(1,185	)
Reductions related to sales		(1,019	)		(5,918	)		(6,937	)
Balance, March 31, 2013		35,961			17,311			53,272
Addition from the FCAL acquisition		10,092			3,680			13,772
Foreclosures		1,035			3,075			4,110
Payments to third parties(1)		14			—			14
Provision for losses		—			(292	)		(292	)
Reductions related to sales		(1,670	)		(4,660	)		(6,330	)
Balance, June 30, 2013		45,432			19,114			64,546
Foreclosures		3,196			468			3,664
Payments to third parties(1)		24			—			24
Provision for losses		(643	)		26			(617	)
Reductions related to sales		(4,051	)		(7,594	)		(11,645	)
Balance, September 30, 2013	$	43,958		$	12,014		$	55,972

(1)

Represents amounts due to participants and for guarantees, property taxes or other prior lien positions.

36

PACWEST BANCORP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Continued)

(Unaudited)

NOTE 8—FDIC LOSS SHARING ASSET

        The FDIC loss sharing asset relates to assets covered by the loss sharing agreements between the Bank and the FDIC arising from the acquisitions of Los Padres Bank and Affinity Bank and, through the FCAL acquisition, the assumption of the loss sharing agreements between First California Bank and the FDIC arising from FCB's acquisition of Western Commercial Bank ("Western Commercial") and San Luis Trust Bank ("San Luis"). The FDIC loss sharing asset related to Western Commercial and San Luis was measured at its fair value as of May 31, 2013 in conjunction with the FCAL acquisition. The FDIC loss sharing asset related to Los Padres and Affinity was measured at its estimated fair value at the respective acquisition dates.

        An increase in the expected amount of losses on the covered assets will increase the FDIC loss sharing asset; such increase is recognized through a credit to FDIC loss sharing income. Recoveries on previous losses paid to us by the FDIC reduce the FDIC loss sharing asset by a charge to FDIC loss sharing income. In addition, decreases in the expected amount of losses on covered assets will decrease the amount of funds expected to be collected from the FDIC and will therefore reduce the FDIC loss sharing asset through higher prospective amortization expense. The FDIC loss sharing asset is being amortized to its estimated value over the lesser of the term of the loss sharing agreements or the remaining contractual life of the assets covered by the loss sharing agreements.

        Both the Western Commercial and San Luis loss sharing agreements contain true-up provisions, under which we will owe the FDIC amounts at the end of the loss sharing agreements based on the performance of the covered assets. The true-up liability is included in other liabilities in the accompanying condensed consolidated balance sheets.

        The following table presents the changes in the FDIC loss sharing asset for the period indicated:

	FDIC Loss Sharing Asset
	(In thousands)
Balance, December 31, 2012	$	57,475
Addition from the FCAL acquisition		17,180
FDIC share of additional losses, net of recoveries		6,440
Cash received from FDIC		(6,724	)
Net amortization		(18,718	)
Balance, September 30, 2013	$	55,653

37

PACWEST BANCORP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Continued)

(Unaudited)

NOTE 8—FDIC LOSS SHARING ASSET (Continued)

        The following table presents information about the composition of the FDIC loss sharing asset, the true-up liability, and the non-single family and the single family covered assets as of the date indicated:

	September 30, 2013
	Affinity Bank		Los Padres Bank		Western Commercial Bank		San Luis Trust Bank		Total
	(Dollars in thousands)
FDIC loss sharing asset	$	12,973	$	27,717	$	2,153	$	12,810	$	55,653
True-up liability		N/A		N/A	$	1,510	$	5,071	$	6,581
Non-single family covered assets(1)	$	230,053	$	157,504	$	21,844	$	51,879	$	461,280
Single family covered assets	$	14,285	$	77,126	$	—	$	41,319	$	132,730
Loss sharing expiration dates:
Non-single family		3rd Quarter 2014		3rd Quarter 2015		4th Quarter 2015		1st Quarter 2016
Single family		3rd Quarter 2019		3rd Quarter 2020		N/A		1st Quarter 2021
Loss recovery expiration dates:
Non-single family		3rd Quarter 2017		3rd Quarter 2018		4th Quarter 2018		1st Quarter 2019
Single family		3rd Quarter 2019		3rd Quarter 2020		N/A		1st Quarter 2021

(1)

Excludes securities.

NOTE 9—BORROWINGS, SUBORDINATED DEBENTURES AND BROKERED DEPOSITS

Borrowings

        As of September 30, 2013 and December 31, 2012, our borrowings consisted of non-recourse debt relating to the payment stream of certain leases sold to third parties. The weighted average interest rate on this debt was 6.30% and 6.28% at September 30, 2013 and December 31, 2012, respectively. The debt is secured by the equipment in the leases and all interest rates are fixed. As of September 30, 2013, the weighted average maturity of the debt was 2.0 years.

        As of September 30, 2013 and December 31, 2012, there were no outstanding FHLB advances. Our aggregate remaining borrowing capacity under the FHLB secured borrowing lines was $1.3 billion at September 30, 2013. As of September 30, 2013, our FHLB advances facility was secured by: (1) a blanket lien on certain qualifying loans in our loan portfolio, which were not pledged to the Federal Reserve Bank of San Francisco ("FRBSF"), and (2) available-for-sale securities with a carrying value of $11.5 million. Additionally, the Bank had secured borrowing capacity from the FRBSF of $467.8 million at September 30, 2013, secured by $589.9 million of certain qualifying loans. As of September 30, 2013, the Bank also had unsecured lines of credit of $80.0 million with correspondent banks for the purchase of overnight funds; these lines are subject to availability of funds.

38

PACWEST BANCORP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Continued)

(Unaudited)

NOTE 9—BORROWINGS, SUBORDINATED DEBENTURES AND BROKERED DEPOSITS (Continued)

Subordinated Debentures

        The following table summarizes the terms of each issuance of the subordinated debentures outstanding as of the dates indicated:

	September 30, 2013						December 31, 2012
												Date Issued		Maturity Date			Next Reset Date
Series	Amount			Rate(1)			Amount		Rate(2)							Rate Index
	(Dollars in thousands)
Trust V	$	10,310			3.35	%	$	10,310		3.41	%		8/15/03		9/17/33	3 month LIBOR + 3.10		12/13/13
Trust VI		10,310			3.30	%		10,310		3.36	%		9/3/03		9/15/33	3 month LIBOR + 3.05		12/12/13
Trust CII		5,155			3.20	%		5,155		3.26	%		9/17/03		9/17/33	3 month LIBOR + 2.95		12/13/13
Trust VII		61,856			2.99	%		61,856		3.05	%		2/5/04		4/23/34	3 month LIBOR + 2.75		1/28/14
Trust CIII		20,619			1.94	%		20,619		2.00	%		8/15/05		9/15/35	3 month LIBOR + 1.69		12/12/13
Trust FCCI(3)		16,495			1.85	%		—		—			1/25/07		3/15/37	3 month LIBOR + 1.60		12/12/13
Trust FCBI(3)		10,310			1.80	%		—		—			9/30/05		12/15/35	3 month LIBOR + 1.55		12/12/13
Gross subordinated debentures		135,055						108,250
Unamortized discount(4)		(2,555	)					—
Net subordinated debentures	$	132,500					$	108,250

(1)

As of October 28, 2013.

(2)

As of January 28, 2013.

(3)

Acquired in the FCAL acquisition.

(4)

Amount represents the fair value adjustment on trusts acquired in the FCAL acquisition.

        Interest payments made by the Company on subordinated debentures are considered dividend payments under the Board of Governors of the Federal Reserve System ("FRB") regulations. Bank holding companies, such as PacWest Bancorp, are required to notify the FRB prior to declaring and paying a dividend to stockholders during any period in which quarterly and/or cumulative twelve-month net earnings are insufficient to fund the dividend amount, among other requirements. We are not required to make such notification to the FRB.

Debt Termination Expense—FHLB Advances and Subordinated Debentures

        In March 2012, the Company incurred $22.6 million in debt termination expense related to the repayment of $225.0 million in fixed-rate term FHLB advances and the early redemption of $18.6 million in fixed-rate subordinated debentures. The Company used a combination of excess cash and collateralized overnight FHLB advances to repay these debt instruments.

39

PACWEST BANCORP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Continued)

(Unaudited)

NOTE 9—BORROWINGS, SUBORDINATED DEBENTURES AND BROKERED DEPOSITS (Continued)

Brokered Deposits

        Brokered time deposits totaled $51.1 million at September 30, 2013, and $37.7 million at December 31, 2012, all of which were part of the CDARS program. The CDARS program represents deposits that are participated with other FDIC insured financial institutions as a means to provide FDIC deposit insurance coverage for the full amount of our customers' deposits. In addition, liabilities from discontinued operations at September 30, 2013 included $104.8 million of noninterest-bearing brokered deposits.

NOTE 10—COMMITMENTS AND CONTINGENCIES

Lending Commitments

        The Bank is a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments include commitments to extend credit, standby letters of credit, and commitments to purchase equipment being acquired for lease to others. Those instruments involve, to varying degrees, elements of credit risk in excess of the amount recognized in the condensed consolidated balance sheets. The contract or notional amounts of those instruments reflect the extent of involvement the Company has in particular classes of financial instruments.

        The following table presents a summary of the financial instruments described above as of the dates indicated:

	September 30, 2013		December 31, 2012
	(In thousands)
Loan commitments to extend credit	$	1,069,451	$	849,607
Standby letters of credit		39,586		27,534
Commitments to purchase equipment being acquired for lease to others		2,964		4,399
	$	1,112,001	$	881,540

        Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements.

        Standby letters of credit are conditional commitments issued by the Company to guarantee the performance of a customer to a third party. Those guarantees are primarily issued to support private borrowing arrangements. Most guarantees expire within one year from the date of issuance. The Company generally requires collateral or other security to support financial instruments with credit risk.

        In addition, the Company has investments in low income housing project partnerships, which provide the Company income tax credits, and in a few small business investment companies. The

40

PACWEST BANCORP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Continued)

(Unaudited)

NOTE 10—COMMITMENTS AND CONTINGENCIES (Continued)

investments call for capital contributions up to an amount specified in the partnership agreements. As of September 30, 2013 and December 31, 2012, the Company had commitments to contribute capital to these entities totaling $9.3 million and $10.8 million, respectively.

Legal Matters

        In the ordinary course of our business, we are party to various legal actions, which we believe are incidental to the operation of our business. The outcome of such legal actions and the timing of ultimate resolution are inherently difficult to predict. In the opinion of management, based upon information currently available to us, any resulting liability, in addition to amounts already accrued, would not have a material adverse effect on the Company's financial statements or operations.

FCAL Merger-Related Litigation

        As set forth below, there are a number of litigation matters pending against FCB. On May 31, 2013, pursuant to the FCAL acquisition, FCAL merged with and into PacWest, and FCB merged with and into Pacific Western. Pursuant to the merger agreement executed between FCAL and PacWest on November 6, 2012, PacWest has assumed the defense of the litigation matters and would assume liability for the results in the event of an adverse result in the cases.

        Eleven lawsuits have been filed in the Superior Court of the State of California, County of Los Angeles against FCB, among others, by various former clients of political campaign and non-profit organization treasurer Kinde Durkee. The lawsuits are entitled (i) Wardlaw, et al. v. First California Bank, et al. (Case No. SC 114232), filed September 23, 2011; (ii) Lou Correa for State Senate, et al. v. First California Bank, et al. (Case No. BC 479872), filed February 29, 2012; (iii) Committee to Re-elect Lorreta Sanchez, et al. v. First California Bank, et al. (Case No. BC 479873), filed February 29, 2012, (iv) Holden for Assembly v. First California Bank, et al. (Case No. BC 489604), filed August 3, 2012; (v) Latino Diabetes Ass'n v. First California Bank, et al. (Case No. BC 489605), filed August 3, 2012; (vi) Jose Solorio Assembly Officeholder Committee, et al. v. First California Bank, et al. (Case No. 492855), filed September 27, 2012; (vii) Foster for Treasurer 2014, et al. v. First California Bank, et al. (Case No. BC 492878), filed September 27, 2012; (viii) Los Angeles County Democratic Central Committee, et al. v. First California Bank, et al. (Case No. BC 492854), filed September 27, 2012; (ix) National Popular Vote v. First California Bank, et al. (Case No. BC 501213), filed February 19, 2013; (x) Zine for City Council v. First California Bank, et al. (Case No. BC 504476), filed April 2, 2013; and (xi) Rothman v. First California Bank, et al. (Case No. BC 511180), filed June 5, 2013. Plaintiffs in each of the cases claim, among other things, that FCB aided and abetted a fraud and unlawful conversion by Ms. Durkee and/or her affiliated company of funds held in accounts at FCB. Based largely on the same alleged conduct, plaintiffs also assert claims for an alleged violation of California Business & Professions Code Section 17200 and for declaratory relief. Plaintiffs seek compensatory and punitive damages, as well as various forms of equitable and declaratory relief.

        Each of the cases is pending before the same judge, who is coordinating their progress. FCB has answered each of the complaints, and the parties are engaged in discovery. A trial date has been scheduled for August 13, 2014.

41

PACWEST BANCORP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Continued)

(Unaudited)

NOTE 10—COMMITMENTS AND CONTINGENCIES (Continued)

        On September 23, 2011, FCB filed a Complaint-in-Interpleader in the Superior Court of the State of California, County of Los Angeles (Case No. BC 470182), pursuant to which FCB interpleaded the sum of $2,539,049 as the amounts on deposit in accounts at FCB that were controlled by Ms. Durkee on behalf of the several hundred named defendants (the "Interpleader Action"). FCB seeks an order requiring the defendants to interplead and litigate their respective claims, discharging FCB from liability, and restraining proceedings or actions against FCB by the defendants with respect to those amounts. On December 6, 2011, the Interpleader Action was designated as complex and transferred to the Superior Court's complex litigation division. It has been related to the other pending actions that relate to the conduct of Ms. Durkee.

        On June 18, 2012, FCB moved for summary judgment in the Interpleader Action. At hearings held in late 2012 and early 2013, the Superior Court entered summary judgment with respect to a majority of the accounts at issue. Those sums have been paid by the Superior Court to the former accountholders.

        Since September 30, 2013, the 11 lawsuits has grown to 14 lawsuits. The allegations in the three new suits were filed by former clients of Kinde Durkee and each new suit makes claims identical to the original 11 lawsuits. The parties participated in a mediation on October 16, 2013. The mediation was unsuccessful and the plaintiffs made a demand which was not reasonable. At the October 30, 2013 status conference, the judge ordered the parties to meet and confer regarding a framework for trying the cases. The Court set a further status conference for December 19, 2013.

        We continue to believe we have made the appropriate accrual for any liabilities that may arise out of the Kinde Durkee litigation matters, but we are unable to determine with certainty whether there will be any material impact on the Company's financial statements or operations.

CapitalSource Merger-Related Litigation

        Between July 24, 2013 and September 19, 2013, 11 putative stockholder class action lawsuits (the "Merger Litigations") were filed against PacWest and certain other defendants in connection with PacWest entering into the CapitalSource Merger Agreement in which PacWest agreed to acquire CapitalSource. The CapitalSource Merger Agreement was publicly announced on July 22, 2013. Five of the 11 actions were filed in Superior Court of California, Los Angeles County: (1) Engel v. CapitalSource, Inc. et al., Case No. BC516267, filed on July 24, 2013; (2) Miller v. Fremder et al., Case No. BC516590, filed on July 29, 2013; (3) Basu v. CapitalSource, Inc. et al., Case No. BC516775, filed on July 31, 2013; (4) Holliday v. PacWest Bancorp et al., Case No. BC517209, filed on August 5, 2013 and (5) Iron Workers Mid-South Pension Fund v. CapitalSource Inc. et al., Case No . BC517698, filed on August 8, 2013 (collectively, the "California Actions"). The other six actions were filed in the Court of Chancery of the State of Delaware: (1) Fosket v. Byrnes et al., Case No. 8765, filed on August 1, 2013; (2) Bennett v. CapitalSource, Inc. et al., Case No. 8770, filed on August 2, 2013; (3) Chalfant v. CapitalSource et al., Case No. 8777, filed on August 6, 2013; (4) Oliveira v. CapitalSource, Inc. et al., Case No. 8779, filed on August 7, 2013; (5) Desai v. CapitalSource, Inc. et al., Case No. 8804, filed on August 13, 2013; and (6) Fattore v. CapitalSource, Inc. et al., Case No. 8927, filed on September 19, 2013 (collectively, the "Delaware Actions").

42

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Notes to Condensed Consolidated Financial Statements (Continued)

(Unaudited)

NOTE 10—COMMITMENTS AND CONTINGENCIES (Continued)

        On August 15, 2013, the Delaware Actions were consolidated into a single action, captioned In re CapitalSource Inc. Stockholder Litigation, Consol. C.A. No. 8765-CS, and assigned to Chancellor Leo E. Strine. On September 25, 2013, plaintiffs in the Delaware Actions filed a Verified Consolidated Amended Class Action Complaint (the "Delaware Consolidated Complaint"). On September 17, 2013, the California Actions were consolidated into a single action, captioned In re CapitalSource Inc. Shareholder Litigation, Lead Case No. BC516267, and assigned to Judge Elihu M. Berle. On October 2, 2013, plaintiffs in the California Actions filed an Amended Consolidated Complaint (the "California Consolidated Complaint").

        The Delaware Consolidated Complaint and the California Consolidated Complaint each allege that the members of the CapitalSource board of directors breached their fiduciary duties to CapitalSource stockholders by approving the proposed merger for inadequate consideration; approving the transaction in order to obtain benefits not equally shared by other CapitalSource stockholders; entering into the merger agreement containing preclusive deal protection devices; and failing to take steps to maximize the value to be paid to the CapitalSource stockholders. The Delaware Consolidated Complaint and the California Consolidated Complaint also each allege claims against CapitalSource and PacWest for aiding and abetting these alleged breaches of fiduciary duties. Plaintiffs in these actions seek, among other things, declaratory and injunctive relief concerning the alleged breaches of fiduciary duties, injunctive relief prohibiting consummation of the merger, rescission, an accounting by defendants, damages and attorneys' fees and costs, and other and further relief. The judge in the Delaware Actions ruled on October 23, 2013, that discovery would proceed in the Delaware Actions and that it would be shared with the plaintiffs in the California Actions and that the California Actions would be stayed while that process takes place. Thereafter, on October 28, 2013, the California Actions' plaintiffs stipulated in the California Actions that they would participate in the discovery process in the Delaware Actions and the administrative stay in the California Actions will remain in place unless and until the Delaware Actions are abandoned. At this stage, it is not possible to predict the outcome of the proceedings or their impact on CapitalSource or PacWest.

NOTE 11—FAIR VALUE MEASUREMENTS

        ASC 820, "Fair Value Measurement," defines fair value, establishes a framework for measuring fair value including a three-level valuation hierarchy, and expands disclosures about fair value measurements. Fair value is defined as the exchange price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date reflecting assumptions that a market participant would use when pricing an asset or liability. The hierarchy uses three levels of inputs to measure the fair value of assets and liabilities as follows:

•

Level 1:    Quoted prices (unadjusted) for identical assets or liabilities in active markets.

•

Level 2:    Observable inputs other than Level 1, including quoted prices for similar assets and liabilities in active markets, quoted prices in less active markets, or other observable inputs that can be corroborated by observable market data, either directly or indirectly, for substantially the full term of the financial instrument. This category generally includes government agency and government-sponsored enterprise securities.

43

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Notes to Condensed Consolidated Financial Statements (Continued)

(Unaudited)

NOTE 11—FAIR VALUE MEASUREMENTS (Continued)

•

Level 3:    Inputs to a valuation methodology that are unobservable, supported by little or no market activity, and significant to the fair value measurement. These valuation methodologies generally include pricing models, discounted cash flow models, or a determination of fair value that requires significant management judgment or estimation. This category also includes unobservable inputs from a pricing service not corroborated by observable market data, and includes our covered private label CMOs.

        We use fair value to measure certain assets on a recurring basis, primarily securities available-for-sale; we have no liabilities being measured at fair value. For assets measured at the lower of cost or fair value, the fair value measurement criteria may or may not be met during a reporting period and such measurements are therefore considered "nonrecurring" for purposes of disclosing our fair value measurements. Fair value is used on a nonrecurring basis to adjust carrying values for impaired loans and other real estate owned and also to record impairment on certain assets, such as goodwill, core deposit intangibles, and other long-lived assets.

        The following table presents information on the assets measured and recorded at fair value on a recurring basis as of the date indicated:

	Fair Value Measurement as of September 30, 2013
	Total		Level 1		Level 2		Level 3
	(In thousands)
Measured on a Recurring Basis:
Securities available-for-sale:
Government agency and government-sponsored enterprise residential mortgage-backed securities	$	913,322	$	—	$	913,322	$	—
Covered private label CMOs		39,378		—		—		39,378
Municipal securities		439,635		—		439,635		—
Corporate securities		82,106		—		82,106		—
Other securities		37,706		514		37,192		—
	$	1,512,147	$	514	$	1,472,255	$	39,378

        There were no transfers of assets either between Level 1 and Level 2 nor in or out of Level 3 of the fair value hierarchy for assets measured on a recurring basis during the three months ended September 30, 2013.

        The following table presents information about quantitative inputs and assumptions used to evaluate the fair values provided by our third party pricing service for our Level 3 covered private label CMOs measured at fair value on a recurring basis as of September 30, 2013:

Unobservable Inputs	Range of Inputs	Weighted Average Input
Voluntary annual prepayment speeds	0% - 32.6%		8.1	%
Annual default rates	0% - 46.2%		3.2	%
Loss severity rates	0% - 64.9%		35.3	%
Discount rates	0% - 13.5%		5.8	%

44

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Notes to Condensed Consolidated Financial Statements (Continued)

(Unaudited)

NOTE 11—FAIR VALUE MEASUREMENTS (Continued)

        The following table summarizes activity for assets measured at fair value on a recurring basis that are categorized as Level 3 for the period indicated:

	Covered Private Label CMOs (Level 3)
	(In thousands)
Balance, December 31, 2012	$	44,684
Total realized in earnings		1,587
Decrease in unrealized gain in comprehensive income		(731	)
Net settlements		(6,162	)
Balance, September 30, 2013	$	39,378

        The following tables present assets measured at fair value on a non-recurring basis as of the date indicated and the gains and (losses) recognized on such assets for the period indicated:

	Fair Value Measurement as of September 30, 2013
	Total		Level 1		Level 2		Level 3
	(In thousands)
Measured on a Non-Recurring Basis:
Non-PCI impaired loans	$	75,435	$	—	$	1,160	$	74,275
Non-covered other real estate owned		7,084		—		7,084		—
Covered other real estate owned		141		—		26		115
SBA loan servicing asset		853		—		—		853
	$	83,513	$	—	$	8,270	$	75,243

	Three Months Ended September 30, 2013			Nine Months Ended September 30, 2013
	(In thousands)
Gain (Loss) on Assets Measured on a Non-Recurring Basis:
Non-PCI impaired loans	$	(545	)	$	(2,422	)
Non-covered other real estate owned		(643	)		(643	)
Covered other real estate owned		(65	)		(69	)
SBA loan servicing asset		—			12
Total net loss	$	(1,253	)	$	(3,122	)

45

PACWEST BANCORP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Continued)

(Unaudited)

NOTE 11—FAIR VALUE MEASUREMENTS (Continued)

        The following table presents the valuation methodology and unobservable inputs for Level 3 assets measured at fair value on a nonrecurring basis as of September 30, 2013:

Asset	Fair Value (in 000's)		Valuation Methodology	Unobservable Inputs	Range	Weighted Average
Impaired loans(1)	$	72,528	Discounted cash flow	Discount rates	4.06% - 8.81%		6.57	%
	$	490	Appraisals	No discounts
OREO(2)	$	115	Appraisals	Discount, including 8% for selling costs	30%		30	%
SBA loan servicing asset	$	853	Discounted cash flow	Prepayment speeds	3.40% - 16.34%			(3)
				Discount rates	9.63% - 13.26%			(3)

(1)

Excludes $1.3 million of impaired loans with balances of $250,000 or less.

(2)

As of September 30, 2013, there was one OREO measured at Level 3.

(3)

Not readily available.

        ASC Topic 825, "Financial Instruments," requires disclosure of the estimated fair value of certain financial instruments and the methods and significant assumptions used to estimate such fair values. Additionally, certain financial instruments and all nonfinancial instruments are excluded from the applicable disclosure requirements.

46

PACWEST BANCORP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Continued)

(Unaudited)

NOTE 11—FAIR VALUE MEASUREMENTS (Continued)

        The following tables present a summary of the carrying values and estimated fair values of certain financial instruments as of the dates indicated:

	September 30, 2013
			Estimated Fair Value
	Carrying or Contract Amount
			Total		Level 1		Level 2		Level 3
	(In thousands)
Financial Assets:
Cash and due from banks	$	132,467	$	132,467	$	132,467	$	—	$	—
Interest-earning deposits in financial institutions		11,552		11,552		11,552		—		—
Securities available-for-sale		1,512,147		1,512,147		514		1,472,255		39,378
Investment in FHLB stock		34,095		34,095		—		34,095		—
Loans and leases, net		4,299,607		4,313,163		—		1,160		4,312,003
SBA loan servicing asset		853		853		—		—		853
Financial Liabilities:
Deposits:
Demand, money market, interest checking, and savings deposits		4,709,623		4,709,623		—		4,709,623		—
Time deposits		723,521		725,184		—		725,184		—
Borrowings		8,243		8,244		—		8,244		—
Subordinated debentures		132,500		132,365		—		132,365		—

	December 31, 2012
			Estimated Fair Value
	Carrying or Contract Amount
			Total		Level 1		Level 2		Level 3
	(In thousands)
Financial Assets:
Cash and due from banks	$	89,011	$	89,011	$	89,011	$	—	$	—
Interest-earning deposits in financial institutions		75,393		75,393		75,393		—		—
Securities available-for-sale		1,355,385		1,355,385		8,985		1,301,716		44,684
Investment in FHLB stock		37,126		37,126		—		37,126		—
Loans and leases, net		3,498,329		3,551,674		—		4,975		3,546,699
SBA loan servicing asset		1,000		1,000		—		—		1,000
Financial Liabilities:
Deposits:
Demand, money market, interest checking, and savings deposits		3,888,794		3,888,794		—		3,888,794		—
Time deposits		820,327		823,912		—		823,912		—
Borrowings		12,591		12,611		—		12,611		—
Subordinated debentures		108,250		108,186		—		108,186		—

47

PACWEST BANCORP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Continued)

(Unaudited)

NOTE 11—FAIR VALUE MEASUREMENTS (Continued)

        The following is a description of the valuation methodologies used to measure our assets recorded at fair value (under ASC Topic 820) and for estimating fair value for financial instruments not recorded at fair value (under ASC Topic 825).

        Cash and due from banks.    The carrying amount is assumed to be the fair value because of the liquidity of these instruments.

        Interest-earning deposits in financial institutions.    The carrying amount is assumed to be the fair value given the short-term nature of these deposits.

        Securities available-for-sale.    Securities available-for-sale are measured and carried at fair value on a recurring basis. Unrealized gains and losses on available-for-sale securities are reported as a component of accumulated other comprehensive income in the condensed consolidated balance sheets. See Note 5, Investment Securities, for further information on unrealized gains and losses on securities available-for-sale.

        Fair value for securities categorized as Level 1, which are primarily equity securities, are based on readily available quoted prices. In determining the fair value of the securities categorized as Level 2, we obtain a report from a nationally recognized broker-dealer detailing the fair value of each investment security we hold as of each reporting date. The broker-dealer uses observable market information to value our securities, with the primary source being a nationally recognized pricing service. We review the market prices provided by the broker-dealer for our securities for reasonableness based on our understanding of the marketplace and we consider any credit issues related to the securities. As we have not made any adjustments to the market quotes provided to us and they are based on observable market data, they have been categorized as Level 2 within the fair value hierarchy.

        Our covered private label CMOs are categorized as Level 3 due in part to the inactive market for such securities. There is a wide range of prices quoted for private label CMOs among independent third party pricing services and this range reflects the significant judgment being exercised over the assumptions and variables that determine the pricing of such securities. We consider this subjectivity to be a significant unobservable input and have concluded that the covered private label CMOs should be categorized as a Level 3 measured asset. Our fair value estimate was based on prices provided to us by a nationally recognized pricing service which we also use to determine the fair value of the majority of our securities portfolio. We determined the reasonableness of the fair values by reviewing assumptions at the individual security level about prepayment, default expectations, estimated severity loss factors, and discount rates, all of which are not directly observable in the market. Significant changes in default expectations, severity loss factors, or discount rates, which occur all together or in isolation, would result in different fair value measurements.

        FHLB stock.    Investments in FHLB stock are recorded at cost and measured for impairment quarterly. Ownership of FHLB stock is restricted to member banks and the securities do not have a readily determinable market value. Purchases and sales of these securities are at par value with the issuer. The fair value of investments in FHLB stock is equal to the carrying amount.

        Impaired loans (excluding PCI loans).    Nonaccrual loans and performing restructured loans are considered impaired for reporting purposes and are measured and recorded at fair value on a

48

PACWEST BANCORP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Continued)

(Unaudited)

NOTE 11—FAIR VALUE MEASUREMENTS (Continued)

non-recurring basis. Non-PCI nonaccrual loans with an unpaid principal balance over $250,000 and all performing restructured loans are reviewed individually for the amount of impairment, if any. Non-PCI nonaccrual loans with an unpaid principal balance of $250,000 or less are evaluated for impairment collectively.

        To the extent a loan is collateral dependent, we measure such impaired loan based on the estimated fair value of the underlying collateral. The fair value of each loan's collateral is generally based on estimated market prices from an independently prepared appraisal, which is then adjusted for the cost related to liquidating such collateral; such valuation inputs result in a nonrecurring fair value measurement that is categorized as a Level 2 measurement. The Level 2 measurement is based on appraisals obtained within the last 12 months and for which a charge-off was recognized or a change in the specific valuation allowance was made during the nine months ended September 30, 2013.

        When adjustments are made to an appraised value to reflect various factors such as the age of the appraisal or known changes in the market or the collateral, such valuation inputs are considered unobservable and the fair value measurement is categorized as a Level 3 measurement. The impaired loans categorized as Level 3 also include unsecured loans and other secured loans whose fair values are based significantly on unobservable inputs such as the strength of a guarantor, including an SBA government guarantee, cash flows discounted at the effective loan rate, and management's judgment.

        The Non-PCI impaired loan balances shown above represent those nonaccrual and restructured loans for which impairment was recognized during the nine months ended September 30, 2013. The amounts shown as net losses include the impairment recognized during the nine months ended September 30, 2013, for the loan balances shown. Of the $50.8 million of nonaccrual loans at September 30, 2013, $1.1 million were written down to their collateral fair values through charge-offs during the quarter.

        Other real estate owned.    The fair value of foreclosed real estate, both non-covered and covered, is generally based on estimated market prices from independently prepared current appraisals or negotiated sales prices with potential buyers, less estimated costs to sell; such valuation inputs result in a fair value measurement that is categorized as a Level 2 measurement on a nonrecurring basis. As a matter of policy, appraisals are required annually and may be updated more frequently as circumstances require in the opinion of management. The Level 2 measurement for OREO is based on appraisals obtained within the last 12 months and for which a write-down was recognized during the nine months ended September 30, 2013.

        When a current appraised value is not available or management determines the fair value of the collateral is further impaired below the appraised value as a result of known changes in the market or the collateral and there is no observable market price, such valuation inputs result in a fair value measurement that is categorized as a Level 3 measurement. To the extent a negotiated sales price or reduced listing price represents a significant discount to an observable market price, such valuation input would result in a fair value measurement that is also considered a Level 3 measurement. The OREO losses disclosed are write-downs based on either a recent appraisal obtained after foreclosure or an accepted purchase offer by an independent third party received after foreclosure.

49

PACWEST BANCORP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Continued)

(Unaudited)

NOTE 11—FAIR VALUE MEASUREMENTS (Continued)

        SBA servicing asset.    In accordance with ASC Topic 860, "Transfers and Servicing," the SBA servicing asset, included in other assets in the condensed consolidated balance sheets, is carried at its implied fair value. The fair value of the servicing asset is estimated by discounting future cash flows using market-based discount rates and prepayment speeds. The discount rate is based on the current U.S. Treasury yield curve, as published by the Department of the Treasury, plus a spread for the marketplace risk associated with these assets. We utilize estimated prepayment vectors using SBA prepayment information provided by Bloomberg for pools of similar assets to determine the timing of the cash flows. These nonrecurring valuation inputs are considered to be Level 3 inputs.

        Deposits.    Deposits are carried at historical cost. The fair value of deposits with no stated maturity, such as noninterest bearing demand deposits, interest checking, money market, and savings accounts, is equal to the amount payable on demand as of the balance sheet date and considered Level 2. The fair value of time deposits is based on the discounted value of contractual cash flows and considered Level 2. The discount rate is estimated using the rates currently offered for deposits of similar remaining maturities. No value has been separately assigned to the Company's long-term relationships with its deposit customers, such as a core deposit intangible.

        Borrowings.    Borrowings are carried at amortized cost. The fair value of fixed-rate borrowings is calculated by discounting scheduled cash flows through the estimated maturity dates or call dates, if applicable, using estimated market discount rates that reflect current rates offered for borrowings with similar remaining maturities and characteristics.

        Subordinated debentures.    Subordinated debentures are carried at amortized cost. The fair value of subordinated debentures with variable rates is determined using a market discount rate on the expected cash flows.

        Commitments to extend credit.    The majority of our commitments to extend credit carry current market interest rates if converted to loans. Because these commitments are generally unassignable by either the borrower or us, they only have value to the borrower and us. The estimated fair value approximates the recorded deferred fee amounts and is excluded from the table above because it is not material.

Limitations

        Fair value estimates are made at a specific point in time and are based on relevant market information and information about the financial instrument. These estimates do not reflect income taxes or any premium or discount that could result from offering for sale at one time the Company's entire holdings of a particular financial instrument. Because no market exists for a portion of the Company's financial instruments, fair value estimates are based on what management believes to be conservative judgments regarding expected future cash flows, current economic conditions, risk characteristics of various financial instruments, and other factors. These estimated fair values are subjective in nature and involve uncertainties and matters of significant judgment and therefore cannot be determined with precision. Changes in assumptions could significantly affect the estimates. Since the fair values have been estimated as of September 30, 2013, the amounts that will actually be realized or paid at settlement or maturity of the instruments could be significantly different.

50

PACWEST BANCORP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Continued)

(Unaudited)

NOTE 12—EARNINGS PER SHARE

        The following is a summary of the calculation of basic and diluted net earnings per share for the periods indicated:

	Three Months Ended									Nine Months Ended September 30,
	September 30, 2013			June 30, 2013			September 30, 2012
										2013			2012
	(In thousands, except per share data)
Basic Earnings Per Share:
Net earnings from continuing operations	$	24,140		$	4,396		$	16,088		$	42,030		$	36,909
Less: earnings allocated to unvested restricted stock(1)		(786	)		(212	)		(574	)		(1,137	)		(1,170	)
Net earnings from continuing operations allocated to common shares		23,354			4,184			15,514			40,893			35,739
Net earnings (loss) from discontinued operations		23			(47	)		—			(24	)		—
Net earnings allocated to common shares	$	23,377		$	4,137		$	15,514		$	40,869		$	35,739
Weighted-average basic shares and unvested restricted stock outstanding		46,091			40,339			37,413			41,306			37,353
Less: weighted-average unvested restricted stock outstanding		(1,795	)		(1,597	)		(1,713	)		(1,663	)		(1,679	)
Weighted-average basic shares outstanding		44,296			38,742			35,700			39,643			35,674
Basic earnings per share:
Net earnings from continuing operations	$	0.53		$	0.11		$	0.43		$	1.03		$	1.00
Net earnings from discontinued operations		—			—			—			—			—
Net earnings	$	0.53		$	0.11		$	0.43		$	1.03		$	1.00
Diluted Earnings Per Share:
Net earnings from continuing operations allocated to common shares	$	23,354		$	4,184		$	15,514		$	40,893		$	35,739
Net earnings (loss) from discontinued operations		23			(47	)		—			(24	)		—
Net earnings allocated to common shares	$	23,377		$	4,137		$	15,514		$	40,869		$	35,739
Weighted-average basic shares outstanding		44,296			38,742			35,700			39,643			35,674
Diluted earnings per share:
Net earnings from continuing operations	$	0.53		$	0.11		$	0.43		$	1.03		$	1.00
Net earnings from discontinued operations		—			—			—			—			—
Net earnings	$	0.53		$	0.11		$	0.43		$	1.03		$	1.00

(1)

Represents cash dividends paid to holders of unvested restricted stock, net of estimated forfeitures, plus undistributed earnings amounts available to holders of unvested restricted stock, if any.

51

PACWEST BANCORP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Continued)

(Unaudited)

NOTE 13—STOCK COMPENSATION PLANS

        The Company's 2003 Stock Incentive Plan, or the 2003 Plan, permits stock based compensation awards to officers, directors, key employees and consultants. As of September 30, 2013, the 2003 Plan authorized grants of stock-based compensation instruments to purchase or issue up to 6,500,000 shares of authorized but unissued Company common stock, subject to adjustments provided by the 2003 Plan. As of September 30, 2013, there were 1,431,481 shares available for grant under the 2003 Plan.

Restricted Stock

        At September 30, 2013, there were outstanding 916,462 shares of unvested time-based restricted common stock and 875,000 shares of unvested performance-based restricted common stock. The awarded shares of time-based restricted common stock vest over a service period of three to four years from the date of the grant. The awarded shares of performance-based restricted common stock vest in full on the date the Compensation, Nominating and Governance, or CNG, Committee of the Board of Directors, as Administrator of the 2003 Plan, determines that the Company achieved certain financial goals established by the CNG Committee as set forth in the grant documents. Both time-based and performance-based restricted common stock vest immediately upon a change in control of the Company as defined in the 2003 Plan and upon death of the employee.

        Compensation expense related to time-based restricted stock awards is based on the fair value of the underlying stock on the award date and is recognized over the vesting period using the straight-line method. Restricted stock amortization totaled $2.4 million, $2.0 million, and $1.4 million for the three months ended September 30, 2013, June 30, 2013, and September 30, 2012, respectively, and $6.1 million and $4.3 million for the nine months ended September 30, 2013 and 2012, respectively. Such amounts are included in compensation expense on the accompanying condensed consolidated statements of earnings.

        We are currently not recognizing any compensation expense for 575,000 of the 875,000 shares of performance-based restricted stock as management has concluded that it is improbable that the respective financial targets related to these outstanding stock awards will be met. If and when the attainment of such financial targets is deemed probable in future periods, a catch-up adjustment will be recorded and amortization of such performance-based restricted stock will begin again. The total amount of unrecognized compensation expense related to performance-based restricted stock for which amortization is not being recognized totaled $19.0 million at September 30, 2013. The amount of unrecognized compensation expense related to all unvested restricted stock as of September 30, 2013 totals $41.7 million.

        As noted above, both time-based and performance-based restricted stock vests upon a change in control of the Company. The CapitalSource, Inc. merger, expected to close in the first quarter of 2014, will trigger restricted stock vesting under the change in control provisions within the 2003 Plan. The remaining unamortized expense for all the performance-based and time-based awards will be recognized at that time. See also Note 18, Subsequent Events.

52

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Notes to Condensed Consolidated Financial Statements (Continued)

(Unaudited)

NOTE 14—ACCUMULATED OTHER COMPREHENSIVE INCOME

        The following table provides information about reclassification adjustments from accumulated other comprehensive income ("AOCI") for the period indicated:

	Nine Months Ended September 30, 2013
AOCI Component:	Amount Reclassified from AOCI(1)			Affected Line Item in the Statement Where Net Income is Presented
	(In thousands)
Unrealized gains (losses) on available-for-sale securities:
	$	409		Gain on sale of securities
		5,222		Acquisition-related securities gain(2)
		5,631		Total before tax
		(172	)	Income tax expense
Total reclassification for the period	$	5,459		Net of tax

(1)

Amounts in parentheses indicate debits to income.

(2)

Non-taxable gain on equity interest in FCAL common stock at its fair value as of the FCAL acquisition date.

NOTE 15—BUSINESS SEGMENTS

        The Company's reportable segments consist of "Banking," "Asset Financing," and "Other." At September 30, 2013, the Other segment consisted of the PacWest Bancorp holding company and other elimination and reconciliation entries.

        The Bank's Asset Financing segment includes the operations of the divisions and subsidiaries that provide asset-based commercial loans and equipment leases. The asset-based lending products are offered primarily through three business units: (1) First Community Financial ("FCF"), a division of the Bank, based in Phoenix, Arizona; (2) BFI Business Finance ("BFI"), a wholly-owned subsidiary of the Bank, based in San Jose, California; and (3) Celtic Capital Corporation ("Celtic"), a wholly-owned subsidiary of the Bank based in Santa Monica, California. The equipment leasing products are offered through Pacific Western Equipment Finance ("EQF"), a division of the Bank based in Midvale, Utah.

53

PACWEST BANCORP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Continued)

(Unaudited)

NOTE 15—BUSINESS SEGMENTS (Continued)

        The following tables present information regarding our business segments as of and for the periods indicated (the only segment income statements for which discontinued operations are applicable and reported are those for the three months ended September 30, 2013 and June 30, 2013 and the nine months ended September 30, 2013):

	September 30, 2013
	Banking			Asset Financing			Other			Consolidated Company
	(In thousands)
Loans and leases, net of unearned income	$	3,912,885		$	470,508		$	—		$	4,383,393
Allowance for loan and lease losses		(76,496	)		(7,290	)		—			(83,786	)
Total loans and leases, net	$	3,836,389		$	463,218		$	—		$	4,299,607
Goodwill	$	190,184		$	25,678		$	—		$	215,862
Core deposit and customer relationship intangibles, net		16,604			2,074			—			18,678
Total assets		6,100,587			507,339			8,929			6,616,855
Total deposits(1)		5,467,568			—			(34,424	)		5,433,144

(1)

The negative balance in the "Other" segment represents the elimination of holding company cash held in deposit accounts at the Bank.

	September 30, 2012
	Banking			Asset Financing			Other			Consolidated Company
	(In thousands)
Loans and leases, net of unearned income	$	3,259,571		$	389,420		$	—		$	3,648,991
Allowance for loan and lease losses		(95,878	)		(3,968	)		—			(99,846	)
Total loans and leases, net	$	3,163,693		$	385,452		$	—		$	3,549,145
Goodwill	$	54,704		$	24,888		$	—		$	79,592
Core deposit and customer relationship intangibles, net		13,194			2,705			—			15,899
Total assets		5,080,308			440,690			17,504			5,538,502
Total deposits(1)		4,800,852			—			(13,504	)		4,787,348

(1)

The negative balance in the "Other" segment represents the elimination of holding company cash held in deposit accounts at the Bank.

54

PACWEST BANCORP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Continued)

(Unaudited)

NOTE 15—BUSINESS SEGMENTS (Continued)

	Three Months Ended September 30, 2013
	Banking			Asset Financing			Other			Consolidated Company
	(In thousands)
Interest income	$	72,873		$	12,285		$	—		$	85,158
Intersegment interest income (expense)		353			(353	)		—			—
Other interest expense		(1,692	)		(108	)		(1,069	)		(2,869	)
Net interest income		71,534			11,824			(1,069	)		82,289
Negative provision (provision) for credit losses		5,782			(1,615	)		—			4,167
Noninterest income		(1,566	)		1,443			5,250			5,127
Intangible asset amortization		(1,354	)		(158	)		—			(1,512	)
Acqusition and integration costs		(5,190	)		—			(260	)		(5,450	)
Other noninterest expense		(42,015	)		(5,822	)		(1,401	)		(49,238	)
Total noninterest expense		(48,559	)		(5,980	)		(1,661	)		(56,200	)
Earnings (loss) from continuing operations before income taxes		27,191			5,672			2,520			35,383
Income tax (expense) benefit		(9,996	)		(2,378	)		1,131			(11,243	)
Net earnings (loss) from continuing operations		17,195			3,294			3,651			24,140
Earnings from discontinued operations before income taxes		39			—			—			39
Income tax expense		(16	)		—			—			(16	)
Net earnings from discontinued operations		23			—			—			23
Net earnings	$	17,218		$	3,294		$	3,651		$	24,163

55

PACWEST BANCORP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Continued)

(Unaudited)

NOTE 15—BUSINESS SEGMENTS (Continued)

	Three Months Ended June 30, 2013
	Banking			Asset Financing			Other			Consolidated Company
	(In thousands)
Interest income	$	59,321		$	12,310		$	—		$	71,631
Intersegment interest income (expense)		460			(460	)		—			—
Other interest expense		(2,080	)		(196	)		(882	)		(3,158	)
Net interest income		57,701			11,654			(882	)		68,473
Negative provision (provision) for credit losses		2,607			(765	)		—			1,842
Noninterest income		(415	)		592			26			203
Intangible asset amortization		(1,127	)		(157	)		—			(1,284	)
Acquisition and integration costs		(17,997	)		—			—			(17,997	)
Other noninterest expense		(37,557	)		(5,980	)		(1,398	)		(44,935	)
Total noninterest expense		(56,681	)		(6,137	)		(1,398	)		(64,216	)
Earnings (loss) from continuing operations before income taxes		3,212			5,344			(2,254	)		6,302
Income tax (expense) benefit		(612	)		(2,237	)		943			(1,906	)
Net earnings (loss) from continuing operations		2,600			3,107			(1,311	)		4,396
Loss from discontinued operations before income taxes		(81	)		—			—			(81	)
Income tax benefit		34			—			—			34
Net loss from discontinued operations		(47	)		—			—			(47	)
Net earnings (loss)	$	2,553		$	3,107		$	(1,311	)	$	4,349

56

PACWEST BANCORP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Continued)

(Unaudited)

NOTE 15—BUSINESS SEGMENTS (Continued)

	Three Months Ended September 30, 2012
	Banking			Asset Financing			Other			Consolidated Company
	(In thousands)
Interest income	$	62,358		$	12,765		$	—		$	75,123
Intersegment interest income (expense)		454			(454	)		—			—
Other interest expense		(3,287	)		(215	)		(850	)		(4,352	)
Net interest income		59,525			12,096			(850	)		70,771
Negative provision (provision) for credit losses		3,325			(1,184	)		—			2,141
Noninterest income		5,191			466			25			5,682
Intangible asset amortization		(1,544	)		(134	)		—			(1,678	)
Acquisition and integration costs		(2,101	)		—			—			(2,101	)
Other noninterest expense		(40,776	)		(5,706	)		(1,396	)		(47,878	)
Total noninterest expense		(44,421	)		(5,840	)		(1,396	)		(51,657	)
Earnings (loss) before income taxes		23,620			5,538			(2,221	)		26,937
Income tax (expense) benefit		(9,491	)		(2,291	)		933			(10,849	)
Net earnings (loss)	$	14,129		$	3,247		$	(1,288	)	$	16,088

57

PACWEST BANCORP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Continued)

(Unaudited)

NOTE 15—BUSINESS SEGMENTS (Continued)

	Nine Months Ended September 30, 2013
	Banking			Asset Financing			Other			Consolidated Company
	(In thousands)
Interest income	$	189,101		$	36,957		$	—		$	226,058
Intersegment interest income (expense)		1,284			(1,284	)		—			—
Other interest expense		(6,422	)		(447	)		(2,734	)		(9,603	)
Net interest income		183,963			35,226			(2,734	)		216,455
Negative provision (provision) for credit losses		6,053			(3,181	)		—			2,872
Noninterest income		292			2,579			5,299			8,170
Intangible asset amortization		(3,474	)		(498	)		—			(3,972	)
Acquisition and integration costs		(23,879	)		—			(260	)		(24,139	)
Other noninterest expense		(114,418	)		(17,855	)		(4,215	)		(136,488	)
Total noninterest expense		(141,771	)		(18,353	)		(4,475	)		(164,599	)
Earnings (loss) from continuing operations before income taxes		48,537			16,271			(1,910	)		62,898
Income tax (expense) benefit		(17,038	)		(6,814	)		2,984			(20,868	)
Net earnings (loss) from continuing operations		31,499			9,457			1,074			42,030
Loss from discontinued operations before income taxes		(42	)		—			—			(42	)
Income tax benefit		18			—			—			18
Net loss from discontinued operations		(24	)		—			—			(24	)
Net earnings	$	31,475		$	9,457		$	1,074		$	42,006

58

PACWEST BANCORP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Continued)

(Unaudited)

NOTE 15—BUSINESS SEGMENTS (Continued)

	Nine Months Ended September 30, 2012
	Banking			Asset Financing			Other			Consolidated Company
	(In thousands)
Interest income	$	189,886		$	32,527		$	—		$	222,413
Intersegment interest income (expense)		1,607			(1,607	)		—			—
Other interest expense		(12,002	)		(658	)		(2,889	)		(15,549	)
Net interest income		179,491			30,262			(2,889	)		206,864
Negative provision (provision) for credit losses		9,770			(1,284	)		—			8,486
Noninterest income		11,382			2,345			88			13,815
Intangible asset amortization		(4,855	)		(295	)		—			(5,150	)
Acquisition and integration costs		(2,951	)		(46	)		—			(2,997	)
Debt termination expense		(24,195	)		—			1,597			(22,598	)
Other noninterest expense		(116,366	)		(16,916	)		(4,110	)		(137,392	)
Total noninterest expense		(148,367	)		(17,257	)		(2,513	)		(168,137	)
Earnings (loss) before income taxes		52,276			14,066			(5,314	)		61,028
Income tax (expense) benefit		(20,412	)		(5,941	)		2,234			(24,119	)
Net earnings (loss)	$	31,864		$	8,125		$	(3,080	)	$	36,909

NOTE 16—RELATED PARTY TRANSACTION

        In connection with the FCAL acquisition on May 31, 2013, the Bank paid an advisory fee of $1.3 million to Castle Creek Financial LLC ("Castle Creek Financial"). Such fee has been included in acquisition and integration costs for the nine months ended September 30, 2013 on the condensed consolidated statements of earnings. Castle Creek Financial is an affiliate of Castle Creek Capital LLC, which is controlled by the Company's chairman.

NOTE 17—RECENTLY ISSUED ACCOUNTING STANDARDS

        In July 2013, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2013-11, "Income Taxes (Topic 740): Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists." Under ASU 2013-11, an unrecognized tax benefit should be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward. However, to the extent a net operating loss carryforward, a similar tax loss, or a tax credit carryforward is not available at the reporting date under the tax law of the applicable jurisdiction to settle any additional income taxes that would result from the disallowance of a tax position, or the tax law of the applicable jurisdiction does not require the entity to use, and the entity does not intend to use, the deferred tax asset for such purpose, the unrecognized tax benefit should be presented in the financial statements as a liability and should not be combined with deferred tax assets. ASU 2013-11 is effective for us on January 1, 2014 and is to be applied prospectively, although early adoption and

59

PACWEST BANCORP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Continued)

(Unaudited)

NOTE 17—RECENTLY ISSUED ACCOUNTING STANDARDS (Continued)

retrospective adoption are permitted. The adoption of this standard is not expected to have any material effect on our financial statements.

NOTE 18—SUBSEQUENT EVENTS

Dividend Approval

        On November 6, 2013, the Company announced that the Board of Directors had declared a quarterly cash dividend of $0.25 per common share payable on November 29, 2013, to stockholders of record at the close of business on November 18, 2013.

PacWest and CapitalSource Merger Announcement

        On July 22, 2013, PacWest announced the signing of a definitive agreement and plan of merger (the "Agreement") whereby PacWest and CapitalSource, Inc. ("CSE") will merge in a transaction valued at approximately $2.4 billion. The combined company will be called PacWest Bancorp and the combined subsidiary bank will be called Pacific Western Bank. The CSE national lending operation will continue to do business under the name CapitalSource as a division of Pacific Western Bank.

        Under the terms of the Agreement, CSE shareholders will receive $2.47 in cash and 0.2837 shares of PacWest common stock for each share of CSE common stock. Based on the closing price of PacWest shares on November 4, 2013 of $38.21, the total value of the CSE per share merger consideration is $13.31.

        As of September 30, 2013, on a pro forma consolidated basis, the combined company would have had approximately $15.4 billion in assets with 95 branches throughout California. The transaction, currently expected to close in the first quarter of 2014, is subject to customary conditions, including the approval of bank regulatory authorities and the stockholders of both companies.

Other

        We have evaluated events that have occurred subsequent to September 30, 2013 and have concluded there are no subsequent events that would require recognition or disclosure in the accompanying condensed consolidated financial statements.

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ITEM 2.    Management's Discussion and Analysis of Financial Condition and Results of Operations

Forward-Looking Information

        This Quarterly Report on Form 10-Q contains certain forward-looking information about the Company and its subsidiaries, which statements are intended to be covered by the safe harbor for "forward-looking statements" provided by the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact are forward-looking statements. Such statements involve inherent risks and uncertainties, many of which are difficult to predict and are generally beyond the control of the Company. We caution readers that a number of important factors could cause actual results to differ materially from those expressed in, implied or projected by, such forward-looking statements. Risks and uncertainties include, but are not limited to:

•

lower than expected revenues;

•

credit quality deterioration or pronounced and sustained reduction in real estate market values could cause an increase in the allowance for credit losses and a reduction in earnings;

•

increased competitive pressure among depository institutions;

•

the Company's ability to complete future acquisitions, including the CapitalSource merger, and to successfully integrate such acquired entities or achieve expected benefits, synergies and/or operating efficiencies within expected time frames or at all;

•

the Company's ability to obtain regulatory approvals and meet other closing conditions to the CapitalSource merger, including approval by the Company and CapitalSource stockholders, on the expected terms and schedule;

•

delay in closing the CapitalSource merger;

•

business disruption following the proposed CapitalSource merger;

•

changes in the Company's stock price before completion of the CapitalSource merger, including as a result of the financial performance of the Company or CapitalSource prior to closing;

•

the reaction to the CapitalSource merger of the companies' customers, employees and counterparties;

•

if the CapitalSource merger is completed, additional regulatory requirements associated with being a bank and bank holding company with assets in excess of $10 billion;

•

the possibility that personnel changes will not proceed as planned;

•

the cost of additional capital is more than expected;

•

a change in the interest rate environment reduces interest margins;

•

asset/liability repricing risks and liquidity risks;

•

pending legal matters may take longer or cost more to resolve or may be resolved adversely to the Company;

•

general economic conditions, either nationally or in the market areas in which the Company does or anticipates doing business, are less favorable than expected;

•

environmental conditions, including natural disasters, may disrupt our business, impede our operations, negatively impact the values of collateral securing the Company's loans or impair the ability of our borrowers to support their debt obligations;

•

the economic and regulatory effects of the continuing war on terrorism and other events of war, including the conflicts and uncertainties in the Middle East;

61

•

legislative or regulatory requirements or changes adversely affecting the Company's business;

•

changes in the securities markets; and

•

regulatory approvals for any capital activities cannot be obtained on the terms expected or on the anticipated schedule.

Overview

        We are a bank holding company registered under the Bank Holding Company Act of 1956, as amended. Our principal business is to serve as the holding company for our Los Angeles-based wholly-owned subsidiary bank, Pacific Western Bank, which we refer to as Pacific Western or the Bank.

        Pacific Western is a full-service commercial bank offering a broad range of banking products and services including: accepting demand, money market, and time deposits; originating loans, including commercial, real estate construction, SBA guaranteed and consumer loans; originating equipment finance leases; and providing other business-oriented products. Our operations are primarily located in Southern California extending from San Diego County to California's Central Coast; we also operate three banking offices in the San Francisco Bay area, a leasing operation based in Utah, and asset-based lending operations based in Arizona as well as San Jose and Santa Monica, California. The Bank focuses on conducting business with small to medium-sized businesses in our marketplace and the owners and employees of those businesses. The majority of our loans are secured by the real estate collateral of such businesses. Our asset-based lending function operates in Arizona, California, Texas, Colorado, Minnesota, and the Pacific Northwest. Our equipment leasing function has lease receivables in 45 states.

        Pacific Western competes actively for deposits, and emphasizes solicitation of noninterest-bearing deposits. In managing the top line of our business, we focus on loan growth, loan yield, deposit cost, and net interest margin; net interest income, on a year-to-date basis, accounted for 96.3% of our net revenues (net interest income plus noninterest income).

        Total assets decreased $92.2 million during the third quarter of 2013 to $6.6 billion due mainly to decreases in cash and cash equivalents, covered loans, and the FDIC loss sharing asset, offset by increases in investment securities available-for-sale and non-covered loans. At September 30, 2013 gross loans and leases totaled $4.4 billion, a decrease of $36.3 million since June 30, 2013. The gross non-covered loan and lease portfolio totaled $3.9 billion, an increase of $34.2 million during the third quarter reflecting $195.8 million in originations, $45.0 million in purchases, and $206.6 million in net paydowns. The covered loan portfolio totaled $510.9 million, down $70.5 million during the third quarter due to repayments and resolution activities. Securities available-for-sale increased $38.6 million to $1.5 billion due to purchases.

        Total liabilities decreased $106.8 million during the third quarter to $5.8 billion due to lower total deposits and liabilities of discontinued operations. Total deposits decreased $89.9 million during the third quarter to $5.4 billion at September 30, 2013, due to a decrease in time deposits of $98.6 million, offset by an increase in core deposits of $8.7 million. The increase in core deposits was due to increases of $37.4 million, $7.6 million, and $5.5 million in noninterest-bearing demand deposits, interest checking deposits, and savings deposits, respectively, offset by a decline of $41.8 million in money market deposits. At September 30, 2013, core deposits totaled $4.7 billion, or 87% of total deposits, and noninterest-bearing demand deposits, which totaled $2.3 billion, were 43% of total deposits at that date.

62

PacWest and CapitalSource Merger Announcement

        On July 22, 2013, PacWest announced the signing of a definitive agreement and plan of merger (the "Agreement") whereby PacWest and CapitalSource, Inc. ("CSE") will merge in a transaction valued at approximately $2.4 billion. The combined company will be called PacWest Bancorp and the combined subsidiary bank will be called Pacific Western Bank. The CSE national lending operation will continue to do business under the name CapitalSource as a division of Pacific Western Bank.

        Under the terms of the Agreement, CSE shareholders will receive $2.47 in cash and 0.2837 shares of PacWest common stock for each share of CSE common stock. Based on the closing price of PacWest shares on November 4, 2013 of $38.21, the total value of the CSE per share merger consideration was $13.31.

        As of September 30, 2013, on a pro forma consolidated basis, the combined company would have had approximately $15.4 billion in assets with 95 branches throughout California. The combined institution would be the 6^th largest publicly-owned bank headquartered in California, and the 8^th largest commercial bank headquartered in California (out of more than 214 financial institutions in the state).

        The transaction, currently expected to close in the first quarter of 2014, is subject to customary conditions, including the approval of bank regulatory authorities and the stockholders of both companies.

First California Financial Group Acquisition

        On May 31, 2013, PacWest Bancorp ("PacWest") completed the acquisition of First California Financial Group, Inc. ("FCAL"). As part of the acquisition, First California Bank ("FCB"), a wholly-owned subsidiary of FCAL, merged with and into Pacific Western. For further information, see Note 3, Acquisitions, in the Notes to Condensed Consolidated Financial Statements (Unaudited) contained in "Item 1. Condensed Consolidated Financial Statements (Unaudited)."

2012 Acquisitions

        We completed the following three acquisitions in 2012: (1) American Perspective Bank, or APB, acquired on August 1, 2012, (2) Celtic Capital Corporation, or Celtic, acquired on April 3, 2012, and (3) Pacific Western Equipment Finance (formerly known as Marquette Equipment Finance), or EQF, acquired on January 3, 2012. For further information regarding these acquisitions, see Note 3, Acquisitions, in the Notes to Condensed Consolidated Financial Statements (Unaudited) contained in "Item 1. Condensed Consolidated Financial Statements (Unaudited)."

Key Performance Indicators

        Among other factors, our operating results depend generally on the following key performance indicators:

The Level of Our Net Interest Income

        Net interest income is the excess of interest earned on our interest-earning assets over the interest paid on our interest-bearing liabilities. Net interest margin is net interest income expressed as a percentage of average interest-earning assets. A sustained low interest rate environment combined with low loan growth and high levels of marketplace liquidity may lower both our net interest income and net interest margin going forward.

        Our primary interest-earning assets are loans and investments. Our primary interest-bearing liabilities are deposits. We attribute our high net interest margin to our high level of noninterest-bearing deposits and low cost of deposits. While our deposit balances will fluctuate depending on

63

deposit holders' perceptions of alternative yields available in the market, we attempt to minimize these variances by attracting a high percentage of noninterest-bearing deposits, which have no expectation of yield.

Loan and Lease Growth

        We generally seek new lending opportunities in the $500,000 to $15 million range; try to limit loan maturities to one year for commercial loans, up to 18 months for construction loans, and up to ten years for commercial real estate loans; and price lending products so as to preserve our interest spread and net interest margin. Achieving robust loan growth has been challenging due to: (a) under-pricing by our competitors in many cases at margins that are not significantly above our securities portfolio yield, and (b) our unwillingness to incur unacceptable interest rate risk. We continue to selectively make or renew quality loans that contribute positively to our profitability and net interest margin and we are focused on building relationships rather than attracting customers at low prices. Our loan pipeline has built-up nicely due to slowly improving economic conditions in our markets, our focus on existing customers for new business referrals, and the service levels we provide that enable us to attract and retain business from the larger banks.

The Magnitude of Credit Losses

        We stress credit quality in originating and monitoring the loans we make and measure our success by the levels of our nonperforming assets, net charge-offs, and allowance for credit losses. We maintain an allowance for credit losses on non-purchased credit impaired ("Non-PCI") loans and leases, which is the sum of our allowance for loan and lease losses and our reserve for unfunded loan commitments. Provisions for credit losses are charged to operations as and when needed for both on and off-balance sheet credit exposure. Loans and leases which are deemed uncollectible are charged off and deducted from the allowance for loan and lease losses. Recoveries on loans and leases previously charged off are added to the allowance for loan and lease losses. The provision for credit losses on the Non-PCI loan and lease portfolio was based on our allowance methodology and reflected historical and current net charge-offs, the levels and trends of nonaccrual and classified loans and leases, the migration of loans and leases into various risk classifications, and the level of outstanding loans and leases. A provision for credit losses on the purchased credit impaired ("PCI") loan portfolio may be recorded to reflect decreases in expected cash flows on PCI loans compared to those previously estimated.

        We regularly review our loans and leases to determine whether there has been any deterioration in credit quality stemming from economic conditions or other factors which may affect collectability of our loans and leases. Changes in economic conditions, such as inflation, unemployment, increases in the general level of interest rates, declines in real estate values and negative conditions in borrowers' businesses could negatively impact our customers and cause us to adversely classify loans and leases and increase portfolio loss factors. An increase in classified loans and leases generally results in increased provisions for credit losses. Any deterioration in the real estate market may lead to increased provisions for credit losses because of our concentration in real estate loans.

The Level of Our Noninterest Expense

        Our noninterest expense includes fixed and controllable overhead, the major components of which are compensation, occupancy, data processing, and other professional services. It also includes costs that tend to vary based on the volume of activity, such as OREO expense. We measure success in controlling both fixed and variable costs through monitoring of the efficiency ratio. We calculate the base efficiency ratio by dividing noninterest expense by net revenues (the sum of net interest income plus noninterest income). We also calculate a non-GAAP measure called the "adjusted efficiency ratio." The adjusted efficiency ratio is calculated in the same manner as the base efficiency ratio except that (a) noninterest income is reduced by FDIC loss sharing income and securities gains and losses, and (b) noninterest expense is reduced by OREO expenses, acquisition and integration costs, and debt termination expense.

64

        The consolidated base and adjusted efficiency ratios have been as follows:

Three Months Ended	Base Efficiency Ratio			Adjusted Efficiency Ratio
September 30, 2013		64.3	%		57.3	%
June 30, 2013		93.5	%		62.4	%
March 31, 2013		64.5	%		61.7	%
December 31, 2012		60.7	%		55.7	%
September 30, 2012		67.6	%		56.5	%

        We disclose the adjusted efficiency ratio as it shows the trend in recurring overhead-related noninterest expense relative to recurring net revenues. See "Results of Operations—Non-GAAP Measurements" for the calculations of the base and adjusted efficiency ratios.

Adjusted Net Earnings

        Our reported net earnings for the third quarter of 2013 were $24.2 million. Another measure of earnings used as an indicator of earnings generating capability and ability to absorb credit losses is adjusted net earnings. We calculate adjusted net earnings by excluding credit loss provisions, OREO expenses, FDIC loss sharing income or expense, securities gains and losses, and acquisition and integration costs. On a pre-tax basis, before loss from discontinued operations, this amounted to $38.1 million for the third quarter of 2013 and after applying our effective tax rate, our adjusted net earnings were $26.0 million.

Critical Accounting Policies

        The Company's accounting policies are fundamental to understanding management's discussion and analysis of results of operations and financial condition. The Company has identified several policies as being critical because they require management to make particularly difficult, subjective and/or complex judgments about matters that are inherently uncertain and because of the likelihood that materially different amounts would be reported under different conditions or using different assumptions. These policies relate to the allowance for credit losses, the carrying values of intangible assets, and deferred income tax assets. For further information, refer to our Annual Report on Form 10-K for the year ended December 31, 2012.

Non-GAAP Measurements

        Certain discussion in this Form 10-Q contains non-GAAP financial disclosures for adjusted earnings from continuing operations before income taxes, adjusted efficiency ratio, return on average tangible equity, tangible common equity, and adjusted allowance for credit losses to loans and leases. The Company uses certain non-GAAP financial measures to provide meaningful supplemental information regarding the Company's operational performance and to enhance investors' overall understanding of such financial performance. As analysts and investors view adjusted earnings from continuing operations before income taxes as an indicator of the Company's ability to both generate earnings and absorb credit losses, we disclose this amount in addition to pre-tax earnings. We disclose the adjusted efficiency ratio as it shows the trend in recurring overhead related noninterest expense relative to recurring net revenues. Given the use of return on average tangible equity and tangible common equity amounts and ratios is prevalent among banking regulators, investors and analysts, we disclose our return on average tangible equity in addition to return on average equity and our tangible common equity ratio in addition to the equity-to-assets ratio. As the allowance for credit losses takes into account credit deterioration on acquired loans and leases, which include an estimate of credit losses in their initial fair values, we disclose the adjusted allowance for credit losses to loans and leases

65

in addition to the allowance for credit losses to loans and leases. The adjusted allowance for credit losses to loans and leases excludes acquired loans and leases and the related allowance. The methodology of determining adjusted earnings from continuing operations before income taxes, the adjusted efficiency ratio, return on average tangible equity, tangible common equity, and the adjusted allowance for credit losses to loans and leases may differ among companies.

        These non-GAAP financial measures are presented for supplemental informational purposes only for understanding the Company's operating results and should not be considered a substitute for financial information presented in accordance with United States generally accepted accounting principles ("GAAP").

        The following tables present performance amounts and ratios in accordance with GAAP and a reconciliation of the non-GAAP financial measurements to the GAAP financial measurements:

	Three Months Ended									Nine Months Ended September 30,
	September 30, 2013			June 30, 2013			September 30, 2012
Adjusted Earnings From Continuing Operations Before Income Taxes										2013			2012
	(In thousands)
Earnings from continuing operations before income taxes	$	35,383		$	6,302		$	26,937		$	62,898		$	61,028
Plus: Provision (negative provision) for credit losses		(4,167	)		(1,842	)		(2,141	)		(2,872	)		(8,486	)
Non-covered OREO (income) expense, net		(88	)		80			1,883			305			3,834
Covered OREO (income) expense, net		(332	)		(94	)		4,290			(1,239	)		7,242
Other-than-temporary impairment loss on covered security		—			—			—			—			1,115
Acquisition and integration costs		5,450			17,997			2,101			24,139			2,997
Debt termination expense		—			—			—			—			22,598
Less: FDIC loss sharing income (expense), net		(7,032	)		(5,410	)		(367	)		(15,579	)		(4,048	)
Gain on sale of securities		—			—			—			409			—
Acquisition-related securities gain		5,222			—			—			5,222			—
Adjusted earnings from continuing operations before income taxes	$	38,056		$	27,853		$	33,437		$	93,179		$	94,376

66

	Three Months Ended									Nine Months Ended September 30,
	September 30, 2013			June 30, 2013			September 30, 2012
Adjusted Efficiency Ratio										2013			2012
	(Dollars in thousands)
Noninterest expense	$	56,200		$	64,216		$	51,657		$	164,599		$	168,137
Less: Non-covered OREO (income) expense, net		(88	)		80			1,883			305			3,834
Covered OREO (income) expense, net		(332	)		(94	)		4,290			(1,239	)		7,242
Acquisition and integration costs		5,450			17,997			2,101			24,139			2,997
Debt termination expense		—			—			—			—			22,598
Adjusted noninterest expense	$	51,170		$	46,233		$	43,383		$	141,394		$	131,466
Net interest income	$	82,289		$	68,473		$	70,771		$	216,455		$	206,864
Noninterest income		5,127			203			5,682			8,170			13,815
Net revenues		87,416			68,676			76,453			224,625			220,679
Less: FDIC loss sharing income (expense), net		(7,032	)		(5,410	)		(367	)		(15,579	)		(4,048	)
Gain on sale of securities		—			—			—			409			—
Acquisition-related securities gain		5,222			—			—			5,222			—
Other-than-temporary impairment loss on covered security		—			—			—			—			(1,115	)
Adjusted net revenues	$	89,226		$	74,086		$	76,820		$	234,573		$	225,842
Base efficiency ratio(1)		64.3	%		93.5	%		67.6	%		73.3	%		76.2	%
Adjusted efficiency ratio(2)		57.3	%		62.4	%		56.5	%		60.3	%		58.2	%

(1)

Noninterest expense divided by net revenues.

(2)

Adjusted noninterest expense divided by adjusted net revenues.

	Three Months Ended									Nine Months Ended September 30,
	September 30, 2013			June 30, 2013			September 30, 2012
Return on Average Tangible Equity										2013			2012
	(Dollars in thousands)
PacWest Bancorp Consolidated:
Net earnings	$	24,163		$	4,349		$	16,088		$	42,006		$	36,909
Average stockholders' equity	$	797,725		$	666,425		$	573,609		$	685,216		$	561,237
Less: Average intangible assets		228,947			129,863			88,258			151,360			81,168
Average tangible common equity	$	568,778		$	536,562		$	485,351		$	533,856		$	480,069
Annualized return on average equity(1)		12.02	%		2.62	%		11.16	%		8.20	%		8.78	%
Annualized return on average tangible equity(2)		16.85	%		3.25	%		13.19	%		10.52	%		10.27	%

(1)

Calculated as annualized net earnings divided by average stockholders' equity.

(2)

Calculated as annualized net earnings divided by average tangible common equity.

67

Tangible Common Equity	September 30, 2013			June 30, 2013			December 31, 2012
	(Dollars in thousands)
PacWest Bancorp Consolidated:
Stockholders' equity	$	816,289		$	801,699		$	589,121
Less: Intangible assets		234,540			229,380			94,589
Tangible common equity	$	581,749		$	572,319		$	494,532
Total assets	$	6,616,855		$	6,709,102		$	5,463,658
Less: Intangible assets		234,540			229,380			94,589
Tangible assets	$	6,382,315		$	6,479,722		$	5,369,069
Equity to assets ratio		12.34	%		11.95	%		10.78	%
Tangible common equity ratio(1)		9.12	%		8.83	%		9.21	%
Book value per share	$	17.71		$	17.40		$	15.74
Tangible book value per share	$	12.62		$	12.42		$	13.22
Shares outstanding		46,090,742			46,080,731			37,420,909
Pacific Western Bank:
Stockholders' equity	$	906,029		$	890,477		$	649,656
Less: Intangible assets		234,540			229,380			94,589
Tangible common equity	$	671,489		$	661,097		$	555,067
Total assets	$	6,607,926		$	6,699,832		$	5,443,484
Less: Intangible assets		234,540			229,380			94,589
Tangible assets	$	6,373,386		$	6,470,452		$	5,348,895
Equity to assets ratio		13.71	%		13.29	%		11.93	%
Tangible common equity ratio(1)		10.54	%		10.22	%		10.38	%

(1)

Calculated as tangible common equity divided by tangible assets.

Adjusted Allowance for Credit Losses to Loans and Leases (Excludes PCI Loans)	September 30, 2013
	(Dollars in thousands)
Allowance for credit losses	$	67,801
Less: Allowance related to acquired loans and leases		691
Adjusted allowance for credit losses	$	67,110
Gross loans and leases	$	3,951,555
Less: Carrying value of acquired Non-PCI loans and leases		1,186,252
Adjusted loans and leases	$	2,765,303
Allowance for credit losses to loans and leases(1)		1.72	%
Adjusted allowance for credit losses to loans and leases(2)		2.43	%

(1)

Allowance for credit losses divided by gross loans and leases.

(2)

Adjusted allowance for credit losses divided by adjusted loans and leases.

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Results of Operations

Acquisitions Impact Earnings Performance

        The comparability of financial information is affected by our acquisitions. We completed the FCAL acquisition on May 31, 2013 ($1.6 billion in assets) and the following three acquisitions during 2012: EQF ($189.8 million in assets), which was acquired on January 3, 2012; Celtic ($67.1 million in assets), which was acquired on April 3, 2012; and APB ($283.8 million in assets), which was acquired on August 1, 2012. These acquisitions have been accounted for using the acquisition method of accounting and, accordingly, their operating results have been included in the consolidated financial statements from their respective acquisition dates.

Earnings Performance

        The following table presents profitability metrics for the periods indicated:

	Three Months Ended									Nine Months Ended September 30,
	September 30, 2013			June 30, 2013			September 30, 2012
										2013			2012
Profitability Measures:
Earnings per share:
Basic	$	0.53		$	0.11		$	0.43		$	1.03		$	1.00
Diluted	$	0.53		$	0.11		$	0.43		$	1.03		$	1.00
Annualized return on:
Average assets		1.44	%		0.30	%		1.16	%		0.95	%		0.90	%
Average equity		12.02	%		2.62	%		11.16	%		8.20	%		8.78	%
Average tangible equity(1)		16.85	%		3.25	%		13.19	%		10.52	%		10.27	%
Net interest margin		5.46	%		5.22	%		5.58	%		5.36	%		5.53	%
Base efficiency ratio		64.3	%		93.5	%		67.6	%		73.3	%		76.2	%
Adjusted efficiency ratio(2)		57.3	%		62.4	%		56.5	%		60.3	%		58.2	%

(1)

Calculation reduces average equity by average intangible assets.

(2)

Excludes FDIC loss sharing expense, securities gains and losses, OREO expense, acquisition and integration costs, and debt termination expense.

        The following table presents net credit costs for the periods indicated:

	Three Months Ended									Nine Months Ended September 30,
	September 30, 2013			June 30, 2013			September 30, 2012
										2013			2012
	(In thousands)
Provision (negative provision) for credit losses on non-covered loans and leases	$	—		$	—		$	(2,000	)	$	—		$	(12,000	)
Non-covered OREO (income) expense, net		(88	)		80			1,883			305			3,834
Total non-covered net credit costs		(88	)		80			(117	)		305			(8,166	)
Provision (negative provision) for credit losses on covered loans		(4,167	)		(1,842	)		(141	)		(2,872	)		3,514
Covered OREO (income) expense, net		(332	)		(94	)		4,290			(1,239	)		7,242
		(4,499	)		(1,936	)		4,149			(4,111	)		10,756
Less: FDIC loss sharing expense, net		7,032			5,410			367			15,579			4,048
Total covered net credit costs		2,533			3,474			4,516			11,468			14,804
Total net credit costs	$	2,445		$	3,554		$	4,399		$	11,773		$	6,638

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Third Quarter of 2013 Compared to Second Quarter of 2013

        Net earnings were $24.2 million, or $0.53 per diluted share, for the third quarter, compared to $4.3 million, or $0.11 per diluted share, for the second quarter of 2013. The quarter-over-quarter increase in net earnings of $19.8 million was due mostly to: (a) the $12.5 million ($7.3 million after tax) decrease in acquisition and integration costs, (b) the $12.0 million ($7.0 million after tax) increase in interest income on loans and leases, (c) the $5.2 million non-taxable acquisition-related securities gain, (d) the $1.5 million ($845,000 after tax) increase in interest income on investment securities, and (e) the $1.1 million ($643,000 after tax) decrease in net credit costs (provision for credit losses, FDIC loss sharing expense, and OREO expense). These items were offset by the increases in compensation expense of $1.9 million ($1.1 million after tax), other professional services of $590,000 ($342,000 after tax) and other expense of $1.3 million ($775,000 after tax). For further information on the acquisition-related securities gain, see Note 3, Acquisitions, in the Notes to Condensed Consolidated Financial Statements (Unaudited) contained in "Item 1. Condensed Consolidated Financial Statements (Unaudited)."

Third Quarter of 2013 Compared to Third Quarter of 2012

        Net earnings for the third quarter of 2013 were $24.2 million, or $0.53 per diluted share, compared to net earnings for the third quarter of 2012 of $16.1 million, or $0.43 per diluted share. The $8.1 million increase in net earnings was due primarily to: (a) the $11.5 million ($6.7 million after tax) increase in net interest income, (b) the $5.2 million non-taxable acquisition-related securities gain, (c) the $2.0 million ($1.1 million after tax) decrease in net credit costs, and (d) the $747,000 increase in other income. These items were offset partially by (a) the $4.2 million ($2.4 million after tax) increase in compensation expense, (b) the $3.3 million ($2.1 million after tax) increase in acquisition and integration costs, (c) the $1.5 million ($842,000 after tax) increase in other expense, (d) the $864,000 ($501,000 after tax) increase in occupancy expense, and (e) the $811,000 ($470,000 after tax) increase in other professional services.

Nine Months Ended September 30, 2013 Compared to Nine Months Ended September 30, 2012

        Net earnings for the nine months ended September 30, 2013 were $42.0 million, an increase of $5.1 million compared to the same period last year. The increase in profitability was due mainly to the $22.6 million ($13.1 million after tax) decrease in debt termination expense, the $9.6 million ($5.6 million after tax) increase in net interest income, and the $5.2 million non-taxable acquisition-related securities gain. These items were offset by: (a) the $21.1 million ($12.7 million after tax) increase in acquisition and integration costs, (b) the $5.1 million ($3.0 million after tax) increase in net credit costs, (c) the $7.7 million ($4.5 million after tax) increase in compensation expense, and (d) the $1.0 million ($580,000 after tax) increase in other professional services.

Net Interest Income

        Net interest income, which is our principal source of revenue, represents the difference between interest earned on interest-earning assets and interest paid on interest-bearing liabilities. Net interest margin is net interest income expressed as a percentage of average interest-earning assets. Net interest income is affected by changes in both interest rates and the volume of average interest-earning assets and interest-bearing liabilities.

70

        The following tables present, for the periods indicated, the distribution of average assets, liabilities and stockholders' equity, as well as interest income and yields earned on average interest-earning assets and interest expense and rates paid on average interest-bearing liabilities:

	Three Months Ended
	September 30, 2013							June 30, 2013							September 30, 2012
	Average Balance		Interest Income/ Expense		Yields and Rates			Average Balance		Interest Income/ Expense		Yields and Rates			Average Balance		Interest Income/ Expense		Yields and Rates
	(Dollars in thousands)
ASSETS
Loans and leases, net of unearned income(1)	$	4,320,770	$	75,196		6.90	%	$	3,765,715	$	63,168		6.73	%	$	3,565,637	$	66,711		7.44	%
Investment securities(2)		1,518,256		9,871		2.58	%		1,424,804		8,414		2.37	%		1,377,016		8,346		2.41	%
Deposits in financial institutions		140,785		91		0.26	%		75,739		49		0.26	%		101,491		66		0.26	%
Total interest-earning assets		5,979,811	$	85,158		5.65	%		5,266,258	$	71,631		5.46	%		5,044,144	$	75,123		5.92	%
Other assets		681,043							511,633							478,428
Total assets	$	6,660,854						$	5,777,891						$	5,522,572
LIABILITIES AND STOCKHOLDERS' EQUITY
Interest checking deposits	$	619,884	$	83		0.05	%	$	557,438	$	75		0.05	%	$	522,551	$	70		0.05	%
Money market deposits		1,567,976		730		0.18	%		1,307,386		587		0.18	%		1,248,723		643		0.20	%
Savings deposits		216,174		14		0.03	%		184,055		22		0.05	%		160,843		13		0.03	%
Time deposits		765,890		865		0.45	%		756,008		1,393		0.74	%		885,181		2,566		1.15	%
Total interest-bearing deposits		3,169,924		1,692		0.21	%		2,804,887		2,077		0.30	%		2,817,298		3,292		0.46	%
Borrowings		9,012		108		4.75	%		20,554		199		3.88	%		22,700		210		3.68	%
Subordinated debentures		132,413		1,069		3.20	%		116,998		882		3.02	%		108,250		850		3.12	%
Total interest-bearing liabilities		3,311,349	$	2,869		0.34	%		2,942,439	$	3,158		0.43	%		2,948,248	$	4,352		0.59	%
Noninterest-bearing demand deposits		2,329,197							2,072,923							1,956,929
Other liabilities		222,583							96,104							43,786
Total liabilities		5,863,129							5,111,466							4,948,963
Stockholders' equity		797,725							666,425							573,609
Total liabilities and
stockholders' equity	$	6,660,854						$	5,777,891						$	5,522,572
Net interest income			$	82,289						$	68,473						$	70,771
Net interest rate spread						5.31	%						5.03	%						5.33	%
Net interest margin						5.46	%						5.22	%						5.58	%
Total deposits	$	5,499,121						$	4,877,810						$	4,774,227
All-in deposit cost(3)						0.12	%						0.17	%						0.27	%

(1)

Includes nonaccrual loans and leases and loan fees.

(2)

The tax-equivalent yield on investment securities was 2.97%, 2.74%, and 2.77% for the three months ended September 30, 2013, June 30, 2013, and September 30, 2012, respectively.

(3)

All-in deposit cost is calculated as annualized interest expense on deposits divided by average total deposits.

71

	Nine Months Ended September 30,
	2013							2012
	Average Balance		Interest Income/ Expense		Yields and Rates			Average Balance		Interest Income/ Expense		Yields and Rates
	(Dollars in thousands)
ASSETS
Loans and leases, net of unearned income(1)	$	3,865,463	$	199,374		6.90	%	$	3,542,571	$	194,775		7.34	%
Investment securities(2)		1,436,650		26,501		2.47	%		1,376,722		27,484		2.67	%
Deposits in financial institutions		95,456		183		0.26	%		77,928		154		0.26	%
Federal funds sold		—		—		—			3		—		—
Total interest-earning assets		5,397,569	$	226,058		5.60	%		4,997,224	$	222,413		5.95	%
Other assets		545,435							471,216
Total assets	$	5,943,004						$	5,468,440
LIABILITIES AND STOCKHOLDERS' EQUITY
Interest checking deposits	$	567,295	$	220		0.05	%	$	516,924	$	202		0.05	%
Money market deposits		1,362,219		1,800		0.18	%		1,206,820		1,764		0.20	%
Savings deposits		185,527		49		0.04	%		160,912		38		0.03	%
Time deposits		772,735		4,349		0.75	%		905,721		8,228		1.21	%
Total interest-bearing deposits		2,887,776		6,418		0.30	%		2,790,377		10,232		0.49	%
Borrowings		14,030		451		4.30	%		124,863		2,428		2.60	%
Subordinated debentures		119,309		2,734		3.06	%		113,279		2,889		3.41	%
Total interest-bearing liabilities		3,021,115	$	9,603		0.42	%		3,028,519	$	15,549		0.69	%
Noninterest-bearing demand deposits		2,115,608							1,833,855
Other liabilities		121,065							44,829
Total liabilities		5,257,788							4,907,203
Stockholders' equity		685,216							561,237
Total liabilities and stockholders' equity	$	5,943,004						$	5,468,440
Net interest income			$	216,455						$	206,864
Net interest rate spread						5.18	%						5.26	%
Net interest margin						5.36	%						5.53	%
Total deposits	$	5,003,384						$	4,624,232
All-in deposit cost(3)						0.17	%						0.30	%

(1)

Includes nonaccrual loans and loan fees.

(2)

The tax-equivalent yield on investment securities was 2.84% for September 30, 2013 and 3.05% for September 30, 2012.

(3)

All-in deposit cost is calculated as annualized interest expense on deposits divided by average total deposits.

72

        The net interest margin ("NIM") is impacted by several items that cause volatility from period to period. The effects of such items on the net interest margin are shown in the following table for the periods indicated:

	Three Months Ended									Nine Months Ended September 30,
	September 30, 2013			June 30, 2013			September 30, 2012
Items Impacting NIM Volatility										2013			2012
	Increase (Decrease) in NIM
Accelerated accretion of acquisition discounts resulting from PCI loan payoffs		0.14	%		0.01	%		0.12	%		0.08	%		0.15	%
Nonaccrual loan interest		0.02	%		0.01	%		0.04	%		0.01	%		0.01	%
Unearned income on the early repayment of leases		0.02	%		0.01	%		0.14	%		0.03	%		0.06	%
Celtic loan portfolio premium amortization		(0.01	)%		(0.02	)%		(0.04	)%		(0.02	)%		(0.03	)%
Total		0.17	%		0.01	%		0.26	%		0.10	%		0.19	%

        The following table presents the loan yields and related average balances for our Non-PCI loans and leases, PCI loans, and total loan and lease portfolio for the periods indicated:

	Three Months Ended									Nine Months Ended September 30,
	September 30, 2013			June 30, 2013			September 30, 2012
										2013			2012
	(Dollars in thousands)
Yields:
Non-PCI loans and leases		6.35	%		6.42	%		7.01	%		6.48	%		6.82	%
PCI loans		11.88	%		8.87	%		9.49	%		9.93	%		9.62	%
Total loans and leases		6.90	%		6.73	%		7.44	%		6.90	%		7.34	%
Average Balances:
Non-PCI loans and leases	$	3,889,780		$	3,293,625		$	2,977,708		$	3,397,398		$	2,904,965
PCI loans		430,990			472,090			587,929			468,065			637,606
Total loans and leases	$	4,320,770		$	3,765,715		$	3,565,637		$	3,865,463		$	3,542,571

        The loan yield is impacted by the same items which cause volatility in the NIM. The following table presents the effects of these items on the total loan and lease yield for the periods indicated:

	Three Months Ended									Nine Months Ended September 30,
	September 30, 2013			June 30, 2013			September 30, 2012
Items Impacting Loan and Lease Yield Volatility										2013			2012
	Increase (Decrease) in Loan Yield
Accelerated accretion of acquisition discounts resulting from PCI loan payoffs		0.19	%		0.02	%		0.16	%		0.10	%		0.24	%
Nonaccrual loan interest		0.03	%		0.02	%		0.06	%		0.02	%		0.01	%
Unearned income on the early repayment of leases		0.03	%		0.01	%		0.21	%		0.05	%		0.07	%
Celtic loan portfolio premium amortization		(0.02	)%		(0.03	)%		(0.06	)%		(0.02	)%		(0.05	)%
Total		0.23	%		0.02	%		0.37	%		0.15	%		0.27	%

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Third Quarter of 2013 Compared to Second Quarter of 2013

        Net interest income increased by $13.8 million to $82.3 million for the third quarter compared to $68.5 million for the second quarter due primarily to higher interest income on loans and leases. The increase in interest income on loans and leases was due to including the acquired FCAL loan portfolio for an entire quarter compared to one month in the second quarter, organic loan growth, and higher accelerated accretion of acquisition discounts resulting from PCI loan payoffs. The increase in interest income on investment securities resulted from a higher average portfolio balance during the quarter, higher yields on securities purchased during the quarter, and lower premium amortization on mortgage-related securities due to slower prepayment speeds. The decline in interest expense was due mostly to a lower average rate on time deposits.

        Our net interest margin ("NIM") for the third quarter was 5.46% compared to 5.22% for the second quarter. The 24 basis point increase in NIM is driven by a 19 basis point increase in our earning asset yield and a five basis point decline in our cost of average funding sources. The increase in the earning asset yield is due to the 17 basis point increase in the loan and lease yield, which is attributed to higher accelerated accretion of acquisition discounts on PCI loan payoffs.

        The yield on loans and leases increased to 6.90% for the third quarter from 6.73% for the second quarter due to higher accelerated accretion of acquisition discounts resulting from PCI loan payoffs. Such accelerated accretion of acquisition discounts resulting from PCI loan payoffs totaled $2.1 million for the third quarter and $177,000 for the second quarter, increasing the loan and lease yields by 19 basis points and two basis points, respectively. Total income from early lease payoffs was $299,000 for the third quarter and $111,000 for the second quarter.

        The cost of average funding sources declined five basis points to 0.20% for the third quarter from 0.25% for the second quarter. This includes all-in deposit cost which declined five basis points to 0.12% for the third quarter from 0.17% for the second quarter. The cost of total interest-bearing deposits decreased nine basis points to 0.21% for the third quarter from 0.30% for the second quarter. The cost of total interest-bearing liabilities declined nine basis points to 0.34% for the third quarter from 0.43% for the second quarter. Such declines are due mainly to a lower average rate on time deposits.

Third Quarter of 2013 Compared to Third Quarter of 2012

        Net interest income increased by $11.5 million to $82.3 million for the third quarter of 2013 compared to $70.8 million for the third quarter of 2012. This change was due mainly to an $8.5 million increase in interest income on loans and leases, a $1.5 million increase in interest income on investment securities, and a $1.6 million decrease in interest expense on deposits.

        Interest income on loans and leases increased due mainly to the addition of the acquired FCAL loan portfolio and higher accelerated accretion of acquisition discounts resulting from PCI loan payoffs, offset by lower income on the early repayment of leases. The yield on loans and leases decreased 54 basis points to 6.90% for the three months ended September 30, 2013 compared to 7.44% for the three months ended September 30, 2012.

        Interest income on investment securities increased due to a higher average portfolio balance and an increase in the portfolio yield. The increase in securities interest income is due to: (a) higher interest on our municipal securities portfolio and on our corporate debt securities attributable to purchases, (b) higher dividends of $475,000 on our FHLB stock due to an increase in dividend yield, and (c) higher interest on our government agency and government-sponsored enterprise ("GSE") collateralized mortgage obligations, offset by lower interest on our GSE pass through securities portfolio. The lower interest on our pass through securities was due to: (a) a lower average balance due to principal paydowns and the fourth quarter of 2012 sale of $43.9 million of these securities, (b) accelerated premium amortization due to increased prepayment speeds, and (c) the lower yields on

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such securities purchased during the fourth quarter of 2012 and the first two quarters of 2013 due to the prevailing market conditions during those periods.

        The decline in interest expense on deposits for the third quarter of 2013 compared to the same period last year was due mainly to the lower rate and average balance of time deposits.

        The NIM declined 12 basis points to 5.46% for the third quarter of 2013 compared to 5.58% for the same quarter last year due mostly to the lower loan and lease yield, offset by lower funding costs. The decrease in the loan and lease yield was driven by: (a) the lower interest rate environment that continued from 2012 through 2013 as loans were originated and acquired at lower market rates during this period, and (b) lower income from early lease payoffs, offset partially by (c) higher accelerated accretion of acquisition discounts from PCI loan payoffs. Income from early lease payoffs was $299,000 for the third quarter of 2013 compared to $1.9 million for the third quarter of 2012, which increased the loan and lease yields by three basis points and 21 basis points, respectively. Accelerated accretion of acquisition discounts resulting from PCI loan payoffs totaled $2.1 million for the three months ended September 30, 2013 compared to $1.4 million for the same period last year, which increased the loan and lease yields by 19 basis points and 16 basis points, respectively.

        All-in deposit cost declined 15 basis points to 0.12% for the third quarter of 2013 compared to the same period last year. The cost of interest-bearing deposits declined 25 basis points to 0.21% due to a lower rate on time deposits and a shift in the deposit mix to lower cost interest-bearing checking, money market, and savings deposits from higher cost time deposits attributable to the decline in average time deposits. The cost of total interest-bearing liabilities declined 25 basis points to 0.34% due mainly to the reduction in the cost of interest-bearing deposits.

Nine Months Ended September 30, 2013 Compared to Nine Months Ended September 30, 2012

        Net interest income increased by $9.6 million to $216.5 million during the nine months ended September 30, 2013; interest income increased $3.7 million and interest expense decreased $5.9 million. Interest income on loans and leases increased due to a higher average loan and lease balance offset by a lower loan and lease yield. The increase in the average loan and lease balance was due mainly to the loans from the FCAL and APB acquisitions. The lower loan and lease yield was due to lower accelerated accretion of acquisition discounts resulting from PCI loan payoffs and lower income from early lease payoffs. The decrease in interest expense was due mainly to a lower rate and average balance for time deposits. The decrease in interest expense on borrowings was due to lower average borrowings; we repaid fixed-rate term FHLB advances at the end of the first quarter of 2012 and replaced a portion of those advances with lower cost overnight FHLB advances that were repaid during the third quarter of 2012.

        The NIM for the nine months ended September 30, 2013 was 5.36%, a decrease of 17 basis points from 5.53% for the same period last year. The decrease was due to lower yields on loans and leases and investment securities, offset in part by lower funding costs.

        The yield on average loans and leases decreased 44 basis points to 6.90% for the nine months ended September 30, 2013 compared to 7.34% for the same period last year, due in part to lower accelerated accretion of acquisition discounts resulting from PCI loan payoffs, lower income on early repayment of leases, and lower yields on new loan and lease originations. Accelerated accretion of acquisition discounts resulting from PCI loan payoffs totaled approximately $3.0 million for the first nine months of 2013 and $6.1 million for the same period last year, increasing the loan yields by 10 basis points and 24 basis points, respectively. Total income from early lease payoffs was $1.3 million for the nine months ended September 30, 2013 and $1.9 million for the same period last year.

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        All-in deposit cost declined 13 basis points to 0.17% for the first nine months of 2013 compared to the same period last year. The cost of interest-bearing deposits declined 19 basis points to 0.30% due to a lower rate on average time deposits and a shift in the deposit mix to lower cost interest-bearing checking, money market and savings deposits from higher cost time deposits. The cost of total interest-bearing liabilities declined 27 basis points to 0.42% due to the reduction in the cost of time deposits and the first quarter of 2012 repayment of FHLB advances and the redemption of subordinated debentures.

Provision for Credit Losses

        The following table sets forth the details of the provision for credit losses and allowance for credit losses data for the periods indicated:

	Three Months Ended									Nine Months Ended September 30,
	September 30, 2013			June 30, 2013			September 30, 2012
										2013			2012
	(Dollars in thousands)
Provision For Credit Losses:
Addition to (reduction in) allowance for Non-PCI loans and leases	$	(570	)	$	—		$	(1,900	)	$	(1,030	)	$	(9,400	)
Addition to (reduction in) reserve for unfunded loan commitments		570			—			(100	)		1,030			(2,600	)
Total provision (negative provision) for Non-PCI loans and leases		—			—			(2,000	)		—			(12,000	)
Provision (negative provision) for PCI loans		(4,167	)		(1,842	)		(141	)		(2,872	)		3,514
Total provision (negative provision) for credit losses	$	(4,167	)	$	(1,842	)	$	(2,141	)	$	(2,872	)	$	(8,486	)
Non-PCI Allowance for Credit Losses Data:
Net charge-offs on Non-PCI loans and leases	$	2,125		$	1,970		$	1,019		$	4,318		$	6,771
Annualized net charge-offs to average Non-PCI loans and leases		0.22	%		0.24	%		0.13	%		0.17	%		0.31	%
At Period End:
Allowance for loan and lease losses	$	60,551		$	63,246		$	69,142
Allowance for credit losses		67,801			69,926			75,012
Non-PCI nonaccrual loans and leases		50,845			51,689			39,185
Non-PCI classified loans and leases		130,791			128,181			100,308
Allowance for credit losses to Non-PCI loans and leases		1.72	%		1.78	%		2.44	%
Allowance for credit losses to Non-PCI nonaccrual loans and leases		133.3	%		135.3	%		191.4	%

        Provisions for credit losses are charged to earnings as and when needed for both on and off-balance sheet credit exposures. We have a provision for credit losses on our Non-PCI loans and leases and a provision for credit losses on our PCI loans. The provision for credit losses on our Non-PCI loans and leases is based on our allowance methodology and is an expense, or contra-expense, that, in our judgment, is required to maintain the adequacy of the allowance for loan and lease losses and the reserve for unfunded loan commitments. Our allowance methodology reflects net charge-offs, the levels and trends of nonaccrual and classified loans and leases, the migration of loans and leases

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into various risk classifications, and the level of outstanding loans and leases. The provision for credit losses on our PCI loans results from decreases or increases in expected cash flows on PCI loans compared to those previously estimated.

        Our Non-PCI loans and leases at September 30, 2013, included $1.2 billion in loans and leases acquired in acquisitions. These acquired loans and leases were initially recorded at their estimated fair values and such initial fair values included an estimate of credit losses. The allowance calculation for Non-PCI loans and leases takes into consideration those acquired loans and leases whose credit quality has deteriorated since their acquisition dates. At September 30, 2013, $691,000 of our allowance for credit losses applies to these acquired loans and leases. When these loans and leases are excluded from the total of Non-PCI loans and leases and the related allowance of $691,000 is also excluded from the allowance for credit losses, the coverage ratio of our allowance for credit losses to Non-PCI loans and leases increases to 2.43% at September 30, 2013; the comparable ratio at June 30, 2013 was 2.55%.

        Increased provisions for credit losses may be required in the future based on loan and unfunded commitment growth, the effect that changes in economic conditions, such as inflation, unemployment, market interest rate levels, and real estate values, may have on the ability of our borrowers to repay their loans, and other negative conditions specific to our borrowers' businesses. See further discussion in "Balance Sheet Analysis—Allowance for Credit Losses on Non-PCI Loans" and "Balance Sheet Analysis—Allowance for Credit Losses on PCI Loans" contained herein.

Noninterest Income

        The following table summarizes noninterest income by category for the periods indicated:

	Three Months Ended									Nine Months Ended September 30,
	September 30, 2013			June 30, 2013			September 30, 2012
										2013			2012
	(In thousands)
Noninterest Income:
Service charges on deposit accounts	$	2,938		$	2,767		$	3,108		$	8,568		$	9,789
Other commissions and fees		2,204			2,154			2,123			6,291			6,101
Gain on sale of leases		604			279			132			1,108			1,525
Gain on sale of securities		—			—			—			409			—
Acquisition-related securities gain		5,222			—			—			5,222			—
Other-than-temporary impairment loss on covered security		—			—			—			—			(1,115	)
Increase in cash surrender value of life insurance		62			221			304			716			964
FDIC loss sharing income (expense), net		(7,032	)		(5,410	)		(367	)		(15,579	)		(4,048	)
Other income		1,129			192			382			1,435			599
Total noninterest income	$	5,127		$	203		$	5,682		$	8,170		$	13,815

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        The following table presents the details of FDIC loss sharing income (expense), net for the periods indicated:

	Three Months Ended									Nine Months Ended September 30,
	September 30, 2013			June 30, 2013			September 30, 2012
										2013			2012
	(In thousands)
FDIC Loss Sharing Income, Net:
Gain on FDIC loss sharing asset(1)	$	269		$	494		$	(593	)	$	4,820		$	(885	)
FDIC loss sharing asset amortization, net		(6,971	)		(5,756	)		(2,488	)		(18,718	)		(6,918	)
Loan recoveries shared with FDIC(2)		—			—			(640	)		(591	)		(2,725	)
Net reimbursement (to) from FDIC for covered OREO activity(3)		(276	)		(149	)		3,350			(1,039	)		5,573
Other-than-temporary impairment losses on covered security		—			—			—			—			892
Other		(54	)		1			4			(51	)		15
Total FDIC loss sharing income (expense), net	$	(7,032	)	$	(5,410	)	$	(367	)	$	(15,579	)	$	(4,048	)

(1)

Includes increases related to covered loan loss provisions and decreases for write-offs for covered loans expected to be resolved at amounts higher than their carrying values.

(2)

Represents amounts to be reimbursed to the FDIC for covered loans resolved at amounts higher than their carrying values.

(3)

Represents amounts to be reimbursed to the FDIC for gains on covered OREO sales and due from the FDIC for covered OREO write-downs.

Third Quarter of 2013 Compared to Second Quarter of 2013

        Noninterest income increased by $4.9 million to $5.1 million for the third quarter compared to $203,000 for the second quarter. The increase was due mostly to the non-taxable acquisition-related securities gain. We recorded this gain to recognize our previously-held equity interest in FCAL common stock at its fair value as of the acquisition date rather than at its historical cost. In addition, we recognized a higher gain on sales of leases, higher service charges on deposit accounts, and higher other income. Other income increased $522,000 due to referral fees and a deposit forfeiture on lease transactions; there were no similar transactions in the prior period. Other income also includes $247,000 of non-tax deductible interest income relating to death benefits on our bank-owned life insurance policies.

        These increases were offset by higher FDIC loss sharing expense of $1.6 million. Net FDIC loss sharing expense increased for the third quarter over the second quarter due to higher amortization of the FDIC loss sharing asset and a lower provision for credit losses on covered loans.

Third Quarter of 2013 Compared to Third Quarter of 2012

        Noninterest income decreased by $555,000 to $5.1 million for the third quarter of 2013 compared to $5.7 million for the third quarter of 2012. The change was due to higher net FDIC loss sharing expense, offset partially by the non-taxable acquisition-related securities gain and higher other income. The increase in other income includes $522,000 for referral fees and a deposit forfeiture on lease transactions; there were no similar income items in the 2012 period. Other income also includes $335,000 of non-tax deductible interest income relating to death benefits on our bank-owned life insurance policies; there was no such income in 2012. Additionally, in the third quarter of 2012, the Company recognized a net gain of $297,000 on the sale of 10 branches; no such gain was recognized in 2013.

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        The third quarter of 2013 included net FDIC loss sharing expense of $7.0 million compared to third quarter of 2012 net FDIC loss sharing expense of $367,000; such change was due mostly to higher net amortization of the FDIC loss sharing asset and lower net covered OREO costs, offset partially by a higher gain on the FDIC loss sharing asset and lower loan recoveries shared with the FDIC.

Nine Months Ended September 30, 2013 Compared to Nine Months Ended September 30, 2012

        Noninterest income declined by $5.6 million to $8.2 million during the nine months ended September 30, 2013 compared to $13.8 million for the same period last year. The decrease was due mainly to higher net FDIC loss sharing expense and lower service charges on deposit accounts, offset in part by the non-taxable acquisition-related securities gain, a decline in OTTI charges, and higher other income. The increase in other income includes $522,000 for referral fees and a deposit forfeiture on lease transactions; there were no similar income items in the 2012 period. Other income also includes $424,000 of non-tax deductible interest income relating to death benefits on our bank-owned life insurance policies; there was no such income in 2012. Additionally, in the third quarter of 2012, the Company recognized a net gain of $297,000 on the sale of 10 branches; no such gain was recognized in 2013. FDIC loss sharing expense, net, increased due to higher amortization of the FDIC loss sharing asset and lower net covered OREO costs, offset by a higher gain on the FDIC loss sharing asset and lower recoveries.

Noninterest Expense

        The following table summarizes noninterest expense by category for the periods indicated:

	Three Months Ended								Nine Months Ended September 30,
	September 30, 2013			June 30, 2013			September 30, 2012
									2013			2012
	(Dollars in thousands)
Noninterest Expense:
Compensation	$	27,963		$	26,057		$	23,812	$	79,370		$	71,698
Occupancy		7,828			7,480			6,964		21,906			21,340
Data processing		2,590			2,455			2,310		7,278			6,848
Other professional services		2,830			2,240			2,019		7,167			6,167
Business development		756			798			635		2,290			1,854
Communications		828			622			652		2,063			1,886
Insurance and assessments		1,496			1,267			1,398		4,024			4,014
Non-covered other real estate owned, net		(88	)		80			1,883		305			3,834
Covered other real estate owned, net		(332	)		(94	)		4,290		(1,239	)		7,242
Intangible asset amortization		1,512			1,284			1,678		3,972			5,150
Acquisition and integration		5,450			17,997			2,101		24,139			2,997
Debt termination		—			—			—		—			22,598
Other expense		5,367			4,030			3,915		13,324			12,509
Total noninterest expense	$	56,200		$	64,216		$	51,657	$	164,599		$	168,137

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        The following tables present the components of OREO expense, net for the periods indicated:

	Three Months Ended									Nine Months Ended September 30,
	September 30, 2013			June 30, 2013			September 30, 2012
										2013			2012
	(In thousands)
Non-Covered OREO Expense:
Provision for losses	$	643		$	—		$	2,566		$	735		$	3,419
Maintenance costs		356			293			354			919			1,738
Gain on sale		(1,087	)		(213	)		(1,037	)		(1,349	)		(1,323	)
Total non-covered OREO (income) expense, net	$	(88	)	$	80		$	1,883		$	305		$	3,834
Covered OREO Expense:
Provision for losses	$	(26	)	$	292		$	5,214		$	1,359		$	10,147
Maintenance costs		11			93			102			59			314
Gain on sale		(317	)		(479	)		(1,026	)		(2,657	)		(3,219	)
Total covered OREO (income) expense, net	$	(332	)	$	(94	)	$	4,290		$	(1,239	)	$	7,242

Third Quarter of 2013 Compared to Second Quarter of 2013

        Noninterest expense declined by $8.0 million to $56.2 million during the third quarter compared to $64.2 million during the second quarter. This was due mainly to the $12.5 million decrease in acquisition and integration costs, offset by an increase in most of the overhead categories due to including the FCAL operations since the acquisition date.

        The decrease in acquisition and integration costs is attributed to the nature and timing of these types of expenses; we consummated the FCAL acquisition on May 31, 2013 and announced the proposed CSE transaction in July 2013. The third quarter acquisition and integration costs include $5.2 million related to the proposed CSE transaction and $250,000 of ongoing integration costs related to FCAL, while the second quarter costs relate solely to the FCAL acquisition.

        The increase in other professional services was due mainly to higher legal expense for litigation and loans. Excluding the change in acquisition and integration costs, OREO expenses, and other professional services, noninterest expense increased $4.3 million due almost entirely to the addition of the FCAL operations for a full quarter. Other expense increased $1.3 million due to higher legal settlement costs of $491,000, higher net losses on low income housing investments of $235,000, and higher loan expense and customer-related expenses of $145,000 and $165,000, respectively.

        Noninterest expense includes: (a) amortization of time-based restricted stock, which is included in compensation, and (b) intangible asset amortization. Amortization of restricted stock totaled $2.4 million for the third quarter and $2.0 million for the second quarter. Intangible asset amortization totaled $1.5 million for the third quarter and $1.3 million for the second quarter.

Third Quarter of 2013 Compared to Third Quarter of 2012

        Noninterest expense increased by $4.5 million to $56.2 million for the third quarter of 2013 compared to $51.7 million for the third quarter of 2012. This change was due mainly to the increase in compensation expense, the increase in acquisition and integration costs, and the increase in other expense, offset partially by the decline in OREO expense. The increase in compensation expense was attributable mainly to the addition of the acquired FCAL operations and higher amortization of restricted stock. The increase in other expense was due mostly to higher legal settlement costs of

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$491,000, higher net losses on low income housing investments of $455,000, and higher customer-related expenses and employee-related expenses of $234,000 and $153,000, respectively. The decline in OREO expense was due mostly to lower write-downs of $7.2 million, offset partially by lower gains on sales of $659,000.

Nine Months Ended September 30, 2013 Compared to Nine Months Ended September 30, 2012

        Noninterest expense decreased by $3.5 million to $164.6 million during the nine months ended September 30, 2013 compared to $168.1 million for the same period last year. This decrease was due mostly to the combination of: (a) lower debt termination expense as a result of the early repayments of FHLB advances and subordinated debentures in 2012, with no such debt termination expense in the current year, and (b) lower OREO expense due to lower write-downs, offset by (c) higher acquisition and integration costs recognized in 2013 compared to 2012, (d) higher compensation expense, and (e) higher other professional services. Compensation expense increased due to a higher employee count resulting from our acquisition activity. Other professional services increased due to higher legal expense for litigation and loans and higher fees for internal and external audit services. Intangible asset amortization declined due to certain intangibles being fully amortized.

        Amortization of restricted stock totaled $6.2 million and $4.3 million for the nine months ended September 30, 2013 and 2012, respectively. Intangible asset amortization totaled $4.0 million for the first nine months of 2013 compared to $5.2 million for the same period last year.

Income Taxes

        The effective tax rate for the third quarter of 2013 was 31.8% compared to 30.1% for the second quarter of 2013 and 40.3% for the third quarter of 2012. The effective tax rates for the nine months ended September 30, 2013 and 2012 were 33.2% and 39.5%, respectively. The third quarter of 2013 effective tax rate was driven lower by the non-taxable nature of the $5.2 million acquisition-related securities gain. Excluding this item, our effective tax rate would have been 37.3%. The lower effective tax rate in the second quarter of 2013 resulted from a higher proportion of tax credits and tax exempt income to pre-tax income. Generally, the difference in the effective tax rates between periods relates mainly to the level of tax credits and tax deductions and the amount of tax exempt income recorded in each of the periods. The Company operates primarily in the Federal and California jurisdictions and the blended statutory tax rate for Federal and California is 42%.

Business Segments

        The Company's reportable segments consist of "Banking," "Asset Financing," and "Other." At September 30, 2013, the Other segment consisted of the PacWest Bancorp holding company and other elimination and reconciliation entries. For further information, see Note 15, Business Segments, in the Notes to Condensed Consolidated Financial Statements (Unaudited) contained in "Item 1. Condensed Consolidated Financial Statements (Unaudited)."

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        The following tables present information regarding our business segments as of and for the periods indicated (the only segment income statements for which discontinued operations are applicable and reported are those for the three months ended September 30, 2013 and June 30, 2013, and the nine months ended September 30, 2013):

	September 30, 2013
	Banking			Asset Financing			Other			Consolidated Company
	(In thousands)
Loans and leases, net of unearned income	$	3,912,885		$	470,508		$	—		$	4,383,393
Allowance for loan and lease losses		(76,496	)		(7,290	)		—			(83,786	)
Total loans and leases, net	$	3,836,389		$	463,218		$	—		$	4,299,607
Goodwill	$	190,184		$	25,678		$	—		$	215,862
Core deposit and customer relationship intangibles, net		16,604			2,074			—			18,678
Total assets		6,100,587			507,339			8,929			6,616,855
Total deposits(1)		5,467,568			—			(34,424	)		5,433,144

(1)

The negative balance in the "Other" segment represents the elimination of holding company cash held in deposit accounts at the Bank.

	September 30, 2012
	Banking			Asset Financing			Other			Consolidated Company
	(In thousands)
Loans and leases, net of unearned income	$	3,259,571		$	389,420		$	—		$	3,648,991
Allowance for loan and lease losses		(95,878	)		(3,968	)		—			(99,846	)
Total loans and leases, net	$	3,163,693		$	385,452		$	—		$	3,549,145
Goodwill	$	54,704		$	24,888		$	—		$	79,592
Core deposit and customer relationship intangibles, net		13,194			2,705			—			15,899
Total assets		5,080,308			440,690			17,504			5,538,502
Total deposits(1)		4,800,852			—			(13,504	)		4,787,348

(1)

The negative balance in the "Other" segment represents the elimination of holding company cash held in deposit accounts at the Bank.

82

	Three Months Ended September 30, 2013
	Banking			Asset Financing			Other			Consolidated Company
	(In thousands)
Interest income	$	72,873		$	12,285		$	—		$	85,158
Intersegment interest income (expense)		353			(353	)		—			—
Other interest expense		(1,692	)		(108	)		(1,069	)		(2,869	)
Net interest income		71,534			11,824			(1,069	)		82,289
Negative provision (provision) for credit losses		5,782			(1,615	)		—			4,167
Noninterest income		(1,566	)		1,443			5,250			5,127
Intangible asset amortization		(1,354	)		(158	)		—			(1,512	)
Acqusition and integration costs		(5,190	)		—			(260	)		(5,450	)
Other noninterest expense		(42,015	)		(5,822	)		(1,401	)		(49,238	)
Total noninterest expense		(48,559	)		(5,980	)		(1,661	)		(56,200	)
Earnings (loss) from continuing operations before income taxes		27,191			5,672			2,520			35,383
Income tax (expense) benefit		(9,996	)		(2,378	)		1,131			(11,243	)
Net earnings (loss) from continuing operations		17,195			3,294			3,651			24,140
Earnings from discontinued operations before income taxes		39			—			—			39
Income tax expense		(16	)		—			—			(16	)
Net earnings from discontinued operations		23			—			—			23
Net earnings	$	17,218		$	3,294		$	3,651		$	24,163

83

	Three Months Ended June 30, 2013
	Banking			Asset Financing			Other			Consolidated Company
	(In thousands)
Interest income	$	59,321		$	12,310		$	—		$	71,631
Intersegment interest income (expense)		460			(460	)		—			—
Other interest expense		(2,080	)		(196	)		(882	)		(3,158	)
Net interest income		57,701			11,654			(882	)		68,473
Negative provision (provision) for credit losses		2,607			(765	)		—			1,842
Noninterest income		(415	)		592			26			203
Intangible asset amortization		(1,127	)		(157	)		—			(1,284	)
Acquisition and integration costs		(17,997	)		—			—			(17,997	)
Other noninterest expense		(37,557	)		(5,980	)		(1,398	)		(44,935	)
Total noninterest expense		(56,681	)		(6,137	)		(1,398	)		(64,216	)
Earnings (loss) from continuing operations before income taxes		3,212			5,344			(2,254	)		6,302
Income tax (expense) benefit		(612	)		(2,237	)		943			(1,906	)
Net earnings (loss) from continuing operations		2,600			3,107			(1,311	)		4,396
Loss from discontinued operations before income taxes		(81	)		—			—			(81	)
Income tax benefit		34			—			—			34
Net loss from discontinued operations		(47	)		—			—			(47	)
Net earnings (loss)	$	2,553		$	3,107		$	(1,311	)	$	4,349

	Three Months Ended September 30, 2012
	Banking			Asset Financing			Other			Consolidated Company
	(In thousands)
Interest income	$	62,358		$	12,765		$	—		$	75,123
Intersegment interest income (expense)		454			(454	)		—			—
Other interest expense		(3,287	)		(215	)		(850	)		(4,352	)
Net interest income		59,525			12,096			(850	)		70,771
Negative provision (provision) for credit losses		3,325			(1,184	)		—			2,141
Noninterest income		5,191			466			25			5,682
Intangible asset amortization		(1,544	)		(134	)		—			(1,678	)
Acquisition and integration costs		(2,101	)		—			—			(2,101	)
Other noninterest expense		(40,776	)		(5,706	)		(1,396	)		(47,878	)
Total noninterest expense		(44,421	)		(5,840	)		(1,396	)		(51,657	)
Earnings (loss) before income taxes		23,620			5,538			(2,221	)		26,937
Income tax (expense) benefit		(9,491	)		(2,291	)		933			(10,849	)
Net earnings (loss)	$	14,129		$	3,247		$	(1,288	)	$	16,088

84

	Nine Months Ended September 30, 2013
	Banking			Asset Financing			Other			Consolidated Company
	(In thousands)
Interest income	$	189,101		$	36,957		$	—		$	226,058
Intersegment interest income (expense)		1,284			(1,284	)		—			—
Other interest expense		(6,422	)		(447	)		(2,734	)		(9,603	)
Net interest income		183,963			35,226			(2,734	)		216,455
Negative provision (provision) for credit losses		6,053			(3,181	)		—			2,872
Noninterest income		292			2,579			5,299			8,170
Intangible asset amortization		(3,474	)		(498	)		—			(3,972	)
Acquisition and integration costs		(23,879	)		—			(260	)		(24,139	)
Other noninterest expense		(114,418	)		(17,855	)		(4,215	)		(136,488	)
Total noninterest expense		(141,771	)		(18,353	)		(4,475	)		(164,599	)
Earnings (loss) from continuing operations before income taxes		48,537			16,271			(1,910	)		62,898
Income tax (expense) benefit		(17,038	)		(6,814	)		2,984			(20,868	)
Net earnings (loss) from continuing operations		31,499			9,457			1,074			42,030
Loss from discontinued operations before income taxes		(42	)		—			—			(42	)
Income tax benefit		18			—			—			18
Net loss from discontinued operations		(24	)		—			—			(24	)
Net earnings	$	31,475		$	9,457		$	1,074		$	42,006

	Nine Months Ended September 30, 2012
	Banking			Asset Financing			Other			Consolidated Company
	(In thousands)
Interest income	$	189,886		$	32,527		$	—		$	222,413
Intersegment interest income (expense)		1,607			(1,607	)		—			—
Other interest expense		(12,002	)		(658	)		(2,889	)		(15,549	)
Net interest income		179,491			30,262			(2,889	)		206,864
Negative provision (provision) for credit losses		9,770			(1,284	)		—			8,486
Noninterest income		11,382			2,345			88			13,815
Intangible asset amortization		(4,855	)		(295	)		—			(5,150	)
Acquisition and integration costs		(2,951	)		(46	)		—			(2,997	)
Debt termination expense		(24,195	)		—			1,597			(22,598	)
Other noninterest expense		(116,366	)		(16,916	)		(4,110	)		(137,392	)
Total noninterest expense		(148,367	)		(17,257	)		(2,513	)		(168,137	)
Earnings (loss) before income taxes		52,276			14,066			(5,314	)		61,028
Income tax (expense) benefit		(20,412	)		(5,941	)		2,234			(24,119	)
Net earnings (loss)	$	31,864		$	8,125		$	(3,080	)	$	36,909

85

Third Quarter 2013 Compared to Third Quarter of 2012

        Net earnings for the Banking segment increased by $3.1 million to $17.2 million for the third quarter of 2013 compared to $14.1 million for the third quarter of 2012. This change was due mostly to an increase in interest income and an increase in negative provision for credit losses, offset partially by a decline in noninterest income, which was due to an increase in FDIC loss sharing expense. The increase in noninterest expense was attributable to one full quarter of overhead costs for FCAL, offset partially by a decline in OREO expenses.

        Net interest income for the Banking segment increased by $12.0 million ($7.0 million after tax) for the third quarter of 2013 compared to the third quarter of 2012, due mainly to an increase in interest-earning assets and lower interest expense on deposits. The yield on average interest-earning assets was 5.24% for the third quarter of 2013 compared to 5.32% for the same quarter last year. The net interest margin attributed to the Banking segment was 5.15% for the third quarter of 2013 compared to 5.08% for the third quarter of 2012.

        Net earnings for the Asset Financing segment increased by $47,000 to $3.3 million for the third quarter of 2013 compared to $3.2 million for the third quarter of 2012. This change was due mainly to an increase in noninterest income, offset partially by an increase in provision for credit losses and lower net interest income. The yield on average interest-earning assets was 10.47% for the third quarter of 2013 compared to 13.51% for the same quarter last year. Yields are impacted by amortization and accretion of purchase premiums and discounts as loans and leases run off, as well as income on the early repayment of leases, which was lower in the third quarter of 2013. Noninterest income increased due to a higher gain on sales of leases, as well as referral fees and a deposit forfeiture on lease transactions.

        Net earnings for the Other segment increased by $4.9 million for the third quarter of 2013 compared to the third quarter 2012. This change was due primarily to the non-taxable acquisition-related securities gain. The Other segment consists principally of holding company operations which result in expenses principally for compensation, facilities, professional services, and interest on subordinated debentures.

Nine Months of 2013 Compared to Nine Months of 2012

        Net earnings for the Banking segment decreased by $389,000 to $31.5 million for the nine months ended September 30, 2013 compared to $31.9 million for the nine months ended September 30, 2012. This change was due mostly to an increase in acquisition and integration costs and a decrease in negative provision for credit losses, offset partially by a reduction in debt termination expense which was recognized in 2012 with no similar charge in 2013. Also contributing to the decline in net earnings was higher FDIC loss sharing expense, offset partially by lower OREO expense. Net interest income for the Banking segment increased by $4.5 million for the first nine months of 2013 compared to the same period last year due mainly to lower interest expense on deposits and borrowings.

        Net earnings for the Asset Financing segment increased by $1.3 million to $9.4 million for the nine months ended September 30, 2013 compared to $8.1 million for the nine months ended September 30, 2012. This change was due primarily to an increase in interest income, most of which resulted from the Celtic acquisition (completed in April 2012). The increase in the provision for credit losses was due primarily to two asset-based lending relationships that were identified as impaired in the current year. Net earnings were positively impacted by an increase in noninterest income, partially offset by an increase in overhead expenses in 2013 from the Celtic acquisition. Excluding the impact of Celtic, noninterest expense decreased due primarily to lower intangible asset amortization for the EQF leasing division.

86

        Net interest income for the Asset Financing segment increased by $5.0 million for the first nine months of 2013 compared to the same period last year, of which $3.2 million related to Celtic. The additional growth in net interest income was due to an increase in average interest-earning assets for the other asset financing entities, offset partially by lower yields. The yield on average interest-earning assets declined to 10.87% for the first nine months of 2013 from 12.61% for the same period last year.

        Net earnings for the Other segment increased by $4.2 million for the nine months ended September 30, 2013 compared to the nine months ended September 30, 2012. This change was due primarily to the non-taxable acquisition-related securities gain recorded in the third quarter of 2013. This was partially offset by the gain on debt termination recognized in the prior year and not repeated in 2013.

Balance Sheet Analysis

Investment Portfolio

        The following table presents the components, yields, and duration of our securities available-for-sale as of the date indicated:

	September 30, 2013
Security Type	Amortized Cost		Carrying Value		Yield(1)			Duration (in years)
	(Dollars in thousands)
Residential mortgage-backed securities:
Government agency and government-sponsored enterprise pass through securities	$	695,768	$	713,962		2.15	%		4.0
Government agency and government-sponsored enterprise collateralized mortgage obligations		201,531		199,360		2.79	%		5.0
Covered private label collateralized mortgage obligations		31,503		39,378		10.26	%		3.1
Municipal securities(2)		460,754		439,635		3.24	%		6.3
Corporate debt securities		84,028		82,106		2.68	%		2.4
Other securities		37,999		37,706		1.02	%		3.2
Total securities available-for-sale(2)	$	1,511,583	$	1,512,147		2.77	%		4.7

(1)

Represents the yield for the month of September 2013.

(2)

The tax equivalent yield was 4.86% and 3.24% for municipal securities and total securities available-for-sale, respectively.

87

        The following table shows the geographic composition of our municipal securities portfolio as of the date indicated:

	September 30, 2013
	Carrying Value		% of Total
	(In thousands)
Municipal Securities by State:
Texas	$	84,517		20	%
Washington		41,748		10	%
New York		32,213		7	%
Colorado		25,342		6	%
Illinois		24,217		6	%
Ohio		22,158		5	%
California		19,524		4	%
Hawaii		15,116		3	%
Florida		14,970		3	%
Massachusetts		14,962		3	%
Total of 10 largest states		294,767		67	%
All other states		144,868		33	%
Total municipal securities	$	439,635		100	%

88

Loans and Leases

        The following table presents the balance of our total gross loans and leases by portfolio segment and class as of the dates indicated:

	September 30, 2013					June 30, 2013					December 31, 2012
	Amount		% of Total			Amount		% of Total			Amount		% of Total
	(Dollars in thousands)
Real estate mortgage:
Hospitality	$	189,274		4	%	$	193,612		4	%	$	183,788		5	%
SBA 504		48,126		1	%		55,591		1	%		54,158		2	%
Other		2,733,981		63	%		2,783,399		63	%		2,184,624		60	%
Total real estate mortgage		2,971,381		68	%		3,032,602		68	%		2,422,570		67	%
Real estate construction:
Residential		62,154		1	%		60,427		1	%		54,602		1	%
Commercial		139,370		4	%		153,308		4	%		100,002		3	%
Total real estate construction		201,524		5	%		213,735		5	%		154,604		4	%
Total real estate loans		3,172,905		73	%		3,246,337		73	%		2,577,174		71	%
Commercial:
Collateralized		563,538		13	%		528,370		12	%		465,831		13	%
Unsecured		106,446		2	%		101,826		2	%		70,373		2	%
Asset-based		231,898		5	%		254,081		6	%		239,430		7	%
SBA 7(a)		27,552		1	%		28,792		1	%		25,325		1	%
Total commercial		929,434		21	%		913,069		21	%		800,959		23	%
Leases		235,791		5	%		216,089		5	%		174,373		5	%
Consumer		34,153		1	%		29,051		1	%		23,085		1	%
Foreign		12,029		—			16,073		—			17,241		—
Total gross loans and leases	$	4,384,312		100	%	$	4,420,619		100	%	$	3,592,832		100	%

        The following table presents our loan and lease portfolio activity for the third and second quarters of 2013:

	June 30, 2013		Originated and Purchased		Net Paydowns			Net Acquired		September 30, 2013
	(In thousands)
Non-covered loans, excluding Asset Financing Segment	$	3,369,045	$	189,321	$	(152,667	)	$	—	$	3,405,699
Asset Financing Segment		470,170		51,436		(53,917	)		—		467,689
Total non-covered loans and leases		3,839,215		240,757		(206,584	)		—		3,873,388
Covered loans		581,404		—		(70,480	)		—		510,924
Total	$	4,420,619	$	240,757	$	(277,064	)	$	—	$	4,384,312

89

	March 31, 2013		Originated and Purchased		Net Paydowns			Net Acquired		June 30, 2013
	(In thousands)
Non-covered loans, excluding Asset Financing Segment	$	2,495,291	$	124,707	$	(154,056	)	$	903,103	$	3,369,045
Asset Financing Segment		463,030		45,453		(38,313	)		—		470,170
Total non-covered loans and leases		2,958,321		170,160		(192,369	)		903,103		3,839,215
Covered loans		512,366		—		(34,999	)		104,037		581,404
Total	$	3,470,687	$	170,160	$	(227,368	)	$	1,007,140	$	4,420,619

        Our real estate loan portfolio is predominantly commercial-related loans and as such does not expose us to the risks generally associated with residential mortgage loans. Our portfolio does expose us to risk elements associated with mortgage loans on commercial property. Commercial real estate mortgage loan repayments typically do not rely on the sale of the underlying collateral, but instead rely on the income producing potential of the collateral as the source of repayment. Ultimately, though, due to the loan amortization period generally being greater than the contractual loan term, the borrower may be required to refinance the loan, either with us or another lender, or pay off the loan, by selling the underlying collateral.

        At September 30, 2013, we had $308.0 million of commercial real estate mortgage loans maturing over the next 12 months. For any of these loans, in the event that we provide a concession through a refinance or modification which we would not ordinarily consider in order to protect as much of our investment as possible, such loans may be considered troubled debt restructurings even though they performed throughout their terms. The circumstances regarding any modification and a borrower's specific situation, such as their ability to obtain financing from another source at similar market terms, are evaluated on an individual basis to determine if a troubled debt restructuring has occurred. Higher levels of troubled debt restructurings may lead to increased classified assets and credit loss provisions.

90

        The following table presents the composition of our total real estate mortgage loan portfolio as of the dates indicated:

	September 30, 2013					June 30, 2013					December 31, 2012
Loan Category	Amount		% of Total			Amount		% of Total			Amount		% of Total
	(Dollars in thousands)
Commercial real estate mortgage:
Industrial/warehouse	$	375,862		13	%	$	409,448		14	%	$	340,499		14	%
Retail		353,039		12	%		381,242		13	%		362,771		15	%
Office buildings		451,783		16	%		435,428		15	%		357,347		14	%
Owner-occupied		244,087		8	%		188,228		6	%		209,697		9	%
Hotel		189,274		6	%		193,612		6	%		183,788		8	%
Healthcare		186,121		6	%		163,615		5	%		113,854		5	%
Mixed use		70,308		2	%		86,466		3	%		54,052		2	%
Gas station		33,839		1	%		33,977		1	%		35,725		1	%
Self storage		75,323		3	%		91,616		3	%		65,362		3	%
Restaurant		22,195		1	%		26,352		1	%		18,325		1	%
Land acquisition/development		13,558		—			13,625		—			21,922		1	%
Unimproved land		12,606		—			14,386		—			13,341		1	%
Other		214,721		7	%		226,079		8	%		182,377		7	%
Total commercial real estate mortgage		2,242,716		75	%		2,264,074		75	%		1,959,060		81	%
Residential real estate mortgage:
Multi-family		383,297		13	%		403,020		13	%		262,815		11	%
Single family owner-occupied		220,440		8	%		245,988		8	%		96,380		4	%
Single family nonowner-occupied		33,338		1	%		24,477		1	%		28,790		1	%
Mixed use		10,761		—			10,335		—			3,372		—
HELOCs		80,829		3	%		84,708		3	%		72,153		3	%
Total residential real estate mortgage		728,665		25	%		768,528		25	%		463,510		19	%
Total gross real estate mortgage loans	$	2,971,381		100	%	$	3,032,602		100	%	$	2,422,570		100	%

91

        The following table presents the balance of our total gross loans and leases by portfolio segment and class, showing the non-covered and covered components, at the date indicated:

	September 30, 2013
	Non-Covered Loans and Leases					Covered Loans					Total Loans and Leases
	Amount		% of Total			Amount		% of Total			Amount		% of Total
	(Dollars in thousands)
Real estate mortgage:
Hospitality	$	186,844		5	%	$	2,430		—		$	189,274		4	%
SBA 504		48,126		1	%		—		—			48,126		1	%
Other		2,259,138		58	%		474,843		93	%		2,733,981		63	%
Total real estate mortgage		2,494,108		64	%		477,273		93	%		2,971,381		68	%
Real estate construction:
Residential		62,154		2	%		—		—			62,154		1	%
Commercial		119,839		3	%		19,531		4	%		139,370		4	%
Total real estate construction		181,993		5	%		19,531		4	%		201,524		5	%
Total real estate loans		2,676,101		69	%		496,804		97	%		3,172,905		73	%
Commercial:
Collateralized		554,817		14	%		8,721		2	%		563,538		13	%
Unsecured		104,402		3	%		2,044		—			106,446		2	%
Asset-based		231,898		6	%		—		—			231,898		5	%
SBA 7(a)		27,552		1	%		—		—			27,552		1	%
Total commercial		918,669		24	%		10,765		2	%		929,434		21	%
Leases		235,791		6	%		—		—			235,791		5	%
Consumer		30,798		1	%		3,355		1	%		34,153		1	%
Foreign		12,029		—			—		—			12,029		—
Total gross loans and leases	$	3,873,388		100	%	$	510,924		100	%	$	4,384,312		100	%

92

Non-Covered Loans and Leases

        The following table presents the balance of our non-covered loans and leases by portfolio segment and class as of the dates indicated:

	September 30, 2013					June 30, 2013					December 31, 2012
	Amount		% of Total			Amount		% of Total			Amount		% of Total
	(Dollars in thousands)
Real estate mortgage:
Hospitality	$	186,844		5	%	$	191,167		5	%	$	181,144		6	%
SBA 504		48,126		1	%		55,591		1	%		54,158		2	%
Other		2,259,138		58	%		2,248,606		59	%		1,682,368		55	%
Total real estate mortgage		2,494,108		64	%		2,495,364		65	%		1,917,670		63	%
Real estate construction:
Residential		62,154		2	%		57,936		2	%		48,629		1	%
Commercial		119,839		3	%		129,257		3	%		81,330		3	%
Total real estate construction		181,993		5	%		187,193		5	%		129,959		4	%
Total real estate loans		2,676,101		69	%		2,682,557		70	%		2,047,629		67	%
Commercial:
Collateralized		554,817		14	%		517,422		13	%		453,176		14	%
Unsecured		104,402		3	%		98,703		3	%		69,844		2	%
Asset-based		231,898		6	%		254,081		6	%		239,430		8	%
SBA 7(a)		27,552		1	%		28,767		1	%		25,325		1	%
Total commercial		918,669		24	%		898,973		23	%		787,775		25	%
Leases		235,791		6	%		216,089		6	%		174,373		6	%
Consumer		30,798		1	%		25,523		1	%		22,487		1	%
Foreign		12,029		—			16,073		—			17,241		1	%
Total gross non-covered loans and leases	$	3,873,388		100	%	$	3,839,215		100	%	$	3,049,505		100	%

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        The following table presents the composition of our non-covered real estate mortgage loan portfolio as of the dates indicated:

	September 30, 2013					June 30, 2013					December 31, 2012
Loan Category	Amount		% of Total			Amount		% of Total			Amount		% of Total
	(Dollars in thousands)
Commercial real estate mortgage:
Industrial/warehouse	$	345,661		14	%	$	375,932		15	%	$	315,096		16	%
Retail		278,071		11	%		291,259		12	%		271,412		14	%
Office buildings		408,961		17	%		390,518		15	%		304,096		16	%
Owner-occupied		228,849		9	%		173,855		7	%		195,170		10	%
Hotel		186,844		7	%		191,167		8	%		181,144		9	%
Healthcare		177,361		7	%		150,704		6	%		102,816		5	%
Mixed use		63,744		3	%		77,609		3	%		51,294		3	%
Gas station		30,015		1	%		27,861		1	%		29,632		2	%
Self storage		48,177		2	%		47,441		2	%		29,688		2	%
Restaurant		21,285		1	%		25,447		1	%		16,755		1	%
Land acquisition/development		13,558		1	%		13,625		1	%		21,922		1	%
Unimproved land		12,157		—			14,254		1	%		13,173		1	%
Other		198,450		8	%		210,937		8	%		172,273		9	%
Total commercial real estate mortgage		2,013,133		81	%		1,990,609		80	%		1,704,471		89	%
Residential real estate mortgage:
Multi-family		245,435		10	%		254,165		10	%		103,742		5	%
Single family owner-occupied		154,008		6	%		171,801		7	%		44,792		2	%
Single family nonowner-occupied		15,449		1	%		8,588		—			12,789		1	%
Mixed used		10,283		—			10,335		—			1,333		—
HELOCs		55,800		2	%		59,866		3	%		50,543		3	%
Total residential real estate mortgage		480,975		19	%		504,755		20	%		213,199		11	%
Total gross non-covered real estate mortgage loans	$	2,494,108		100	%	$	2,495,364		100	%	$	1,917,670		100	%

        The largest subset of the "Other" commercial real estate mortgage category is for fixed base operators at airports with a balance of $49.5 million, or 24.9% of the total in "Other."

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Covered Loans

        The following table presents the composition of our covered loans as of the dates indicated:

	September 30, 2013					June 30, 2013					December 31, 2012
	Amount		% of Total			Amount		% of Total			Amount		% of Total
	(Dollars in thousands)
Real estate mortgage:
Hospitality	$	2,430		—		$	2,445		—		$	2,644		1	%
Other		474,843		93	%		534,793		92	%		502,256		92	%
Total real estate mortgage		477,273		93	%		537,238		92	%		504,900		93	%
Real estate construction:
Residential		—		—			2,491		—			5,973		1	%
Commercial		19,531		4	%		24,051		4	%		18,672		4	%
Total real estate construction		19,531		4	%		26,542		4	%		24,645		5	%
Total real estate loans		496,804		97	%		563,780		96	%		529,545		98	%
Commercial:
Collateralized		8,721		2	%		10,948		2	%		12,655		2	%
Unsecured		2,044		—			3,123		1	%		529		—
SBA 7(a)		—		—			25		—			—		—
Total commercial		10,765		2	%		14,096		3	%		13,184		2	%
Consumer		3,355		1	%		3,528		1	%		598		—
Total gross covered loans	$	510,924		100	%	$	581,404		100	%	$	543,327		100	%

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        The following table presents our gross covered real estate mortgage loan portfolio as of the dates indicated:

	September 30, 2013					June 30, 2013					December 31, 2012
Loan Category	Amount		% of Total			Amount		% of Total			Amount		% of Total
	(Dollars in thousands)
Commercial real estate mortgage:
Industrial/warehouse	$	30,201		6	%	$	33,516		6	%	$	25,403		5	%
Retail		74,968		16	%		89,983		17	%		91,359		18	%
Office buildings		42,822		9	%		44,910		8	%		53,251		11	%
Owner-occupied		15,238		3	%		14,373		3	%		14,527		3	%
Hotel		2,430		1	%		2,445		1	%		2,644		1	%
Healthcare		8,760		2	%		12,911		2	%		11,038		2	%
Mixed use		6,564		1	%		8,857		2	%		2,758		1	%
Gas station		3,824		1	%		6,116		1	%		6,093		1	%
Self storage		27,146		6	%		44,175		8	%		35,674		7	%
Restaurant		910		—			905		—			1,570		—
Unimproved land		449		—			132		—			168		—
Other		16,271		3	%		15,142		3	%		10,104		2	%
Total commercial real estate mortgage		229,583		48	%		273,465		51	%		254,589		51	%
Residential real estate mortgage:
Multi-family		137,862		29	%		148,855		27	%		159,073		32	%
Single family owner-occupied		66,432		14	%		74,187		14	%		51,588		10	%
Single family nonowner-occupied		17,889		4	%		15,889		3	%		16,001		3	%
Mixed use		478		—			—		—			2,039		—
HELOCs		25,029		5	%		24,842		5	%		21,610		4	%
Total residential real estate mortgage		247,690		52	%		263,773		49	%		250,311		49	%
Total gross covered real estate mortgage loans	$	477,273		100	%	$	537,238		100	%	$	504,900		100	%

        The loans acquired in the Affinity and Los Padres acquisitions are covered by loss sharing agreements with the FDIC and we will be reimbursed for a substantial portion of any future losses. We acquired $110.0 million of covered assets in the FCAL acquisition. We assumed the loss sharing agreements between First California Bank and the FDIC related to FCB's acquisition of Western Commercial Bank ("Western Commercial") and San Luis Trust Bank ("San Luis").

        Under the terms of the Affinity loss sharing agreement, the FDIC will (a) absorb 80% of losses and receive 80% of loss recoveries on the first $234 million of losses on covered assets and (b) absorb 95% of losses and receive 95% of loss recoveries on losses exceeding $234 million. The Affinity loss sharing provisions expire in the third quarters of 2014 and 2019 for non-single family covered assets and single family covered assets, respectively, while the related loss recovery provisions expire in the third quarters of 2017 and 2019, respectively.

        Under the terms of the Los Padres loss sharing agreement, the FDIC will absorb 80% of losses and receive 80% of loss recoveries on the covered assets. The Los Padres loss sharing provisions expire in the third quarters of 2015 and 2020 for non-single family and single family covered assets, respectively, while the related loss recovery provisions expire in the third quarters of 2018 and 2020, respectively.

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        Under the terms of the Western Commercial loss sharing agreement, the FDIC will absorb 80% of losses and receive 80% of loss recoveries on the covered assets; all of which were deemed to be non-single family. The Western Commercial loss sharing provision expires in the fourth quarter of 2015, while the related loss recovery provision expires in the fourth quarter of 2018.

        Under the terms of the San Luis loss sharing agreement, the FDIC will absorb 80% of losses and receive 80% of loss recoveries on the covered assets. The San Luis loss sharing provisions expire in the first quarters of 2016 and 2021 for non-single family and single family covered assets, respectively, while the related loss recovery provisions expire in the first quarters of 2019 and 2021, respectively.

        Both the Western Commercial and San Luis loss sharing agreements contain True-Up provisions. As of September 30, 2013, the estimated True-Up liability of $6.6 million is included in other liabilities in the accompanying condensed consolidated balance sheets.

Allowance for Credit Losses on Non-PCI Loans and Leases

        The allowance for credit losses on Non-PCI loans and leases is the combination of the allowance for loan and lease losses and the reserve for unfunded loan commitments. The allowance for loan and lease losses is reported as a reduction of outstanding loan and lease balances and the reserve for unfunded loan commitments is included within other liabilities. Generally, as loans are funded, the amount of the commitment reserve applicable to such funded loans is transferred from the reserve for unfunded loan commitments to the allowance for loan and lease losses based on our allowance methodology. The following discussion is for Non-PCI loans and leases and the allowance for credit losses thereon. Refer to "Balance Sheet Analysis—Allowance for Credit Losses on PCI Loans" for the policy on covered loans.

        The allowance for loan and lease losses is maintained at a level deemed appropriate by management to adequately provide for known and inherent risks in the loan and lease portfolio and other extensions of credit at the balance sheet date. The allowance is based upon a continuing review of the portfolio, past loan and lease loss experience, current economic conditions which may affect the borrowers' ability to pay, and the underlying collateral value of the loans and leases. Loans and leases which are deemed to be uncollectible are charged off and deducted from the allowance. The provision for loan and lease losses and recoveries on loans and leases previously charged off are added to the allowance.

        The methodology we use to estimate the amount of our allowance for credit losses is based on both objective and subjective criteria. While some criteria are formula driven, other criteria are subjective inputs included to capture environmental and general economic risk elements which may trigger losses in the loan and lease portfolios, and to account for the varying levels of credit quality in the loan and lease portfolios of the entities we have acquired that have not yet been captured in our objective loss factors.

        Specifically, our allowance methodology contains three key elements: (i) amounts based on specific evaluations of impaired loans and leases; (ii) amounts of estimated losses on several pools of loans categorized by risk rating and loan and lease type; and (iii) amounts for environmental and general economic factors that indicate probable losses were incurred but were not captured through the other elements of our allowance process. In addition, for loans and leases measured at fair value on the acquisition date and deemed to be non-impaired, our allowance methodology captures deterioration in credit quality and other inherent risks of such acquired assets experienced after the purchase date.

        Impaired loans and leases are identified at each reporting date based on certain criteria and the majority of which are individually reviewed for impairment. Non-PCI nonaccrual loans and leases with an unpaid principal balance over $250,000 and all performing restructured loans are reviewed individually for the amount of impairment, if any. Non-PCI nonaccrual loans and leases with an unpaid

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principal balance of $250,000 or less are evaluated for impairment collectively. A loan or lease is considered impaired when it is probable that a creditor will be unable to collect all amounts due according to the original contractual terms of the agreement. We measure impairment of a loan based upon the fair value of the loan's collateral if the loan is collateral-dependent or the present value of cash flows, discounted at the loan's effective interest rate, if the loan is not collateral-dependent. The impairment amount on a collateral-dependent loan is charged-off to the allowance, and the impairment amount on a loan that is not collateral-dependent is set up as a specific reserve. We measure impairment of a lease based upon the present value of the scheduled lease and residual cash flows, discounted at the lease's effective interest rate. Increased charge-offs or additions to specific reserves generally result in increased provisions for credit losses.

        Our loan and lease portfolio, excluding impaired loans and leases which are evaluated individually, is categorized into several pools for purposes of determining allowance amounts by pool. The pools we currently evaluate are: commercial real estate construction, residential real estate construction, SBA real estate, hospitality real estate, real estate other, commercial collateralized, commercial unsecured, SBA commercial, consumer, foreign, asset- based and leasing. Within these pools, we then evaluate loans and leases not adversely classified, which we refer to as "pass" credits, separately from adversely classified loans and leases. The adversely classified loans and leases are further grouped into three credit risk rating categories: "special mention," "substandard," and "doubtful," which we define as follows:

•

Special Mention: Loans and leases classified as "special mention" have a potential weakness that requires management's attention. If not addressed, these potential weaknesses may result in further deterioration in the borrower's ability to repay the loan or lease.

•

Substandard: Loans and leases classified as "substandard" have a well-defined weakness or weaknesses that jeopardize the collection of the debt. They are characterized by the possibility that we will sustain some loss if the weaknesses are not corrected.

•

Doubtful: Loans and leases classified as "doubtful" have all the weaknesses of those classified as "substandard," with the additional trait that the weaknesses make collection or repayment in full highly questionable and improbable.

        In addition, we may refer to the loans and leases classified as "substandard" and "doubtful" together as "criticized" loans and leases. For additional information on classified loans and leases, see Note 6, Loans and Leases, in the Notes to Condensed Consolidated Financial Statements (Unaudited) contained in "Item 1. Condensed Consolidated Financial Statements (Unaudited)."

        The allowance amounts for "pass" rated loans and leases and those loans and leases adversely classified, which are not reviewed individually, are determined using historical loss rates developed through migration analysis. The migration analysis is updated quarterly based on historic losses and movement of loans between ratings. As a result of this migration analysis and its quarterly updating, decreases we experience in both charge-offs and adverse classifications generally result in lower loss factors.

        Finally, in order to ensure our allowance methodology is incorporating recent trends and economic conditions, we apply environmental and general economic factors to our allowance methodology including: credit concentrations; delinquency trends; economic and business conditions; the quality of lending management and staff; lending policies and procedures; loss and recovery trends; nature and volume of the portfolio; nonaccrual and problem loan trends; usage trends of unfunded commitments; and other adjustments for items not covered by other factors.

        Management believes that the allowance for loan and lease losses is adequate and appropriate for the known and inherent risks in our Non-PCI loan and lease portfolio. In making its evaluation, management considers certain quantitative and qualitative factors including the Company's historical

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loss experience; the volume and type of lending conducted by the Company; the results of our credit review process; the levels of classified and criticized loans and leases; the levels of impaired loans and leases, including nonperforming loans and leases and performing restructured loans; regulatory policies; general economic conditions; underlying collateral values; and other factors regarding collectability and impairment. To the extent we experience, for example, increased levels of documentation deficiencies, adverse changes in collateral values, or negative changes in economic and business conditions which adversely affect our borrowers, our classified loans and leases may increase. Higher levels of classified loans and leases generally result in higher allowances for loan and lease losses.

        We recognize that the determination of the allowance for loan and lease losses is sensitive to the assigned credit risk ratings and inherent loss rates at any given point in time. Therefore, we perform sensitivity analyses to provide insight regarding the impact that adverse changes in credit risk ratings may have on our allowance for loan and lease losses. The sensitivity analyses have inherent limitations and are based on various assumptions as of a point in time and, accordingly, it is not necessarily representative of the impact loan risk rating changes may have on the allowance for loan and lease losses.

        At September 30, 2013, in the event that 1% of our Non-PCI loans and leases were downgraded one credit risk rating category for each category (e.g., 1% of the "pass" category moved to the "special mention" category, 1% of the "special mention" category moved to "substandard" category, and 1% of the "substandard" category moved to the "doubtful" category within our current allowance methodology), the allowance for credit losses would have increased by approximately $1.1 million. In the event that 5% of our Non-PCI loans and leases were downgraded one credit risk category, the allowance for credit losses would increase by approximately $5.5 million.

        Given our current risk management processes, we believe that the credit risk ratings and inherent loss rates currently assigned are appropriate. It is possible that others, given the same information, may at any point in time reach different conclusions that could be significant to the Company's financial statements. In addition, current credit risk ratings are subject to change as we continue to review loans and leases within our portfolio and as our borrowers are impacted by economic trends within their market areas.

        Although we have established an allowance for loan and lease losses that we consider appropriate, there can be no assurance that the established allowance for loan and lease losses will be sufficient to offset losses on loans and leases in the future. Management also believes that the reserve for unfunded loan commitments is appropriate. In making this determination, we use the same methodology for the reserve for unfunded loan commitments as we do for the allowance for loan and lease losses and consider the same quantitative and qualitative factors, as well as an estimate of the probability of advances of the commitments correlated to their credit risk rating.

        The following table presents information regarding the allowance for credit losses on Non-PCI loans and leases as of the dates indicated:

Non-PCI Allowance Data:	September 30, 2013			June 30, 2013			December 31, 2012			September 30, 2012
	(Dollars in thousands)
Allowance for loan and lease losses	$	60,551		$	63,246		$	65,899		$	69,142
Reserve for unfunded loan commitments		7,250			6,680			6,220			5,870
Total allowance for credit losses	$	67,801		$	69,926		$	72,119		$	75,012
Allowance for credit losses to loans and leases		1.72	%		1.78	%		2.35	%		2.44	%
Allowance for credit losses to nonaccrual loans and leases		133.3	%		135.3	%		172.7	%		191.4	%
Allowance for credit losses to nonperforming assets		63.5	%		60.2	%		73.5	%		72.9	%

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        The following table presents the changes in our allowance for credit losses on Non-PCI loans and leases for the periods indicated:

	Three Months Ended									Nine Months Ended September 30,
	September 30, 2013			June 30, 2013			September 30, 2012
Non-PCI Allowance for Credit Losses:										2013			2012
	(In thousands)
Allowance for credit losses, beginning of period	$	69,926		$	71,896		$	78,031		$	72,119		$	93,783
Provision (negative provision) for credit losses		—			—			(2,000	)		—			(12,000	)
Net charge-offs		(2,125	)		(1,970	)		(1,019	)		(4,318	)		(6,771	)
Allowance for credit losses, end of period	$	67,801		$	69,926		$	75,012		$	67,801		$	75,012

        The following table presents the changes in our allowance for loan and lease losses on Non-PCI loans and leases for the periods indicated:

	Three Months Ended									Nine Months Ended September 30,
	September 30, 2013			June 30, 2013			September 30, 2012
Non-PCI Allowance for Loan and Lease Losses:										2013			2012
	(Dollars in thousands)
Allowance for loan and lease losses, beginning of period	$	63,246		$	65,216		$	72,061		$	65,899		$	85,313
Loans and leases charged off:
Real estate mortgage		(281	)		(3,237	)		(1,118	)		(3,840	)		(5,891	)
Real estate construction		—			—			(492	)		—			(492	)
Commercial		(2,439	)		(1,370	)		(492	)		(4,517	)		(2,715	)
Leases		—			—			—			(114	)		—
Consumer		(75	)		(27	)		(25	)		(111	)		(258	)
Total loans and leases charged off		(2,795	)		(4,634	)		(2,127	)		(8,582	)		(9,356	)
Recoveries on loans charged off:
Real estate mortgage		152			1,336			845			1,665			1,217
Real estate construction		179			12			11			514			35
Commercial		321			1,297			218			2,025			1,232
Consumer		15			19			32			57			79
Foreign		3			—			2			3			22
Total recoveries on loans charged off		670			2,664			1,108			4,264			2,585
Net charge-offs		(2,125	)		(1,970	)		(1,019	)		(4,318	)		(6,771	)
Provision (negative provision) for loan and lease losses		(570	)		—			(1,900	)		(1,030	)		(9,400	)
Allowance for loan and lease losses, end of period	$	60,551		$	63,246		$	69,142		$	60,551		$	69,142
Ratios:
Allowance for loan and lease losses to loans and leases (end of period)		1.53	%		1.61	%		2.24	%		1.53	%		2.24	%
Allowance for loan and lease losses to nonaccrual loans and leases (end of period)		119.1	%		122.4	%		176.5	%		119.1	%		176.5	%
Annualized net charge-offs to average loans and leases		0.22	%		0.24	%		0.13	%		0.17	%		0.31	%

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        The following table presents the changes in our reserve for unfunded loan commitments for the periods indicated:

	Three Months Ended							Nine Months Ended September 30,
	September 30, 2013		June 30, 2013		September 30, 2012
Non-PCI Reserve for Unfunded Loan Commitments:								2013		2012
	(In thousands)
Reserve for unfunded loan commitments, beginning of period	$	6,680	$	6,680	$	5,970		$	6,220	$	8,470
Provision (negative provision)		570		—		(100	)		1,030		(2,600	)
Reserve for unfunded loan commitments, end of period	$	7,250	$	6,680	$	5,870		$	7,250	$	5,870

Allowance for Credit Losses on PCI Loans

        The PCI loans are subject to our internal and external credit review. If deterioration in the expected cash flows results in a reserve requirement, a provision for credit losses is charged to earnings. For PCI loans, the allowance for loan losses is measured at the end of each financial reporting period based on expected cash flows. Decreases or (increases) in the amount and changes in the timing of expected cash flows on the PCI loans as of the financial reporting date compared to those previously estimated are usually recognized by recording a provision or a (negative provision) for credit losses on such loans.

        The following table presents the changes in our allowance for credit losses on PCI loans for the periods indicated:

	Three Months Ended									Nine Months Ended September 30,
	September 30, 2013			June 30, 2013			September 30, 2012
										2013			2012
	(In thousands)
Allowance for credit losses on PCI loans, beginning of period	$	27,397		$	29,303		$	31,463		$	26,069		$	31,275
Provision (negative provision)		(4,167	)		(1,842	)		(141	)		(2,872	)		3,514
Net (charge-offs) recoveries		5			(64	)		(618	)		38			(4,085	)
Allowance for credit losses on PCI loans, end of period	$	23,235		$	27,397		$	30,704		$	23,235		$	30,704

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Nonperforming Assets and Performing Restructured Loans

        The following table presents nonperforming assets and performing restructured loans information as of the dates indicated:

	September 30, 2013			June 30, 2013			December 31, 2012			September 30, 2012
	(Dollars in thousands)
Nonaccrual loans and leases(1)	$	50,845		$	51,689		$	41,762		$	39,185
Other real estate owned		55,972			64,546			56,414			63,707
Total nonperforming assets	$	106,817		$	116,235		$	98,176		$	102,892
Performing restructured loans(1)	$	80,237		$	83,543		$	106,288		$	112,834
Nonaccrual loans and leases to loans and leases, net of unearned income(1)		1.29	%		1.32	%		1.36	%		1.27	%
Nonperforming assets ratio(1)(2)		2.67	%		2.91	%		3.14	%		3.27	%

(1)

Excludes PCI loans.

(2)

Nonperforming assets ratio is calculated as nonperforming assets divided by the sum of total non-PCI loans and leases and total OREO.

        Nonperforming assets include Non-PCI nonaccrual loans and leases and OREO and totaled $106.8 million at September 30, 2013 compared to $116.2 million at June 30, 2013. The $9.4 million decrease in nonperforming assets was due to an $844,000 decrease in nonaccrual loans and leases and an $8.6 million decrease in OREO. The nonperforming assets ratio decreased to 2.67% at September 30, 2013 from 2.91% at June 30, 2013.

Nonaccrual Loans and Leases

        The $844,000 decrease in nonaccrual loans and leases (excluding PCI loans) during the third quarter of 2013 was attributable to (a) additions of $13.5 million, (b) charge-offs of $2.4 million, (c) other reductions, payoffs and returns to accrual status of $8.7 million, and (d) foreclosures of $3.2 million.

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        The following table presents our Non-PCI nonaccrual loans and leases and accruing loans and leases past due between 30 and 89 days by portfolio segment and class as of the dates indicated:

	Nonaccrual Loans and Leases
											Accruing and 30 - 89 Days Past Due
	September 30, 2013					June 30, 2013
	Amount		% of Loan Category			Amount		% of Loan Category			September 30, 2013 Amount		June 30, 2013 Amount
	(Dollars in thousands)
Real estate mortgage:
SBA 504	$	2,791		5.8	%	$	3,007		5.4	%	$	—	$	929
Other		21,628		0.9	%		26,093		1.1	%		4,473		2,060
Total real estate mortgage		24,419		1.0	%		29,100		1.1	%		4,473		2,989
Real estate construction:
Residential		826		1.3	%		834		1.4	%		—		—
Commercial		2,857		2.2	%		2,938		2.1	%		50		—
Total real estate construction		3,683		1.9	%		3,772		1.9	%		50		—
Commercial:
Collateralized		15,256		2.7	%		13,441		2.6	%		2,250		796
Unsecured		334		0.3	%		1,583		1.6	%		1,381		976
Asset-based		3,381		1.5	%		—		—			—		—
SBA 7(a)		2,934		10.6	%		3,052		10.7	%		132		262
Total commercial		21,905		2.4	%		18,076		2.0	%		3,763		2,034
Leases		244		0.1	%		244		0.1	%		—		—
Consumer		594		1.8	%		497		1.7	%		167		24
Total non-covered loans and leases	$	50,845		1.3	%	$	51,689		1.3	%	$	8,453	$	5,047

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        The following table lists the ten largest lending relationships on nonaccrual status, excluding SBA-related loans, as of the date indicated:

September 30, 2013 Nonaccrual Amount		Description
(In thousands)
$	5,565	Three loans to a contractor, one of which is secured by equipment, one of which is secured by an industrial building in San Diego County, and one of which is unsecured.(2)
	4,006	Loan represents 6% interest in a syndicated credit facility secured by a film library. The lending group foreclosed on the film library in November.(1)
	3,141	Two loans that are both unsecured. The borrower is paying according to the restructured terms of the loan.(1)
	2,295	Two loans, one of which is secured by an office building in Clark County, Nevada, and the other of which is secured by an office building in Maricopa County, Arizona.(1)
	2,177	Three loans, one of which is secured by an office building in Ventura County, California; the other two loans are unsecured.(1)
	1,891	Asset-based loan to a clothing manufacturer secured by accounts receivable and inventory. Loan is in the process of liquidation.(2)
	1,504	Loan secured by industrial zoned land in Ventura County, CA.(1)
	1,490	Asset-based loan to a contractor secured by accounts receivable. Loan is in the process of liquidation.(2)
	1,317	Loan secured by a strip retail center in Clark County, Nevada.(1)
	1,171	Loan secured by an industrial building in San Bernardino County, California.(1)
$	24,557	Total

(1)

On nonaccrual status at June 30, 2013.

(2)

New nonaccrual in third quarter of 2013.

Other Real Estate Owned (OREO)

        The following table presents the components of total OREO by property type as of the dates indicated:

Property Type	September 30, 2013		June 30, 2013		December 31, 2012		September 30, 2012
	(Dollars in thousands)
Commercial real estate	$	18,826	$	18,422	$	13,319	$	20,184
Construction and land development		36,131		39,356		38,596		40,718
Multi-family		989		3,807		4,239		939
Single family residence		26		2,961		260		1,866
Total OREO	$	55,972	$	64,546	$	56,414	$	63,707

        OREO decreased $8.6 million during the third quarter of 2013 due mainly to sales of $11.6 million, offset by foreclosures of $3.7 million.

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Performing Restructured Loans

        Non-PCI performing restructured loans declined by $3.3 million during the third quarter of 2013 to $80.2 million at September 30, 2013. The decrease was attributable primarily to $2.3 million in transfers to nonaccrual status and $3.4 million in payoffs, paydowns, and other reductions, offset partially by $2.4 million in additions. At September 30, 2013, we had $65.9 million in real estate mortgage loans, $11.2 million in real estate construction loans, $2.9 million in commercial loans, and $198,000 in consumer loans that were accruing interest under the terms of troubled debt restructurings.

        The majority of the performing restructured loans was on accrual status prior to the loan modifications and has remained on accrual status after the loan modifications due to the borrowers making payments before and after the restructurings. In these circumstances, generally, a borrower may have had a fixed-rate loan that they continued to repay, but may be having cash flow difficulties. In an effort to work with certain borrowers, we have agreed to interest rate reductions to reflect the lower market interest rate environment and/or interest-only payments for a period of time. In these cases, we do not forgive principal or extend the maturity date as part of the loan modification. As a result of the current economic environment in our market areas, we anticipate loan restructurings to continue.

PCI Nonaccrual Loans and Performing Restructured Loans

        Loans accounted for as purchased credit impaired are generally considered accruing and performing loans as the loans accrete interest income over the estimated life of the loan when cash flows are reasonably estimable. Accordingly, PCI loans that are contractually past due are still considered to be accruing and performing loans. If the timing and amount of future cash flows is not reasonably estimable, the loans may be classified as nonaccrual loans and interest income is not recognized until the timing and amount of future cash flows can be reasonably estimated.

        The following table presents a summary of PCI loans that would be considered nonaccrual except for the accounting requirements regarding PCI loans and PCI performing restructured loans as of the dates indicated:

	September 30, 2013		June 30, 2013		December 31, 2012		September 30, 2012
	(In thousands)
PCI nonaccrual loans	$	123,273	$	128,553	$	112,304	$	123,908
PCI performing restructured loans	$	25,945	$	25,901	$	21,553	$	27,006

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Deposits

        The following table presents the balance of each major category of deposits at the dates indicated:

	September 30, 2013					June 30, 2013					December 31, 2012
Deposit Category	Amount		% of Total			Amount		% of Total			Amount		% of Total
	(Dollars in thousands)
Noninterest-bearing deposits	$	2,328,688		43	%	$	2,291,246		41	%	$	1,939,212		41	%
Interest checking deposits		617,965		11			610,328		11			513,389		11
Money market deposits		1,544,686		29			1,586,547		29			1,282,513		28
Savings deposits		218,284		4			212,766		4			153,680		3
Total core deposits		4,709,623		87			4,700,887		85			3,888,794		83
Time deposits under $100,000		241,582		4			269,481		5			274,622		6
Time deposits $100,000 and over		481,939		9			552,632		10			545,705		11
Total time deposits		723,521		13			822,113		15			820,327		17
Total deposits	$	5,433,144		100	%	$	5,523,000		100	%	$	4,709,121		100	%

        Total deposits decreased $89.9 million during the third quarter to $5.4 billion at September 30, 2013, due to a decrease in time deposits of $98.6 million, offset by an increase in core deposits of $8.7 million. The increase in core deposits was due to increases of $37.4 million, $7.6 million, and $5.5 million in noninterest-bearing demand deposits, interest checking deposits, and savings deposits, respectively, offset by a decline of $41.8 million in money market deposits. At September 30, 2013, core deposits totaled $4.7 billion, or 87% of total deposits, and noninterest-bearing demand deposits, which totaled $2.3 billion, were 43% of total deposits at that date.

        The following table summarizes the maturities of time deposits as of the date indicated:

	September 30, 2013
Maturity	Time Deposits Under $100,000		Time Deposits $100,000 or More		Total Time Deposits		Rate
	(Dollars in thousands)
Due in three months or less	$	65,144	$	142,023	$	207,167		0.43	%
Due in over three months through six months		51,330		103,548		154,878		0.61	%
Due in over six months through twelve months		70,323		128,760		199,083		0.61	%
Due in over 12 months through 24 months		23,295		50,892		74,187		0.81	%
Due in over 24 months		31,490		56,716		88,206		0.87	%
Total	$	241,582	$	481,939	$	723,521		0.61	%

Regulatory Matters

Capital

        Bank regulatory agencies measure capital adequacy through standardized risk-based capital guidelines which compare different levels of capital (as defined by such guidelines) to risk-weighted assets and off-balance sheet obligations. Banks and bank holding companies considered to be "well capitalized" must maintain a minimum Tier 1 leverage ratio of 5%, a minimum Tier 1 risk-based capital ratio of 6.0%, and a minimum total risk-based capital ratio of 10%. Regulatory capital requirements limit the amount of deferred tax assets that may be included when determining the amount of regulatory capital. Deferred tax asset amounts in excess of the calculated limit are deducted from regulatory capital. There was no limitation on our deferred tax assets at September 30, 2013. No

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assurance can be given that the regulatory capital deferred tax asset limitation will not increase in the future.

        The following table presents regulatory capital requirements and our regulatory capital ratios as of the date indicated:

	September 30, 2013
	Well Capitalized Requirement			Pacific Western Bank			PacWest Bancorp Consolidated
Tier 1 leverage capital ratio		5.00	%		10.53	%		11.16	%
Tier 1 risk-based capital ratio		6.00	%		14.27	%		15.35	%
Total risk-based capital ratio		10.00	%		15.53	%		16.39	%
Tangible common equity ratio		N/A			10.54	%		9.12	%

Subordinated Debentures

        The Company issued subordinated debentures to trusts that were established by us or entities we have acquired, which, in turn, issued trust preferred securities, which totaled $131.0 million at September 30, 2013. With the FCAL acquisition, we added $26.0 million of trust preferred securities. The Company includes in Tier 1 capital an amount of trust preferred securities equal to no more than 25% of the sum of all core capital elements, which is generally defined as shareholders' equity less goodwill, net of any related deferred income tax liability. At September 30, 2013, the amount of trust preferred securities included in Tier I capital was $131.0 million. While our existing trust preferred securities are currently grandfathered as Tier 1 capital under the Dodd-Frank Wall Street Reform and Consumer Protection Act, recently approved regulatory capital rules would phase them out of Tier 1 capital assuming that the Company exceeds $15 billion in consolidated total assets with the proposed CSE merger. However, under such rules, trust preferred securities no longer included in Tier 1 capital may be included in Tier 2 capital on a permanent basis. See "—New Capital Rules" below. If trust preferred securities are excluded from regulatory capital, we remain "well capitalized" at September 30, 2013.

New Capital Rules

        In July 2013, the Company's primary federal regulator, the Board of Governors of the Federal Reserve System, or FRB, and the Bank's primary federal regulator, the FDIC, approved final rules (the "New Capital Rules") establishing a new comprehensive capital framework for U.S. banking organizations. The New Capital Rules generally implement the Basel Committee on Banking Supervision's (the "Basel Committee") December 2010 final capital framework referred to as "Basel III" for strengthening international capital standards. The New Capital Rules substantially revise the risk-based capital requirements applicable to bank holding companies and their depository institution subsidiaries, including the Company and the Bank, as compared to the current U.S. general risk-based capital rules. The New Capital Rules revise the definitions and the components of regulatory capital, as well as address other issues affecting the numerator in banking institutions' regulatory capital ratios. The New Capital Rules also address asset risk weights and other matters affecting the denominator in banking institutions' regulatory capital ratios and replace the existing general risk-weighting approach, which was derived from the Basel Committee's 1988 "Basel I" capital accords, with a more risk-sensitive approach based, in part, on the "standardized approach" in the Basel Committee's 2004 "Basel II" capital accords. In addition, the New Capital Rules implement certain provisions of the Dodd-Frank Act, including the requirements of Section 939A to remove references to credit ratings from the federal agencies' rules. The New Capital Rules are effective for the Company and the Bank on January 1, 2015, subject to phase-in periods for certain of their components and other provisions.

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        Among other matters, the New Capital Rules: (i) introduce a new capital measure called "Common Equity Tier 1" ("CET1") and related regulatory capital ratio of CET1 to risk-weighted assets; (ii) specify that Tier 1 capital consists of CET1 and "Additional Tier 1 capital" instruments meeting certain revised requirements; (iii) mandate that most deductions/adjustments to regulatory capital measures be made to CET1 and not to the other components of capital; and (iv) expand the scope of the deductions from and adjustments to capital as compared to existing regulations. Under the New Capital Rules, for most banking organizations the most common form of Additional Tier 1 capital is non-cumulative perpetual preferred stock and the most common form of Tier 2 capital is subordinated notes and a portion of the allocation for loan and lease losses, in each case, subject to the New Capital Rules' specific requirements.

        Pursuant to the New Capital Rules, the minimum capital ratios as of January 1, 2015 will be as follows:

•

4.5% CET1 to risk-weighted assets;

•

6.0% Tier 1 capital (that is, CET1 plus Additional Tier 1 capital) to risk-weighted assets;

•

8.0% Total capital (that is, Tier 1 capital plus Tier 2 capital) to risk-weighted assets; and

•

4% Tier 1 capital to average consolidated assets as reported on consolidated financial statements (known as the "leverage ratio").

        The New Capital Rules also introduce a new "capital conservation buffer," composed entirely of CET1, on top of these minimum risk-weighted asset ratios. The capital conservation buffer is designed to absorb losses during periods of economic stress. Banking institutions with a ratio of CET1 to risk-weighted assets above the minimum but below the capital conservation buffer will face constraints on dividends, equity repurchases and compensation based on the amount of the shortfall. Thus, when fully phased-in on January 1, 2019, the Company and the Bank will be required to maintain such additional capital conservation buffer of 2.5% of CET1, effectively resulting in minimum ratios of: (i) CET1 to risk-weighted assets of at least 7%, (ii) Tier 1 capital to risk-weighted assets of at least 8.5%, and (iii) Total capital to risk-weighted assets of at least 10.5%.

        The New Capital Rules provide for a number of deductions from and adjustments to CET1. These include, for example, the requirement that mortgage servicing rights, deferred tax assets arising from temporary differences that could not be realized through net operating loss carrybacks and significant investments in non-consolidated financial entities be deducted from CET1 to the extent that any one such category exceeds 10% of CET1 or all such items, in the aggregate, exceed 15% of CET1.

        In addition, under the current general risk-based capital rules, the effects of accumulated other comprehensive income or loss ("AOCI") items included in shareholders' equity (for example, unrealized gains and losses of securities held in the available-for-sale portfolio) under U.S. GAAP are reversed for the purposes of determining regulatory capital ratios. Pursuant to the New Capital Rules, the effects of certain AOCI items are not excluded; however, non-advanced approaches banking organizations, including the Company and the Bank, may make a one-time permanent election to continue to exclude these items. This election must be made concurrently with the first filing of certain of the Company's and the Bank's periodic regulatory reports in the beginning of 2015. The Company and the Bank expect to make this election in order to avoid significant variations in the level of capital depending upon the impact of interest rate fluctuations on the fair value of our securities portfolio. The New Capital Rules also preclude certain hybrid securities, such as trust preferred securities, from inclusion in bank holding companies' Tier 1 capital, subject to phase-out in the case of bank holding companies that had $15 billion or more in total consolidated assets as of December 31, 2009. Although the Company did not have $15 billion or more in consolidated assets as of December 31, 2009, the Company anticipates being subject to this phase-out due to the proposed merger with CapitalSource. As a result, beginning in 2015, only 25% of the Company's $131.0 million of trust preferred securities currently

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outstanding and expected to be outstanding on the effective date of the New Capital Rules (which is the date of publication in the Federal Register) will be included in Tier 1 capital and in 2016, none of the Company's trust preferred securities will be included in Tier 1 capital. Trust preferred securities no longer included in the Company's Tier 1 capital may nonetheless be included as a component of our Tier 2 capital on a permanent basis without phase-out and irrespective of whether such securities otherwise meet the revised definition of Tier 2 capital set forth in the New Capital Rules.

        Implementation of the deductions and other adjustments to CET1 will begin on January 1, 2015 and will be phased-in over a 4-year period (beginning at 40% on January 1, 2015 and an additional 20% per year thereafter). The implementation of the capital conservation buffer will begin on January 1, 2016 at the 0.625% level and increase by 0.625% on each subsequent January 1, until it reaches 2.5% on January 1, 2019.

        With respect to the Bank, the New Capital Rules revise the "prompt corrective action" ("PCA") regulations adopted pursuant to Section 38 of the Federal Deposit Insurance Act, by: (i) introducing a CET1 ratio requirement at each PCA category (other than critically undercapitalized), with the required CET1 ratio being 6.5% for well-capitalized status; (ii) increasing the minimum Tier 1 capital ratio requirement for each category, with the minimum Tier 1 capital ratio for well-capitalized status being 8% (as compared to the current 6%); and (iii) eliminating the current provision that provides that a bank with a composite supervisory rating of 1 may have a 3% leverage ratio and still be adequately capitalized. The New Capital Rules do not change the total risk-based capital requirement for any PCA category.

        The New Capital Rules prescribe a new standardized approach for risk weightings that expand the risk-weighting categories from the current four Basel I-derived categories (0%, 20%, 50% and 100%) to a larger and more risk-sensitive number of categories, depending on the nature of the assets, generally ranging from 0% for U.S. government and agency securities, to 600% for certain equity exposures, and resulting in higher risk weights for a variety of asset classes.

        We are currently evaluating the impact of the New Capital Rules, including the capital conservation buffer, on our capital ratios and related calculations.

Dividends on Common Stock and Interest on Subordinated Debentures

        Bank holding companies, such as PacWest Bancorp, are required to notify the Board of Governors of the Federal Reserve System ("FRB") prior to declaring and paying a dividend to stockholders during any period in which quarterly and/or cumulative twelve-month net earnings are insufficient to fund the dividend amount, among other requirements. Interest payments on subordinated debentures are considered dividend payments under FRB regulations. We are not required to make such notification to the FRB.

Liquidity Management

Liquidity

        The goals of our liquidity management are to ensure the ability of the Company to meet its financial commitments when contractually due and to respond to other demands for funds such as the ability to meet the cash flow requirements of customers who may be either depositors wanting to withdraw funds or borrowers who may need assurance that sufficient funds will be available to meet their credit needs. We have an Executive Asset/Liability Management Committee, or Executive ALM Committee, which is comprised of members of senior management and is responsible for managing balance sheet and off-balance sheet commitments to meet the needs of customers while achieving our financial objectives. Our Executive ALM Committee meets regularly to review funding capacities, current and forecasted loan demand, and investment opportunities.

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        The Bank manages its liquidity by maintaining pools of liquid assets on-balance sheet, consisting of cash and due from banks, interest-earning deposits in other financial institutions and unpledged investment securities available-for-sale, which we refer to as our primary liquidity. In addition, we also maintain available borrowing capacity under secured borrowing lines with the FHLB and the Federal Reserve Bank of San Francisco ("FRBSF"), which we refer to as our secondary liquidity. In addition to its secured lines of credit, the Bank also maintains unsecured lines of credit, subject to availability, of $80.0 million with correspondent banks for purchase of overnight funds.

        The following table provides a summary of the Bank's primary and secondary liquidity levels at the dates indicated:

	September 30, 2013			June 30, 2013			December 31, 2012
	(Dollars in thousands)
Primary Liquidity—On-Balance Sheet:
Cash and due from banks	$	132,467		$	106,237		$	89,011
Interest-earning deposits at financial institutions		11,552			112,590			75,393
Investment securities available-for-sale		1,512,147			1,473,578			1,355,385
Less: pledged securities		(201,921	)		(208,192	)		(157,279	)
Total primary liquidity	$	1,454,245		$	1,484,213		$	1,362,510
Ratio of primary liquidity to total deposits		26.8	%		26.9	%		28.9	%
Secondary Liquidity—Off-Balance Sheet Available Secured Borrowing Capacity:
Total secured borrowing capacity with the FHLB	$	1,330,217		$	1,384,705		$	1,024,261
Less: secured letters of credit outstanding		—			—			(1,244	)
Net secured borrowing capacity with the FHLB		1,330,217			1,384,705			1,023,017
Secured credit line with the FRBSF		467,833			489,891			347,407
Total secondary liquidity	$	1,798,050		$	1,874,596		$	1,370,424

        During the three months ended September 30, 2013, the Bank's primary liquidity decreased $30.0 million due mostly to a $101.0 million decrease in interest-earning deposits at financial institutions, offset partially by a $44.8 million net increase in unpledged investment securities available-for-sale and $26.2 million increase in cash and due from banks. The Bank's secondary liquidity decreased $76.5 million during the third quarter due to decreases in borrowing capacity for the Bank's secured borrowing lines with the FHLB and FRBSF. The borrowing lines declined due to the decrease in loan collateral pledged to secure the borrowing lines. Our total liquidity and the ratio of primary liquidity to total deposits remain at historically high levels. We expect to continue to maintain higher levels of on-balance sheet liquidity during the remainder of 2013 compared to historical levels until we are able to effectively increase loan portfolio balances.

        At September 30, 2013, $589.9 million of certain qualifying loans were specifically pledged as collateral for the secured borrowing line maintained with the FRBSF. The FHLB borrowing lines are secured by: (1) a blanket lien on certain qualifying loans in our loan portfolio, which are not pledged to the FRBSF, and (2) a portion of our available-for-sale securities.

        In addition to our primary liquidity, we generate liquidity from cash flow from our amortizing loan and securities portfolios and from our large base of core customer deposits, defined as noninterest-bearing demand, interest checking, savings and money market accounts. At September 30, 2013, such deposits totaled $4.7 billion and represented 87% of the Company's total deposits. These core deposits are normally less volatile, often with customer relationships tied to other products offered by the Company promoting long- standing relationships and stable funding sources.

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        Deposits from our customers may decline if interest rates increase significantly or if corporate customers move funds from the Bank generally. In order to address the Bank's liquidity risk as deposit balances may fluctuate, the Bank maintains adequate levels of available liquidity.

        The following table provides a summary of the Bank's core deposits at the dates indicated:

	September 30, 2013		June 30, 2013		December 31, 2012
	(In thousands)
Core Deposits:
Noninterest-bearing demand	$	2,328,688	$	2,291,246	$	1,939,212
Interest checking		617,965		610,328		513,389
Money market deposits		1,544,686		1,586,547		1,282,513
Savings deposits		218,284		212,766		153,680
Total core deposits	$	4,709,623	$	4,700,887	$	3,888,794

        Our asset/liability management policy establishes various liquidity guidelines for the Bank. The policy includes guidelines for On-Balance Sheet Liquidity (a measurement of primary liquidity to total deposits), Coverage and Crisis Coverage Ratios (measurements of liquid assets to expected short- term liquidity required for the loan and deposit portfolios under normal and stressed conditions), Loan to Funding Ratio, Wholesale Funding Ratio, and other guidelines developed for measuring and maintaining liquidity. As of September 30, 2013, we were in compliance with all liquidity guidelines established in the asset/liability management policy.

        We may use large denomination brokered time deposits, the availability of which is uncertain and subject to competitive market forces, for liquidity management purposes. At September 30, 2013, the Bank had none of these brokered deposits. However, we had $51.1 million of time deposits which were part of the CDARS program. The CDARS program represents deposits that are participated with other FDIC insured financial institutions as a means to provide FDIC deposit insurance coverage for the full amount of our participating customers' deposits.

Holding Company Liquidity

        The primary sources of liquidity for the Company, on a stand-alone basis, include dividends from the Bank and our ability to raise capital, issue subordinated debt and secure outside borrowings. The ability of the Company to obtain funds for the payment of dividends to our stockholders and for other cash requirements is largely dependent upon the Bank's earnings. Pacific Western is subject to restrictions under certain federal and state laws and regulations which limit its ability to transfer funds to the Company through intercompany loans, advances or cash dividends.

        Dividends paid by state banks, such as Pacific Western, are regulated by the California Department of Financial Institutions ("DFI") under its general supervisory authority as it relates to a bank's capital requirements. A state bank may declare a dividend without the approval of the DFI as long as the total dividends declared in a calendar year do not exceed either the retained earnings or the total of net profits for three previous fiscal years less any dividends paid during such period. During the nine months ended September 30, 2013, PacWest received $36.0 million in dividends from the Bank. For the foreseeable future, any dividends from the Bank to the Company require DFI approval.

        At September 30, 2013, the Company had, on a stand-alone basis, $34.4 million in cash on deposit at the Bank. Management believes that this amount of cash, along with anticipated dividends from the Bank, will be sufficient to fund the Company's 2013 cash flow needs.

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Contractual Obligations

        The following table presents the known contractual obligations of the Company as of the date indicated:

	September 30, 2013
	Due Within One Year		Due in One to Three Years		Due in Three to Five Years		Due After Five Years		Total
	(In thousands)
Time deposits(1)	$	560,661	$	124,012	$	37,172	$	—	$	721,845
Long-term debt obligations(1)		4,880		2,878		395		135,055		143,208
Contractual interest(2)		1,699		2,006		1,353		—		5,058
Operating lease obligations		17,049		26,007		15,837		12,907		71,800
Other contractual obligations		12,245		4,253		70		67		16,635
Total	$	596,534	$	159,156	$	54,827	$	148,029	$	958,546

(1)

Excludes purchase accounting fair value adjustments.

(2)

Excludes interest on subordinated debentures as these instruments are floating rate.

        Long-term debt obligations include subordinated debentures. Debt obligations are also discussed in Note 9, Borrowings, Subordinated Debentures and Brokered Deposits, in the Notes to Condensed Consolidated Financial Statements (Unaudited) contained in "Item 1. Condensed Consolidated Financial Statements (Unaudited)." Operating lease obligations are discussed in the Notes to Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2012. The other contractual obligations relate to our minimum liability associated with our data and item processing contract with a third-party provider and commitments to contribute capital to investments in low income housing project partnerships.

        We believe that we will be able to meet our contractual obligations as they come due through the maintenance of adequate cash levels. We expect to maintain adequate cash levels through profitability, loan and securities repayment and maturity activity, and continued deposit gathering activities. We believe we have in place various borrowing mechanisms for both short-term and long- term liquidity needs.

Off-Balance Sheet Arrangements

        Our obligations also include off-balance sheet arrangements consisting of loan and lease-related commitments, of which only a portion are expected to be funded. At September 30, 2013, our loan and lease-related commitments, including standby letters of credit, totaled $1.1 billion. The commitments, which result in funded loans and leases, increase our profitability through net interest income. We manage our overall liquidity taking into consideration funded and unfunded commitments as a percentage of our liquidity sources. Our liquidity sources have been and are expected to be sufficient to meet the cash requirements of our lending activities.

Asset/Liability Management and Interest Rate Sensitivity

Interest Rate Risk

        We measure our interest rate risk position on at least a quarterly basis using two methods: (i) net interest income simulation analysis, and (ii) market value of equity modeling. The results of these analyses are reviewed by the Executive ALM Committee and the Board ALCO quarterly. If hypothetical changes to interest rates cause changes to our simulated net present value of equity and/or

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net interest income outside our pre- established limits, we may adjust our asset and liability mix in an effort to bring our interest rate risk exposure within our established limits.

        We evaluated the results of our net interest income simulation and market value of equity models prepared as of September 30, 2013, the results of which are presented below. Our net interest income simulation indicates that our balance sheet is liability sensitive as rising interest rates would result in a decline in our net interest margin. This profile is primarily a result of (a) the increased origination of fixed-rate loans and variable-rate loans with initial fixed-rate terms over the last several years and (b) declining floating-rate construction loans. Our market value of equity model indicates an asset sensitive profile in the up 100 basis points scenario, switching to liability sensitive in the up 200 and 300 basis point scenarios. An asset sensitive profile would suggest that a sudden sustained increase in rates would result in an increase in our estimated market value of equity, while a liability sensitive profile would suggest that our estimated market value of equity would decrease when rates increase. In general, we view the net interest income model results as more relevant to the Company's current operating profile and manage our balance sheet giving priority to this information.

Net Interest Income Simulation

        We used a simulation model to measure the estimated changes in net interest income that would result over the next 12 months from immediate and sustained changes in interest rates as of September 30, 2013. This model is an interest rate risk management tool and the results are not necessarily an indication of our future net interest income. This model has inherent limitations and these results are based on a given set of rate changes and assumptions at one point in time. We have assumed no growth in either our interest-sensitive assets or liabilities over the next 12 months; therefore, the results reflect an interest rate shock to a static balance sheet.

        This analysis calculates the difference between net interest income forecasted using both increasing and decreasing interest rate scenarios and net interest income forecasted using a base market interest rate derived from the U.S. Treasury yield curve at September 30, 2013. In order to arrive at the base case, we extend our balance sheet at September 30, 2013 one year and reprice any assets and liabilities that would contractually reprice or mature during that period using the products' pricing as of September 30, 2013. Based on such repricings, we calculate an estimated net interest income and net interest margin.

        The repricing relationship for each of our assets and liabilities includes many assumptions. For example, many of our assets are floating-rate loans, which are assumed to reprice to the same extent as the change in market rates according to their contracted index except for floating-rate loans tied to our base lending rate which are assumed to reprice upward only after the first 75 basis point increase in market rates. This assumption is due to the fact that our base lending rate is 4.00% while the major bank prime rate is 3.25%. Some loans and investment vehicles include the opportunity of prepayment (imbedded options) and the simulation model uses a prepayment model to estimate these prepayments and reinvest these proceeds at current simulated yields. Our deposit products reprice at our discretion and are assumed to reprice more slowly in a rising or declining interest rate environment and usually reprice at a rate less than the change in market rates. The effects of certain balance sheet attributes, such as fixed-rate loans, floating-rate loans that have reached their floors, and the volume of noninterest-bearing deposits as a percentage of earning assets, impact our assumptions and consequently the results of our interest rate risk management model. Changes that could vary significantly from our assumptions include loan and deposit growth or contraction, changes in the mix of our earning assets or funding sources, and future asset/liability management decisions, all of which may have significant effects on our net interest income.

        The simulation analysis does not account for all factors that impact this analysis, including changes by management to mitigate the impact of interest rate changes or the impact a change in interest rates

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may have on our credit risk profile, loan prepayment estimates and spread relationships which can change regularly. In addition, the simulation analysis does not make any assumptions regarding loan fee income, which is a component of our net interest income and tends to increase our net interest margin. Management reviews the model assumptions for reasonableness on a quarterly basis.

        The following table presents as of September 30, 2013, forecasted net interest income and net interest margin for the next 12 months using a base market interest rate and the estimated change to the base scenario given immediate and sustained upward and downward movements in interest rates of 100, 200 and 300 basis points:

September 30, 2013 Interest Rate Scenario	Estimated Net Interest Income		Percentage Change From Base			Estimated Net Interest Margin			Estimated Net Interest Margin Change From Base
	(Dollars in millions)
Up 300 basis points	$	307.2		(1.7	)%		5.15	%		(0.09	)%
Up 200 basis points	$	305.3		(2.3	)%		5.12	%		(0.12	)%
Up 100 basis points	$	304.2		(2.7	)%		5.10	%		(0.14	)%
BASE CASE	$	312.6		—			5.24	%		—
Down 100 basis points	$	309.7		(0.9	)%		5.19	%		(0.05	)%
Down 200 basis points	$	307.4		(1.7	)%		5.15	%		(0.09	)%
Down 300 basis points	$	303.9		(2.8	)%		5.10	%		(0.14	)%

        The net interest income simulation model prepared as of September 30, 2013 suggests our balance sheet is liability sensitive. Liability sensitivity indicates that in a rising interest rate environment, our net interest margin would decrease. Due to the historically low market interest rates as of September 30, 2013 the "down" scenarios are not considered meaningful and are excluded from the following discussion. The liability sensitive profile is due mostly to the mix of fixed-rate loans to total loans in the loan portfolio relative to our amount of interest-bearing deposits that would reprice as interest rates change. Although $2.2 billion of the $4.4 billion of total loans in the portfolio have variable interest rate terms, only $459 million of those variable-rate loans would immediately reprice at September 30, 2013 under the modeled scenarios. Of the remaining variable-rate loans, $1.5 billion would not immediately reprice because the loans' fully indexed rates are below their floor rates. Of these $1.5 billion of loans at their floors, the fully indexed rates would rise off of the floors and reprice as follows:

Cumulative Amount of Loans		Rate Increase Needed to Reprice
(Dollars in millions)
$	867.7		100 bps
$	1,230.1		200 bps
$	1,543.4		300 bps

        An additional $255 million of hybrid ARM loans would not immediately reprice because the loans contain an initial fixed-rate period before they become adjustable. The cumulative amounts of hybrid ARM loans that would switch from being fixed-rate to floating-rate because the initial fixed- rate term would expire is approximately $94 million, $130 million, and $189 million in the next one, two, and three years, respectively.

        In comparing the September 30, 2013 simulation results to December 31, 2012, our profile has remained relatively unchanged while our overall estimated net interest income has increased for all scenarios. The increase in the simulated net interest income is primarily a result of higher interest income due to the higher average balance of the loan portfolio resulting from the FCAL acquisition.

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Market Value of Equity

        We measure the impact of market interest rate changes on the net present value of estimated cash flows from our assets, liabilities and off-balance sheet items, defined as the market value of equity, using a simulation model. This simulation model assesses the changes in the market value of our interest sensitive financial instruments that would occur in response to an instantaneous and sustained increase or decrease in market interest rates of 100, 200, and 300 basis points. This analysis assigns significant value to our noninterest-bearing deposit balances. The projections are by their nature forward looking and therefore inherently uncertain, and include various assumptions regarding cash flows and interest rates.

        This model is an interest rate risk management tool and the results are not necessarily an indication of our actual future results. Actual results may vary significantly from the results suggested by the market value of equity table. Loan prepayments and deposit attrition, changes in the mix of our earning assets or funding sources, and future asset/liability management decisions, among others, may vary significantly from our assumptions. The base case is determined by applying various current market discount rates to the estimated cash flows from the different types of assets, liabilities and off-balance sheet items existing at September 30, 2013.

        The following table shows the projected change in the market value of equity for the set of rate shocks presented as of September 30, 2013:

September 30, 2013 Interest Rate Scenario	Estimated Market Value		Dollar Change From Base			Percentage Change From Base			Percentage of Total Assets			Ratio of Estimated Market Value to Book Value
	(Dollars in millions)
Up 300 basis points	$	1,036.0	$	(62.0	)		(5.6	)%		15.7	%		126.9	%
Up 200 basis points	$	1,083.2	$	(14.8	)		(1.3	)%		16.4	%		132.7	%
Up 100 basis points	$	1,118.3	$	20.3			1.8	%		16.9	%		137.0	%
BASE CASE	$	1,098.0		—			—			16.6	%		134.5	%
Down 100 basis points	$	1,050.1	$	(48.0	)		(4.4	)%		15.9	%		128.6	%
Down 200 basis points	$	1,033.6	$	(64.4	)		(5.9	)%		15.6	%		126.6	%
Down 300 basis points	$	1,021.2	$	(76.8	)		(7.0	)%		15.4	%		125.1	%

        In comparing the September 30, 2013 simulation results to December 31, 2012, our base case estimated market value of equity has increased while the sensitivity of our overall profile has shifted to a more neutral profile. Base case market value of equity increased $327.3 million compared to December 31, 2012. The increase was due to the $227.2 million increase in book shareholders' equity (due primarily to the $242.3 million increase from the FCAL acquisition, offset partially by the $32.6 million decrease in accumulated other comprehensive income), and the $138.8 million increase in the fair value of deposits less the $39.2 million decrease in the fair value of loans resulting from the change in the market interest rates during the period.

        Our market value of equity profile is affected by the assumed floors in the Company's base lending rate and the significant value placed on the Company's noninterest-bearing deposits for purposes of this analysis. Static balances of noninterest-bearing deposits do not impact the net interest income simulation, while at the same time the value of these deposits increases substantially in the market value of equity model when market rates are assumed to rise.

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ITEM 3.    Quantitative and Qualitative Disclosure about Market Risk

        Please see the section above titled "Asset/Liability Management and Interest Rate Sensitivity" in "Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations" which provides an update to our quantitative and qualitative disclosure about market risk. This analysis should be read in conjunction with text under the caption "Quantitative and Qualitative Disclosure About Market Risk" in our Annual Report on Form 10-K for the year ended December 31, 2012, which text is incorporated herein by reference. Our analysis of market risk and market-sensitive financial information contains forward-looking statements and is subject to the disclosure at the beginning of Item 2 regarding such forward-looking information.

ITEM 4.    Controls and Procedures

        As of the end of the period covered by this report, an evaluation was carried out by the Company's management, with the participation of the Chief Executive Officer and the Chief Financial Officer, of the effectiveness of the Company's disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934). Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that, as of the end of the period covered by this report, these disclosure controls and procedures were effective.

        There have been no changes in the Company's internal control over financial reporting (as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934) during our most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.

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PART II—OTHER INFORMATION

ITEM 1.    Legal Proceedings

        In the ordinary course of our business, we are party to various legal actions, which we believe are incidental to the operation of our business. The outcome of such legal actions and the timing of ultimate resolution are inherently difficult to predict. In the opinion of management, based upon information currently available to us, any resulting liability, in addition to amounts already accrued, would not have a material adverse effect on the Company's financial statements or operations.

FCAL Merger-Related Litigation

        As set forth below, there are a number of litigation matters pending against FCB. On May 31, 2013, pursuant to the FCAL acquisition, FCAL merged with and into PacWest, and FCB merged with and into Pacific Western. Pursuant to the merger agreement executed between FCAL and PacWest on November 6, 2012, PacWest has assumed the defense of the litigation matters and would assume liability for the results in the event of an adverse result in the cases.

        Eleven lawsuits have been filed in the Superior Court of the State of California, County of Los Angeles against FCB, among others, by various former clients of political campaign and non-profit organization treasurer Kinde Durkee. The lawsuits are entitled (i) Wardlaw, et al. v. First California Bank, et al. (Case No. SC 114232), filed September 23, 2011; (ii) Lou Correa for State Senate, et al. v. First California Bank, et al. (Case No. BC 479872), filed February 29, 2012; (iii) Committee to Re-elect Lorreta Sanchez, et al. v. First California Bank, et al. (Case No. BC 479873), filed February 29, 2012, (iv) Holden for Assembly v. First California Bank, et al. (Case No. BC 489604), filed August 3, 2012; (v) Latino Diabetes Ass'n v. First California Bank, et al. (Case No. BC 489605), filed August 3, 2012; (vi) Jose Solorio Assembly Officeholder Committee, et al. v. First California Bank, et al. (Case No. 492855), filed September 27, 2012; (vii) Foster for Treasurer 2014, et al. v. First California Bank, et al. (Case No. BC 492878), filed September 27, 2012; (viii) Los Angeles County Democratic Central Committee, et al. v. First California Bank, et al. (Case No. BC 492854), filed September 27, 2012; (ix) National Popular Vote v. First California Bank, et al. (Case No. BC 501213), filed February 19, 2013; (x) Zine for City Council v. First California Bank, et al. (Case No. BC 504476), filed April 2, 2013; and (xi) Rothman v. First California Bank, et al. (Case No. BC 511180), filed June 5, 2013. Plaintiffs in each of the cases claim, among other things, that FCB aided and abetted a fraud and unlawful conversion by Ms. Durkee and/or her affiliated company of funds held in accounts at FCB. Based largely on the same alleged conduct, plaintiffs also assert claims for an alleged violation of California Business & Professions Code Section 17200 and for declaratory relief. Plaintiffs seek compensatory and punitive damages, as well as various forms of equitable and declaratory relief.

        Each of the cases is pending before the same judge, who is coordinating their progress. FCB has answered each of the complaints, and the parties are engaged in discovery. A trial date has been scheduled for August 13, 2014.

        On September 23, 2011, FCB filed a Complaint-in-Interpleader in the Superior Court of the State of California, County of Los Angeles (Case No. BC 470182), pursuant to which FCB interpleaded the sum of $2,539,049 as the amounts on deposit in accounts at FCB that were controlled by Ms. Durkee on behalf of the several hundred named defendants (the "Interpleader Action"). FCB seeks an order requiring the defendants to interplead and litigate their respective claims, discharging FCB from liability, and restraining proceedings or actions against FCB by the defendants with respect to those amounts. On December 6, 2011, the Interpleader Action was designated as complex and transferred to the Superior Court's complex litigation division. It has been related to the other pending actions that relate to the conduct of Ms. Durkee.

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        On June 18, 2012, FCB moved for summary judgment in the Interpleader Action. At hearings held in late 2012 and early 2013, the Superior Court entered summary judgment with respect to a majority of the accounts at issue. Those sums have been paid by the Superior Court to the former accountholders.

        Since September 30, 2013, the 11 lawsuits has grown to 14 lawsuits. The allegations in the three new suits were filed by former clients of Kinde Durkee and each new suit makes claims identical to the original 11 lawsuits. The parties participated in a mediation on October 16, 2013. The mediation was unsuccessful and the plaintiffs made a demand which was not reasonable. At the October 30, 2013 status conference, the judge ordered the parties to meet and confer regarding a framework for trying the cases. The Court set a further status conference for December 19, 2013.

        We continue to believe we have made the appropriate accrual for any liabilities that may arise out of the Kinde Durkee litigation matters, but we are unable to determine with certainty whether there will be any material impact on the Company's financial statements or operations.

CapitalSource Merger-Related Litigation

        Between July 24, 2013 and September 19, 2013, 11 putative stockholder class action lawsuits (the "Merger Litigations") were filed against PacWest and certain other defendants in connection with PacWest entering into the CapitalSource Merger Agreement in which PacWest agreed to acquire CapitalSource. The CapitalSource Merger Agreement was publicly announced on July 22, 2013. Five of the 11 actions were filed in Superior Court of California, Los Angeles County: (1) Engel v. CapitalSource, Inc. et al., Case No. BC516267, filed on July 24, 2013; (2) Miller v. Fremder et al., Case No. BC516590, filed on July 29, 2013; (3) Basu v. CapitalSource, Inc. et al., Case No. BC516775, filed on July 31, 2013; (4) Holliday v. PacWest Bancorp et al., Case No. BC517209, filed on August 5, 2013 and (5) Iron Workers Mid-South Pension Fund v. CapitalSource Inc. et al., Case No. BC517698, filed on August 8, 2013 (collectively, the "California Actions"). The other six actions were filed in the Court of Chancery of the State of Delaware: (1) Fosket v. Byrnes et al., Case No. 8765, filed on August 1, 2013; (2) Bennett v. CapitalSource, Inc. et al., Case No. 8770, filed on August 2, 2013; (3) Chalfant v. CapitalSource et al., Case No. 8777, filed on August 6, 2013; (4) Oliveira v. CapitalSource, Inc. et al., Case No. 8779, filed on August 7, 2013; (5) Desai v. CapitalSource, Inc. et al., Case No. 8804, filed on August 13, 2013; and (6) Fattore v. CapitalSource, Inc. et al., Case No. 8927, filed on September 19, 2013 (collectively, the "Delaware Actions").

        On August 15, 2013, the Delaware Actions were consolidated into a single action, captioned In re CapitalSource Inc. Stockholder Litigation, Consol. C.A. No. 8765-CS, and assigned to Chancellor Leo E. Strine. On September 25, 2013, plaintiffs in the Delaware Actions filed a Verified Consolidated Amended Class Action Complaint (the "Delaware Consolidated Complaint"). On September 17, 2013, the California Actions were consolidated into a single action, captioned In re CapitalSource Inc. Shareholder Litigation, Lead Case No. BC516267, and assigned to Judge Elihu M. Berle. On October 2, 2013, plaintiffs in the California Actions filed an Amended Consolidated Complaint (the "California Consolidated Complaint").

        The Delaware Consolidated Complaint and the California Consolidated Complaint each allege that the members of the CapitalSource board of directors breached their fiduciary duties to CapitalSource stockholders by approving the proposed merger for inadequate consideration; approving the transaction in order to obtain benefits not equally shared by other CapitalSource stockholders; entering into the merger agreement containing preclusive deal protection devices; and failing to take steps to maximize the value to be paid to the CapitalSource stockholders. The Delaware Consolidated Complaint and the California Consolidated Complaint also each allege claims against CapitalSource and PacWest for aiding and abetting these alleged breaches of fiduciary duties. Plaintiffs in these actions seek, among other things, declaratory and injunctive relief concerning the alleged breaches of fiduciary duties,

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injunctive relief prohibiting consummation of the merger, rescission, an accounting by defendants, damages and attorneys' fees and costs, and other and further relief. The judge in the Delaware Actions ruled on October 23, 2013, that discovery would proceed in the Delaware Actions and that it would be shared with the plaintiffs in the California Actions and that the California Actions would be stayed while that process takes place. Thereafter, on October 28, 2013, the California Actions' plaintiffs stipulated in the California Actions that they would participate in the discovery process in the Delaware Actions and the administrative stay in the California Actions will remain in place unless and until the Delaware Actions are abandoned. At this stage, it is not possible to predict the outcome of the proceedings or their impact on CapitalSource or PacWest.

ITEM 2.    Unregistered Sales of Equity Securities and Use of Proceeds

(c)   Issuer Repurchases of Common Stock

        The following table presents stock purchases made during the third quarter of 2013:

Purchase Dates	Total Number of Shares Purchased(1)		Average Price Paid Per Share
July 1 - July 31, 2013		—	$	—
August 1 - August 31, 2013		4,223		35.02
September 1 - September 30, 2013		—		—
Total		4,223	$	35.02

(1)

Shares repurchased pursuant to net settlement by employees, in satisfaction of financial obligations incurred through the vesting of the Company's restricted stock.

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ITEM 6.   Exhibits

Exhibit Number		Description
	2.1	Agreement and Plan of Merger dated July 22, 2013 between PacWest Bancorp and CapitalSource Inc. (Exhibit 2.1 to Form 8-K filed on July 26, 2013 and incorporated herein by reference).
	3.1	Certificate of Incorporation, as amended, of PacWest Bancorp, a Delaware corporation (Exhibit 3.1 to Form 8-K filed on May 14, 2008 and incorporated herein by this reference).
	3.2	Certificate of Amendment, dated May 14, 2010, to Certificate of Incorporation of PacWest Bancorp (Exhibit 3.1 to Form 8-K filed on May 14, 2010 and incorporated herein by this reference).
	3.3	Bylaws of PacWest Bancorp, a Delaware corporation, dated April 22, 2008 (Exhibit 3.2 to Form 8-K filed on May 14, 2008 and incorporated herein by this reference).
	31.1	Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer.
	31.2	Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer.
	32.1	Section 1350 Certification of Chief Executive Officer.
	32.2	Section 1350 Certification of Chief Financial Officer.
	101	Interactive data files pursuant to Rule 405 of Regulation S-T: (i) the Condensed Consolidated Balance Sheets as of September 30, 2013 and December 31, 2012, (ii) the Condensed Consolidated Statements of Earnings for the three months ended September 30, 2013, June 30, 2013, and September 30, 2012 and the nine months ended September 30, 2013 and 2012, (iii) the Condensed Consolidated Statements of Comprehensive Income for the three months ended September 30, 2013, June 30, 2013, and September 30, 2012 and the nine months ended September 30, 2013 and 2012, (iv) the Condensed Consolidated Statement of Changes in Stockholders' Equity for the nine months ended September 30, 2013, (v) the Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2013 and 2012, and (vi) the Notes to Condensed Consolidated Financial Statements.

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SIGNATURES

        Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	PACWEST BANCORP
Date: November 8, 2013	/s/ VICTOR R. SANTORO Victor R. Santoro Executive Vice President and Chief Financial Officer

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EX-31.1

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Exhibit 31.1

Certification
Pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002

I, Matthew P. Wagner, certify that:

1.

I have reviewed this report on Form 10-Q for the quarterly period ended September 30, 2013 of PacWest Bancorp;

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.

The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

(c)

Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)

Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.

The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: November 8, 2013 /s/ MATTHEW P. WAGNER
Matthew P. Wagner
Chief Executive Officer

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Exhibit 31.1

Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

EX-31.2

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Exhibit 31.2

Certification
Pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002

I, Victor R. Santoro, certify that:

1.

I have reviewed this report on Form 10-Q for the quarterly period ended September 30, 2013 of PacWest Bancorp;

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.

The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

(c)

Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)

Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.

The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: November 8, 2013 /s/ VICTOR R. SANTORO
Victor R. Santoro
Executive Vice President and Chief Financial Officer

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Exhibit 31.2

Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

EX-32.1

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Exhibit 32.1

Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted
Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002

        Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350), the undersigned officer of PacWest Bancorp (the "Company") hereby certifies that the Company's Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2013 (the "Report") fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934 and that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: November 8, 2013	/s/ MATTHEW P. WAGNER
	Name:	Matthew P. Wagner
	Title:	Chief Executive Officer

        The foregoing certification is being furnished solely pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350) and is not being filed as part of the Report or as a separate disclosure document.

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Exhibit 32.1

Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

EX-32.2

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Exhibit 32.2

Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted
Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002

        Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350), the undersigned officer of PacWest Bancorp (the "Company") hereby certifies that the Company's Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2013 (the "Report") fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934 and that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: November 8, 2013	/s/ VICTOR R. SANTORO
	Name:	Victor R. Santoro
	Title:	Chief Financial Officer

        The foregoing certification is being furnished solely pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350) and is not being filed as part of the Report or as a separate disclosure document.

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Exhibit 32.2

Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

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BORROWINGS, SUBORDINATED DEBENTURES AND BROKERED DEPOSITS

9 Months Ended

Sep. 30, 2013

BORROWINGS, SUBORDINATED DEBENTURES AND BROKERED DEPOSITS

BORROWINGS, SUBORDINATED DEBENTURES AND BROKERED DEPOSITS

NOTE 9—BORROWINGS, SUBORDINATED DEBENTURES AND BROKERED DEPOSITS

• Borrowings

        As of September 30, 2013 and December 31, 2012, our borrowings consisted of non-recourse debt relating to the payment stream of certain leases sold to third parties. The weighted average interest rate on this debt was 6.30% and 6.28% at September 30, 2013 and December 31, 2012, respectively. The debt is secured by the equipment in the leases and all interest rates are fixed. As of September 30, 2013, the weighted average maturity of the debt was 2.0 years.

        As of September 30, 2013 and December 31, 2012, there were no outstanding FHLB advances. Our aggregate remaining borrowing capacity under the FHLB secured borrowing lines was $1.3 billion at September 30, 2013. As of September 30, 2013, our FHLB advances facility was secured by: (1) a blanket lien on certain qualifying loans in our loan portfolio, which were not pledged to the Federal Reserve Bank of San Francisco ("FRBSF"), and (2) available-for-sale securities with a carrying value of $11.5 million. Additionally, the Bank had secured borrowing capacity from the FRBSF of $467.8 million at September 30, 2013, secured by $589.9 million of certain qualifying loans. As of September 30, 2013, the Bank also had unsecured lines of credit of $80.0 million with correspondent banks for the purchase of overnight funds; these lines are subject to availability of funds.

• Subordinated Debentures

        The following table summarizes the terms of each issuance of the subordinated debentures outstanding as of the dates indicated:

	September 30, 2013						December 31, 2012
												Date Issued		Maturity Date			Next Reset Date
Series	Amount			Rate(1)			Amount		Rate(2)							Rate Index
	(Dollars in thousands)
Trust V	$	10,310			3.35	%	$	10,310		3.41	%		8/15/03		9/17/33	3 month LIBOR + 3.10		12/13/13
Trust VI		10,310			3.30	%		10,310		3.36	%		9/3/03		9/15/33	3 month LIBOR + 3.05		12/12/13
Trust CII		5,155			3.20	%		5,155		3.26	%		9/17/03		9/17/33	3 month LIBOR + 2.95		12/13/13
Trust VII		61,856			2.99	%		61,856		3.05	%		2/5/04		4/23/34	3 month LIBOR + 2.75		1/28/14
Trust CIII		20,619			1.94	%		20,619		2.00	%		8/15/05		9/15/35	3 month LIBOR + 1.69		12/12/13
Trust FCCI(3)		16,495			1.85	%		—		—			1/25/07		3/15/37	3 month LIBOR + 1.60		12/12/13
Trust FCBI(3)		10,310			1.80	%		—		—			9/30/05		12/15/35	3 month LIBOR + 1.55		12/12/13
Gross subordinated debentures		135,055						108,250
Unamortized discount(4)		(2,555	)					—
Net subordinated debentures	$	132,500					$	108,250

(1)

As of October 28, 2013.

(2)

As of January 28, 2013.

(3)

Acquired in the FCAL acquisition.

(4)

Amount represents the fair value adjustment on trusts acquired in the FCAL acquisition.

        Interest payments made by the Company on subordinated debentures are considered dividend payments under the Board of Governors of the Federal Reserve System ("FRB") regulations. Bank holding companies, such as PacWest Bancorp, are required to notify the FRB prior to declaring and paying a dividend to stockholders during any period in which quarterly and/or cumulative twelve-month net earnings are insufficient to fund the dividend amount, among other requirements. We are not required to make such notification to the FRB.

• Debt Termination Expense—FHLB Advances and Subordinated Debentures

        In March 2012, the Company incurred $22.6 million in debt termination expense related to the repayment of $225.0 million in fixed-rate term FHLB advances and the early redemption of $18.6 million in fixed-rate subordinated debentures. The Company used a combination of excess cash and collateralized overnight FHLB advances to repay these debt instruments.

• Brokered Deposits

        Brokered time deposits totaled $51.1 million at September 30, 2013, and $37.7 million at December 31, 2012, all of which were part of the CDARS program. The CDARS program represents deposits that are participated with other FDIC insured financial institutions as a means to provide FDIC deposit insurance coverage for the full amount of our customers' deposits. In addition, liabilities from discontinued operations at September 30, 2013 included $104.8 million of noninterest-bearing brokered deposits.

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LOANS AND LEASES (Details 5) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2013	Dec. 31, 2012	Sep. 30, 2012
Credit risk rating categories for non-covered loans by portfolio segment and class
Total gross loans and leases	$ 4,384,312	$ 3,592,832	$ 3,651,181
Real estate mortgage
Credit risk rating categories for non-covered loans by portfolio segment and class
Total gross loans and leases	2,971,381	2,422,570	1,950,777
Real estate construction
Credit risk rating categories for non-covered loans by portfolio segment and class
Total gross loans and leases	201,524	154,604	152,748
Commercial
Credit risk rating categories for non-covered loans by portfolio segment and class
Total gross loans and leases	929,434	800,959
Leases
Credit risk rating categories for non-covered loans by portfolio segment and class
Total gross loans and leases	235,791	174,373
Consumer
Credit risk rating categories for non-covered loans by portfolio segment and class
Total gross loans and leases	34,153	23,085
Foreign
Credit risk rating categories for non-covered loans by portfolio segment and class
Total gross loans and leases	12,029	17,241
Non-PCI Loans
Credit risk rating categories for non-covered loans by portfolio segment and class
Total gross loans and leases	3,951,555	3,074,947	3,080,068
Non-PCI Loans | Real estate mortgage
Credit risk rating categories for non-covered loans by portfolio segment and class
Total gross loans and leases	2,551,781	1,938,513	1,950,777
Non-PCI Loans | Hospitality
Credit risk rating categories for non-covered loans by portfolio segment and class
Total gross loans and leases	188,073	181,144
Non-PCI Loans | SBA 504
Credit risk rating categories for non-covered loans by portfolio segment and class
Total gross loans and leases	48,126	54,158
Non-PCI Loans | Other
Credit risk rating categories for non-covered loans by portfolio segment and class
Total gross loans and leases	2,315,582	1,703,211
Non-PCI Loans | Real estate construction
Credit risk rating categories for non-covered loans by portfolio segment and class
Total gross loans and leases	189,957	129,959	152,748
Non-PCI Loans | Residential
Credit risk rating categories for non-covered loans by portfolio segment and class
Total gross loans and leases	62,154	48,629
Non-PCI Loans | Commercial
Credit risk rating categories for non-covered loans by portfolio segment and class
Total gross loans and leases	127,803	81,330
Non-PCI Loans | Commercial
Credit risk rating categories for non-covered loans by portfolio segment and class
Total gross loans and leases	928,169	791,888	777,365
Non-PCI Loans | Collateralized
Credit risk rating categories for non-covered loans by portfolio segment and class
Total gross loans and leases	562,493	457,095
Non-PCI Loans | Unsecured
Credit risk rating categories for non-covered loans by portfolio segment and class
Total gross loans and leases	106,226	70,038
Non-PCI Loans | Asset-based
Credit risk rating categories for non-covered loans by portfolio segment and class
Total gross loans and leases	231,898	239,430
Non-PCI Loans | SBA 7(a)
Credit risk rating categories for non-covered loans by portfolio segment and class
Total gross loans and leases	27,552	25,325
Non-PCI Loans | Leases
Credit risk rating categories for non-covered loans by portfolio segment and class
Total gross loans and leases	235,791	174,373	161,934
Non-PCI Loans | Consumer
Credit risk rating categories for non-covered loans by portfolio segment and class
Total gross loans and leases	33,828	22,973	21,118
Non-PCI Loans | Foreign
Credit risk rating categories for non-covered loans by portfolio segment and class
Total gross loans and leases	12,029	17,241	16,126
Non-PCI Loans | Nonclassified
Credit risk rating categories for non-covered loans by portfolio segment and class
Total gross loans and leases	3,820,764	2,970,893
Non-PCI Loans | Nonclassified | Real estate mortgage
Credit risk rating categories for non-covered loans by portfolio segment and class
Total gross loans and leases	2,472,905	1,870,307
Non-PCI Loans | Nonclassified | Hospitality
Credit risk rating categories for non-covered loans by portfolio segment and class
Total gross loans and leases	182,419	168,489
Non-PCI Loans | Nonclassified | SBA 504
Credit risk rating categories for non-covered loans by portfolio segment and class
Total gross loans and leases	42,621	48,372
Non-PCI Loans | Nonclassified | Other
Credit risk rating categories for non-covered loans by portfolio segment and class
Total gross loans and leases	2,247,865	1,653,446
Non-PCI Loans | Nonclassified | Real estate construction
Credit risk rating categories for non-covered loans by portfolio segment and class
Total gross loans and leases	181,611	124,094
Non-PCI Loans | Nonclassified | Residential
Credit risk rating categories for non-covered loans by portfolio segment and class
Total gross loans and leases	60,390	46,591
Non-PCI Loans | Nonclassified | Commercial
Credit risk rating categories for non-covered loans by portfolio segment and class
Total gross loans and leases	121,221	77,503
Non-PCI Loans | Nonclassified | Commercial
Credit risk rating categories for non-covered loans by portfolio segment and class
Total gross loans and leases	889,583	763,389
Non-PCI Loans | Nonclassified | Collateralized
Credit risk rating categories for non-covered loans by portfolio segment and class
Total gross loans and leases	538,101	442,293
Non-PCI Loans | Nonclassified | Unsecured
Credit risk rating categories for non-covered loans by portfolio segment and class
Total gross loans and leases	104,608	67,133
Non-PCI Loans | Nonclassified | Asset-based
Credit risk rating categories for non-covered loans by portfolio segment and class
Total gross loans and leases	225,110	235,075
Non-PCI Loans | Nonclassified | SBA 7(a)
Credit risk rating categories for non-covered loans by portfolio segment and class
Total gross loans and leases	21,764	18,888
Non-PCI Loans | Nonclassified | Leases
Credit risk rating categories for non-covered loans by portfolio segment and class
Total gross loans and leases	235,547	174,129
Non-PCI Loans | Nonclassified | Consumer
Credit risk rating categories for non-covered loans by portfolio segment and class
Total gross loans and leases	29,089	21,733
Non-PCI Loans | Nonclassified | Foreign
Credit risk rating categories for non-covered loans by portfolio segment and class
Total gross loans and leases	12,029	17,241
Non-PCI Loans | Classified
Credit risk rating categories for non-covered loans by portfolio segment and class
Total gross loans and leases	130,791	104,054
Non-PCI Loans | Classified | Real estate mortgage
Credit risk rating categories for non-covered loans by portfolio segment and class
Total gross loans and leases	78,876	68,206
Non-PCI Loans | Classified | Hospitality
Credit risk rating categories for non-covered loans by portfolio segment and class
Total gross loans and leases	5,654	12,655
Non-PCI Loans | Classified | SBA 504
Credit risk rating categories for non-covered loans by portfolio segment and class
Total gross loans and leases	5,505	5,786
Non-PCI Loans | Classified | Other
Credit risk rating categories for non-covered loans by portfolio segment and class
Total gross loans and leases	67,717	49,765
Non-PCI Loans | Classified | Real estate construction
Credit risk rating categories for non-covered loans by portfolio segment and class
Total gross loans and leases	8,346	5,865
Non-PCI Loans | Classified | Residential
Credit risk rating categories for non-covered loans by portfolio segment and class
Total gross loans and leases	1,764	2,038
Non-PCI Loans | Classified | Commercial
Credit risk rating categories for non-covered loans by portfolio segment and class
Total gross loans and leases	6,582	3,827
Non-PCI Loans | Classified | Commercial
Credit risk rating categories for non-covered loans by portfolio segment and class
Total gross loans and leases	38,586	28,499
Non-PCI Loans | Classified | Collateralized
Credit risk rating categories for non-covered loans by portfolio segment and class
Total gross loans and leases	24,392	14,802
Non-PCI Loans | Classified | Unsecured
Credit risk rating categories for non-covered loans by portfolio segment and class
Total gross loans and leases	1,618	2,905
Non-PCI Loans | Classified | Asset-based
Credit risk rating categories for non-covered loans by portfolio segment and class
Total gross loans and leases	6,788	4,355
Non-PCI Loans | Classified | SBA 7(a)
Credit risk rating categories for non-covered loans by portfolio segment and class
Total gross loans and leases	5,788	6,437
Non-PCI Loans | Classified | Leases
Credit risk rating categories for non-covered loans by portfolio segment and class
Total gross loans and leases	244	244
Non-PCI Loans | Classified | Consumer
Credit risk rating categories for non-covered loans by portfolio segment and class
Total gross loans and leases	$ 4,739	$ 1,240

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CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended			9 Months Ended
	Sep. 30, 2013	Jun. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Interest income:
Loans and leases	$ 75,196	$ 63,168	$ 66,711	$ 199,374	$ 194,775
Investment securities	9,871	8,414	8,346	26,501	27,484
Deposits in financial institutions	91	49	66	183	154
Total interest income	85,158	71,631	75,123	226,058	222,413
Interest expense:
Deposits	1,692	2,077	3,292	6,418	10,232
Borrowings	108	199	210	451	2,428
Subordinated debentures	1,069	882	850	2,734	2,889
Total interest expense	2,869	3,158	4,352	9,603	15,549
Net interest income	82,289	68,473	70,771	216,455	206,864
Negative provision for credit losses	(4,167)	(1,842)	(2,141)	(2,872)	(8,486)
Net interest income after negative provision for credit losses	86,456	70,315	72,912	219,327	215,350
Noninterest income:
Service charges on deposit accounts	2,938	2,767	3,108	8,568	9,789
Other commissions and fees	2,204	2,154	2,123	6,291	6,101
Gain on sale of leases	604	279	132	1,108	1,525
Gain on sale of securities				409
Acquisition-related securities gain	5,222			5,222
Other-than-temporary impairment loss on covered security					(1,115)
Increase in cash surrender value of life insurance	62	221	304	716	964
FDIC loss sharing expense, net	(7,032)	(5,410)	(367)	(15,579)	(4,048)
Other income	1,129	192	382	1,435	599
Total noninterest income	5,127	203	5,682	8,170	13,815
Noninterest expense:
Compensation	27,963	26,057	23,812	79,370	71,698
Occupancy	7,828	7,480	6,964	21,906	21,340
Data processing	2,590	2,455	2,310	7,278	6,848
Other professional services	2,830	2,240	2,019	7,167	6,167
Business development	756	798	635	2,290	1,854
Communications	828	622	652	2,063	1,886
Insurance and assessments	1,496	1,267	1,398	4,024	4,014
Non-covered other real estate owned, net	(88)	80	1,883	305	3,834
Covered other real estate owned, net	(332)	(94)	4,290	(1,239)	7,242
Intangible asset amortization	1,512	1,284	1,678	3,972	5,150
Acquisition and integration	5,450	17,997	2,101	24,139	2,997
Debt termination					22,598
Other expense	5,367	4,030	3,915	13,324	12,509
Total noninterest expense	56,200	64,216	51,657	164,599	168,137
Earnings from continuing operations before income taxes	35,383	6,302	26,937	62,898	61,028
Income tax expense	(11,243)	(1,906)	(10,849)	(20,868)	(24,119)
Net earnings from continuing operations	24,140	4,396	16,088	42,030	36,909
Earnings (loss) from discontinued operations before income taxes	39	(81)		(42)
Income tax (expense) benefit	(16)	34		18
Net earnings (loss) from discontinued operations	23	(47)		(24)
Net earnings	$ 24,163	$ 4,349	$ 16,088	$ 42,006	$ 36,909
Basic earnings per share:
Net earnings from continuing operations (in dollars per share)	$ 0.53	$ 0.11	$ 0.43	$ 1.03	$ 1.00
Net earnings (in dollars per share)	$ 0.53	$ 0.11	$ 0.43	$ 1.03	$ 1.00
Diluted earnings per share:
Net earnings from continuing operations (in dollars per share)	$ 0.53	$ 0.11	$ 0.43	$ 1.03	$ 1.00
Net earnings (in dollars per share)	$ 0.53	$ 0.11	$ 0.43	$ 1.03	$ 1.00
Dividends declared per share (in dollars per share)	$ 0.25	$ 0.25	$ 0.18	$ 0.75	$ 0.54

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DISCONTINUED OPERATIONS

9 Months Ended

Sep. 30, 2013

DISCONTINUED OPERATIONS

DISCONTINUED OPERATIONS

NOTE 2—DISCONTINUED OPERATIONS

        In connection with the acquisition of FCAL, we acquired Electronic Payment Services ("EPS"), a division of the Bank that is being discontinued. Accordingly, all income and expense related to EPS have been removed from continuing operations and are included in the condensed consolidated statements of earnings under the caption "Earnings (loss) from discontinued operations." For the three months ended September 30, 2013, revenues (net interest income plus noninterest income) and pre-tax income for the EPS division were $1.1 million and $39,000, respectively. For the period from acquisition date to September 30, 2013, revenues and pre-tax loss for the EPS division were $1.6 million and $42,000, respectively. Liabilities of the EPS division, which consist primarily of noninterest-bearing deposits, are included in the condensed consolidated balance sheets under the caption "Discontinued operations." Included in the EPS noninterest-bearing deposits are $104.8 million of brokered deposits. For segment reporting purposes, the EPS division is included in our Banking Segment.

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RELATED PARTY TRANSACTION

9 Months Ended

Sep. 30, 2013

RELATED PARTY TRANSACTION

RELATED PARTY TRANSACTION

NOTE 16—RELATED PARTY TRANSACTION

        In connection with the FCAL acquisition on May 31, 2013, the Bank paid an advisory fee of $1.3 million to Castle Creek Financial LLC ("Castle Creek Financial"). Such fee has been included in acquisition and integration costs for the nine months ended September 30, 2013 on the condensed consolidated statements of earnings. Castle Creek Financial is an affiliate of Castle Creek Capital LLC, which is controlled by the Company's chairman.

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FAIR VALUE MEASUREMENTS (Details 3) (USD $) In Thousands, unless otherwise specified	3 Months Ended	9 Months Ended
	Sep. 30, 2013	Sep. 30, 2013
Assets measured and recorded at fair value on a recurring and nonrecurring basis
Total gain (loss) on assets measured on a nonrecurring basis	$ (1,253)	$ (3,122)
Non-covered other real estate owned
Assets measured and recorded at fair value on a recurring and nonrecurring basis
Total gain (loss) on assets measured on a nonrecurring basis	(643)	(643)
Covered other real estate owned
Assets measured and recorded at fair value on a recurring and nonrecurring basis
Total gain (loss) on assets measured on a nonrecurring basis	(65)	(69)
Non-PCI impaired loans
Assets measured and recorded at fair value on a recurring and nonrecurring basis
Total gain (loss) on assets measured on a nonrecurring basis	(545)	(2,422)
SBA loan servicing asset
Assets measured and recorded at fair value on a recurring and nonrecurring basis
Total gain (loss) on assets measured on a nonrecurring basis		12
Nonrecurring basis | Total
Assets measured and recorded at fair value on a recurring and nonrecurring basis
Assets at fair value	83,513	83,513
Nonrecurring basis | Total | Non-covered other real estate owned
Assets measured and recorded at fair value on a recurring and nonrecurring basis
Assets at fair value	7,084	7,084
Nonrecurring basis | Total | Covered other real estate owned
Assets measured and recorded at fair value on a recurring and nonrecurring basis
Assets at fair value	141	141
Nonrecurring basis | Total | Non-PCI impaired loans
Assets measured and recorded at fair value on a recurring and nonrecurring basis
Assets at fair value	75,435	75,435
Nonrecurring basis | Total | SBA loan servicing asset
Assets measured and recorded at fair value on a recurring and nonrecurring basis
Assets at fair value	853	853
Nonrecurring basis | Level 2
Assets measured and recorded at fair value on a recurring and nonrecurring basis
Assets at fair value	8,270	8,270
Nonrecurring basis | Level 2 | Non-covered other real estate owned
Assets measured and recorded at fair value on a recurring and nonrecurring basis
Assets at fair value	7,084	7,084
Nonrecurring basis | Level 2 | Covered other real estate owned
Assets measured and recorded at fair value on a recurring and nonrecurring basis
Assets at fair value	26	26
Nonrecurring basis | Level 2 | Non-PCI impaired loans
Assets measured and recorded at fair value on a recurring and nonrecurring basis
Assets at fair value	1,160	1,160
Nonrecurring basis | Level 3
Assets measured and recorded at fair value on a recurring and nonrecurring basis
Assets at fair value	75,243	75,243
Nonrecurring basis | Level 3 | Covered other real estate owned
Assets measured and recorded at fair value on a recurring and nonrecurring basis
Assets at fair value	115	115
Nonrecurring basis | Level 3 | Non-PCI impaired loans
Assets measured and recorded at fair value on a recurring and nonrecurring basis
Assets at fair value	74,275	74,275
Nonrecurring basis | Level 3 | SBA loan servicing asset
Assets measured and recorded at fair value on a recurring and nonrecurring basis
Assets at fair value	$ 853	$ 853

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LOANS AND LEASES (Details 8) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012	Dec. 31, 2012
Impaired loans and leases by portfolio segment and class
Nonaccrual Loans/Leases	$ 50,845		$ 50,845		$ 41,762
Performing Restructured Loans	80,237		80,237		106,288
Loans and leases recorded investment	131,082		131,082		148,050
Real estate mortgage
Impaired loans and leases by portfolio segment and class
Nonaccrual Loans/Leases	24,419		24,419		26,475
Performing Restructured Loans	65,910		65,910		80,723
Loans and leases recorded investment	90,329		90,329		107,198
Real estate construction
Impaired loans and leases by portfolio segment and class
Nonaccrual Loans/Leases	3,683		3,683		3,772
Performing Restructured Loans	11,195		11,195		21,678
Loans and leases recorded investment	14,878		14,878		25,450
Commercial
Impaired loans and leases by portfolio segment and class
Nonaccrual Loans/Leases	21,905		21,905		10,846
Performing Restructured Loans	2,934		2,934		3,684
Loans and leases recorded investment	24,839		24,839		14,530
Leases
Impaired loans and leases by portfolio segment and class
Nonaccrual Loans/Leases	244		244		244
Loans and leases recorded investment	244		244		244
Consumer
Impaired loans and leases by portfolio segment and class
Nonaccrual Loans/Leases	594		594		425
Performing Restructured Loans	198		198		203
Loans and leases recorded investment	792		792		628
Non-PCI Loans
Impaired loans and leases by portfolio segment and class
Loans and leases recorded investment	131,082		131,082		148,050
Loans and leases unpaid principal balance	161,204		161,204		163,815
Loans and leases related allowance	9,715		9,715		12,988
Loans Weighted Average Recorded Investment	122,921	144,921	107,797	135,842
Loans Interest Income Recognized	1,259	1,399	2,801	3,595
Non-PCI Loans | Real estate mortgage
Impaired loans and leases by portfolio segment and class
Loans and leases recorded investment	90,329		90,329		107,198
Loans and leases unpaid principal balance	105,902		105,902		114,836
Loans and leases related allowance	3,225		3,225		7,827
Loans Weighted Average Recorded Investment	86,161	94,390	79,373	87,114
Loans Interest Income Recognized	1,023	1,066	2,344	2,648
Non-PCI Loans | Hospitality
Impaired loans and leases by portfolio segment and class
Loans and leases with an allowance recorded, recorded investment	8,770		8,770		8,954
Loans With An Allowance Recorded, Unpaid Principal Balance	9,611		9,611		9,640
Loans and leases related allowance	319		319		2,396
Loans With An Allowance Recorded, Weighted Average Recorded Investment	8,770	9,049	8,770	9,049
Loans With An Allowance Recorded, Interest Income Recognized	109	21	355	57
Non-PCI Loans | SBA 504
Impaired loans and leases by portfolio segment and class
Loans and leases with an allowance recorded, recorded investment	1,649		1,649		1,676
Loans and leases with no related allowance recorded, recorded investment	2,791		2,791		2,982
Loans With An Allowance Recorded, Unpaid Principal Balance	1,649		1,649		1,676
Loans and leases with no related allowance recorded, unpaid principal balance	3,785		3,785		3,755
Loans and leases related allowance	231		231		324
Loans With An Allowance Recorded, Weighted Average Recorded Investment	1,649	927	1,649	545
Loans With No Related Allowance Recorded, Weighted Average Recorded Investment	2,791	1,330	2,727	1,330
Loans With An Allowance Recorded, Interest Income Recognized	23	25	67	17
Non-PCI Loans | Other
Impaired loans and leases by portfolio segment and class
Loans and leases with an allowance recorded, recorded investment	50,029		50,029		58,364
Loans and leases with no related allowance recorded, recorded investment	27,090		27,090		35,222
Loans With An Allowance Recorded, Unpaid Principal Balance	50,164		50,164		60,262
Loans and leases with no related allowance recorded, unpaid principal balance	40,693		40,693		39,503
Loans and leases related allowance	2,675		2,675		5,107
Loans With An Allowance Recorded, Weighted Average Recorded Investment	47,411	30,884	46,401	27,749
Loans With No Related Allowance Recorded, Weighted Average Recorded Investment	25,540	52,200	19,826	48,441
Loans With An Allowance Recorded, Interest Income Recognized	481	443	1,400	886
Loans With No Related Allowance Recorded, Interest Income Recognized	410	577	522	1,688
Non-PCI Loans | Real estate construction
Impaired loans and leases by portfolio segment and class
Loans and leases recorded investment	14,878		14,878		25,450
Loans and leases unpaid principal balance	19,326		19,326		29,138
Loans and leases related allowance	103		103		371
Loans Weighted Average Recorded Investment	14,878	31,792	14,046	31,042
Loans Interest Income Recognized	186	262	337	739
Non-PCI Loans | Residential
Impaired loans and leases by portfolio segment and class
Loans and leases with an allowance recorded, recorded investment	391		391		1,303
Loans and leases with no related allowance recorded, recorded investment	435		435
Loans With An Allowance Recorded, Unpaid Principal Balance	391		391		1,330
Loans and leases with no related allowance recorded, unpaid principal balance	471		471
Loans and leases related allowance	82		82		165
Loans With An Allowance Recorded, Weighted Average Recorded Investment	391	1,283	391	1,283
Loans With No Related Allowance Recorded, Weighted Average Recorded Investment	435	753	435	753
Loans With An Allowance Recorded, Interest Income Recognized		3		7
Loans With No Related Allowance Recorded, Interest Income Recognized		16		49
Non-PCI Loans | Commercial
Impaired loans and leases by portfolio segment and class
Loans and leases with an allowance recorded, recorded investment	8,541		8,541		6,723
Loans and leases with no related allowance recorded, recorded investment	5,511		5,511		17,424
Loans With An Allowance Recorded, Unpaid Principal Balance	8,541		8,541		6,723
Loans and leases with no related allowance recorded, unpaid principal balance	9,923		9,923		21,085
Loans and leases related allowance	21		21		206
Loans With An Allowance Recorded, Weighted Average Recorded Investment	8,541	18,408	8,541	18,408
Loans With No Related Allowance Recorded, Weighted Average Recorded Investment	5,511	11,348	4,679	10,598
Loans With An Allowance Recorded, Interest Income Recognized	88	146	268	407
Loans With No Related Allowance Recorded, Interest Income Recognized	98	97	69	276
Non-PCI Loans | Commercial
Impaired loans and leases by portfolio segment and class
Loans and leases recorded investment	24,839		24,839		14,530
Loans and leases unpaid principal balance	34,784		34,784		18,858
Loans and leases related allowance	6,147		6,147		4,525
Loans Weighted Average Recorded Investment	20,961	17,756	13,523	16,911
Loans Interest Income Recognized	47	68	112	204
Non-PCI Loans | Collateralized
Impaired loans and leases by portfolio segment and class
Loans and leases with an allowance recorded, recorded investment	4,483		4,483		2,477
Loans and leases with no related allowance recorded, recorded investment	11,813		11,813		3,657
Loans With An Allowance Recorded, Unpaid Principal Balance	4,752		4,752		2,731
Loans and leases with no related allowance recorded, unpaid principal balance	19,542		19,542		4,994
Loans and leases related allowance	4,340		4,340		1,865
Loans With An Allowance Recorded, Weighted Average Recorded Investment	4,467	4,199	3,000	3,773
Loans With No Related Allowance Recorded, Weighted Average Recorded Investment	8,989	4,972	4,861	4,796
Loans With An Allowance Recorded, Interest Income Recognized	7	17	22	45
Loans With No Related Allowance Recorded, Interest Income Recognized	15	7	15	20
Non-PCI Loans | Unsecured
Impaired loans and leases by portfolio segment and class
Loans and leases with an allowance recorded, recorded investment	787		787		2,396
Loans and leases with no related allowance recorded, recorded investment	217		217		156
Loans With An Allowance Recorded, Unpaid Principal Balance	815		815		3,121
Loans and leases with no related allowance recorded, unpaid principal balance	298		298		163
Loans and leases related allowance	361		361		2,234
Loans With An Allowance Recorded, Weighted Average Recorded Investment	787	2,309	787	2,302
Loans With No Related Allowance Recorded, Weighted Average Recorded Investment	217	156	170	156
Loans With An Allowance Recorded, Interest Income Recognized	8	5	25	16
Non-PCI Loans | Asset-based
Impaired loans and leases by portfolio segment and class
Loans and leases with an allowance recorded, recorded investment	3,381		3,381
Loans and leases with no related allowance recorded, recorded investment					176
Loans With An Allowance Recorded, Unpaid Principal Balance	3,381		3,381
Loans and leases with no related allowance recorded, unpaid principal balance					176
Loans and leases related allowance	1,238		1,238
Loans With An Allowance Recorded, Weighted Average Recorded Investment	2,377		870
Loans With No Related Allowance Recorded, Weighted Average Recorded Investment		176		117
Non-PCI Loans | SBA 7(a)
Impaired loans and leases by portfolio segment and class
Loans and leases with an allowance recorded, recorded investment	1,278		1,278		2,871
Loans and leases with no related allowance recorded, recorded investment	2,880		2,880		2,797
Loans With An Allowance Recorded, Unpaid Principal Balance	1,351		1,351		3,616
Loans and leases with no related allowance recorded, unpaid principal balance	4,645		4,645		4,057
Loans and leases related allowance	208		208		426
Loans With An Allowance Recorded, Weighted Average Recorded Investment	1,278	2,042	1,278	1,996
Loans With No Related Allowance Recorded, Weighted Average Recorded Investment	2,846	3,902	2,557	3,771
Loans With An Allowance Recorded, Interest Income Recognized	12	20	35	62
Loans With No Related Allowance Recorded, Interest Income Recognized	5	19	15	61
Non-PCI Loans | Leases
Impaired loans and leases by portfolio segment and class
Loans and leases with no related allowance recorded, recorded investment	244		244		244
Loans and leases recorded investment	244		244		244
Loans and leases with no related allowance recorded, unpaid principal balance	244		244		244
Loans and leases unpaid principal balance	244		244		244
Loans With No Related Allowance Recorded, Weighted Average Recorded Investment	244	360	244	256
Loans Weighted Average Recorded Investment	244	360	244	256
Non-PCI Loans | Consumer
Impaired loans and leases by portfolio segment and class
Loans and leases with an allowance recorded, recorded investment	429		429		466
Loans and leases with no related allowance recorded, recorded investment	363		363		162
Loans and leases recorded investment	792		792		628
Loans With An Allowance Recorded, Unpaid Principal Balance	473		473		506
Loans and leases with no related allowance recorded, unpaid principal balance	475		475		233
Loans and leases unpaid principal balance	948		948		739
Loans and leases related allowance	240		240		265
Loans With An Allowance Recorded, Weighted Average Recorded Investment	429	474	429	370
Loans With No Related Allowance Recorded, Weighted Average Recorded Investment	248	149	182	149
Loans Weighted Average Recorded Investment	677	623	611	519
Loans With An Allowance Recorded, Interest Income Recognized	3	3	8	4
Loans Interest Income Recognized	$ 3	$ 3	$ 8	$ 4

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COMMITMENTS AND CONTINGENCIES

9 Months Ended

Sep. 30, 2013

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES

NOTE 10—COMMITMENTS AND CONTINGENCIES

• Lending Commitments

        The Bank is a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments include commitments to extend credit, standby letters of credit, and commitments to purchase equipment being acquired for lease to others. Those instruments involve, to varying degrees, elements of credit risk in excess of the amount recognized in the condensed consolidated balance sheets. The contract or notional amounts of those instruments reflect the extent of involvement the Company has in particular classes of financial instruments.

        The following table presents a summary of the financial instruments described above as of the dates indicated:

	September 30, 2013		December 31, 2012
	(In thousands)
Loan commitments to extend credit	$	1,069,451	$	849,607
Standby letters of credit		39,586		27,534
Commitments to purchase equipment being acquired for lease to others		2,964		4,399
	$	1,112,001	$	881,540

        Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements.

        Standby letters of credit are conditional commitments issued by the Company to guarantee the performance of a customer to a third party. Those guarantees are primarily issued to support private borrowing arrangements. Most guarantees expire within one year from the date of issuance. The Company generally requires collateral or other security to support financial instruments with credit risk.

        In addition, the Company has investments in low income housing project partnerships, which provide the Company income tax credits, and in a few small business investment companies. The investments call for capital contributions up to an amount specified in the partnership agreements. As of September 30, 2013 and December 31, 2012, the Company had commitments to contribute capital to these entities totaling $9.3 million and $10.8 million, respectively.

• Legal Matters

        In the ordinary course of our business, we are party to various legal actions, which we believe are incidental to the operation of our business. The outcome of such legal actions and the timing of ultimate resolution are inherently difficult to predict. In the opinion of management, based upon information currently available to us, any resulting liability, in addition to amounts already accrued, would not have a material adverse effect on the Company's financial statements or operations.

• FCAL Merger-Related Litigation

        As set forth below, there are a number of litigation matters pending against FCB. On May 31, 2013, pursuant to the FCAL acquisition, FCAL merged with and into PacWest, and FCB merged with and into Pacific Western. Pursuant to the merger agreement executed between FCAL and PacWest on November 6, 2012, PacWest has assumed the defense of the litigation matters and would assume liability for the results in the event of an adverse result in the cases.

        Eleven lawsuits have been filed in the Superior Court of the State of California, County of Los Angeles against FCB, among others, by various former clients of political campaign and non-profit organization treasurer Kinde Durkee. The lawsuits are entitled (i) Wardlaw, et al. v. First California Bank, et al. (Case No. SC 114232), filed September 23, 2011; (ii) Lou Correa for State Senate, et al. v. First California Bank, et al. (Case No. BC 479872), filed February 29, 2012; (iii) Committee to Re-elect Lorreta Sanchez, et al. v. First California Bank, et al. (Case No. BC 479873), filed February 29, 2012, (iv) Holden for Assembly v. First California Bank, et al. (Case No. BC 489604), filed August 3, 2012; (v) Latino Diabetes Ass'n v. First California Bank, et al. (Case No. BC 489605), filed August 3, 2012; (vi) Jose Solorio Assembly Officeholder Committee, et al. v. First California Bank, et al. (Case No. 492855), filed September 27, 2012; (vii) Foster for Treasurer 2014, et al. v. First California Bank, et al. (Case No. BC 492878), filed September 27, 2012; (viii) Los Angeles County Democratic Central Committee, et al. v. First California Bank, et al. (Case No. BC 492854), filed September 27, 2012; (ix) National Popular Vote v. First California Bank, et al. (Case No. BC 501213), filed February 19, 2013; (x) Zine for City Council v. First California Bank, et al. (Case No. BC 504476), filed April 2, 2013; and (xi) Rothman v. First California Bank, et al. (Case No. BC 511180), filed June 5, 2013. Plaintiffs in each of the cases claim, among other things, that FCB aided and abetted a fraud and unlawful conversion by Ms. Durkee and/or her affiliated company of funds held in accounts at FCB. Based largely on the same alleged conduct, plaintiffs also assert claims for an alleged violation of California Business & Professions Code Section 17200 and for declaratory relief. Plaintiffs seek compensatory and punitive damages, as well as various forms of equitable and declaratory relief.

        Each of the cases is pending before the same judge, who is coordinating their progress. FCB has answered each of the complaints, and the parties are engaged in discovery. A trial date has been scheduled for August 13, 2014.

        On September 23, 2011, FCB filed a Complaint-in-Interpleader in the Superior Court of the State of California, County of Los Angeles (Case No. BC 470182), pursuant to which FCB interpleaded the sum of $2,539,049 as the amounts on deposit in accounts at FCB that were controlled by Ms. Durkee on behalf of the several hundred named defendants (the "Interpleader Action"). FCB seeks an order requiring the defendants to interplead and litigate their respective claims, discharging FCB from liability, and restraining proceedings or actions against FCB by the defendants with respect to those amounts. On December 6, 2011, the Interpleader Action was designated as complex and transferred to the Superior Court's complex litigation division. It has been related to the other pending actions that relate to the conduct of Ms. Durkee.

        On June 18, 2012, FCB moved for summary judgment in the Interpleader Action. At hearings held in late 2012 and early 2013, the Superior Court entered summary judgment with respect to a majority of the accounts at issue. Those sums have been paid by the Superior Court to the former accountholders.

        Since September 30, 2013, the 11 lawsuits has grown to 14 lawsuits. The allegations in the three new suits were filed by former clients of Kinde Durkee and each new suit makes claims identical to the original 11 lawsuits. The parties participated in a mediation on October 16, 2013. The mediation was unsuccessful and the plaintiffs made a demand which was not reasonable. At the October 30, 2013 status conference, the judge ordered the parties to meet and confer regarding a framework for trying the cases. The Court set a further status conference for December 19, 2013.

        We continue to believe we have made the appropriate accrual for any liabilities that may arise out of the Kinde Durkee litigation matters, but we are unable to determine with certainty whether there will be any material impact on the Company's financial statements or operations.

• CapitalSource Merger-Related Litigation

        Between July 24, 2013 and September 19, 2013, 11 putative stockholder class action lawsuits (the "Merger Litigations") were filed against PacWest and certain other defendants in connection with PacWest entering into the CapitalSource Merger Agreement in which PacWest agreed to acquire CapitalSource. The CapitalSource Merger Agreement was publicly announced on July 22, 2013. Five of the 11 actions were filed in Superior Court of California, Los Angeles County: (1) Engel v. CapitalSource, Inc. et al., Case No. BC516267, filed on July 24, 2013; (2) Miller v. Fremder et al., Case No. BC516590, filed on July 29, 2013; (3) Basu v. CapitalSource, Inc. et al., Case No. BC516775, filed on July 31, 2013; (4) Holliday v. PacWest Bancorp et al., Case No. BC517209, filed on August 5, 2013 and (5) Iron Workers Mid-South Pension Fund v. CapitalSource Inc. et al., Case No . BC517698, filed on August 8, 2013 (collectively, the "California Actions"). The other six actions were filed in the Court of Chancery of the State of Delaware: (1) Fosket v. Byrnes et al., Case No. 8765, filed on August 1, 2013; (2) Bennett v. CapitalSource, Inc. et al., Case No. 8770, filed on August 2, 2013; (3) Chalfant v. CapitalSource et al., Case No. 8777, filed on August 6, 2013; (4) Oliveira v. CapitalSource, Inc. et al., Case No. 8779, filed on August 7, 2013; (5) Desai v. CapitalSource, Inc. et al., Case No. 8804, filed on August 13, 2013; and (6) Fattore v. CapitalSource, Inc. et al., Case No. 8927, filed on September 19, 2013 (collectively, the "Delaware Actions").

        On August 15, 2013, the Delaware Actions were consolidated into a single action, captioned In re CapitalSource Inc. Stockholder Litigation, Consol. C.A. No. 8765-CS, and assigned to Chancellor Leo E. Strine. On September 25, 2013, plaintiffs in the Delaware Actions filed a Verified Consolidated Amended Class Action Complaint (the "Delaware Consolidated Complaint"). On September 17, 2013, the California Actions were consolidated into a single action, captioned In re CapitalSource Inc. Shareholder Litigation, Lead Case No. BC516267, and assigned to Judge Elihu M. Berle. On October 2, 2013, plaintiffs in the California Actions filed an Amended Consolidated Complaint (the "California Consolidated Complaint").

        The Delaware Consolidated Complaint and the California Consolidated Complaint each allege that the members of the CapitalSource board of directors breached their fiduciary duties to CapitalSource stockholders by approving the proposed merger for inadequate consideration; approving the transaction in order to obtain benefits not equally shared by other CapitalSource stockholders; entering into the merger agreement containing preclusive deal protection devices; and failing to take steps to maximize the value to be paid to the CapitalSource stockholders. The Delaware Consolidated Complaint and the California Consolidated Complaint also each allege claims against CapitalSource and PacWest for aiding and abetting these alleged breaches of fiduciary duties. Plaintiffs in these actions seek, among other things, declaratory and injunctive relief concerning the alleged breaches of fiduciary duties, injunctive relief prohibiting consummation of the merger, rescission, an accounting by defendants, damages and attorneys' fees and costs, and other and further relief. The judge in the Delaware Actions ruled on October 23, 2013, that discovery would proceed in the Delaware Actions and that it would be shared with the plaintiffs in the California Actions and that the California Actions would be stayed while that process takes place. Thereafter, on October 28, 2013, the California Actions' plaintiffs stipulated in the California Actions that they would participate in the discovery process in the Delaware Actions and the administrative stay in the California Actions will remain in place unless and until the Delaware Actions are abandoned. At this stage, it is not possible to predict the outcome of the proceedings or their impact on CapitalSource or PacWest.

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INVESTMENT SECURITIES (Details 2) (USD $)	3 Months Ended			9 Months Ended
	Sep. 30, 2013	Jun. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012	Dec. 31, 2012
Amortized Cost
Due in one year or less	$ 3,774,000			$ 3,774,000
Due after one year through five years	24,449,000			24,449,000
Due after five years through ten years	124,905,000			124,905,000
Due after ten years	1,358,455,000			1,358,455,000
Total securities available-for-sale	1,511,583,000			1,511,583,000		1,298,661,000
Carrying Value
Due in one year or less	3,775,000			3,775,000
Due after one year through five years	24,707,000			24,707,000
Due after five years through ten years	124,317,000			124,317,000
Due after ten years	1,359,348,000			1,359,348,000
Carrying Value	1,512,147,000			1,512,147,000		1,355,385,000
Estimated fair value of available-for-sale securities pledged as collateral	201,900,000			201,900,000
Carrying values and gross unrealized losses on securities by length of time the securities were in an unrealized loss position
Less Than 12 Months, Carrying Value	683,669,000			683,669,000		192,738,000
Less Than 12 Months, Gross Unrealized Losses	(30,079,000)			(30,079,000)		(2,616,000)
12 months or Longer, Carrying Value	5,289,000			5,289,000		1,752,000
12 months or Longer, Gross Unrealized Losses	(135,000)			(135,000)		(124,000)
Total, Carrying Value	688,958,000			688,958,000		194,490,000
Total, Gross Unrealized Losses	(30,214,000)			(30,214,000)		(2,740,000)
Interest income on investment securities
Taxable interest	6,028,000	5,388,000	6,832,000	16,979,000	23,716,000
Nontaxable interest	3,302,000	2,716,000	1,458,000	8,443,000	3,572,000
Dividend income	541,000	310,000	56,000	1,079,000	196,000
Total interest income on investment securities	9,871,000	8,414,000	8,346,000	26,501,000	27,484,000
FHLB Stock
Investment in Federal Home Loan Bank stock carried at cost	34,095,000			34,095,000		37,126,000
Decrease in FHLB stock	5,000,000
Government agency and government-sponsored enterprise pass through securities
Amortized Cost
Total securities available-for-sale	695,768,000			695,768,000		774,677,000
Carrying Value
Carrying Value	713,962,000			713,962,000		807,842,000
Carrying values and gross unrealized losses on securities by length of time the securities were in an unrealized loss position
Less Than 12 Months, Carrying Value	124,088,000			124,088,000		67,299,000
Less Than 12 Months, Gross Unrealized Losses	(1,658,000)			(1,658,000)		(452,000)
12 months or Longer, Carrying Value	43,000			43,000		60,000
12 months or Longer, Gross Unrealized Losses	(1,000)			(1,000)		(1,000)
Total, Carrying Value	124,131,000			124,131,000		67,359,000
Total, Gross Unrealized Losses	(1,659,000)			(1,659,000)		(453,000)
Government agency and government-sponsored enterprise collateralized mortgage obligations
Amortized Cost
Total securities available-for-sale	201,531,000			201,531,000		99,956,000
Carrying Value
Carrying Value	199,360,000			199,360,000		101,694,000
Carrying values and gross unrealized losses on securities by length of time the securities were in an unrealized loss position
Less Than 12 Months, Carrying Value	139,846,000			139,846,000		18,317,000
Less Than 12 Months, Gross Unrealized Losses	(2,856,000)			(2,856,000)		(132,000)
12 months or Longer, Carrying Value	4,610,000			4,610,000
12 months or Longer, Gross Unrealized Losses	(45,000)			(45,000)
Total, Carrying Value	144,456,000			144,456,000		18,317,000
Total, Gross Unrealized Losses	(2,901,000)			(2,901,000)		(132,000)
Covered private label collateralized mortgage obligations
Amortized Cost
Total securities available-for-sale	31,503,000			31,503,000		36,078,000
Carrying Value
Carrying Value	39,378,000			39,378,000		44,684,000
Carrying values and gross unrealized losses on securities by length of time the securities were in an unrealized loss position
Less Than 12 Months, Carrying Value	543,000			543,000
Less Than 12 Months, Gross Unrealized Losses	(19,000)			(19,000)
12 months or Longer, Carrying Value	636,000			636,000		1,692,000
12 months or Longer, Gross Unrealized Losses	(89,000)			(89,000)		(123,000)
Total, Carrying Value	1,179,000			1,179,000		1,692,000
Total, Gross Unrealized Losses	(108,000)			(108,000)		(123,000)
Municipal securities
Amortized Cost
Total securities available-for-sale	460,754,000			460,754,000		339,547,000
Carrying Value
Carrying Value	439,635,000			439,635,000		348,041,000
Carrying values and gross unrealized losses on securities by length of time the securities were in an unrealized loss position
Less Than 12 Months, Carrying Value	323,419,000			323,419,000		90,303,000
Less Than 12 Months, Gross Unrealized Losses	(23,269,000)			(23,269,000)		(1,951,000)
Total, Carrying Value	323,419,000			323,419,000		90,303,000
Total, Gross Unrealized Losses	(23,269,000)			(23,269,000)		(1,951,000)
Corporate debt securities
Amortized Cost
Total securities available-for-sale	84,028,000			84,028,000		42,014,000
Carrying Value
Carrying Value	82,106,000			82,106,000		42,365,000
Carrying values and gross unrealized losses on securities by length of time the securities were in an unrealized loss position
Less Than 12 Months, Carrying Value	61,831,000			61,831,000		16,819,000
Less Than 12 Months, Gross Unrealized Losses	(1,983,000)			(1,983,000)		(81,000)
Total, Carrying Value	61,831,000			61,831,000		16,819,000
Total, Gross Unrealized Losses	(1,983,000)			(1,983,000)		(81,000)
Other securities
Amortized Cost
Total securities available-for-sale	37,999,000			37,999,000		6,389,000
Carrying Value
Carrying Value	37,706,000			37,706,000		10,759,000
Carrying values and gross unrealized losses on securities by length of time the securities were in an unrealized loss position
Less Than 12 Months, Carrying Value	33,942,000			33,942,000
Less Than 12 Months, Gross Unrealized Losses	(294,000)			(294,000)
Total, Carrying Value	33,942,000			33,942,000
Total, Gross Unrealized Losses	$ (294,000)			$ (294,000)

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LOANS AND LEASES (Details 9) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2013 item	Sep. 30, 2012 item	Sep. 30, 2013 item	Sep. 30, 2012 item
Troubled debt restructurings
Number of Loans	11	11	29	23
Pre-Modification Outstanding Recorded investment	$ 5,340,000	$ 18,856,000	$ 23,439,000	$ 22,306,000
Post-Modification Outstanding Recorded investment	5,340,000	18,856,000	23,439,000	22,306,000
Troubled debt restructurings that subsequently defaulted
Number of Loans	2	4	4	14
Recorded investment	70,000	745,000	1,824,000	2,539,000
Charge-offs	0	82,000	1,100,000	613,000
Recorded investment for defaulted troubled debt restructurings excluded	0	0	0	0
SBA 504
Troubled debt restructurings
Number of Loans		1		2
Pre-Modification Outstanding Recorded investment		1,118,000		1,680,000
Post-Modification Outstanding Recorded investment		1,118,000		1,680,000
Other
Troubled debt restructurings
Number of Loans	8	4	12	4
Pre-Modification Outstanding Recorded investment	4,824,000	10,119,000	16,215,000	10,119,000
Post-Modification Outstanding Recorded investment	4,824,000	10,119,000	16,215,000	10,119,000
Troubled debt restructurings that subsequently defaulted
Number of Loans		2	1	2
Recorded investment		627,000	1,327,000	627,000
Commercial
Troubled debt restructurings
Number of Loans		1		2
Pre-Modification Outstanding Recorded investment		6,973,000		8,419,000
Post-Modification Outstanding Recorded investment		6,973,000		8,419,000
Collateralized
Troubled debt restructurings
Number of Loans	2	2	7	7
Pre-Modification Outstanding Recorded investment	499,000	370,000	4,553,000	1,545,000
Post-Modification Outstanding Recorded investment	499,000	370,000	4,553,000	1,545,000
Troubled debt restructurings that subsequently defaulted
Number of Loans			1	7
Recorded investment			427,000	828,000
Unsecured
Troubled debt restructurings
Number of Loans	1		5	3
Pre-Modification Outstanding Recorded investment	17,000		502,000	38,000
Post-Modification Outstanding Recorded investment	17,000		502,000	38,000
Troubled debt restructurings that subsequently defaulted
Number of Loans	2		2	2
Recorded investment	70,000		70,000	93,000
Asset-based
Troubled debt restructurings
Number of Loans			1
Pre-Modification Outstanding Recorded investment			2,032,000
Post-Modification Outstanding Recorded investment			2,032,000
SBA 7(a)
Troubled debt restructurings
Number of Loans		2	4	4
Pre-Modification Outstanding Recorded investment		70,000	137,000	299,000
Post-Modification Outstanding Recorded investment		70,000	137,000	299,000
Troubled debt restructurings that subsequently defaulted
Number of Loans		2		3
Recorded investment		118,000		991,000
Consumer
Troubled debt restructurings
Number of Loans		1		1
Pre-Modification Outstanding Recorded investment		206,000		206,000
Post-Modification Outstanding Recorded investment		$ 206,000		$ 206,000

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ACCUMULATED OTHER COMPREHENSIVE INCOME (Tables)

9 Months Ended

Sep. 30, 2013

ACCUMULATED OTHER COMPREHENSIVE INCOME

Schedule of information about reclassification adjustments from accumulated other comprehensive income ("AOCI")

	Nine Months Ended September 30, 2013
AOCI Component:	Amount Reclassified from AOCI(1)			Affected Line Item in the Statement Where Net Income is Presented
	(In thousands)
Unrealized gains (losses) on available-for-sale securities:
	$	409		Gain on sale of securities
		5,222		Acquisition-related securities gain(2)
		5,631		Total before tax
		(172	)	Income tax expense
Total reclassification for the period	$	5,459		Net of tax

(1)

Amounts in parentheses indicate debits to income.

(2)

Non-taxable gain on equity interest in FCAL common stock at its fair value as of the FCAL acquisition date.

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BASIS OF PRESENTATION (Policies)

9 Months Ended

Sep. 30, 2013

BASIS OF PRESENTATION

Basis of Presentation

• Basis of Presentation

        The accounting and reporting policies of the Company are in accordance with U.S. generally accepted accounting principles, which we may refer to as GAAP. All significant intercompany balances and transactions have been eliminated.

        Our financial statements reflect all adjustments that are, in the opinion of management, necessary to present a fair statement of the results for the interim periods presented. Certain information and note disclosures normally included in consolidated financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission. The interim operating results are not necessarily indicative of operating results for the full year.

Use of Estimates

• Use of Estimates

        Management of the Company has made a number of estimates and assumptions relating to the reporting of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenue and expenses during the reporting period to prepare these condensed consolidated financial statements in conformity with GAAP. Actual results could differ from those estimates. Material estimates subject to change in the near term include, among other items, the allowance for credit losses, the carrying value of intangible assets, the carrying value of the FDIC loss sharing asset, and the realization of deferred tax assets.

        As described in Note 3 below, we completed the acquisition of FCAL on May 31, 2013. The acquired assets and liabilities of FCAL were measured at their estimated fair values. Management made significant estimates and exercised significant judgment in estimating fair values and accounting for the acquired assets and assumed liabilities of FCAL.

Reclassifications

• Reclassifications

        Certain prior period amounts have been reclassified to conform to the current period's presentation format. Starting with the June 30, 2013 quarter-end, loan tables presented non-purchased credit impaired ("Non-PCI") and purchased credit impaired ("PCI") loan categories in addition to covered and non-covered loan information. Previously the loan tables only presented covered and non-covered loan categories.

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SUBSEQUENT EVENTS

9 Months Ended

Sep. 30, 2013

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS

NOTE 18—SUBSEQUENT EVENTS

• Dividend Approval

        On November 6, 2013, the Company announced that the Board of Directors had declared a quarterly cash dividend of $0.25 per common share payable on November 29, 2013, to stockholders of record at the close of business on November 18, 2013.

• PacWest and CapitalSource Merger Announcement

        On July 22, 2013, PacWest announced the signing of a definitive agreement and plan of merger (the "Agreement") whereby PacWest and CapitalSource, Inc. ("CSE") will merge in a transaction valued at approximately $2.4 billion. The combined company will be called PacWest Bancorp and the combined subsidiary bank will be called Pacific Western Bank. The CSE national lending operation will continue to do business under the name CapitalSource as a division of Pacific Western Bank.

        Under the terms of the Agreement, CSE shareholders will receive $2.47 in cash and 0.2837 shares of PacWest common stock for each share of CSE common stock. Based on the closing price of PacWest shares on November 4, 2013 of $38.21, the total value of the CSE per share merger consideration is $13.31.

        As of September 30, 2013, on a pro forma consolidated basis, the combined company would have had approximately $15.4 billion in assets with 95 branches throughout California. The transaction, currently expected to close in the first quarter of 2014, is subject to customary conditions, including the approval of bank regulatory authorities and the stockholders of both companies.

• Other

        We have evaluated events that have occurred subsequent to September 30, 2013 and have concluded there are no subsequent events that would require recognition or disclosure in the accompanying condensed consolidated financial statements.

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GOODWILL AND OTHER INTANGIBLE ASSETS (Details 2) (USD $)	3 Months Ended			9 Months Ended		12 Months Ended
	Sep. 30, 2013	Jun. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012	Dec. 31, 2013 Forecast
OTHER INTANGIBLE ASSETS
Amortization	$ 1,512,000	$ 1,284,000	$ 1,678,000	$ 3,972,000	$ 5,150,000	$ 5,400,000
Estimated aggregate amortization expense
2014	5,300,000			5,300,000
2015	4,800,000			4,800,000
2016	3,000,000			3,000,000
2017	1,600,000			1,600,000
2018	1,300,000			1,300,000
Gross amount of CDI and CRI:
Balance, beginning of period	53,339,000	45,412,000	62,272,000	45,412,000	67,100,000
Additions		7,927,000	1,924,000	7,927,000	4,924,000
Fully amortized portion	(4,376,000)		(12,918,000)	(4,376,000)	(20,746,000)
Removal due to branch sale			(5,866,000)		(5,866,000)
Balance, end of period	48,963,000	53,339,000	45,412,000	48,963,000	45,412,000
Accumulated Amortization:
Balance, beginning of period	(33,149,000)	(31,865,000)	(45,329,000)	(30,689,000)	(49,685,000)
Amortization	(1,512,000)	(1,284,000)	(1,678,000)	(3,972,000)	(5,150,000)	(5,400,000)
Fully amortized portion	4,376,000		12,918,000	4,376,000	20,746,000
Removal due to branch sale			4,576,000		4,576,000
Balance, end of period	(30,285,000)	(33,149,000)	(29,513,000)	(30,285,000)	(29,513,000)
Finite lived intangible assets, net
Net CDI and CRI, end of year	$ 18,678,000	$ 20,190,000	$ 15,899,000	$ 18,678,000	$ 15,899,000

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BORROWINGS, SUBORDINATED DEBENTURES AND BROKERED DEPOSITS (Tables)

9 Months Ended

Sep. 30, 2013

BORROWINGS, SUBORDINATED DEBENTURES AND BROKERED DEPOSITS

Summary of the terms of each issuance of the subordinated debentures outstanding

	September 30, 2013						December 31, 2012
												Date Issued		Maturity Date			Next Reset Date
Series	Amount			Rate(1)			Amount		Rate(2)							Rate Index
	(Dollars in thousands)
Trust V	$	10,310			3.35	%	$	10,310		3.41	%		8/15/03		9/17/33	3 month LIBOR + 3.10		12/13/13
Trust VI		10,310			3.30	%		10,310		3.36	%		9/3/03		9/15/33	3 month LIBOR + 3.05		12/12/13
Trust CII		5,155			3.20	%		5,155		3.26	%		9/17/03		9/17/33	3 month LIBOR + 2.95		12/13/13
Trust VII		61,856			2.99	%		61,856		3.05	%		2/5/04		4/23/34	3 month LIBOR + 2.75		1/28/14
Trust CIII		20,619			1.94	%		20,619		2.00	%		8/15/05		9/15/35	3 month LIBOR + 1.69		12/12/13
Trust FCCI(3)		16,495			1.85	%		—		—			1/25/07		3/15/37	3 month LIBOR + 1.60		12/12/13
Trust FCBI(3)		10,310			1.80	%		—		—			9/30/05		12/15/35	3 month LIBOR + 1.55		12/12/13
Gross subordinated debentures		135,055						108,250
Unamortized discount(4)		(2,555	)					—
Net subordinated debentures	$	132,500					$	108,250

(1)

As of October 28, 2013.

(2)

As of January 28, 2013.

(3)

Acquired in the FCAL acquisition.

(4)

Amount represents the fair value adjustment on trusts acquired in the FCAL acquisition.

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BASIS OF PRESENTATION (Details)	9 Months Ended	161 Months Ended
	Sep. 30, 2013 item	Sep. 30, 2013 item
BASIS OF PRESENTATION
Number of banking offices operated in San Francisco Bay area	3
Number of states where the entity has lease receivables	45
Number of acquisitions completed		26
Number of branches	73	73
Number of California counties where branches are located	10

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LOANS AND LEASES (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2013	Jun. 30, 2013	Dec. 31, 2012	Sep. 30, 2012	Jun. 30, 2012	Dec. 31, 2011
Composition of loan portfolio
Non-covered loans and leases	$ 3,873,388		$ 3,049,505
Covered loans	510,924		543,327
Total gross loans and leases	4,384,312		3,592,832	3,651,181
Unearned income	(919)		(2,535)
Total loans and leases, net of unearned income	4,383,393		3,590,297	3,648,991
Allowance for loan and lease losses:
Non-covered loans and leases	(60,551)		(65,899)
Covered loans	(23,235)		(26,069)
Total allowance for loans and lease losses	(83,786)	(90,643)	(91,968)	(99,846)	(103,524)	(116,588)
Total loans and leases, net	4,299,607		3,498,329	3,549,145
Non-PCI Loans
Composition of loan portfolio
Non-covered loans and leases	3,854,129		3,049,505
Covered loans	97,426		25,442
Total gross loans and leases	3,951,555		3,074,947	3,080,068
Unearned income	(919)		(2,535)
Total loans and leases, net of unearned income	3,950,636		3,072,412
Allowance for loan and lease losses:
Non-covered loans and leases	(60,551)		(65,899)
Total allowance for loans and lease losses	(60,551)	(63,246)	(65,899)	(69,142)	(72,061)	(85,313)
Total loans and leases, net	3,890,085		3,006,513
PCI Loans
Composition of loan portfolio
Non-covered loans and leases	19,259
Covered loans	413,498		517,885
Total gross loans and leases	432,757		517,885	571,113
Total loans and leases, net of unearned income	432,757		517,885
Allowance for loan and lease losses:
Covered loans	(23,235)		(26,069)
Total allowance for loans and lease losses	(23,235)	(27,397)	(26,069)	(30,704)	(31,463)	(31,275)
Total loans and leases, net	$ 409,522		$ 491,816

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LOANS AND LEASES (Tables)

9 Months Ended

Sep. 30, 2013

LOANS AND LEASES

Summary of the composition of the entity's loan portfolio

	September 30, 2013									December 31, 2012
	Non-PCI Loans and Leases			PCI Loans			Total			Non-PCI Loans and Leases			PCI Loans			Total
	(In thousands)
Non-covered loans and leases	$	3,854,129		$	19,259		$	3,873,388		$	3,049,505		$	—		$	3,049,505
Covered loans		97,426			413,498			510,924			25,442			517,885			543,327
Total gross loans and leases		3,951,555			432,757			4,384,312			3,074,947			517,885			3,592,832
Unearned income		(919	)		—			(919	)		(2,535	)		—			(2,535	)
Total loans and leases, net of unearned income		3,950,636			432,757			4,383,393			3,072,412			517,885			3,590,297
Allowance for loan and lease losses:
Non-covered loans and leases		(60,551	)		—			(60,551	)		(65,899	)		—			(65,899	)
Covered loans		—			(23,235	)		(23,235	)		—			(26,069	)		(26,069	)
Total allowance for loan and lease losses		(60,551	)		(23,235	)		(83,786	)		(65,899	)		(26,069	)		(91,968	)
Total net loans and leases	$	3,890,085		$	409,522		$	4,299,607		$	3,006,513		$	491,816		$	3,498,329

Summary of the activity in the allowance for loan and lease losses on Non-PCI loans and leases and PCI loans by portfolio segment

	Three Months Ended September 30, 2013
	Real Estate Mortgage			Real Estate Construction			Commercial			Leases		Consumer			Foreign			Total Non-PCI			Total PCI			Total
	(In thousands)
Allowance for Loan and Lease Losses:
Balance, beginning of period	$	31,804		$	3,432		$	24,165		$	2,096	$	1,667		$	82		$	63,246		$	27,397		$	90,643
Charge-offs		(281	)		—			(2,439	)		—		(75	)		—			(2,795	)		—			(2,795	)
Recoveries		152			179			321			—		15			3			670			5			675
Provision (negative provision)		(2,069	)		(66	)		1,022			240		332			(29	)		(570	)		(4,167	)		(4,737	)
Balance, end of period	$	29,606		$	3,545		$	23,069		$	2,336	$	1,939		$	56		$	60,551		$	23,235		$	83,786

	Nine Months Ended September 30, 2013
	Real Estate Mortgage			Real Estate Construction			Commercial			Leases			Consumer			Foreign			Total Non-PCI			Total PCI			Total
	(In thousands)
Allowance for Loan and Lease Losses:
Balance, beginning of period	$	38,700		$	3,221		$	20,661		$	1,493		$	1,726		$	98		$	65,899		$	26,069		$	91,968
Charge-offs		(3,840	)		—			(4,517	)		(114	)		(111	)		—			(8,582	)		—			(8,582	)
Recoveries		1,665			514			2,025			—			57			3			4,264			38			4,302
Provision (negative provision)		(6,919	)		(190	)		4,900			957			267			(45	)		(1,030	)		(2,872	)		(3,902	)
Balance, end of period	$	29,606		$	3,545		$	23,069		$	2,336		$	1,939		$	56		$	60,551		$	23,235		$	83,786
Amount of the allowance applicable to loans and leases:
Individually evaluated for impairment	$	3,225		$	103		$	6,147		$	—		$	240		$	—		$	9,715
Collectively evaluated for impairment	$	26,381		$	3,442		$	16,922		$	2,336		$	1,699		$	56		$	50,836
Acquired with deteriorated credit quality																						$	23,235
Loans and Leases:
Ending balance	$	2,551,781		$	189,957		$	928,169		$	235,791		$	33,828		$	12,029		$	3,951,555		$	432,757		$	4,384,312
The ending balance of the loan and lease portfolio is composed of loans and leases:
Individually evaluated for impairment	$	90,329		$	14,878		$	24,839		$	244		$	792		$	—		$	131,082
Collectively evaluated for impairment	$	2,461,452		$	175,079		$	903,330		$	235,547		$	33,036		$	12,029		$	3,820,473
Acquired with deteriorated credit quality																						$	432,757

	Three Months Ended September 30, 2012
	Real Estate Mortgage			Real Estate Construction			Commercial			Leases		Consumer			Foreign			Total Non-PCI			Total PCI			Total
	(In thousands)
Allowance for Loan and Lease Losses:
Balance, beginning of period	$	42,236		$	5,496		$	21,979		$	498	$	1,735		$	117		$	72,061		$	31,463		$	103,524
Charge-offs		(1,118	)		(492	)		(492	)		—		(25	)		—			(2,127	)		(618	)		(2,745	)
Recoveries		845			11			218			—		32			2			1,108			—			1,108
Provision (negative provision)		(3,226	)		1,582			(685	)		629		(188	)		(12	)		(1,900	)		(141	)		(2,041	)
Balance, end of period	$	38,737		$	6,597		$	21,020		$	1,127	$	1,554		$	107		$	69,142		$	30,704		$	99,846

	Nine Months Ended September 30, 2012
	Real Estate Mortgage			Real Estate Construction			Commercial			Leases		Consumer			Foreign			Total Non-PCI			Total PCI			Total
	(In thousands)
Allowance for Loan and Lease Losses:
Balance, beginning of period	$	50,205		$	8,697		$	23,308		$	—	$	2,768		$	335		$	85,313		$	31,275		$	116,588
Charge-offs		(5,891	)		(492	)		(2,715	)		—		(258	)		—			(9,356	)		(4,085	)		(13,441	)
Recoveries		1,217			35			1,232			—		79			22			2,585			—			2,585
Provision (negative provision)		(6,794	)		(1,643	)		(805	)		1,127		(1,035	)		(250	)		(9,400	)		3,514			(5,886	)
Balance, end of period	$	38,737		$	6,597		$	21,020		$	1,127	$	1,554		$	107		$	69,142		$	30,704		$	99,846
Amount of the allowance applicable to loans and leases:
Individually evaluated for impairment	$	5,568		$	2,468		$	6,051		$	—	$	265		$	—		$	14,352
Collectively evaluated for impairment	$	33,169		$	4,129		$	14,969		$	1,127	$	1,289		$	107		$	54,790
Acquired with deteriorated credit quality																					$	30,704
Loans and Leases:
Ending balance	$	1,950,777		$	152,748		$	777,365		$	161,934	$	21,118		$	16,126		$	3,080,068		$	571,113		$	3,651,181
The ending balance of the loan and lease portfolio is composed of loans and leases:
Individually evaluated for impairment	$	100,133		$	31,792		$	19,051		$	420	$	623		$	—		$	152,019
Collectively evaluated for impairment	$	1,850,644		$	120,956		$	758,314		$	161,514	$	20,495		$	16,126		$	2,928,049
Acquired with deteriorated credit quality																					$	571,113

Composition of loan portfolio

Schedule of composition of loans and leases by portfolio segment

	September 30, 2013						December 31, 2012
	Non-PCI Loans and Leases		PCI Loans		Total		Non-PCI Loans and Leases		PCI Loans		Total
	(In thousands)
Non-Covered Loans and Leases
Real estate mortgage	$	2,476,180	$	17,928	$	2,494,108	$	1,917,670	$	—	$	1,917,670
Real estate construction		180,697		1,296		181,993		129,959		—		129,959
Commercial		918,669		—		918,669		787,775		—		787,775
Leases		235,791		—		235,791		174,373		—		174,373
Consumer		30,763		35		30,798		22,487		—		22,487
Foreign		12,029		—		12,029		17,241		—		17,241
Total gross non-covered loans and leases	$	3,854,129	$	19,259	$	3,873,388	$	3,049,505	$	—	$	3,049,505
Covered Loans
Real estate mortgage	$	75,601	$	401,672	$	477,273	$	20,843	$	484,057	$	504,900
Real estate construction		9,260		10,271		19,531		—		24,645		24,645
Commercial		9,500		1,265		10,765		4,113		9,071		13,184
Consumer		3,065		290		3,355		486		112		598
Total gross covered loans	$	97,426	$	413,498	$	510,924	$	25,442	$	517,885	$	543,327
Total Loans and Leases
Real estate mortgage	$	2,551,781	$	419,600	$	2,971,381	$	1,938,513	$	484,057	$	2,422,570
Real estate construction		189,957		11,567		201,524		129,959		24,645		154,604
Commercial		928,169		1,265		929,434		791,888		9,071		800,959
Leases		235,791		—		235,791		174,373		—		174,373
Consumer		33,828		325		34,153		22,973		112		23,085
Foreign		12,029		—		12,029		17,241		—		17,241
Total gross loans and leases	$	3,951,555	$	432,757	$	4,384,312	$	3,074,947	$	517,885	$	3,592,832

Schedule of aging analysis of Non-PCI loans and leases by portfolio segment and class

	September 30, 2013
	30 - 59 Days Past Due		60 - 89 Days Past Due		Greater Than 90 Days Past Due		Total Past Due		Current		Total
	(In thousands)
Real estate mortgage:
Hospitality	$	—	$	—	$	—	$	—	$	188,073	$	188,073
SBA 504		—		—		120		120		48,006		48,126
Other		4,623		486		3,294		8,403		2,307,179		2,315,582
Total real estate mortgage		4,623		486		3,414		8,523		2,543,258		2,551,781
Real estate construction:
Residential		—		—		—		—		62,154		62,154
Commercial		571		—		—		571		127,232		127,803
Total real estate construction		571		—		—		571		189,386		189,957
Commercial:
Collateralized		2,250		426		6,004		8,680		553,813		562,493
Unsecured		82		1,348		225		1,655		104,571		106,226
Asset-based		1,490		—		—		1,490		230,408		231,898
SBA 7(a)		72		868		201		1,141		26,411		27,552
Total commercial		3,894		2,642		6,430		12,966		915,203		928,169
Leases		—		—		244		244		235,547		235,791
Consumer		163		5		178		346		33,482		33,828
Foreign		—		—		—		—		12,029		12,029
Total non-PCI loans and leases	$	9,251	$	3,133	$	10,266	$	22,650	$	3,928,905	$	3,951,555

	December 31, 2012
	30 - 59 Days Past Due		60 - 89 Days Past Due		Greater Than 90 Days Past Due		Total Past Due		Current		Total
	(In thousands)
Real estate mortgage:
Hospitality	$	—	$	—	$	—	$	—	$	181,144	$	181,144
SBA 504		955		—		1,727		2,682		51,476		54,158
Other		4,098		54		3,271		7,423		1,695,788		1,703,211
Total real estate mortgage		5,053		54		4,998		10,105		1,928,408		1,938,513
Real estate construction:
Residential		—		—		—		—		48,629		48,629
Commercial		—		—		1,245		1,245		80,085		81,330
Total real estate construction		—		—		1,245		1,245		128,714		129,959
Commercial:
Collateralized		964		161		872		1,997		455,098		457,095
Unsecured		3		135		230		368		69,670		70,038
Asset-based		—		—		176		176		239,254		239,430
SBA 7(a)		281		547		1,271		2,099		23,226		25,325
Total commercial		1,248		843		2,549		4,640		787,248		791,888
Leases		225		132		244		601		173,772		174,373
Consumer		23		1		—		24		22,949		22,973
Foreign		—		—		—		—		17,241		17,241
Total Non-PCI loans and leases	$	6,549	$	1,030	$	9,036	$	16,615	$	3,058,332	$	3,074,947

Schedule of nonaccrual and performing Non-PCI loans and leases by portfolio segment and class

	September 30, 2013						December 31, 2012
	Nonaccrual		Performing		Total		Nonaccrual		Performing		Total
	(In thousands)
Real estate mortgage:
Hospitality	$	—	$	188,073	$	188,073	$	6,908	$	174,236	$	181,144
SBA 504		2,791		45,335		48,126		2,982		51,176		54,158
Other		21,628		2,293,954		2,315,582		16,585		1,686,626		1,703,211
Total real estate mortgage		24,419		2,527,362		2,551,781		26,475		1,912,038		1,938,513
Real estate construction:
Residential		826		61,328		62,154		1,057		47,572		48,629
Commercial		2,857		124,946		127,803		2,715		78,615		81,330
Total real estate construction		3,683		186,274		189,957		3,772		126,187		129,959
Commercial:
Collateralized		15,256		547,237		562,493		4,462		452,633		457,095
Unsecured		334		105,892		106,226		2,027		68,011		70,038
Asset-based		3,381		228,517		231,898		176		239,254		239,430
SBA 7(a)		2,934		24,618		27,552		4,181		21,144		25,325
Total commercial		21,905		906,264		928,169		10,846		781,042		791,888
Leases		244		235,547		235,791		244		174,129		174,373
Consumer		594		33,234		33,828		425		22,548		22,973
Foreign		—		12,029		12,029		—		17,241		17,241
Total Non-PCI loans and leases	$	50,845	$	3,900,710	$	3,951,555	$	41,762	$	3,033,185	$	3,074,947

Schedule of composition of impaired loans and leases

	September 30, 2013						December 31, 2012
	Nonaccrual Loans/Leases		Performing Restructured Loans		Total Impaired Loans/Leases		Nonaccrual Loans/Leases		Performing Restructured Loans		Total Impaired Loans/Leases
	(In thousands)
Real estate mortgage	$	24,419	$	65,910	$	90,329	$	26,475	$	80,723	$	107,198
Real estate construction		3,683		11,195		14,878		3,772		21,678		25,450
Commercial		21,905		2,934		24,839		10,846		3,684		14,530
Leases		244		—		244		244		—		244
Consumer		594		198		792		425		203		628
Total	$	50,845	$	80,237	$	131,082	$	41,762	$	106,288	$	148,050

Schedule of information regarding impaired loans and leases (excluding PCI loans) by portfolio segment and class

	September 30, 2013						December 31, 2012
	Recorded Investment		Unpaid Principal Balance		Related Allowance		Recorded Investment		Unpaid Principal Balance		Related Allowance
	(In thousands)
With An Allowance Recorded:
Real estate mortgage:
Hospitality	$	8,770	$	9,611	$	319	$	8,954	$	9,640	$	2,396
SBA 504		1,649		1,649		231		1,676		1,676		324
Other		50,029		50,164		2,675		58,364		60,262		5,107
Real estate construction:
Residential		391		391		82		1,303		1,330		165
Commercial		8,541		8,541		21		6,723		6,723		206
Commercial:
Collateralized		4,483		4,752		4,340		2,477		2,731		1,865
Unsecured		787		815		361		2,396		3,121		2,234
Asset-based		3,381		3,381		1,238		—		—		—
SBA 7(a)		1,278		1,351		208		2,871		3,616		426
Consumer		429		473		240		466		506		265
With No Related Allowance Recorded:
Real estate mortgage:
SBA 504	$	2,791	$	3,785	$	—	$	2,982	$	3,755	$	—
Other		27,090		40,693		—		35,222		39,503		—
Real estate construction:
Residential		435		471		—		—		—		—
Commercial		5,511		9,923		—		17,424		21,085		—
Commercial:
Collateralized		11,813		19,542		—		3,657		4,994		—
Unsecured		217		298		—		156		163		—
Asset-based		—		—		—		176		176		—
SBA 7(a)		2,880		4,645		—		2,797		4,057		—
Leases		244		244		—		244		244		—
Consumer		363		475		—		162		233		—
Total Non-PCI Loans and Leases With and Without An Allowance Recorded:
Real estate mortgage	$	90,329	$	105,902	$	3,225	$	107,198	$	114,836	$	7,827
Real estate construction		14,878		19,326		103		25,450		29,138		371
Commercial		24,839		34,784		6,147		14,530		18,858		4,525
Leases		244		244		—		244		244		—
Consumer		792		948		240		628		739		265
Total	$	131,082	$	161,204	$	9,715	$	148,050	$	163,815	$	12,988

	Three Months Ended September 30,
	2013				2012
	Weighted Average Recorded Investment(1)		Interest Income Recognized		Weighted Average Recorded Investment(1)		Interest Income Recognized
	(In thousands)
With An Allowance Recorded:
Real estate mortgage:
Hospitality	$	8,770	$	109	$	9,049	$	21
SBA 504		1,649		23		927		25
Other		47,411		481		30,884		443
Real estate construction:
Residential		391		—		1,283		3
Commercial		8,541		88		18,408		146
Commercial:
Collateralized		4,467		7		4,199		17
Unsecured		787		8		2,309		5
Asset-based		2,377		—		—		—
SBA 7(a)		1,278		12		2,042		20
Consumer		429		3		474		3
With No Related Allowance Recorded:
Real estate mortgage:
SBA 504	$	2,791	$	—	$	1,330	$	—
Other		25,540		410		52,200		577
Real estate construction:
Residential		435		—		753		16
Commercial		5,511		98		11,348		97
Commercial:
Collateralized		8,989		15		4,972		7
Unsecured		217		—		156		—
Asset-based		—		—		176		—
SBA 7(a)		2,846		5		3,902		19
Leases		244		—		360		—
Consumer		248		—		149		—
Total Non-PCI Loans and Leases With and Without An Allowance Recorded:
Real estate mortgage	$	86,161	$	1,023	$	94,390	$	1,066
Real estate construction		14,878		186		31,792		262
Commercial		20,961		47		17,756		68
Leases		244		—		360		—
Consumer		677		3		623		3
Total	$	122,921	$	1,259	$	144,921	$	1,399

(1)

For the loans and leases (excluding PCI loans) reported as impaired at September 30, 2013 and September 30, 2012, amounts were calculated based on the period of time such loans and leases were impaired during the reporting period.

	Nine Months Ended September 30,
	2013				2012
	Weighted Average Recorded Investment(1)		Interest Income Recognized		Weighted Average Recorded Investment(1)		Interest Income Recognized
	(In thousands)
With An Allowance Recorded:
Real estate mortgage:
Hospitality	$	8,770	$	355	$	9,049	$	57
SBA 504		1,649		67		545		17
Other		46,401		1,400		27,749		886
Real estate construction:
Residential		391		—		1,283		7
Commercial		8,541		268		18,408		407
Commercial:
Collateralized		3,000		22		3,773		45
Unsecured		787		25		2,302		16
Asset-based		870		—		—		—
SBA 7(a)		1,278		35		1,996		62
Consumer		429		8		370		4
With No Related Allowance Recorded:
Real estate mortgage:
SBA 504	$	2,727	$	—	$	1,330	$	—
Other		19,826		522		48,441		1,688
Real estate construction:
Residential		435		—		753		49
Commercial		4,679		69		10,598		276
Commercial:
Collateralized		4,861		15		4,796		20
Unsecured		170		—		156		—
Asset-based		—		—		117		—
SBA 7(a)		2,557		15		3,771		61
Leases		244		—		256		—
Consumer		182		—		149		—
Total Non-PCI Loans and Leases With and Without An Allowance Recorded:
Real estate mortgage	$	79,373	$	2,344	$	87,114	$	2,648
Real estate construction		14,046		337		31,042		739
Commercial		13,523		112		16,911		204
Leases		244		—		256		—
Consumer		611		8		519		4
Total	$	107,797	$	2,801	$	135,842	$	3,595

(1)

For the loans and leases (excluding PCI loans) reported as impaired at September 30, 2013 and September 30, 2012, amounts were calculated based on the period of time such loans and leases were impaired during the reporting period.

Schedule of new troubled debt restructurings and defaulted troubled debt restructurings (excluding PCI loans)

	Three Months Ended September 30,
		2013						2012
		Number of Loans		Pre- Modification Outstanding Recorded Investment		Post- Modification Outstanding Recorded Investment		Number of Loans		Pre- Modification Outstanding Recorded Investment		Post- Modification Outstanding Recorded Investment
		(Dollars in thousands)
Troubled Debt Restructurings:
Real estate mortgage:
SBA 504			—	$	—	$	—		1	$	1,118	$	1,118
Other			8		4,824		4,824		4		10,119		10,119
Real estate construction:
Commercial			—		—		—		1		6,973		6,973
Commercial:
Collateralized			2		499		499		2		370		370
Unsecured			1		17		17		—		—		—
SBA 7(a)			—		—		—		2		70		70
Consumer			—		—		—		1		206		206
Total			11	$	5,340	$	5,340		11	$	18,856	$	18,856

	Nine Months Ended September 30,
	2013						2012
	Number of Loans		Pre- Modification Outstanding Recorded Investment		Post- Modification Outstanding Recorded Investment		Number of Loans		Pre- Modification Outstanding Recorded Investment		Post- Modification Outstanding Recorded Investment
	(Dollars in thousands)
Troubled Debt Restructurings:
Real estate mortgage:
SBA 504		—	$	—	$	—		2	$	1,680	$	1,680
Other		12		16,215		16,215		4		10,119		10,119
Real estate construction:
Commercial		—		—		—		2		8,419		8,419
Commercial:
Collateralized		7		4,553		4,553		7		1,545		1,545
Unsecured		5		502		502		3		38		38
Asset-based		1		2,032		2,032		—		—		—
SBA 7(a)		4		137		137		4		299		299
Consumer		—		—		—		1		206		206
Total		29	$	23,439	$	23,439		23	$	22,306	$	22,306

	Three Months Ended September 30,
	2013				2012
	Number of Loans		Recorded Investment(1)		Number of Loans		Recorded Investment(2)
	(Dollars in thousands)
Troubled Debt Restructurings That Subsequently Defaulted(3):
Real estate mortgage:
Other		—	$	—		2	$	627
Commercial:
Unsecured		2		70		—		—
SBA 7(a)		—		—		2		118
Total		2	$	70		4	$	745

(1)

Represents the balance at September 30, 2013 and no charge-off.

(2)

Represents the balance at September 30, 2012 and is net of charge-offs of $82,000.

(3)

The population of defaulted restructured loans for the period indicated includes only those loans restructured during the preceding 12-month period. The table excludes defaulted troubled debt restructurings in those classes for which the recorded investment was zero at the end of the period.

	Nine Months Ended September 30,
	2013				2012
	Number of Loans		Recorded Investment(1)		Number of Loans		Recorded Investment(2)
	(Dollars in thousands)
Troubled Debt Restructurings That Subsequently Defaulted(3):
Real estate mortgage:
Other		1	$	1,327		2	$	627
Commercial:
Collateralized		1		427		7		828
Unsecured		2		70		2		93
SBA 7(a)		—		—		3		991
Total		4	$	1,824		14	$	2,539

(1)

Represents the balance at September 30, 2013 and is net of charge-offs of $1.1 million.

(2)

Represents the balance at September 30, 2012 and is net of charge-offs of $613,000.

(3)

The population of defaulted restructured loans for the period indicated includes only those loans restructured during the preceding 12-month period. The table excludes defaulted troubled debt restructurings in those classes for which the recorded investment was zero at the end of the period.

Schedule of accretable yield on the purchased credit impaired loans acquired in the FCAL acquisition

	May 31, 2013
	Accretable Yield
	Covered PCI Loans			Non-Covered PCI Loans			Total
	(In thousands)
Undiscounted contractual cash flows	$	42,881		$	41,936		$	84,817
Undiscounted cash flows not expected to be collected (nonaccretable difference)		(16,050	)		(16,337	)		(32,387	)
Undiscounted cash flows expected to be collected		26,831			25,599			52,430
Estimated fair value of loans acquired		(24,341	)		(19,805	)		(44,146	)
Acquired accrued interest receivable		(66	)		(122	)		(188	)
Accretable yield	$	2,424		$	5,672		$	8,096

Schedule of changes in the carrying amount of PCI loans and accretable yield on those loans

	Purchased Credit Impaired Loans
	Carrying Amount			Accretable Yield
	(In thousands)
Covered PCI Loans:
Balance, December 31, 2012	$	491,816		$	(196,022	)
Addition from the FCAL acquisition		24,341			(2,424	)
Accretion		33,057			33,057
Payments received		(161,823	)		—
Decrease in expected cash flows, net		—			12,521
Provision for credit losses		2,872			—
Balance, September 30, 2013	$	390,263		$	(152,868	)
Non-Covered PCI Loans:
Balance, December 31, 2012	$	—		$	—
Addition from the FCAL acquisition		19,805			(5,672	)
Accretion		899			899
Payments received		(1,445	)		—
Increase in expected cash flows, net		—			(1,808	)
Balance, September 30, 2013	$	19,259		$	(6,581	)

Non-PCI Loans

Composition of loan portfolio

Schedule of composition of loans and leases by portfolio segment

	September 30, 2013						December 31, 2012
	Amount			% of Total			Amount			% of Total
	(Dollars in thousands)
Real estate mortgage	$	2,551,781			65	%	$	1,938,513			63	%
Real estate construction		189,957			5			129,959			4
Commercial		928,169			23			791,888			25
Leases		235,791			6			174,373			6
Consumer		33,828			1			22,973			1
Foreign		12,029			—			17,241			1
Total gross Non-PCI loans and leases		3,951,555			100	%		3,074,947			100	%
Less:
Unearned income		(919	)					(2,535	)
Allowance for loan and lease losses		(60,551	)					(65,899	)
Total net Non-PCI loans and leases	$	3,890,085					$	3,006,513

Schedule of credit risk rating categories for loans and leases by portfolio segment and class

	September 30, 2013						December 31, 2012
	Nonclassified		Classified		Total		Nonclassified		Classified		Total
	(In thousands)
Real estate mortgage:
Hospitality	$	182,419	$	5,654	$	188,073	$	168,489	$	12,655	$	181,144
SBA 504		42,621		5,505		48,126		48,372		5,786		54,158
Other		2,247,865		67,717		2,315,582		1,653,446		49,765		1,703,211
Total real estate mortgage		2,472,905		78,876		2,551,781		1,870,307		68,206		1,938,513
Real estate construction:
Residential		60,390		1,764		62,154		46,591		2,038		48,629
Commercial		121,221		6,582		127,803		77,503		3,827		81,330
Total real estate construction		181,611		8,346		189,957		124,094		5,865		129,959
Commercial:
Collateralized		538,101		24,392		562,493		442,293		14,802		457,095
Unsecured		104,608		1,618		106,226		67,133		2,905		70,038
Asset-based		225,110		6,788		231,898		235,075		4,355		239,430
SBA 7(a)		21,764		5,788		27,552		18,888		6,437		25,325
Total commercial		889,583		38,586		928,169		763,389		28,499		791,888
Leases		235,547		244		235,791		174,129		244		174,373
Consumer		29,089		4,739		33,828		21,733		1,240		22,973
Foreign		12,029		—		12,029		17,241		—		17,241
Total Non-PCI loans and leases	$	3,820,764	$	130,791	$	3,951,555	$	2,970,893	$	104,054	$	3,074,947

PCI Loans

Composition of loan portfolio

Schedule of composition of loans and leases by portfolio segment

	September 30, 2013						December 31, 2012
	Amount			% of Total			Amount			% of Total
	(Dollars in thousands)
Real estate mortgage	$	419,600			97	%	$	484,057			93	%
Real estate construction		11,567			3			24,645			5
Commercial		1,265			—			9,071			2
Consumer		325			—			112			—
Total gross PCI loans		432,757			100	%		517,885			100	%
Less:
Allowance for loan losses		(23,235	)					(26,069	)
Total net PCI loans	$	409,522					$	491,816

Schedule of credit risk rating categories for loans and leases by portfolio segment and class

	September 30, 2013						December 31, 2012
	Nonclassified		Classified		Total		Nonclassified		Classified		Total
	(In thousands)
Real estate mortgage	$	246,718	$	172,882	$	419,600	$	331,341	$	152,716	$	484,057
Real estate construction		4,303		7,264		11,567		6,311		18,334		24,645
Commercial		642		623		1,265		3,420		5,651		9,071
Consumer		—		325		325		—		112		112
Total PCI loans	$	251,663	$	181,094	$	432,757	$	341,072	$	176,813	$	517,885

XML

COMMITMENTS AND CONTINGENCIES (Details) (USD $)	9 Months Ended	12 Months Ended	20 Months Ended		1 Months Ended	2 Months Ended	25 Months Ended	2 Months Ended				9 Months Ended
	Sep. 30, 2013	Dec. 31, 2012	Jun. 05, 2013 item	Sep. 23, 2011	Oct. 31, 2013 CapitalSource Merger-Related Litigation Subsequent event item	Sep. 30, 2013 CapitalSource Merger-Related Litigation Subsequent event item	Oct. 31, 2013 CapitalSource Merger-Related Litigation Subsequent event item	Sep. 30, 2013 CapitalSource Merger-Related Litigation California Subsequent event item	Sep. 30, 2013 CapitalSource Merger-Related Litigation Delaware Subsequent event item	Sep. 30, 2013 Standby letters of credit	Dec. 31, 2012 Standby letters of credit	Sep. 30, 2013 Standby letters of credit Maximum
COMMITMENTS AND CONTINGENCIES
Loan commitments to extend credit	$ 1,069,451,000	$ 849,607,000
Commitments and contingencies
Credit commitments										39,586,000	27,534,000
Expiration period of guarantees												1 year
Number of lawsuits			11		3	11	14	5	6
Commitments to purchase equipment being acquired for lease to others	2,964,000	4,399,000
Commitments to extend credit	1,112,001,000	881,540,000
Commitment to contribute capital to miscellaneous investments	9,300,000	10,800,000
Interpleader amounts on deposit				$ 2,539,049

XML

ACCUMULATED OTHER COMPREHENSIVE INCOME (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended			9 Months Ended
	Sep. 30, 2013	Jun. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Reclassification adjustments from accumulated other comprehensive income
Gain on sale of securities				$ 409
Acquisition-related securities gain	5,222			5,222
Total before tax	35,383	6,302	26,937	62,898	61,028
Income tax expense	(11,243)	(1,906)	(10,849)	(20,868)	(24,119)
Net earnings	24,163	4,349	16,088	42,006	36,909
Unrealized gains (losses) on available-for-sale securities | Amount Reclassified from AOCI
Reclassification adjustments from accumulated other comprehensive income
Gain on sale of securities				409
Acquisition-related securities gain				5,222
Total before tax				5,631
Income tax expense				(172)
Net earnings				$ 5,459

XML

BORROWINGS, SUBORDINATED DEBENTURES AND BROKERED DEPOSITS (Details) (USD $)						9 Months Ended		9 Months Ended		9 Months Ended				9 Months Ended				9 Months Ended				9 Months Ended				9 Months Ended				9 Months Ended		9 Months Ended		1 Months Ended
	Sep. 30, 2013	Dec. 31, 2012	Sep. 30, 2013 FHLB secured lines of credit	Sep. 30, 2013 Federal Reserve discount window	Sep. 30, 2013 Unsecured lines of credit	Sep. 30, 2013 Non-recourse notes	Dec. 31, 2012 Non-recourse notes	Sep. 30, 2013 Subordinated debentures	Mar. 31, 2012 Trust I and Trust CI	Sep. 30, 2013 Trust V	Oct. 28, 2013 Trust V	Jan. 28, 2013 Trust V	Dec. 31, 2012 Trust V	Sep. 30, 2013 Trust VI	Oct. 28, 2013 Trust VI	Jan. 28, 2013 Trust VI	Dec. 31, 2012 Trust VI	Sep. 30, 2013 Trust CII	Oct. 28, 2013 Trust CII	Jan. 28, 2013 Trust CII	Dec. 31, 2012 Trust CII	Sep. 30, 2013 Trust VII	Oct. 28, 2013 Trust VII	Jan. 28, 2013 Trust VII	Dec. 31, 2012 Trust VII	Sep. 30, 2013 Trust CIII	Oct. 28, 2013 Trust CIII	Jan. 28, 2013 Trust CIII	Dec. 31, 2012 Trust CIII	Sep. 30, 2013 Trust FCCI	Oct. 28, 2013 Trust FCCI	Sep. 30, 2013 Trust FCBI	Oct. 28, 2013 Trust FCBI	Mar. 31, 2012 FHLB advances	Sep. 30, 2013 FHLB advances	Dec. 31, 2012 FHLB advances	Sep. 30, 2013 Bank Federal Reserve discount window
Borrowings, subordinated debentures and brokered deposits
Weighted average interest rate on non-recourse debt (as a percent)						6.30%	6.28%
Weighted average remaining maturity of non-recourse debt						2 years
Outstanding FHLB advances																																			$ 0	$ 0
Remaining borrowing capacity			1,300,000,000
Carrying value of securities pledged	201,900,000																																		11,500,000
Borrowing capacity				467,800,000	80,000,000																																589,900,000
Gross subordinated debentures	135,055,000	108,250,000								10,310,000			10,310,000	10,310,000			10,310,000	5,155,000			5,155,000	61,856,000			61,856,000	20,619,000			20,619,000	16,495,000		10,310,000
Unamortized discount	(2,555,000)
Net subordinated debentures	132,500,000	108,250,000
Current Rate (as a percent)											3.35%	3.41%			3.30%	3.36%			3.20%	3.26%			2.99%	3.05%			1.94%	2.00%			1.85%		1.80%
Rate Index										3 month LIBOR				3 month LIBOR				3 month LIBOR				3 month LIBOR				3 month LIBOR				3 month LIBOR		3 month LIBOR
Spread on variable rate (as a percent)										3.10%				3.05%				2.95%				2.75%				1.69%				1.60%		1.55%
Number of months for which cumulative and among other requirements net earnings are not sufficient for dividend payments due for those periods, requiring prior notification to FRB								12 months
Debt termination expense related to prepayment of debt																																		22,600,000
Redemption of debt									18,600,000																									225,000,000
Brokered Deposits
Amount of customer deposits that were participated with other FDIC-insured financial institutions through the CDARS program as a means to provide FDIC deposit insurance coverage for the full amount of the entity's customer deposits	51,100,000	37,700,000
Noninterest-bearing brokered deposits amount included in liabilities of entity's discontinued operations	$ 104,800,000

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ACQUISITIONS (Details 2) (USD $)				0 Months Ended	3 Months Ended	9 Months Ended	0 Months Ended					0 Months Ended			0 Months Ended
	Sep. 30, 2013	Dec. 31, 2012	Sep. 30, 2012	May 31, 2013 First California Financial Group	Sep. 30, 2013 First California Financial Group	Sep. 30, 2013 First California Financial Group	May 31, 2013 First California Financial Group Maximum	May 31, 2013 First California Financial Group Pacific Western item	May 31, 2013 First California Financial Group FCB item	Aug. 03, 2012 APB	Aug. 01, 2012 APB	Aug. 03, 2012 APB Pacific Western item	Apr. 03, 2012 Celtic	Apr. 03, 2012 Celtic Pacific Western Maximum	Jan. 03, 2012 Pacific Western Equipment Finance
Acquisitions
Number of shares of entity receivable by stockholders of acquiree for each share of acquiree				0.2966
Measuring period for determining weighted average price per share for fluctuating shares				20 days
Issuance of common stock (in shares)				8,400,000
Common stock of acquiree cancelled in merger (in shares)				1,000,000
Closing price of common stock (in dollars per share)				$ 28.83
Total consideration paid				$ 251,568,000						$ 58,076,000			$ 18,000,000		$ 35,000,000
Number of operating branches									15			2
Number of operating branches which overlapped with existing branches									8
Number of operating branches closed as part of the integration and consolidation plan								2	6
Number of locations added to branch network as a result of integration and consolidation plan								7
Period for adjustment of fair values preliminary estimates							1 year
Goodwill	215,862,000	79,866,000	79,592,000	136,189,000							15,047,000		6,645,000		19,033,000
Threshold limit of asset-based loans														5,000,000
Non-taxable gain in earnings on previously-held equity interest					5,200,000	5,200,000
Available for sale equity securities acquired (in shares)					1,094,000	1,094,000
Cost of available for sale securities acquired					4,100,000	4,100,000
Unrealized gain included in stockholders' equity					$ 5,200,000

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FAIR VALUE MEASUREMENTS (Details 5) (USD $)	Sep. 30, 2013	Dec. 31, 2012	Sep. 30, 2012
Financial Assets:
Interest-earning deposits in financial institutions	$ 11,552,000	$ 75,393,000
Loans and leases, net	4,299,607,000	3,498,329,000	3,549,145,000
Non-PCI Loans
Financial Assets:
Loans and leases, net	3,890,085,000	3,006,513,000
Impaired loans (excluding PCI loans)
Nonaccrual loans	50,800,000	41,800,000
Amount of nonaccrual loans written down to fair values through chargeoffs	1,100,000
Minimum | Non-PCI Loans
Impaired loans (excluding PCI loans)
Threshold of unpaid principal balance of non-purchased credit impaired nonaccrual loans for individual evaluation of impairment	250,000
Maximum | Non-PCI Loans
Impaired loans (excluding PCI loans)
Threshold of unpaid principal balance of non-purchased credit impaired nonaccrual loans for collective evaluation of impairment	250,000
Total
Financial Assets:
Cash and due from banks	132,467,000	89,011,000
Interest-earning deposits in financial institutions	11,552,000	75,393,000
Securities available-for-sale	1,512,147,000	1,355,385,000
Investment in FHLB stock	34,095,000	37,126,000
Loans and leases, net	4,313,163,000	3,551,674,000
SBA loan servicing asset	853,000	1,000,000
Financial Liabilities:
Demand, money market, interest checking and savings deposits	4,709,623,000	3,888,794,000
Time deposits	725,184,000	823,912,000
Borrowings	8,244,000	12,611,000
Subordinated debentures	132,365,000	108,186,000
Level 1
Financial Assets:
Cash and due from banks	132,467,000	89,011,000
Interest-earning deposits in financial institutions	11,552,000	75,393,000
Securities available-for-sale	514,000	8,985,000
Level 2
Financial Assets:
Securities available-for-sale	1,472,255,000	1,301,716,000
Investment in FHLB stock	34,095,000	37,126,000
Loans and leases, net	1,160,000	4,975,000
Financial Liabilities:
Demand, money market, interest checking and savings deposits	4,709,623,000	3,888,794,000
Time deposits	725,184,000	823,912,000
Borrowings	8,244,000	12,611,000
Subordinated debentures	132,365,000	108,186,000
Level 3
Financial Assets:
Securities available-for-sale	39,378,000	44,684,000
Loans and leases, net	4,312,003,000	3,546,699,000
SBA loan servicing asset	853,000	1,000,000
Carrying or Contract Amount
Financial Assets:
Cash and due from banks	132,467,000	89,011,000
Interest-earning deposits in financial institutions	11,552,000	75,393,000
Securities available-for-sale	1,512,147,000	1,355,385,000
Investment in FHLB stock	34,095,000	37,126,000
Loans and leases, net	4,299,607,000	3,498,329,000
SBA loan servicing asset	853,000	1,000,000
Financial Liabilities:
Demand, money market, interest checking and savings deposits	4,709,623,000	3,888,794,000
Time deposits	723,521,000	820,327,000
Borrowings	8,243,000	12,591,000
Subordinated debentures	$ 132,500,000	$ 108,250,000

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RECENTLY ISSUED ACCOUNTING STANDARDS

9 Months Ended

Sep. 30, 2013

RECENTLY ISSUED ACCOUNTING STANDARDS

RECENTLY ISSUED ACCOUNTING STANDARDS

NOTE 17—RECENTLY ISSUED ACCOUNTING STANDARDS

        In July 2013, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2013-11, "Income Taxes (Topic 740): Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists." Under ASU 2013-11, an unrecognized tax benefit should be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward. However, to the extent a net operating loss carryforward, a similar tax loss, or a tax credit carryforward is not available at the reporting date under the tax law of the applicable jurisdiction to settle any additional income taxes that would result from the disallowance of a tax position, or the tax law of the applicable jurisdiction does not require the entity to use, and the entity does not intend to use, the deferred tax asset for such purpose, the unrecognized tax benefit should be presented in the financial statements as a liability and should not be combined with deferred tax assets. ASU 2013-11 is effective for us on January 1, 2014 and is to be applied prospectively, although early adoption and retrospective adoption are permitted. The adoption of this standard is not expected to have any material effect on our financial statements.

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CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (USD $) In Thousands, except Share data, unless otherwise specified	Total	Common Stock	Additional Paid-in Capital	Accumulated Deficit	Treasury Stock	Accumulated Other Comprehensive Income
Balance at Dec. 31, 2012	$ 589,121	$ 377	$ 1,062,184	$ (499,537)	$ (6,803)	$ 32,900
Balance (in shares) at Dec. 31, 2012		37,420,909
Increase (Decrease) in Stockholders' Equity
Net earnings	42,006			42,006
Other comprehensive loss - net unrealized loss on securities available-for-sale, net of tax	(32,573)					(32,573)
Issuance of common stock for acquisition of First California Financial Group, Inc.	242,268	84	242,184
Issuance of common stock for acquisition of First California Financial Group, Inc. (in shares)		8,403,119
Restricted stock awarded and earned stock compensation, net of shares forfeited	6,545	4	6,541
Restricted stock awarded and earned stock compensation, net of shares forfeited (in shares)		352,612
Restricted stock surrendered	(2,415)				(2,415)
Restricted stock surrendered (in shares)		(85,898)
Tax effect from vesting of restricted stock	985		985
Cash dividends paid ($0.75 per share)	(29,648)		(29,648)
Balance at Sep. 30, 2013	$ 816,289	$ 465	$ 1,282,246	$ (457,531)	$ (9,218)	$ 327
Balance (in shares) at Sep. 30, 2013		46,090,742

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012
Cash flows from operating activities:
Net earnings	$ 42,006	$ 36,909
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization	23,768	18,349
Negative provision for credit losses	(2,872)	(8,486)
Gain on sale of other real estate owned	(4,006)	(4,542)
Provision for losses on other real estate owned	2,094	13,566
Gain on sale of leases	(1,108)	(1,525)
(Gain) loss on sale of premises and equipment	(15)	158
Gain on branch sale		(297)
Gain on sale of securities	(409)
Acquisition-related securities gain	(5,222)
Other-than-temporary impairment loss on covered security		1,115
Earned stock compensation	6,545	4,631
Tax effect included in stockholders' equity of restricted stock vesting	(985)	(224)
Decrease in accrued and deferred income taxes, net	4,267	6,423
Decrease in FDIC loss sharing asset	19,063	22,547
Decrease in other assets	6,254	3,262
Decrease in accrued interest payable and other liabilities	(22,952)	(19,156)
Net cash provided by operating activities	66,428	72,730
Cash flows from investing activities:
Net cash and cash equivalents acquired (used) in acquisitions	273,013	(86,931)
Net cash used in branch sale		(119,756)
Net decrease in loans and leases	221,779	200,080
Proceeds from sale of loans and leases	18,812	42,128
Securities available-for-sale:
Proceeds from maturities and paydowns	264,654	310,273
Proceeds from sales	12,810	45,639
Purchases	(504,936)	(320,936)
Net redemptions of Federal Home Loan Bank stock	12,549	6,595
Proceeds from sales of other real estate owned	28,918	43,881
Purchases of premises and equipment, net	(2,246)	(2,208)
Proceeds from sales of premises and equipment	26	700
Net cash provided by investing activities	325,379	119,465
Net increase (decrease) in deposits:
Noninterest-bearing	28,310	339,718
Interest-bearing	(405,166)	(224,165)
Net decrease in borrowings	(4,258)	(222,736)
Redemption of subordinated debentures		(18,558)
Repayment of acquired debt		(180,796)
Restricted stock surrendered	(2,415)	(1,424)
Tax effect included in stockholders' equity of restricted stock vesting	985	224
Cash dividends paid	(29,648)	(19,669)
Net cash used in financing activities	(412,192)	(327,406)
Net decrease in cash and cash equivalents	(20,385)	(135,211)
Cash and cash equivalents, beginning of period	164,404	295,617
Cash and cash equivalents, end of period	144,019	160,406
Supplemental disclosures of cash flow information:
Cash paid for interest	10,604	17,457
Cash paid for income taxes	16,703	17,884
Loans transferred to other real estate owned	12,754	32,244
Common stock issued for First California Financial Group acquisition	$ 242,268

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ACQUISITIONS

9 Months Ended

Sep. 30, 2013

ACQUISITIONS

ACQUISITIONS

NOTE 3—ACQUISITIONS

        We completed the following acquisitions during the time period of January 1, 2012 to September 30, 2013, using the acquisition method of accounting, and accordingly, the operating results of the acquired entities have been included in our condensed consolidated financial statements from their respective dates of acquisition.

        The following balance sheets of the acquired entities are presented at estimated fair value as of their respective acquisition dates:

	Acquisition and Date Acquired
	First California Financial Group		American Perspective Bank		Celtic Capital Corporation		Pacific Western Equipment Finance
	May 31, 2013		August 1, 2012		April 3, 2012		January 3, 2012
	(In thousands)
Assets Acquired:
Cash and due from banks	$	6,124	$	3,370	$	3,435	$	7,092
Interest-earning deposits in financial institutions		266,889		10,081		—		—
Investment securities available-for-sale		4,444		48,887		—		—
FHLB stock		9,518		1,412		—		—
Loans and leases		1,049,613		197,279		54,963		140,959
Other real estate owned		13,772		1,561		—		—
Premises and equipment		15,322		—		—		—
FDIC loss sharing asset		17,241		—		—		—
Cash surrender value of life insurance		13,265		—		—		—
Goodwill		136,189		15,047		6,645		19,033
Core deposit and customer relationship intangibles		7,927		1,924		1,300		1,700
Other intangible assets		—		—		670		1,420
Leases in process		—		—		—		19,162
Other assets		40,192		4,234		69		467
Total assets acquired	$	1,580,496	$	283,795	$	67,082	$	189,833
Liabilities Assumed:
Noninterest-bearing deposits	$	361,166	$	40,673	$	—	$	—
Interest-bearing deposits		739,713		178,891		—		—
Borrowings from parent		—		—		—		128,677
Other borrowings		—		5,315		46,804		15,839
Subordinated debentures		24,061		—		—		—
Discontinued operations		184,619		—		—		—
Accrued interest payable and other liabilities		19,369		840		2,278		10,317
Total liabilities assumed	$	1,328,928	$	225,719	$	49,082	$	154,833
Total consideration paid	$	251,568	$	58,076	$	18,000	$	35,000
Summary of consideration:
Cash paid	$	—	$	58,076	$	18,000	$	35,000
PacWest common stock issued		242,268		—		—		—
Cancellation of FCAL common stock owned by
PacWest (at acquisition date fair value)		9,300		—		—		—
Total	$	251,568	$	58,076	$	18,000	$	35,000

• First California Financial Group Acquisition

        On May 31, 2013, PacWest Bancorp ("PacWest") completed the acquisition of First California Financial Group, Inc. ("FCAL"). As part of the acquisition, First California Bank ("FCB"), a wholly-owned subsidiary of FCAL, merged with and into Pacific Western. The acquisition, which was first announced on November 6, 2012, was concluded following receipt of shareholder approval from both institutions and all required regulatory approvals.

        In the FCAL acquisition, each share of FCAL common stock was converted into the right to receive 0.2966 of a share of PacWest common stock. The exchange ratio was calculated based on the volume-weighted average share price of PacWest common stock for the 20 consecutive trading days ending on the second full trading day prior to the receipt of the last of the regulatory approvals required under the merger agreement. PacWest issued an aggregate of approximately 8.4 million shares of PacWest common stock to FCAL stockholders. In addition, approximately one million shares of FCAL common stock previously owned by PacWest were cancelled in the transaction. Based on the closing price of PacWest's common stock on May 31, 2013 of $28.83 per share, the aggregate consideration paid to FCAL common stockholders, plus the acquisition date fair value of the FCAL shares of common stock cancelled in the merger, was $251.6 million.

        The integration of FCB systems and the conversion of FCB's branches to PWB's operating platform were completed in June 2013. FCB had 15 branches, eight of which overlapped with existing PWB branches. Six of the FCB branches and two PWB branches were closed as part of the integration and consolidation plan. As a result PWB added seven locations to its branch network.

        FCB was a full-service commercial bank headquartered in Westlake Village, California. FCB provided a full range of banking services, including revolving lines of credit, term loans, commercial real estate loans, construction loans, consumer loans and home equity loans to individuals, professionals, and small to mid-sized businesses. FCB operated throughout Southern California in the Los Angeles, Orange, Riverside, San Bernardino, San Diego, Ventura, and San Luis Obispo Counties. We made this acquisition to expand our presence in Southern California.

        The FCAL acquisition has been accounted for under the acquisition method of accounting. The assets and liabilities, both tangible and intangible, were recorded at their estimated fair values as of the May 31, 2013 acquisition date. Such fair values are preliminary estimates and are subject to adjustment for up to one year after the acquisition date or when additional information relative to the closing date fair values becomes available and such information is considered final, whichever is earlier. While the fair values are preliminary we believe there will not be material adjustments to the amounts recorded with the exception of the acquired tax assets, which will be finalized once the final tax returns have been filed. The application of the acquisition method of accounting resulted in goodwill of $136.2 million. All of the recognized goodwill is expected to be non-deductible for tax purposes.

        During the third quarter of 2013, we recorded a $5.2 million non-taxable securities gain in earnings related to the FCAL acquisition. Prior to the closing of the FCAL acquisition, we acquired 1,094,000 shares of FCAL common stock at a cost of $4.1 million. These shares were carried in our securities available-for-sale portfolio at their estimated market value with their unrealized gain of $5.2 million included in stockholders' equity at May 31, 2013. Our accounting for the FCAL acquisition included these shares at their historical cost. We should have included these shares at their estimated fair value and recognized an acquisition-related securities gain of $5.2 million at May 31, 2013. We corrected for this in the third quarter of 2013 by recognizing the gain with an offset to goodwill.

• American Perspective Bank Acquisition

        On August 1, 2012, Pacific Western completed the acquisition of American Perspective Bank, or APB, previously headquartered in San Luis Obispo, California. Pacific Western acquired all of the outstanding common stock of APB for $58.1 million in cash and APB was merged with and into Pacific Western; we refer to this transaction as the APB acquisition. APB operated two branches located in San Luis Obispo and Santa Maria, California, and a loan production office located in Paso Robles, California, which has since been converted to a full-service branch. The APB acquisition strengthened our presence in the Central Coast region.

• Celtic Capital Corporation Acquisition

        On April 3, 2012, Pacific Western completed the acquisition of Celtic Capital Corporation, or Celtic, an asset-based lending company based in Santa Monica, California. Pacific Western acquired all of the capital stock of Celtic for $18 million in cash and Celtic became a wholly-owned subsidiary of Pacific Western; we refer to this transaction as the Celtic acquisition. Celtic focuses on providing asset-based loans to borrowers across the United States for amounts generally up to $5 million. The Celtic acquisition diversified our loan portfolio, expanded our product lines, and deployed excess liquidity into higher yielding assets.

• Pacific Western Equipment Finance Acquisition

        On January 3, 2012, Pacific Western completed the acquisition of Pacific Western Equipment Finance (formerly known as Marquette Equipment Finance, and which we refer to as EQF), an equipment leasing company based in Midvale, Utah. Pacific Western acquired all of the capital stock of EQF for $35 million in cash and EQF became a division of Pacific Western; we refer to this transaction as the EQF acquisition. The EQF acquisition diversified our lending portfolio, expanded our product lines, and deployed excess liquidity into higher yielding assets.

• Unaudited Pro Forma Results of Operations

        The following table presents our unaudited pro forma results of operations for the periods presented as if the FCAL acquisition had been completed on January 1, 2012. The unaudited pro forma results of operations include the historical accounts of the Company and FCAL and pro forma adjustments as may be required, including the amortization of intangibles with definite lives and the amortization or accretion of any premiums or discounts arising from fair value adjustments for assets acquired and liabilities assumed. The unaudited pro forma information is intended for informational purposes only and is not necessarily indicative of our future operating results or operating results that would have occurred had the FCAL acquisition been completed at the beginning of 2012. No assumptions have been applied to the pro forma results of operations regarding possible revenue enhancements, expense efficiencies or asset dispositions.

        No pro forma results of operations information have been provided for the three months ended September 30, 2013 as FCAL was acquired on May 31, 2013 and the actual results of FCAL and the Company are included together for this three-month period in the condensed consolidated statements of earnings.

			Nine Months Ended September 30,
	Three Months Ended September 30, 2012
			2013		2012
	(In thousands, except per share data)
Pro forma revenues (net interest income plus noninterest income)	$	95,441	$	250,155	$	278,182
Pro forma net earnings from continuing operations	$	19,880	$	49,692	$	47,039
Pro forma net earnings from continuing operations per share:
Basic	$	0.44	$	1.09	$	1.04
Diluted	$	0.44	$	1.09	$	1.04

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BUSINESS SEGMENTS (Details) (USD $)	3 Months Ended			9 Months Ended
	Sep. 30, 2013	Jun. 30, 2013	Sep. 30, 2012	Sep. 30, 2013 item	Sep. 30, 2012	Dec. 31, 2012	Jun. 30, 2012	Dec. 31, 2011
Business segments
Number of reportable segments				3
Loans and leases, net of unearned income	$ 4,383,393,000		$ 3,648,991,000	$ 4,383,393,000	$ 3,648,991,000	$ 3,590,297,000
Total allowance for loans and lease losses	(83,786,000)	(90,643,000)	(99,846,000)	(83,786,000)	(99,846,000)	(91,968,000)	(103,524,000)	(116,588,000)
Total loans and leases, net	4,299,607,000		3,549,145,000	4,299,607,000	3,549,145,000	3,498,329,000
Goodwill	215,862,000		79,592,000	215,862,000	79,592,000	79,866,000
Core deposit and customer relationship intangibles, net	18,678,000		15,899,000	18,678,000	15,899,000	14,723,000
Total assets	6,616,855,000		5,538,502,000	6,616,855,000	5,538,502,000	5,463,658,000
Total deposits	5,433,144,000		4,787,348,000	5,433,144,000	4,787,348,000	4,709,121,000
Interest income	85,158,000	71,631,000	75,123,000	226,058,000	222,413,000
Other interest expense	(2,869,000)	(3,158,000)	(4,352,000)	(9,603,000)	(15,549,000)
Net interest income	82,289,000	68,473,000	70,771,000	216,455,000	206,864,000
Negative provision (provision) for credit losses	4,167,000	1,842,000	2,141,000	2,872,000	8,486,000
Noninterest income	5,127,000	203,000	5,682,000	8,170,000	13,815,000
Intangible asset amortization	(1,512,000)	(1,284,000)	(1,678,000)	(3,972,000)	(5,150,000)
Acquisition and integration costs	(5,450,000)	(17,997,000)	(2,101,000)	(24,139,000)	(2,997,000)
Debt termination expense					(22,598,000)
Other noninterest expense	(49,238,000)	(44,935,000)	(47,878,000)	(136,488,000)	(137,392,000)
Total noninterest expense	(56,200,000)	(64,216,000)	(51,657,000)	(164,599,000)	(168,137,000)
Earnings from continuing operations before income taxes	35,383,000	6,302,000	26,937,000	62,898,000	61,028,000
Income taxes (expense) benefit	(11,243,000)	(1,906,000)	(10,849,000)	(20,868,000)	(24,119,000)
Net earnings from continuing operations	24,140,000	4,396,000	16,088,000	42,030,000	36,909,000
Earnings (loss) from discontinued operations before income taxes	39,000	(81,000)		(42,000)
Income tax (expense) benefit	(16,000)	34,000		18,000
Net earnings (loss) from discontinued operations	23,000	(47,000)		(24,000)
Net earnings	24,163,000	4,349,000	16,088,000	42,006,000	36,909,000
Banking
Business segments
Loans and leases, net of unearned income	3,912,885,000		3,259,571,000	3,912,885,000	3,259,571,000
Total allowance for loans and lease losses	(76,496,000)		(95,878,000)	(76,496,000)	(95,878,000)
Total loans and leases, net	3,836,389,000		3,163,693,000	3,836,389,000	3,163,693,000
Goodwill	190,184,000		54,704,000	190,184,000	54,704,000
Core deposit and customer relationship intangibles, net	16,604,000		13,194,000	16,604,000	13,194,000
Total assets	6,100,587,000		5,080,308,000	6,100,587,000	5,080,308,000
Total deposits	5,467,568,000		4,800,852,000	5,467,568,000	4,800,852,000
Other interest expense	(1,692,000)	(2,080,000)	(3,287,000)	(6,422,000)	(12,002,000)
Net interest income	71,534,000	57,701,000	59,525,000	183,963,000	179,491,000
Negative provision (provision) for credit losses	5,782,000	2,607,000	3,325,000	6,053,000	9,770,000
Noninterest income	(1,566,000)	(415,000)	5,191,000	292,000	11,382,000
Intangible asset amortization	(1,354,000)	(1,127,000)	(1,544,000)	(3,474,000)	(4,855,000)
Acquisition and integration costs	(5,190,000)	(17,997,000)	(2,101,000)	(23,879,000)	(2,951,000)
Debt termination expense					(24,195,000)
Other noninterest expense	(42,015,000)	(37,557,000)	(40,776,000)	(114,418,000)	(116,366,000)
Total noninterest expense	(48,559,000)	(56,681,000)	(44,421,000)	(141,771,000)	(148,367,000)
Earnings from continuing operations before income taxes	27,191,000	3,212,000	23,620,000	48,537,000	52,276,000
Income taxes (expense) benefit	(9,996,000)	(612,000)	(9,491,000)	(17,038,000)	(20,412,000)
Net earnings from continuing operations	17,195,000	2,600,000		31,499,000
Earnings (loss) from discontinued operations before income taxes	39,000	(81,000)		(42,000)
Income tax (expense) benefit	(16,000)	34,000		18,000
Net earnings (loss) from discontinued operations	23,000	(47,000)		(24,000)
Net earnings	17,218,000	2,553,000	14,129,000	31,475,000	31,864,000
Asset Financing
Business segments
Loans and leases, net of unearned income	470,508,000		389,420,000	470,508,000	389,420,000
Total allowance for loans and lease losses	(7,290,000)		(3,968,000)	(7,290,000)	(3,968,000)
Total loans and leases, net	463,218,000		385,452,000	463,218,000	385,452,000
Goodwill	25,678,000		24,888,000	25,678,000	24,888,000
Core deposit and customer relationship intangibles, net	2,074,000		2,705,000	2,074,000	2,705,000
Total assets	507,339,000		440,690,000	507,339,000	440,690,000
Other interest expense	(108,000)	(196,000)	(215,000)	(447,000)	(658,000)
Net interest income	11,824,000	11,654,000	12,096,000	35,226,000	30,262,000
Negative provision (provision) for credit losses	(1,615,000)	(765,000)	(1,184,000)	(3,181,000)	(1,284,000)
Noninterest income	1,443,000	592,000	466,000	2,579,000	2,345,000
Intangible asset amortization	(158,000)	(157,000)	(134,000)	(498,000)	(295,000)
Acquisition and integration costs					(46,000)
Other noninterest expense	(5,822,000)	(5,980,000)	(5,706,000)	(17,855,000)	(16,916,000)
Total noninterest expense	(5,980,000)	(6,137,000)	(5,840,000)	(18,353,000)	(17,257,000)
Earnings from continuing operations before income taxes	5,672,000	5,344,000	5,538,000	16,271,000	14,066,000
Income taxes (expense) benefit	(2,378,000)	(2,237,000)	(2,291,000)	(6,814,000)	(5,941,000)
Net earnings from continuing operations	3,294,000	3,107,000		9,457,000
Net earnings	3,294,000	3,107,000	3,247,000	9,457,000	8,125,000
Other
Business segments
Total assets	8,929,000		17,504,000	8,929,000	17,504,000
Total deposits	(34,424,000)		(13,504,000)	(34,424,000)	(13,504,000)
Other interest expense	(1,069,000)	(882,000)	(850,000)	(2,734,000)	(2,889,000)
Net interest income	(1,069,000)	(882,000)	(850,000)	(2,734,000)	(2,889,000)
Noninterest income	5,250,000	26,000	25,000	5,299,000	88,000
Acquisition and integration costs	(260,000)			(260,000)
Debt termination expense					1,597,000
Other noninterest expense	(1,401,000)	(1,398,000)	(1,396,000)	(4,215,000)	(4,110,000)
Total noninterest expense	(1,661,000)	(1,398,000)	(1,396,000)	(4,475,000)	(2,513,000)
Earnings from continuing operations before income taxes	2,520,000	(2,254,000)	(2,221,000)	(1,910,000)	(5,314,000)
Income taxes (expense) benefit	1,131,000	943,000	933,000	2,984,000	2,234,000
Net earnings from continuing operations	3,651,000	(1,311,000)		1,074,000
Net earnings	3,651,000	(1,311,000)	(1,288,000)	1,074,000	(3,080,000)
Operating segment
Business segments
Interest income	85,158,000	71,631,000	75,123,000	226,058,000	222,413,000
Operating segment | Banking
Business segments
Interest income	72,873,000	59,321,000	62,358,000	189,101,000	189,886,000
Operating segment | Asset Financing
Business segments
Interest income	12,285,000	12,310,000	12,765,000	36,957,000	32,527,000
Intersegment | Banking
Business segments
Net interest income	353,000	460,000	454,000	1,284,000	1,607,000
Intersegment | Asset Financing
Business segments
Net interest income	$ (353,000)	$ (460,000)	$ (454,000)	$ (1,284,000)	$ (1,607,000)

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BASIS OF PRESENTATION

9 Months Ended

Sep. 30, 2013

BASIS OF PRESENTATION

BASIS OF PRESENTATION

NOTE 1—BASIS OF PRESENTATION

        PacWest Bancorp is a bank holding company registered under the Bank Holding Company Act of 1956, as amended. Our principal business is to serve as the holding company for our Los Angeles-based wholly-owned banking subsidiary, Pacific Western Bank, which we refer to as "Pacific Western" or the "Bank." When we say "we," "our," or the "Company," we mean the Company on a consolidated basis with the Bank. When we refer to "PacWest" or to the holding company, we are referring to the parent company on a stand-alone basis.

        Pacific Western is a full-service commercial bank offering a broad range of banking products and services including: accepting demand, money market, and time deposits; originating loans and leases, including commercial, real estate construction, equipment finance leases, SBA guaranteed and consumer loans; and providing other business-oriented products. Our operations are primarily located in Southern California extending from San Diego County to California's Central Coast; we also operate three banking offices in the San Francisco Bay area, a leasing operation based in Utah, and asset-based lending operations based in Arizona as well as San Jose and Santa Monica, California. The Bank focuses on conducting business with small to medium sized businesses in our marketplace and the owners and employees of those businesses. The majority of our loans are secured by the real estate collateral of such businesses. Our asset-based lending function operates in Arizona, California, Texas, Colorado, Minnesota, and the Pacific Northwest. Our equipment leasing function has lease receivables in 45 states.

        We generate our revenue primarily from interest received on loans and leases and, to a lesser extent, from interest received on investment securities, and fees received in connection with deposit services, extending credit and other services offered, including foreign exchange services. Our major operating expenses are the interest paid by the Bank on deposits and borrowings, compensation and general operating expenses. The Bank relies on a foundation of locally generated and relationship-based deposits, with 73 branches located across 10 California counties. The Bank has a relatively low cost of funds due to a high percentage of noninterest-bearing and low cost deposits.

        We have completed 26 acquisitions from May 2000 through September 30, 2013, including the acquisition of First California Financial Group, Inc. ("FCAL") on May 31, 2013. Since 2000, our acquisitions have been accounted for using the acquisition method of accounting and accordingly, the operating results of the acquired entities have been included in the condensed consolidated financial statements from their respective acquisition dates. See Note 3, Acquisitions, for more information about the FCAL acquisition and the acquisitions that we made in 2012, and Note 18, Subsequent Events, for information regarding the announcement of the CapitalSource, Inc. merger.

• Basis of Presentation

        The accounting and reporting policies of the Company are in accordance with U.S. generally accepted accounting principles, which we may refer to as GAAP. All significant intercompany balances and transactions have been eliminated.

        Our financial statements reflect all adjustments that are, in the opinion of management, necessary to present a fair statement of the results for the interim periods presented. Certain information and note disclosures normally included in consolidated financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission. The interim operating results are not necessarily indicative of operating results for the full year.

• Use of Estimates

        Management of the Company has made a number of estimates and assumptions relating to the reporting of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenue and expenses during the reporting period to prepare these condensed consolidated financial statements in conformity with GAAP. Actual results could differ from those estimates. Material estimates subject to change in the near term include, among other items, the allowance for credit losses, the carrying value of intangible assets, the carrying value of the FDIC loss sharing asset, and the realization of deferred tax assets.

        As described in Note 3 below, we completed the acquisition of FCAL on May 31, 2013. The acquired assets and liabilities of FCAL were measured at their estimated fair values. Management made significant estimates and exercised significant judgment in estimating fair values and accounting for the acquired assets and assumed liabilities of FCAL.

• Reclassifications

        Certain prior period amounts have been reclassified to conform to the current period's presentation format. Starting with the June 30, 2013 quarter-end, loan tables presented non-purchased credit impaired ("Non-PCI") and purchased credit impaired ("PCI") loan categories in addition to covered and non-covered loan information. Previously the loan tables only presented covered and non-covered loan categories.

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DISCONTINUED OPERATIONS (Details) (USD $)	3 Months Ended		9 Months Ended	3 Months Ended	4 Months Ended
	Sep. 30, 2013	Jun. 30, 2013	Sep. 30, 2013	Sep. 30, 2013 EPS	Sep. 30, 2013 EPS
DISCONTINUED OPERATIONS
Revenues				$ 1,100,000	$ 1,600,000
Earnings (loss) from discontinued operations before income taxes	39,000	(81,000)	(42,000)	39,000	(42,000)
Noninterest-bearing brokered deposits amount included in liabilities of entity's discontinued operations	$ 104,800,000		$ 104,800,000	$ 104,800,000	$ 104,800,000

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ACQUISITIONS (Tables)

9 Months Ended

Sep. 30, 2013

ACQUISITIONS

Schedule of balance sheets of the acquired entities presented at estimated fair value as of their respective acquisition dates

	Acquisition and Date Acquired
	First California Financial Group		American Perspective Bank		Celtic Capital Corporation		Pacific Western Equipment Finance
	May 31, 2013		August 1, 2012		April 3, 2012		January 3, 2012
	(In thousands)
Assets Acquired:
Cash and due from banks	$	6,124	$	3,370	$	3,435	$	7,092
Interest-earning deposits in financial institutions		266,889		10,081		—		—
Investment securities available-for-sale		4,444		48,887		—		—
FHLB stock		9,518		1,412		—		—
Loans and leases		1,049,613		197,279		54,963		140,959
Other real estate owned		13,772		1,561		—		—
Premises and equipment		15,322		—		—		—
FDIC loss sharing asset		17,241		—		—		—
Cash surrender value of life insurance		13,265		—		—		—
Goodwill		136,189		15,047		6,645		19,033
Core deposit and customer relationship intangibles		7,927		1,924		1,300		1,700
Other intangible assets		—		—		670		1,420
Leases in process		—		—		—		19,162
Other assets		40,192		4,234		69		467
Total assets acquired	$	1,580,496	$	283,795	$	67,082	$	189,833
Liabilities Assumed:
Noninterest-bearing deposits	$	361,166	$	40,673	$	—	$	—
Interest-bearing deposits		739,713		178,891		—		—
Borrowings from parent		—		—		—		128,677
Other borrowings		—		5,315		46,804		15,839
Subordinated debentures		24,061		—		—		—
Discontinued operations		184,619		—		—		—
Accrued interest payable and other liabilities		19,369		840		2,278		10,317
Total liabilities assumed	$	1,328,928	$	225,719	$	49,082	$	154,833
Total consideration paid	$	251,568	$	58,076	$	18,000	$	35,000
Summary of consideration:
Cash paid	$	—	$	58,076	$	18,000	$	35,000
PacWest common stock issued		242,268		—		—		—
Cancellation of FCAL common stock owned by
PacWest (at acquisition date fair value)		9,300		—		—		—
Total	$	251,568	$	58,076	$	18,000	$	35,000

Schedule of pro forma results of operations

			Nine Months Ended September 30,
	Three Months Ended September 30, 2012
			2013		2012
	(In thousands, except per share data)
Pro forma revenues (net interest income plus noninterest income)	$	95,441	$	250,155	$	278,182
Pro forma net earnings from continuing operations	$	19,880	$	49,692	$	47,039
Pro forma net earnings from continuing operations per share:
Basic	$	0.44	$	1.09	$	1.04
Diluted	$	0.44	$	1.09	$	1.04

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OTHER REAL ESTATE OWNED (OREO) (Tables)

9 Months Ended

Sep. 30, 2013

OTHER REAL ESTATE OWNED (OREO)

Summary of OREO by property type

	September 30, 2013						December 31, 2012
Property Type	Non-Covered OREO		Covered OREO		Total OREO		Non-Covered OREO		Covered OREO		Total OREO
	(In thousands)
Commercial real estate	$	11,914	$	6,912	$	18,826	$	1,684	$	11,635	$	13,319
Construction and land development		32,025		4,106		36,131		31,888		6,708		38,596
Multi-family		—		989		989		—		4,239		4,239
Single family residence		19		7		26		—		260		260
Total OREO, net	$	43,958	$	12,014	$	55,972	$	33,572	$	22,842	$	56,414

Schedule of roll forward of OREO, net of the valuation allowance

	Non-Covered OREO			Covered OREO			Total OREO
	(In thousands)
OREO Activity:
Balance, December 31, 2012	$	33,572		$	22,842		$	56,414
Foreclosures		3,500			1,480			4,980
Provision for losses		(92	)		(1,093	)		(1,185	)
Reductions related to sales		(1,019	)		(5,918	)		(6,937	)
Balance, March 31, 2013		35,961			17,311			53,272
Addition from the FCAL acquisition		10,092			3,680			13,772
Foreclosures		1,035			3,075			4,110
Payments to third parties(1)		14			—			14
Provision for losses		—			(292	)		(292	)
Reductions related to sales		(1,670	)		(4,660	)		(6,330	)
Balance, June 30, 2013		45,432			19,114			64,546
Foreclosures		3,196			468			3,664
Payments to third parties(1)		24			—			24
Provision for losses		(643	)		26			(617	)
Reductions related to sales		(4,051	)		(7,594	)		(11,645	)
Balance, September 30, 2013	$	43,958		$	12,014		$	55,972

(1)

Represents amounts due to participants and for guarantees, property taxes or other prior lien positions.

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STOCK COMPENSATION PLANS (Details) (USD $) In Millions, except Share data, unless otherwise specified	3 Months Ended			9 Months Ended
	Sep. 30, 2013	Jun. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Stock Compensation Plans
Number of common shares authorized under the 2003 Plan	6,500,000			6,500,000
Number of shares available for grant under the 2003 Plan	1,431,481			1,431,481
Restricted Stock
Stock Compensation Plans
Total unrecognized compensation expense	$ 41.7			$ 41.7
Restricted Stock | Time-based restricted stock
Stock Compensation Plans
Outstanding awards (in shares)	916,462			916,462
Compensation expense	2.4	2.0	1.4	6.1	4.3
Restricted Stock | Time-based restricted stock | Minimum
Stock Compensation Plans
Vesting period				3 years
Restricted Stock | Time-based restricted stock | Maximum
Stock Compensation Plans
Vesting period				4 years
Restricted Stock | Performance-based restricted stock
Stock Compensation Plans
Outstanding awards (in shares)	875,000			875,000
Outstanding awards for which compensation expense not yet recognized (in shares)	575,000			575,000
Total unrecognized compensation expense	$ 19.0			$ 19.0

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EARNINGS PER SHARE (Tables)

9 Months Ended

Sep. 30, 2013

EARNINGS PER SHARE

Schedule of the calculation of basic and diluted net earnings per share

	Three Months Ended									Nine Months Ended September 30,
	September 30, 2013			June 30, 2013			September 30, 2012
										2013			2012
	(In thousands, except per share data)
Basic Earnings Per Share:
Net earnings from continuing operations	$	24,140		$	4,396		$	16,088		$	42,030		$	36,909
Less: earnings allocated to unvested restricted stock(1)		(786	)		(212	)		(574	)		(1,137	)		(1,170	)
Net earnings from continuing operations allocated to common shares		23,354			4,184			15,514			40,893			35,739
Net earnings (loss) from discontinued operations		23			(47	)		—			(24	)		—
Net earnings allocated to common shares	$	23,377		$	4,137		$	15,514		$	40,869		$	35,739
Weighted-average basic shares and unvested restricted stock outstanding		46,091			40,339			37,413			41,306			37,353
Less: weighted-average unvested restricted stock outstanding		(1,795	)		(1,597	)		(1,713	)		(1,663	)		(1,679	)
Weighted-average basic shares outstanding		44,296			38,742			35,700			39,643			35,674
Basic earnings per share:
Net earnings from continuing operations	$	0.53		$	0.11		$	0.43		$	1.03		$	1.00
Net earnings from discontinued operations		—			—			—			—			—
Net earnings	$	0.53		$	0.11		$	0.43		$	1.03		$	1.00
Diluted Earnings Per Share:
Net earnings from continuing operations allocated to common shares	$	23,354		$	4,184		$	15,514		$	40,893		$	35,739
Net earnings (loss) from discontinued operations		23			(47	)		—			(24	)		—
Net earnings allocated to common shares	$	23,377		$	4,137		$	15,514		$	40,869		$	35,739
Weighted-average basic shares outstanding		44,296			38,742			35,700			39,643			35,674
Diluted earnings per share:
Net earnings from continuing operations	$	0.53		$	0.11		$	0.43		$	1.03		$	1.00
Net earnings from discontinued operations		—			—			—			—			—
Net earnings	$	0.53		$	0.11		$	0.43		$	1.03		$	1.00

(1)

Represents cash dividends paid to holders of unvested restricted stock, net of estimated forfeitures, plus undistributed earnings amounts available to holders of unvested restricted stock, if any.

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EARNINGS PER SHARE (Details) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended			9 Months Ended
	Sep. 30, 2013	Jun. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Basic earnings per share:
Net earnings from continuing operations	$ 24,140	$ 4,396	$ 16,088	$ 42,030	$ 36,909
Less: earnings allocated to unvested restricted stock	(786)	(212)	(574)	(1,137)	(1,170)
Net earnings from continuing operations allocated to common shares	23,354	4,184	15,514	40,893	35,739
Net earnings (loss) from discontinued operations	23	(47)		(24)
Net earnings allocated to common shares	23,377	4,137	15,514	40,869	35,739
Weighted-average basic shares and unvested restricted stock outstanding	46,091	40,339	37,413	41,306	37,353
Less: weighted-average unvested restricted stock outstanding (in shares)	(1,795)	(1,597)	(1,713)	(1,663)	(1,679)
Weighted-average basic shares outstanding	44,296	38,742	35,700	39,643	35,674
Net earnings from continuing operations (in dollars per share)	$ 0.53	$ 0.11	$ 0.43	$ 1.03	$ 1.00
Net earnings (in dollars per share)	$ 0.53	$ 0.11	$ 0.43	$ 1.03	$ 1.00
Diluted earnings per share:
Net earnings from continuing operations allocated to common shares	23,354	4,184	15,514	40,893	35,739
Net earnings (loss) from discontinued operations	23	(47)		(24)
Net earnings allocated to common shares	$ 23,377	$ 4,137	$ 15,514	$ 40,869	$ 35,739
Weighted-average basic shares outstanding	44,296	38,742	35,700	39,643	35,674
Net earnings from continuing operations (in dollars per share)	$ 0.53	$ 0.11	$ 0.43	$ 1.03	$ 1.00
Net earnings (in dollars per share)	$ 0.53	$ 0.11	$ 0.43	$ 1.03	$ 1.00

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LOANS AND LEASES (Details 7) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2013	Dec. 31, 2012	Sep. 30, 2012
Nonaccrual and performing non-covered loans by portfolio segment and class
Total gross loans and leases	$ 4,384,312	$ 3,592,832	$ 3,651,181
Real estate mortgage
Nonaccrual and performing non-covered loans by portfolio segment and class
Total gross loans and leases	2,971,381	2,422,570	1,950,777
Real estate construction
Nonaccrual and performing non-covered loans by portfolio segment and class
Total gross loans and leases	201,524	154,604	152,748
Commercial
Nonaccrual and performing non-covered loans by portfolio segment and class
Total gross loans and leases	929,434	800,959
Leases
Nonaccrual and performing non-covered loans by portfolio segment and class
Total gross loans and leases	235,791	174,373
Consumer
Nonaccrual and performing non-covered loans by portfolio segment and class
Total gross loans and leases	34,153	23,085
Foreign
Nonaccrual and performing non-covered loans by portfolio segment and class
Total gross loans and leases	12,029	17,241
Non-PCI Loans
Nonaccrual and performing non-covered loans by portfolio segment and class
Total gross loans and leases	3,951,555	3,074,947	3,080,068
Non-PCI Loans | Real estate mortgage
Nonaccrual and performing non-covered loans by portfolio segment and class
Total gross loans and leases	2,551,781	1,938,513	1,950,777
Non-PCI Loans | Hospitality
Nonaccrual and performing non-covered loans by portfolio segment and class
Total gross loans and leases	188,073	181,144
Non-PCI Loans | SBA 504
Nonaccrual and performing non-covered loans by portfolio segment and class
Total gross loans and leases	48,126	54,158
Non-PCI Loans | Other
Nonaccrual and performing non-covered loans by portfolio segment and class
Total gross loans and leases	2,315,582	1,703,211
Non-PCI Loans | Real estate construction
Nonaccrual and performing non-covered loans by portfolio segment and class
Total gross loans and leases	189,957	129,959	152,748
Non-PCI Loans | Residential
Nonaccrual and performing non-covered loans by portfolio segment and class
Total gross loans and leases	62,154	48,629
Non-PCI Loans | Commercial
Nonaccrual and performing non-covered loans by portfolio segment and class
Total gross loans and leases	127,803	81,330
Non-PCI Loans | Commercial
Nonaccrual and performing non-covered loans by portfolio segment and class
Total gross loans and leases	928,169	791,888	777,365
Non-PCI Loans | Collateralized
Nonaccrual and performing non-covered loans by portfolio segment and class
Total gross loans and leases	562,493	457,095
Non-PCI Loans | Unsecured
Nonaccrual and performing non-covered loans by portfolio segment and class
Total gross loans and leases	106,226	70,038
Non-PCI Loans | Asset-based
Nonaccrual and performing non-covered loans by portfolio segment and class
Total gross loans and leases	231,898	239,430
Non-PCI Loans | SBA 7(a)
Nonaccrual and performing non-covered loans by portfolio segment and class
Total gross loans and leases	27,552	25,325
Non-PCI Loans | Leases
Nonaccrual and performing non-covered loans by portfolio segment and class
Total gross loans and leases	235,791	174,373	161,934
Non-PCI Loans | Consumer
Nonaccrual and performing non-covered loans by portfolio segment and class
Total gross loans and leases	33,828	22,973	21,118
Non-PCI Loans | Foreign
Nonaccrual and performing non-covered loans by portfolio segment and class
Total gross loans and leases	12,029	17,241	16,126
Non-PCI Loans | Nonaccrual
Nonaccrual and performing non-covered loans by portfolio segment and class
Total gross loans and leases	50,845	41,762
Non-PCI Loans | Nonaccrual | Real estate mortgage
Nonaccrual and performing non-covered loans by portfolio segment and class
Total gross loans and leases	24,419	26,475
Non-PCI Loans | Nonaccrual | Hospitality
Nonaccrual and performing non-covered loans by portfolio segment and class
Total gross loans and leases		6,908
Non-PCI Loans | Nonaccrual | SBA 504
Nonaccrual and performing non-covered loans by portfolio segment and class
Total gross loans and leases	2,791	2,982
Non-PCI Loans | Nonaccrual | Other
Nonaccrual and performing non-covered loans by portfolio segment and class
Total gross loans and leases	21,628	16,585
Non-PCI Loans | Nonaccrual | Real estate construction
Nonaccrual and performing non-covered loans by portfolio segment and class
Total gross loans and leases	3,683	3,772
Non-PCI Loans | Nonaccrual | Residential
Nonaccrual and performing non-covered loans by portfolio segment and class
Total gross loans and leases	826	1,057
Non-PCI Loans | Nonaccrual | Commercial
Nonaccrual and performing non-covered loans by portfolio segment and class
Total gross loans and leases	2,857	2,715
Non-PCI Loans | Nonaccrual | Commercial
Nonaccrual and performing non-covered loans by portfolio segment and class
Total gross loans and leases	21,905	10,846
Non-PCI Loans | Nonaccrual | Collateralized
Nonaccrual and performing non-covered loans by portfolio segment and class
Total gross loans and leases	15,256	4,462
Non-PCI Loans | Nonaccrual | Unsecured
Nonaccrual and performing non-covered loans by portfolio segment and class
Total gross loans and leases	334	2,027
Non-PCI Loans | Nonaccrual | Asset-based
Nonaccrual and performing non-covered loans by portfolio segment and class
Total gross loans and leases	3,381	176
Non-PCI Loans | Nonaccrual | SBA 7(a)
Nonaccrual and performing non-covered loans by portfolio segment and class
Total gross loans and leases	2,934	4,181
Non-PCI Loans | Nonaccrual | Leases
Nonaccrual and performing non-covered loans by portfolio segment and class
Total gross loans and leases	244	244
Non-PCI Loans | Nonaccrual | Consumer
Nonaccrual and performing non-covered loans by portfolio segment and class
Total gross loans and leases	594	425
Non-PCI Loans | Performing
Nonaccrual and performing non-covered loans by portfolio segment and class
Total gross loans and leases	3,900,710	3,033,185
Non-PCI Loans | Performing | Real estate mortgage
Nonaccrual and performing non-covered loans by portfolio segment and class
Total gross loans and leases	2,527,362	1,912,038
Non-PCI Loans | Performing | Hospitality
Nonaccrual and performing non-covered loans by portfolio segment and class
Total gross loans and leases	188,073	174,236
Non-PCI Loans | Performing | SBA 504
Nonaccrual and performing non-covered loans by portfolio segment and class
Total gross loans and leases	45,335	51,176
Non-PCI Loans | Performing | Other
Nonaccrual and performing non-covered loans by portfolio segment and class
Total gross loans and leases	2,293,954	1,686,626
Non-PCI Loans | Performing | Real estate construction
Nonaccrual and performing non-covered loans by portfolio segment and class
Total gross loans and leases	186,274	126,187
Non-PCI Loans | Performing | Residential
Nonaccrual and performing non-covered loans by portfolio segment and class
Total gross loans and leases	61,328	47,572
Non-PCI Loans | Performing | Commercial
Nonaccrual and performing non-covered loans by portfolio segment and class
Total gross loans and leases	124,946	78,615
Non-PCI Loans | Performing | Commercial
Nonaccrual and performing non-covered loans by portfolio segment and class
Total gross loans and leases	906,264	781,042
Non-PCI Loans | Performing | Collateralized
Nonaccrual and performing non-covered loans by portfolio segment and class
Total gross loans and leases	547,237	452,633
Non-PCI Loans | Performing | Unsecured
Nonaccrual and performing non-covered loans by portfolio segment and class
Total gross loans and leases	105,892	68,011
Non-PCI Loans | Performing | Asset-based
Nonaccrual and performing non-covered loans by portfolio segment and class
Total gross loans and leases	228,517	239,254
Non-PCI Loans | Performing | SBA 7(a)
Nonaccrual and performing non-covered loans by portfolio segment and class
Total gross loans and leases	24,618	21,144
Non-PCI Loans | Performing | Leases
Nonaccrual and performing non-covered loans by portfolio segment and class
Total gross loans and leases	235,547	174,129
Non-PCI Loans | Performing | Consumer
Nonaccrual and performing non-covered loans by portfolio segment and class
Total gross loans and leases	33,234	22,548
Non-PCI Loans | Performing | Foreign
Nonaccrual and performing non-covered loans by portfolio segment and class
Total gross loans and leases	$ 12,029	$ 17,241

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LOANS AND LEASES (Details 2) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2013	Dec. 31, 2012	Sep. 30, 2012
Summary of the carrying values of PCI loans
Non-covered loans and leases	$ 3,873,388	$ 3,049,505
Covered loans	510,924	543,327
Total gross loans and leases	4,384,312	3,592,832	3,651,181
Real estate mortgage
Summary of the carrying values of PCI loans
Non-covered loans and leases	2,494,108	1,917,670
Covered loans	477,273	504,900
Total gross loans and leases	2,971,381	2,422,570	1,950,777
Real estate construction
Summary of the carrying values of PCI loans
Non-covered loans and leases	181,993	129,959
Covered loans	19,531	24,645
Total gross loans and leases	201,524	154,604	152,748
Commercial
Summary of the carrying values of PCI loans
Non-covered loans and leases	918,669	787,775
Covered loans	10,765	13,184
Total gross loans and leases	929,434	800,959
Leases
Summary of the carrying values of PCI loans
Non-covered loans and leases	235,791	174,373
Total gross loans and leases	235,791	174,373
Consumer
Summary of the carrying values of PCI loans
Non-covered loans and leases	30,798	22,487
Covered loans	3,355	598
Total gross loans and leases	34,153	23,085
Foreign
Summary of the carrying values of PCI loans
Non-covered loans and leases	12,029	17,241
Total gross loans and leases	12,029	17,241
Non-PCI Loans and Leases
Summary of the carrying values of PCI loans
Non-covered loans and leases	3,854,129	3,049,505
Covered loans	97,426	25,442
Total gross loans and leases	3,951,555	3,074,947	3,080,068
Non-PCI Loans and Leases | Real estate mortgage
Summary of the carrying values of PCI loans
Non-covered loans and leases	2,476,180	1,917,670
Covered loans	75,601	20,843
Total gross loans and leases	2,551,781	1,938,513	1,950,777
Non-PCI Loans and Leases | Real estate construction
Summary of the carrying values of PCI loans
Non-covered loans and leases	180,697	129,959
Covered loans	9,260
Total gross loans and leases	189,957	129,959	152,748
Non-PCI Loans and Leases | Commercial
Summary of the carrying values of PCI loans
Non-covered loans and leases	918,669	787,775
Covered loans	9,500	4,113
Total gross loans and leases	928,169	791,888	777,365
Non-PCI Loans and Leases | Leases
Summary of the carrying values of PCI loans
Non-covered loans and leases	235,791	174,373
Total gross loans and leases	235,791	174,373	161,934
Non-PCI Loans and Leases | Consumer
Summary of the carrying values of PCI loans
Non-covered loans and leases	30,763	22,487
Covered loans	3,065	486
Total gross loans and leases	33,828	22,973	21,118
Non-PCI Loans and Leases | Foreign
Summary of the carrying values of PCI loans
Non-covered loans and leases	12,029	17,241
Total gross loans and leases	12,029	17,241	16,126
PCI Loans
Summary of the carrying values of PCI loans
Non-covered loans and leases	19,259
Covered loans	413,498	517,885
Total gross loans and leases	432,757	517,885	571,113
PCI Loans | Real estate mortgage
Summary of the carrying values of PCI loans
Non-covered loans and leases	17,928
Covered loans	401,672	484,057
Total gross loans and leases	419,600	484,057
PCI Loans | Real estate construction
Summary of the carrying values of PCI loans
Non-covered loans and leases	1,296
Covered loans	10,271	24,645
Total gross loans and leases	11,567	24,645
PCI Loans | Commercial
Summary of the carrying values of PCI loans
Covered loans	1,265	9,071
Total gross loans and leases	1,265	9,071
PCI Loans | Consumer
Summary of the carrying values of PCI loans
Non-covered loans and leases	35
Covered loans	290	112
Total gross loans and leases	$ 325	$ 112

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GOODWILL AND OTHER INTANGIBLE ASSETS (Details) (USD $) In Thousands, unless otherwise specified	9 Months Ended		9 Months Ended		3 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013 APB	Aug. 01, 2012 APB	Sep. 30, 2013 FCAL
Changes in the carrying amount of goodwill
Balance, at the beginning of the period	$ 79,866	$ 79,592		$ 15,047
Adjustment to APB goodwill			(193)
Non-tax deductible addition from the FCAL acquisition	136,189
Balance, at the end of the period	$ 215,862	$ 79,592		$ 15,047
Remaining weighted average amortization period	3 years				3 years 1 month 6 days

XML

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) In Thousands, except Share data, unless otherwise specified	Sep. 30, 2013	Dec. 31, 2012
CONDENSED CONSOLIDATED BALANCE SHEETS
Securities available-for-sale, covered by FDIC loss sharing (in dollars)	$ 39,378	$ 44,684
Loans and leases, covered by FDIC loss sharing (in dollars)	510,924	543,327
Allowance for loan and lease, covered by FDIC loss sharing (in dollars)	23,235	26,069
Other real estate owned, covered by FDIC loss sharing (in dollars)	$ 12,014	$ 22,842
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, authorized shares	5,000,000	5,000,000
Preferred stock, issued shares	0	0
Preferred stock, outstanding shares	0	0
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, authorized shares	75,000,000	75,000,000
Common stock, issued shares	46,528,290	37,772,559
Common stock, unvested restricted stock	1,791,462	1,698,281
Treasury stock, shares	437,548	351,650

XML

LOANS AND LEASES

9 Months Ended

Sep. 30, 2013

LOANS AND LEASES

LOANS AND LEASES

NOTE 6—LOANS AND LEASES

        The Company's loan portfolio consists of (1) purchased credit-impaired ("PCI") loans and (2) non-purchased credit-impaired ("Non-PCI") loans. PCI loans represent acquired loans for which there is, at the acquisition date, evidence of credit deterioration since their origination and it is probable that we would be unable to collect all contractually required payments. Such loans are accounted for in accordance with ASC Subtopic 310-30, "Loans and Debt Securities Acquired with Deteriorated Credit Quality." Non-PCI loans are comprised of originated loans and acquired non-impaired loans for which there is no evidence of credit deterioration at their acquisition date and it is probable that we would be able to collect all contractually required payments. Originated loans are carried at the principal amount outstanding, net of unearned income. Unearned income is recognized as an adjustment to interest income over the contractual life of the loans using the effective interest method or taken into income when the related loans are paid off or sold. The purchase discount on acquired non-impaired loans is recognized as an adjustment to interest income over the contractual life of such loans using the effective interest method or taken into income when the related loans are paid off or sold.

        We further present our loans by "covered" and "non-covered" loan categories. Covered loans represent loans covered by loss sharing agreements with the FDIC for which we will be reimbursed for a substantial portion of any future losses under the terms of the agreements. Covered loans also include a portion of the loans acquired in the FCAL acquisition as FCB had acquired two failed banks from the FDIC for which the loss sharing agreements with the FDIC remain in effect. Non-covered loans and leases represent loans and leases not covered by FDIC loss sharing agreements.

        The following table summarizes the composition of our loan and lease portfolio as of the dates indicated:

	September 30, 2013									December 31, 2012
	Non-PCI Loans and Leases			PCI Loans			Total			Non-PCI Loans and Leases			PCI Loans			Total
	(In thousands)
Non-covered loans and leases	$	3,854,129		$	19,259		$	3,873,388		$	3,049,505		$	—		$	3,049,505
Covered loans		97,426			413,498			510,924			25,442			517,885			543,327
Total gross loans and leases		3,951,555			432,757			4,384,312			3,074,947			517,885			3,592,832
Unearned income		(919	)		—			(919	)		(2,535	)		—			(2,535	)
Total loans and leases, net of unearned income		3,950,636			432,757			4,383,393			3,072,412			517,885			3,590,297
Allowance for loan and lease losses:
Non-covered loans and leases		(60,551	)		—			(60,551	)		(65,899	)		—			(65,899	)
Covered loans		—			(23,235	)		(23,235	)		—			(26,069	)		(26,069	)
Total allowance for loan and lease losses		(60,551	)		(23,235	)		(83,786	)		(65,899	)		(26,069	)		(91,968	)
Total net loans and leases	$	3,890,085		$	409,522		$	4,299,607		$	3,006,513		$	491,816		$	3,498,329

        The following table presents the composition of our gross loans and leases by portfolio segment as of the dates indicated:

	September 30, 2013						December 31, 2012
	Non-PCI Loans and Leases		PCI Loans		Total		Non-PCI Loans and Leases		PCI Loans		Total
	(In thousands)
Non-Covered Loans and Leases
Real estate mortgage	$	2,476,180	$	17,928	$	2,494,108	$	1,917,670	$	—	$	1,917,670
Real estate construction		180,697		1,296		181,993		129,959		—		129,959
Commercial		918,669		—		918,669		787,775		—		787,775
Leases		235,791		—		235,791		174,373		—		174,373
Consumer		30,763		35		30,798		22,487		—		22,487
Foreign		12,029		—		12,029		17,241		—		17,241
Total gross non-covered loans and leases	$	3,854,129	$	19,259	$	3,873,388	$	3,049,505	$	—	$	3,049,505
Covered Loans
Real estate mortgage	$	75,601	$	401,672	$	477,273	$	20,843	$	484,057	$	504,900
Real estate construction		9,260		10,271		19,531		—		24,645		24,645
Commercial		9,500		1,265		10,765		4,113		9,071		13,184
Consumer		3,065		290		3,355		486		112		598
Total gross covered loans	$	97,426	$	413,498	$	510,924	$	25,442	$	517,885	$	543,327
Total Loans and Leases
Real estate mortgage	$	2,551,781	$	419,600	$	2,971,381	$	1,938,513	$	484,057	$	2,422,570
Real estate construction		189,957		11,567		201,524		129,959		24,645		154,604
Commercial		928,169		1,265		929,434		791,888		9,071		800,959
Leases		235,791		—		235,791		174,373		—		174,373
Consumer		33,828		325		34,153		22,973		112		23,085
Foreign		12,029		—		12,029		17,241		—		17,241
Total gross loans and leases	$	3,951,555	$	432,757	$	4,384,312	$	3,074,947	$	517,885	$	3,592,832

        The following tables present a summary of the activity in the allowance for loan and lease losses on Non-PCI loans and leases and PCI loans by portfolio segment for the periods indicated:

	Three Months Ended September 30, 2013
	Real Estate Mortgage			Real Estate Construction			Commercial			Leases		Consumer			Foreign			Total Non-PCI			Total PCI			Total
	(In thousands)
Allowance for Loan and Lease Losses:
Balance, beginning of period	$	31,804		$	3,432		$	24,165		$	2,096	$	1,667		$	82		$	63,246		$	27,397		$	90,643
Charge-offs		(281	)		—			(2,439	)		—		(75	)		—			(2,795	)		—			(2,795	)
Recoveries		152			179			321			—		15			3			670			5			675
Provision (negative provision)		(2,069	)		(66	)		1,022			240		332			(29	)		(570	)		(4,167	)		(4,737	)
Balance, end of period	$	29,606		$	3,545		$	23,069		$	2,336	$	1,939		$	56		$	60,551		$	23,235		$	83,786

	Nine Months Ended September 30, 2013
	Real Estate Mortgage			Real Estate Construction			Commercial			Leases			Consumer			Foreign			Total Non-PCI			Total PCI			Total
	(In thousands)
Allowance for Loan and Lease Losses:
Balance, beginning of period	$	38,700		$	3,221		$	20,661		$	1,493		$	1,726		$	98		$	65,899		$	26,069		$	91,968
Charge-offs		(3,840	)		—			(4,517	)		(114	)		(111	)		—			(8,582	)		—			(8,582	)
Recoveries		1,665			514			2,025			—			57			3			4,264			38			4,302
Provision (negative provision)		(6,919	)		(190	)		4,900			957			267			(45	)		(1,030	)		(2,872	)		(3,902	)
Balance, end of period	$	29,606		$	3,545		$	23,069		$	2,336		$	1,939		$	56		$	60,551		$	23,235		$	83,786
Amount of the allowance applicable to loans and leases:
Individually evaluated for impairment	$	3,225		$	103		$	6,147		$	—		$	240		$	—		$	9,715
Collectively evaluated for impairment	$	26,381		$	3,442		$	16,922		$	2,336		$	1,699		$	56		$	50,836
Acquired with deteriorated credit quality																						$	23,235
Loans and Leases:
Ending balance	$	2,551,781		$	189,957		$	928,169		$	235,791		$	33,828		$	12,029		$	3,951,555		$	432,757		$	4,384,312
The ending balance of the loan and lease portfolio is composed of loans and leases:
Individually evaluated for impairment	$	90,329		$	14,878		$	24,839		$	244		$	792		$	—		$	131,082
Collectively evaluated for impairment	$	2,461,452		$	175,079		$	903,330		$	235,547		$	33,036		$	12,029		$	3,820,473
Acquired with deteriorated credit quality																						$	432,757

	Three Months Ended September 30, 2012
	Real Estate Mortgage			Real Estate Construction			Commercial			Leases		Consumer			Foreign			Total Non-PCI			Total PCI			Total
	(In thousands)
Allowance for Loan and Lease Losses:
Balance, beginning of period	$	42,236		$	5,496		$	21,979		$	498	$	1,735		$	117		$	72,061		$	31,463		$	103,524
Charge-offs		(1,118	)		(492	)		(492	)		—		(25	)		—			(2,127	)		(618	)		(2,745	)
Recoveries		845			11			218			—		32			2			1,108			—			1,108
Provision (negative provision)		(3,226	)		1,582			(685	)		629		(188	)		(12	)		(1,900	)		(141	)		(2,041	)
Balance, end of period	$	38,737		$	6,597		$	21,020		$	1,127	$	1,554		$	107		$	69,142		$	30,704		$	99,846

	Nine Months Ended September 30, 2012
	Real Estate Mortgage			Real Estate Construction			Commercial			Leases		Consumer			Foreign			Total Non-PCI			Total PCI			Total
	(In thousands)
Allowance for Loan and Lease Losses:
Balance, beginning of period	$	50,205		$	8,697		$	23,308		$	—	$	2,768		$	335		$	85,313		$	31,275		$	116,588
Charge-offs		(5,891	)		(492	)		(2,715	)		—		(258	)		—			(9,356	)		(4,085	)		(13,441	)
Recoveries		1,217			35			1,232			—		79			22			2,585			—			2,585
Provision (negative provision)		(6,794	)		(1,643	)		(805	)		1,127		(1,035	)		(250	)		(9,400	)		3,514			(5,886	)
Balance, end of period	$	38,737		$	6,597		$	21,020		$	1,127	$	1,554		$	107		$	69,142		$	30,704		$	99,846
Amount of the allowance applicable to loans and leases:
Individually evaluated for impairment	$	5,568		$	2,468		$	6,051		$	—	$	265		$	—		$	14,352
Collectively evaluated for impairment	$	33,169		$	4,129		$	14,969		$	1,127	$	1,289		$	107		$	54,790
Acquired with deteriorated credit quality																					$	30,704
Loans and Leases:
Ending balance	$	1,950,777		$	152,748		$	777,365		$	161,934	$	21,118		$	16,126		$	3,080,068		$	571,113		$	3,651,181
The ending balance of the loan and lease portfolio is composed of loans and leases:
Individually evaluated for impairment	$	100,133		$	31,792		$	19,051		$	420	$	623		$	—		$	152,019
Collectively evaluated for impairment	$	1,850,644		$	120,956		$	758,314		$	161,514	$	20,495		$	16,126		$	2,928,049
Acquired with deteriorated credit quality																					$	571,113

• Loans and Leases, Excluding PCI Loans

        The following table presents the composition of loans and leases (excluding PCI loans), which we also refer to as Non-PCI loans and leases, by portfolio segment as of the dates indicated:

	September 30, 2013						December 31, 2012
	Amount			% of Total			Amount			% of Total
	(Dollars in thousands)
Real estate mortgage	$	2,551,781			65	%	$	1,938,513			63	%
Real estate construction		189,957			5			129,959			4
Commercial		928,169			23			791,888			25
Leases		235,791			6			174,373			6
Consumer		33,828			1			22,973			1
Foreign		12,029			—			17,241			1
Total gross Non-PCI loans and leases		3,951,555			100	%		3,074,947			100	%
Less:
Unearned income		(919	)					(2,535	)
Allowance for loan and lease losses		(60,551	)					(65,899	)
Total net Non-PCI loans and leases	$	3,890,085					$	3,006,513

        As of May 31, 2013, the fair value of the FCAL Non-PCI loans acquired was $1.0 billion, the related gross contractual amount was $1.3 billion, and the estimated contractual cash flows not expected to be collected was $34.4 million.

        The following table presents the credit risk rating categories for Non-PCI loans and leases by portfolio segment and class as of the dates indicated. Nonclassified loans and leases are those with a credit risk rating of either pass or special mention, while classified loans and leases are those with a credit risk rating of either substandard or doubtful.

	September 30, 2013						December 31, 2012
	Nonclassified		Classified		Total		Nonclassified		Classified		Total
	(In thousands)
Real estate mortgage:
Hospitality	$	182,419	$	5,654	$	188,073	$	168,489	$	12,655	$	181,144
SBA 504		42,621		5,505		48,126		48,372		5,786		54,158
Other		2,247,865		67,717		2,315,582		1,653,446		49,765		1,703,211
Total real estate mortgage		2,472,905		78,876		2,551,781		1,870,307		68,206		1,938,513
Real estate construction:
Residential		60,390		1,764		62,154		46,591		2,038		48,629
Commercial		121,221		6,582		127,803		77,503		3,827		81,330
Total real estate construction		181,611		8,346		189,957		124,094		5,865		129,959
Commercial:
Collateralized		538,101		24,392		562,493		442,293		14,802		457,095
Unsecured		104,608		1,618		106,226		67,133		2,905		70,038
Asset-based		225,110		6,788		231,898		235,075		4,355		239,430
SBA 7(a)		21,764		5,788		27,552		18,888		6,437		25,325
Total commercial		889,583		38,586		928,169		763,389		28,499		791,888
Leases		235,547		244		235,791		174,129		244		174,373
Consumer		29,089		4,739		33,828		21,733		1,240		22,973
Foreign		12,029		—		12,029		17,241		—		17,241
Total Non-PCI loans and leases	$	3,820,764	$	130,791	$	3,951,555	$	2,970,893	$	104,054	$	3,074,947

        In addition to our internal risk rating process, our federal and state banking regulators, as an integral part of their examination process, periodically review the Company's loan risk rating classifications. Our regulators may require the Company to recognize rating downgrades based on their judgments related to information available to them at the time of their examinations. Risk rating downgrades generally result in higher allowances for credit losses.

        The following tables present an aging analysis of our Non-PCI loans and leases by portfolio segment and class as of the dates indicated:

	September 30, 2013
	30 - 59 Days Past Due		60 - 89 Days Past Due		Greater Than 90 Days Past Due		Total Past Due		Current		Total
	(In thousands)
Real estate mortgage:
Hospitality	$	—	$	—	$	—	$	—	$	188,073	$	188,073
SBA 504		—		—		120		120		48,006		48,126
Other		4,623		486		3,294		8,403		2,307,179		2,315,582
Total real estate mortgage		4,623		486		3,414		8,523		2,543,258		2,551,781
Real estate construction:
Residential		—		—		—		—		62,154		62,154
Commercial		571		—		—		571		127,232		127,803
Total real estate construction		571		—		—		571		189,386		189,957
Commercial:
Collateralized		2,250		426		6,004		8,680		553,813		562,493
Unsecured		82		1,348		225		1,655		104,571		106,226
Asset-based		1,490		—		—		1,490		230,408		231,898
SBA 7(a)		72		868		201		1,141		26,411		27,552
Total commercial		3,894		2,642		6,430		12,966		915,203		928,169
Leases		—		—		244		244		235,547		235,791
Consumer		163		5		178		346		33,482		33,828
Foreign		—		—		—		—		12,029		12,029
Total non-PCI loans and leases	$	9,251	$	3,133	$	10,266	$	22,650	$	3,928,905	$	3,951,555

        At September 30, 2013 and December 31, 2012, the Company had no loans and leases (excluding PCI loans) that were greater than 90 days past due and still accruing interest. It is the Company's policy to discontinue accruing interest when principal or interest payments are past due 90 days or when, in the opinion of management, there is a reasonable doubt as to the collectability of a loan or lease in the normal course of business. At September 30, 2013, nonaccrual loans and leases totaled $50.8 million. Nonaccrual loans and leases include $3.9 million of loans 30 to 89 days past due and $36.6 million of current loans which have been placed on nonaccrual status based on management's judgment regarding their collectability.

	December 31, 2012
	30 - 59 Days Past Due		60 - 89 Days Past Due		Greater Than 90 Days Past Due		Total Past Due		Current		Total
	(In thousands)
Real estate mortgage:
Hospitality	$	—	$	—	$	—	$	—	$	181,144	$	181,144
SBA 504		955		—		1,727		2,682		51,476		54,158
Other		4,098		54		3,271		7,423		1,695,788		1,703,211
Total real estate mortgage		5,053		54		4,998		10,105		1,928,408		1,938,513
Real estate construction:
Residential		—		—		—		—		48,629		48,629
Commercial		—		—		1,245		1,245		80,085		81,330
Total real estate construction		—		—		1,245		1,245		128,714		129,959
Commercial:
Collateralized		964		161		872		1,997		455,098		457,095
Unsecured		3		135		230		368		69,670		70,038
Asset-based		—		—		176		176		239,254		239,430
SBA 7(a)		281		547		1,271		2,099		23,226		25,325
Total commercial		1,248		843		2,549		4,640		787,248		791,888
Leases		225		132		244		601		173,772		174,373
Consumer		23		1		—		24		22,949		22,973
Foreign		—		—		—		—		17,241		17,241
Total Non-PCI loans and leases	$	6,549	$	1,030	$	9,036	$	16,615	$	3,058,332	$	3,074,947

        Nonaccrual loans totaled $41.8 million at December 31, 2012, including $4.2 million of loans 30 to 89 days past due and $28.6 million of current loans.

        The following table presents our nonaccrual and performing Non-PCI loans and leases by portfolio segment and class as of the dates indicated:

	September 30, 2013						December 31, 2012
	Nonaccrual		Performing		Total		Nonaccrual		Performing		Total
	(In thousands)
Real estate mortgage:
Hospitality	$	—	$	188,073	$	188,073	$	6,908	$	174,236	$	181,144
SBA 504		2,791		45,335		48,126		2,982		51,176		54,158
Other		21,628		2,293,954		2,315,582		16,585		1,686,626		1,703,211
Total real estate mortgage		24,419		2,527,362		2,551,781		26,475		1,912,038		1,938,513
Real estate construction:
Residential		826		61,328		62,154		1,057		47,572		48,629
Commercial		2,857		124,946		127,803		2,715		78,615		81,330
Total real estate construction		3,683		186,274		189,957		3,772		126,187		129,959
Commercial:
Collateralized		15,256		547,237		562,493		4,462		452,633		457,095
Unsecured		334		105,892		106,226		2,027		68,011		70,038
Asset-based		3,381		228,517		231,898		176		239,254		239,430
SBA 7(a)		2,934		24,618		27,552		4,181		21,144		25,325
Total commercial		21,905		906,264		928,169		10,846		781,042		791,888
Leases		244		235,547		235,791		244		174,129		174,373
Consumer		594		33,234		33,828		425		22,548		22,973
Foreign		—		12,029		12,029		—		17,241		17,241
Total Non-PCI loans and leases	$	50,845	$	3,900,710	$	3,951,555	$	41,762	$	3,033,185	$	3,074,947

        Nonaccrual loans and leases and performing restructured loans are considered impaired for reporting purposes. The following table presents the composition of our impaired loans and leases as of the dates indicated:

	September 30, 2013						December 31, 2012
	Nonaccrual Loans/Leases		Performing Restructured Loans		Total Impaired Loans/Leases		Nonaccrual Loans/Leases		Performing Restructured Loans		Total Impaired Loans/Leases
	(In thousands)
Real estate mortgage	$	24,419	$	65,910	$	90,329	$	26,475	$	80,723	$	107,198
Real estate construction		3,683		11,195		14,878		3,772		21,678		25,450
Commercial		21,905		2,934		24,839		10,846		3,684		14,530
Leases		244		—		244		244		—		244
Consumer		594		198		792		425		203		628
Total	$	50,845	$	80,237	$	131,082	$	41,762	$	106,288	$	148,050

        The following tables present information regarding our impaired loans and leases (excluding PCI loans) by portfolio segment and class for the dates indicated:

	September 30, 2013						December 31, 2012
	Recorded Investment		Unpaid Principal Balance		Related Allowance		Recorded Investment		Unpaid Principal Balance		Related Allowance
	(In thousands)
With An Allowance Recorded:
Real estate mortgage:
Hospitality	$	8,770	$	9,611	$	319	$	8,954	$	9,640	$	2,396
SBA 504		1,649		1,649		231		1,676		1,676		324
Other		50,029		50,164		2,675		58,364		60,262		5,107
Real estate construction:
Residential		391		391		82		1,303		1,330		165
Commercial		8,541		8,541		21		6,723		6,723		206
Commercial:
Collateralized		4,483		4,752		4,340		2,477		2,731		1,865
Unsecured		787		815		361		2,396		3,121		2,234
Asset-based		3,381		3,381		1,238		—		—		—
SBA 7(a)		1,278		1,351		208		2,871		3,616		426
Consumer		429		473		240		466		506		265
With No Related Allowance Recorded:
Real estate mortgage:
SBA 504	$	2,791	$	3,785	$	—	$	2,982	$	3,755	$	—
Other		27,090		40,693		—		35,222		39,503		—
Real estate construction:
Residential		435		471		—		—		—		—
Commercial		5,511		9,923		—		17,424		21,085		—
Commercial:
Collateralized		11,813		19,542		—		3,657		4,994		—
Unsecured		217		298		—		156		163		—
Asset-based		—		—		—		176		176		—
SBA 7(a)		2,880		4,645		—		2,797		4,057		—
Leases		244		244		—		244		244		—
Consumer		363		475		—		162		233		—
Total Non-PCI Loans and Leases With and Without An Allowance Recorded:
Real estate mortgage	$	90,329	$	105,902	$	3,225	$	107,198	$	114,836	$	7,827
Real estate construction		14,878		19,326		103		25,450		29,138		371
Commercial		24,839		34,784		6,147		14,530		18,858		4,525
Leases		244		244		—		244		244		—
Consumer		792		948		240		628		739		265
Total	$	131,082	$	161,204	$	9,715	$	148,050	$	163,815	$	12,988

	Three Months Ended September 30,
	2013				2012
	Weighted Average Recorded Investment(1)		Interest Income Recognized		Weighted Average Recorded Investment(1)		Interest Income Recognized
	(In thousands)
With An Allowance Recorded:
Real estate mortgage:
Hospitality	$	8,770	$	109	$	9,049	$	21
SBA 504		1,649		23		927		25
Other		47,411		481		30,884		443
Real estate construction:
Residential		391		—		1,283		3
Commercial		8,541		88		18,408		146
Commercial:
Collateralized		4,467		7		4,199		17
Unsecured		787		8		2,309		5
Asset-based		2,377		—		—		—
SBA 7(a)		1,278		12		2,042		20
Consumer		429		3		474		3
With No Related Allowance Recorded:
Real estate mortgage:
SBA 504	$	2,791	$	—	$	1,330	$	—
Other		25,540		410		52,200		577
Real estate construction:
Residential		435		—		753		16
Commercial		5,511		98		11,348		97
Commercial:
Collateralized		8,989		15		4,972		7
Unsecured		217		—		156		—
Asset-based		—		—		176		—
SBA 7(a)		2,846		5		3,902		19
Leases		244		—		360		—
Consumer		248		—		149		—
Total Non-PCI Loans and Leases With and Without An Allowance Recorded:
Real estate mortgage	$	86,161	$	1,023	$	94,390	$	1,066
Real estate construction		14,878		186		31,792		262
Commercial		20,961		47		17,756		68
Leases		244		—		360		—
Consumer		677		3		623		3
Total	$	122,921	$	1,259	$	144,921	$	1,399

(1)

For the loans and leases (excluding PCI loans) reported as impaired at September 30, 2013 and September 30, 2012, amounts were calculated based on the period of time such loans and leases were impaired during the reporting period.

	Nine Months Ended September 30,
	2013				2012
	Weighted Average Recorded Investment(1)		Interest Income Recognized		Weighted Average Recorded Investment(1)		Interest Income Recognized
	(In thousands)
With An Allowance Recorded:
Real estate mortgage:
Hospitality	$	8,770	$	355	$	9,049	$	57
SBA 504		1,649		67		545		17
Other		46,401		1,400		27,749		886
Real estate construction:
Residential		391		—		1,283		7
Commercial		8,541		268		18,408		407
Commercial:
Collateralized		3,000		22		3,773		45
Unsecured		787		25		2,302		16
Asset-based		870		—		—		—
SBA 7(a)		1,278		35		1,996		62
Consumer		429		8		370		4
With No Related Allowance Recorded:
Real estate mortgage:
SBA 504	$	2,727	$	—	$	1,330	$	—
Other		19,826		522		48,441		1,688
Real estate construction:
Residential		435		—		753		49
Commercial		4,679		69		10,598		276
Commercial:
Collateralized		4,861		15		4,796		20
Unsecured		170		—		156		—
Asset-based		—		—		117		—
SBA 7(a)		2,557		15		3,771		61
Leases		244		—		256		—
Consumer		182		—		149		—
Total Non-PCI Loans and Leases With and Without An Allowance Recorded:
Real estate mortgage	$	79,373	$	2,344	$	87,114	$	2,648
Real estate construction		14,046		337		31,042		739
Commercial		13,523		112		16,911		204
Leases		244		—		256		—
Consumer		611		8		519		4
Total	$	107,797	$	2,801	$	135,842	$	3,595

(1)

For the loans and leases (excluding PCI loans) reported as impaired at September 30, 2013 and September 30, 2012, amounts were calculated based on the period of time such loans and leases were impaired during the reporting period.

        The following tables present new troubled debt restructurings and defaulted troubled debt restructurings (excluding PCI loans) for the periods indicated:

	Three Months Ended September 30,
	2013						2012
	Number of Loans		Pre- Modification Outstanding Recorded Investment		Post- Modification Outstanding Recorded Investment		Number of Loans		Pre- Modification Outstanding Recorded Investment		Post- Modification Outstanding Recorded Investment
	(Dollars in thousands)
Troubled Debt Restructurings:
Real estate mortgage:
SBA 504		—	$	—	$	—		1	$	1,118	$	1,118
Other		8		4,824		4,824		4		10,119		10,119
Real estate construction:
Commercial		—		—		—		1		6,973		6,973
Commercial:
Collateralized		2		499		499		2		370		370
Unsecured		1		17		17		—		—		—
SBA 7(a)		—		—		—		2		70		70
Consumer		—		—		—		1		206		206
Total		11	$	5,340	$	5,340		11	$	18,856	$	18,856

	Nine Months Ended September 30,
	2013						2012
	Number of Loans		Pre- Modification Outstanding Recorded Investment		Post- Modification Outstanding Recorded Investment		Number of Loans		Pre- Modification Outstanding Recorded Investment		Post- Modification Outstanding Recorded Investment
	(Dollars in thousands)
Troubled Debt Restructurings:
Real estate mortgage:
SBA 504		—	$	—	$	—		2	$	1,680	$	1,680
Other		12		16,215		16,215		4		10,119		10,119
Real estate construction:
Commercial		—		—		—		2		8,419		8,419
Commercial:
Collateralized		7		4,553		4,553		7		1,545		1,545
Unsecured		5		502		502		3		38		38
Asset-based		1		2,032		2,032		—		—		—
SBA 7(a)		4		137		137		4		299		299
Consumer		—		—		—		1		206		206
Total		29	$	23,439	$	23,439		23	$	22,306	$	22,306

	Three Months Ended September 30,
	2013				2012
	Number of Loans		Recorded Investment(1)		Number of Loans		Recorded Investment(2)
	(Dollars in thousands)
Troubled Debt Restructurings That Subsequently Defaulted(3):
Real estate mortgage:
Other		—	$	—		2	$	627
Commercial:
Unsecured		2		70		—		—
SBA 7(a)		—		—		2		118
Total		2	$	70		4	$	745

(1)

Represents the balance at September 30, 2013 and no charge-off.

(2)

Represents the balance at September 30, 2012 and is net of charge-offs of $82,000.

(3)

The population of defaulted restructured loans for the period indicated includes only those loans restructured during the preceding 12-month period. The table excludes defaulted troubled debt restructurings in those classes for which the recorded investment was zero at the end of the period.

	Nine Months Ended September 30,
	2013				2012
	Number of Loans		Recorded Investment(1)		Number of Loans		Recorded Investment(2)
	(Dollars in thousands)
Troubled Debt Restructurings That Subsequently Defaulted(3):
Real estate mortgage:
Other		1	$	1,327		2	$	627
Commercial:
Collateralized		1		427		7		828
Unsecured		2		70		2		93
SBA 7(a)		—		—		3		991
Total		4	$	1,824		14	$	2,539

(1)

Represents the balance at September 30, 2013 and is net of charge-offs of $1.1 million.

(2)

Represents the balance at September 30, 2012 and is net of charge-offs of $613,000.

(3)

The population of defaulted restructured loans for the period indicated includes only those loans restructured during the preceding 12-month period. The table excludes defaulted troubled debt restructurings in those classes for which the recorded investment was zero at the end of the period.

• Purchased Credit Impaired (PCI) Loans

        The following table reflects the PCI loans by portfolio segment as of the dates indicated:

	September 30, 2013						December 31, 2012
	Amount			% of Total			Amount			% of Total
	(Dollars in thousands)
Real estate mortgage	$	419,600			97	%	$	484,057			93	%
Real estate construction		11,567			3			24,645			5
Commercial		1,265			—			9,071			2
Consumer		325			—			112			—
Total gross PCI loans		432,757			100	%		517,885			100	%
Less:
Allowance for loan losses		(23,235	)					(26,069	)
Total net PCI loans	$	409,522					$	491,816

        The following table summarizes the accretable yield on the purchased credit impaired loans acquired in the FCAL acquisition as of May 31, 2013:

	May 31, 2013
	Accretable Yield
	Covered PCI Loans			Non-Covered PCI Loans			Total
	(In thousands)
Undiscounted contractual cash flows	$	42,881		$	41,936		$	84,817
Undiscounted cash flows not expected to be collected (nonaccretable difference)		(16,050	)		(16,337	)		(32,387	)
Undiscounted cash flows expected to be collected		26,831			25,599			52,430
Estimated fair value of loans acquired		(24,341	)		(19,805	)		(44,146	)
Acquired accrued interest receivable		(66	)		(122	)		(188	)
Accretable yield	$	2,424		$	5,672		$	8,096

        The following table summarizes the changes in the carrying amount of PCI loans and accretable yield on those loans for the period indicated:

	Purchased Credit Impaired Loans
	Carrying Amount			Accretable Yield
	(In thousands)
Covered PCI Loans:
Balance, December 31, 2012	$	491,816		$	(196,022	)
Addition from the FCAL acquisition		24,341			(2,424	)
Accretion		33,057			33,057
Payments received		(161,823	)		—
Decrease in expected cash flows, net		—			12,521
Provision for credit losses		2,872			—
Balance, September 30, 2013	$	390,263		$	(152,868	)
Non-Covered PCI Loans:
Balance, December 31, 2012	$	—		$	—
Addition from the FCAL acquisition		19,805			(5,672	)
Accretion		899			899
Payments received		(1,445	)		—
Increase in expected cash flows, net		—			(1,808	)
Balance, September 30, 2013	$	19,259		$	(6,581	)

        The following table presents the credit risk rating categories for PCI loans by portfolio segment as of the dates indicated. Nonclassified loans are those with a credit risk rating of either pass or special mention, while classified loans are those with a credit risk rating of either substandard or doubtful.

	September 30, 2013						December 31, 2012
	Nonclassified		Classified		Total		Nonclassified		Classified		Total
	(In thousands)
Real estate mortgage	$	246,718	$	172,882	$	419,600	$	331,341	$	152,716	$	484,057
Real estate construction		4,303		7,264		11,567		6,311		18,334		24,645
Commercial		642		623		1,265		3,420		5,651		9,071
Consumer		—		325		325		—		112		112
Total PCI loans	$	251,663	$	181,094	$	432,757	$	341,072	$	176,813	$	517,885

        In addition to our internal risk rating process, our federal and state banking regulators, as an integral part of their examination process, periodically review the Company's loan risk rating classifications. Our regulators may require the Company to recognize rating downgrades based on their judgments related to information available to them at the time of their examinations.

XML

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (USD $) In Thousands, unless otherwise specified	3 Months Ended			9 Months Ended
	Sep. 30, 2013	Jun. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Net earnings	$ 24,163	$ 4,349	$ 16,088	$ 42,006	$ 36,909
Other comprehensive income (loss) related to unrealized gains (losses) on securities available-for-sale:
Unrealized holding gains (losses) arising during the period	4,070	(48,189)	12,966	(50,529)	28,560
Income tax benefit (expense) related to unrealized holding (losses) gains arising during the period	483	20,240	(5,445)	23,415	(11,995)
Reclassification adjustment for (gain) loss included in net earnings	(5,222)			(5,631)	1,115
Income tax (benefit) expense related to reclassification adjustment				172	(468)
Other comprehensive income (loss)	(669)	(27,949)	7,521	(32,573)	17,212
Comprehensive income (loss)	$ 23,494	$ (23,600)	$ 23,609	$ 9,433	$ 54,121

XML

LOANS AND LEASES (Details 10) (USD $) In Thousands, unless otherwise specified	0 Months Ended		9 Months Ended	0 Months Ended	9 Months Ended	0 Months Ended
	May 31, 2013 FCAL	May 31, 2013 FCAL Non-PCI Loans	Sep. 30, 2013 Covered loans PCI Loans	May 31, 2013 Covered loans FCAL	Sep. 30, 2013 Non-Covered loans PCI Loans	May 31, 2013 Non-Covered loans FCAL
Summary of accretable yield
Undiscounted contractual cash flows	$ 84,817	$ 1,300,000		$ 42,881		$ 41,936
Undiscounted cash flows not expected to be collected (nonaccretable difference)	(32,387)			(16,050)		(16,337)
Undiscounted cash flows expected to be collected	52,430			26,831		25,599
Estimated fair value of loans acquired	(44,146)	1,000,000	24,341	(24,341)	19,805	(19,805)
Acquired accrued interest receivable	(188)			(66)		(122)
Accretable yield	$ 8,096		$ (2,424)	$ 2,424	$ (5,672)	$ 5,672

XML

CONDENSED CONSOLIDATED BALANCE SHEETS (USD $) In Thousands, unless otherwise specified	Sep. 30, 2013	Dec. 31, 2012
ASSETS
Cash and due from banks	$ 132,467	$ 89,011
Interest-earning deposits in financial institutions	11,552	75,393
Total cash and cash equivalents	144,019	164,404
Securities available-for-sale, at fair value ($39,378 and $44,684 covered by FDIC loss sharing at September 30, 2013 and December 31, 2012)	1,512,147	1,355,385
Federal Home Loan Bank stock, at cost	34,095	37,126
Total investment securities	1,546,242	1,392,511
Loans and leases, net of unearned income ($510,924 and $543,327 covered by FDIC loss sharing at September 30, 2013 and December 31, 2012)	4,383,393	3,590,297
Allowance for loan and lease losses ($23,235 and $26,069 for loans covered by FDIC loss sharing at September 30, 2013 and December 31, 2012)	(83,786)	(91,968)
Total loans and leases, net	4,299,607	3,498,329
Other real estate owned, net ($12,014 and $22,842 covered by FDIC loss sharing at September 30, 2013 and December 31, 2012)	55,972	56,414
Premises and equipment, net	32,683	19,503
FDIC loss sharing asset	55,653	57,475
Cash surrender value of life insurance	77,512	68,326
Goodwill	215,862	79,866
Core deposit and customer relationship intangibles, net	18,678	14,723
Other assets	170,627	112,107
Total assets	6,616,855	5,463,658
LIABILITIES
Noninterest-bearing deposits	2,328,688	1,939,212
Interest-bearing deposits	3,104,456	2,769,909
Total deposits	5,433,144	4,709,121
Borrowings	8,243	12,591
Subordinated debentures	132,500	108,250
Discontinued operations	155,807
Accrued interest payable and other liabilities	70,872	44,575
Total liabilities	5,800,566	4,874,537
Commitments and contingencies
STOCKHOLDERS' EQUITY
Preferred stock, $0.01 par value; authorized 5,000,000 shares; none issued and outstanding
Common stock, $0.01 par value; authorized 75,000,000 shares; 46,528,290 shares issued at September 30, 2013 and 37,772,559 at December 31, 2012 (includes 1,791,462 and 1,698,281 shares of unvested restricted stock)	465	377
Additional paid-in capital	1,282,246	1,062,184
Accumulated deficit	(457,531)	(499,537)
Treasury stock, at cost; 437,548 and 351,650 shares at September 30, 2013 and December 31, 2012	(9,218)	(6,803)
Accumulated other comprehensive income	327	32,900
Total stockholders' equity	816,289	589,121
Total liabilities and stockholders' equity	$ 6,616,855	$ 5,463,658

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LOANS AND LEASES (Details 3) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012	Dec. 31, 2012
Allowance for Loan and Lease Losses:
Balance, beginning of period	$ 90,643	$ 103,524	$ 91,968	$ 116,588
Charge-offs	(2,795)	(2,745)	(8,582)	(13,441)
Recoveries	675	1,108	4,302	2,585
Provision (negative provision)	(4,737)	(2,041)	(3,902)	(5,886)
Balance, end of period	83,786	99,846	83,786	99,846
Loans and Leases:
Total gross loans and leases	4,384,312	3,651,181	4,384,312	3,651,181	3,592,832
Real estate mortgage
Loans and Leases:
Total gross loans and leases	2,971,381	1,950,777	2,971,381	1,950,777	2,422,570
Real estate construction
Loans and Leases:
Total gross loans and leases	201,524	152,748	201,524	152,748	154,604
Commercial
Loans and Leases:
Total gross loans and leases	929,434		929,434		800,959
Leases
Loans and Leases:
Total gross loans and leases	235,791		235,791		174,373
Consumer
Loans and Leases:
Total gross loans and leases	34,153		34,153		23,085
Foreign
Loans and Leases:
Total gross loans and leases	12,029		12,029		17,241
Non-PCI Loans
Allowance for Loan and Lease Losses:
Balance, beginning of period	63,246	72,061	65,899	85,313
Charge-offs	(2,795)	(2,127)	(8,582)	(9,356)
Recoveries	670	1,108	4,264	2,585
Provision (negative provision)	(570)	(1,900)	(1,030)	(9,400)
Balance, end of period	60,551	69,142	60,551	69,142
Amount of the allowance applicable to loans and leases:
Individually evaluated for impairment	9,715	14,352	9,715	14,352
Collectively evaluated for impairment	50,836	54,790	50,836	54,790
Loans and Leases:
Total gross loans and leases	3,951,555	3,080,068	3,951,555	3,080,068	3,074,947
Individually evaluated for impairment	131,082	152,019	131,082	152,019
Collectively evaluated for impairment	3,820,473	2,928,049	3,820,473	2,928,049
Non-PCI Loans | Real estate mortgage
Allowance for Loan and Lease Losses:
Balance, beginning of period	31,804	42,236	38,700	50,205
Charge-offs	(281)	(1,118)	(3,840)	(5,891)
Recoveries	152	845	1,665	1,217
Provision (negative provision)	(2,069)	(3,226)	(6,919)	(6,794)
Balance, end of period	29,606	38,737	29,606	38,737
Amount of the allowance applicable to loans and leases:
Individually evaluated for impairment	3,225	5,568	3,225	5,568
Collectively evaluated for impairment	26,381	33,169	26,381	33,169
Loans and Leases:
Total gross loans and leases	2,551,781	1,950,777	2,551,781	1,950,777	1,938,513
Individually evaluated for impairment	90,329	100,133	90,329	100,133
Collectively evaluated for impairment	2,461,452	1,850,644	2,461,452	1,850,644
Non-PCI Loans | Real estate construction
Allowance for Loan and Lease Losses:
Balance, beginning of period	3,432	5,496	3,221	8,697
Charge-offs		(492)		(492)
Recoveries	179	11	514	35
Provision (negative provision)	(66)	1,582	(190)	(1,643)
Balance, end of period	3,545	6,597	3,545	6,597
Amount of the allowance applicable to loans and leases:
Individually evaluated for impairment	103	2,468	103	2,468
Collectively evaluated for impairment	3,442	4,129	3,442	4,129
Loans and Leases:
Total gross loans and leases	189,957	152,748	189,957	152,748	129,959
Individually evaluated for impairment	14,878	31,792	14,878	31,792
Collectively evaluated for impairment	175,079	120,956	175,079	120,956
Non-PCI Loans | Commercial
Allowance for Loan and Lease Losses:
Balance, beginning of period	24,165	21,979	20,661	23,308
Charge-offs	(2,439)	(492)	(4,517)	(2,715)
Recoveries	321	218	2,025	1,232
Provision (negative provision)	1,022	(685)	4,900	(805)
Balance, end of period	23,069	21,020	23,069	21,020
Amount of the allowance applicable to loans and leases:
Individually evaluated for impairment	6,147	6,051	6,147	6,051
Collectively evaluated for impairment	16,922	14,969	16,922	14,969
Loans and Leases:
Total gross loans and leases	928,169	777,365	928,169	777,365	791,888
Individually evaluated for impairment	24,839	19,051	24,839	19,051
Collectively evaluated for impairment	903,330	758,314	903,330	758,314
Non-PCI Loans | Leases
Allowance for Loan and Lease Losses:
Balance, beginning of period	2,096	498	1,493
Charge-offs			(114)
Provision (negative provision)	240	629	957	1,127
Balance, end of period	2,336	1,127	2,336	1,127
Amount of the allowance applicable to loans and leases:
Collectively evaluated for impairment	2,336	1,127	2,336	1,127
Loans and Leases:
Total gross loans and leases	235,791	161,934	235,791	161,934	174,373
Individually evaluated for impairment	244	420	244	420
Collectively evaluated for impairment	235,547	161,514	235,547	161,514
Non-PCI Loans | Consumer
Allowance for Loan and Lease Losses:
Balance, beginning of period	1,667	1,735	1,726	2,768
Charge-offs	(75)	(25)	(111)	(258)
Recoveries	15	32	57	79
Provision (negative provision)	332	(188)	267	(1,035)
Balance, end of period	1,939	1,554	1,939	1,554
Amount of the allowance applicable to loans and leases:
Individually evaluated for impairment	240	265	240	265
Collectively evaluated for impairment	1,699	1,289	1,699	1,289
Loans and Leases:
Total gross loans and leases	33,828	21,118	33,828	21,118	22,973
Individually evaluated for impairment	792	623	792	623
Collectively evaluated for impairment	33,036	20,495	33,036	20,495
Non-PCI Loans | Foreign
Allowance for Loan and Lease Losses:
Balance, beginning of period	82	117	98	335
Recoveries	3	2	3	22
Provision (negative provision)	(29)	(12)	(45)	(250)
Balance, end of period	56	107	56	107
Amount of the allowance applicable to loans and leases:
Collectively evaluated for impairment	56	107	56	107
Loans and Leases:
Total gross loans and leases	12,029	16,126	12,029	16,126	17,241
Collectively evaluated for impairment	12,029	16,126	12,029	16,126
PCI Loans
Allowance for Loan and Lease Losses:
Balance, beginning of period	27,397	31,463	26,069	31,275
Charge-offs		(618)		(4,085)
Recoveries	5		38
Provision (negative provision)	(4,167)	(141)	(2,872)	3,514
Balance, end of period	23,235	30,704	23,235	30,704
Amount of the allowance applicable to loans and leases:
Acquired with deteriorated credit quality	23,235	30,704	23,235	30,704
Loans and Leases:
Total gross loans and leases	432,757	571,113	432,757	571,113	517,885
Acquired with deteriorated credit quality	432,757	571,113	432,757	571,113
PCI Loans | Real estate mortgage
Loans and Leases:
Total gross loans and leases	419,600		419,600		484,057
PCI Loans | Real estate construction
Loans and Leases:
Total gross loans and leases	11,567		11,567		24,645
PCI Loans | Commercial
Loans and Leases:
Total gross loans and leases	1,265		1,265		9,071
PCI Loans | Consumer
Loans and Leases:
Total gross loans and leases	$ 325		$ 325		$ 112

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SUBSEQUENT EVENTS (Details) (USD $)	3 Months Ended			9 Months Ended		0 Months Ended		0 Months Ended
	Sep. 30, 2013	Jun. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012	Nov. 06, 2013 Subsequent event	Nov. 04, 2013 Subsequent event	Jul. 22, 2013 Subsequent event Capital Source item
Subsequent events
Quarterly cash dividends declared per common share (in dollars per share)	$ 0.25	$ 0.25	$ 0.18	$ 0.75	$ 0.54	$ 0.25
Purchase price								$ 2,400,000,000
Cash receivable by stockholders of acquiree for each share of acquiree								$ 2.47
Number of shares of the entity receivable by stockholders of acquiree for each share of acquiree								0.2837
Closing price of common stock (in dollars per share)							$ 38.21
Shares acquired (in dollars per share)								$ 13.31
Pro forma consolidated assets								$ 15,400,000,000
Pro forma consolidated branches								95

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GOODWILL AND OTHER INTANGIBLE ASSETS (Tables)

9 Months Ended

Sep. 30, 2013

GOODWILL AND OTHER INTANGIBLE ASSETS

Schedule of changes in the carrying amount of goodwill

	Goodwill
	(In thousands)
Balance, December 31, 2012	$	79,866
Adjustment to APB goodwill		(193	)
Non-tax deductible addition from the FCAL acquisition		136,189
Balance, September 30, 2013	$	215,862

Schedule of the changes in CDI and CRI and the related accumulated amortization

	Three Months Ended									Nine Months Ended September 30,
	September 30, 2013			June 30, 2013			September 30, 2012
										2013			2012
	(In thousands)
Gross Amount of CDI and CRI:
Balance, beginning of period	$	53,339		$	45,412		$	62,272		$	45,412		$	67,100
Additions		—			7,927			1,924			7,927			4,924
Fully amortized portion		(4,376	)		—			(12,918	)		(4,376	)		(20,746	)
Removal due to branch sale		—			—			(5,866	)		—			(5,866	)
Balance, end of period		48,963			53,339			45,412			48,963			45,412
Accumulated Amortization:
Balance, beginning of period		(33,149	)		(31,865	)		(45,329	)		(30,689	)		(49,685	)
Amortization		(1,512	)		(1,284	)		(1,678	)		(3,972	)		(5,150	)
Fully amortized portion		4,376			—			12,918			4,376			20,746
Removal due to branch sale		—			—			4,576			—			4,576
Balance, end of period		(30,285	)		(33,149	)		(29,513	)		(30,285	)		(29,513	)
Net CDI and CRI, end of period	$	18,678		$	20,190		$	15,899		$	18,678		$	15,899

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BUSINESS SEGMENTS

9 Months Ended

Sep. 30, 2013

BUSINESS SEGMENTS

BUSINESS SEGMENTS

NOTE 15—BUSINESS SEGMENTS

        The Company's reportable segments consist of "Banking," "Asset Financing," and "Other." At September 30, 2013, the Other segment consisted of the PacWest Bancorp holding company and other elimination and reconciliation entries.

        The Bank's Asset Financing segment includes the operations of the divisions and subsidiaries that provide asset-based commercial loans and equipment leases. The asset-based lending products are offered primarily through three business units: (1) First Community Financial ("FCF"), a division of the Bank, based in Phoenix, Arizona; (2) BFI Business Finance ("BFI"), a wholly-owned subsidiary of the Bank, based in San Jose, California; and (3) Celtic Capital Corporation ("Celtic"), a wholly-owned subsidiary of the Bank based in Santa Monica, California. The equipment leasing products are offered through Pacific Western Equipment Finance ("EQF"), a division of the Bank based in Midvale, Utah.

        The following tables present information regarding our business segments as of and for the periods indicated (the only segment income statements for which discontinued operations are applicable and reported are those for the three months ended September 30, 2013 and June 30, 2013 and the nine months ended September 30, 2013):

	September 30, 2013
	Banking			Asset Financing			Other			Consolidated Company
	(In thousands)
Loans and leases, net of unearned income	$	3,912,885		$	470,508		$	—		$	4,383,393
Allowance for loan and lease losses		(76,496	)		(7,290	)		—			(83,786	)
Total loans and leases, net	$	3,836,389		$	463,218		$	—		$	4,299,607
Goodwill	$	190,184		$	25,678		$	—		$	215,862
Core deposit and customer relationship intangibles, net		16,604			2,074			—			18,678
Total assets		6,100,587			507,339			8,929			6,616,855
Total deposits(1)		5,467,568			—			(34,424	)		5,433,144

(1)

The negative balance in the "Other" segment represents the elimination of holding company cash held in deposit accounts at the Bank.

	September 30, 2012
	Banking			Asset Financing			Other			Consolidated Company
	(In thousands)
Loans and leases, net of unearned income	$	3,259,571		$	389,420		$	—		$	3,648,991
Allowance for loan and lease losses		(95,878	)		(3,968	)		—			(99,846	)
Total loans and leases, net	$	3,163,693		$	385,452		$	—		$	3,549,145
Goodwill	$	54,704		$	24,888		$	—		$	79,592
Core deposit and customer relationship intangibles, net		13,194			2,705			—			15,899
Total assets		5,080,308			440,690			17,504			5,538,502
Total deposits(1)		4,800,852			—			(13,504	)		4,787,348

(1)

The negative balance in the "Other" segment represents the elimination of holding company cash held in deposit accounts at the Bank.

	Three Months Ended September 30, 2013
	Banking			Asset Financing			Other			Consolidated Company
	(In thousands)
Interest income	$	72,873		$	12,285		$	—		$	85,158
Intersegment interest income (expense)		353			(353	)		—			—
Other interest expense		(1,692	)		(108	)		(1,069	)		(2,869	)
Net interest income		71,534			11,824			(1,069	)		82,289
Negative provision (provision) for credit losses		5,782			(1,615	)		—			4,167
Noninterest income		(1,566	)		1,443			5,250			5,127
Intangible asset amortization		(1,354	)		(158	)		—			(1,512	)
Acqusition and integration costs		(5,190	)		—			(260	)		(5,450	)
Other noninterest expense		(42,015	)		(5,822	)		(1,401	)		(49,238	)
Total noninterest expense		(48,559	)		(5,980	)		(1,661	)		(56,200	)
Earnings (loss) from continuing operations before income taxes		27,191			5,672			2,520			35,383
Income tax (expense) benefit		(9,996	)		(2,378	)		1,131			(11,243	)
Net earnings (loss) from continuing operations		17,195			3,294			3,651			24,140
Earnings from discontinued operations before income taxes		39			—			—			39
Income tax expense		(16	)		—			—			(16	)
Net earnings from discontinued operations		23			—			—			23
Net earnings	$	17,218		$	3,294		$	3,651		$	24,163

	Three Months Ended June 30, 2013
	Banking			Asset Financing			Other			Consolidated Company
	(In thousands)
Interest income	$	59,321		$	12,310		$	—		$	71,631
Intersegment interest income (expense)		460			(460	)		—			—
Other interest expense		(2,080	)		(196	)		(882	)		(3,158	)
Net interest income		57,701			11,654			(882	)		68,473
Negative provision (provision) for credit losses		2,607			(765	)		—			1,842
Noninterest income		(415	)		592			26			203
Intangible asset amortization		(1,127	)		(157	)		—			(1,284	)
Acquisition and integration costs		(17,997	)		—			—			(17,997	)
Other noninterest expense		(37,557	)		(5,980	)		(1,398	)		(44,935	)
Total noninterest expense		(56,681	)		(6,137	)		(1,398	)		(64,216	)
Earnings (loss) from continuing operations before income taxes		3,212			5,344			(2,254	)		6,302
Income tax (expense) benefit		(612	)		(2,237	)		943			(1,906	)
Net earnings (loss) from continuing operations		2,600			3,107			(1,311	)		4,396
Loss from discontinued operations before income taxes		(81	)		—			—			(81	)
Income tax benefit		34			—			—			34
Net loss from discontinued operations		(47	)		—			—			(47	)
Net earnings (loss)	$	2,553		$	3,107		$	(1,311	)	$	4,349

	Three Months Ended September 30, 2012
	Banking			Asset Financing			Other			Consolidated Company
	(In thousands)
Interest income	$	62,358		$	12,765		$	—		$	75,123
Intersegment interest income (expense)		454			(454	)		—			—
Other interest expense		(3,287	)		(215	)		(850	)		(4,352	)
Net interest income		59,525			12,096			(850	)		70,771
Negative provision (provision) for credit losses		3,325			(1,184	)		—			2,141
Noninterest income		5,191			466			25			5,682
Intangible asset amortization		(1,544	)		(134	)		—			(1,678	)
Acquisition and integration costs		(2,101	)		—			—			(2,101	)
Other noninterest expense		(40,776	)		(5,706	)		(1,396	)		(47,878	)
Total noninterest expense		(44,421	)		(5,840	)		(1,396	)		(51,657	)
Earnings (loss) before income taxes		23,620			5,538			(2,221	)		26,937
Income tax (expense) benefit		(9,491	)		(2,291	)		933			(10,849	)
Net earnings (loss)	$	14,129		$	3,247		$	(1,288	)	$	16,088

	Nine Months Ended September 30, 2013
	Banking			Asset Financing			Other			Consolidated Company
	(In thousands)
Interest income	$	189,101		$	36,957		$	—		$	226,058
Intersegment interest income (expense)		1,284			(1,284	)		—			—
Other interest expense		(6,422	)		(447	)		(2,734	)		(9,603	)
Net interest income		183,963			35,226			(2,734	)		216,455
Negative provision (provision) for credit losses		6,053			(3,181	)		—			2,872
Noninterest income		292			2,579			5,299			8,170
Intangible asset amortization		(3,474	)		(498	)		—			(3,972	)
Acquisition and integration costs		(23,879	)		—			(260	)		(24,139	)
Other noninterest expense		(114,418	)		(17,855	)		(4,215	)		(136,488	)
Total noninterest expense		(141,771	)		(18,353	)		(4,475	)		(164,599	)
Earnings (loss) from continuing operations before income taxes		48,537			16,271			(1,910	)		62,898
Income tax (expense) benefit		(17,038	)		(6,814	)		2,984			(20,868	)
Net earnings (loss) from continuing operations		31,499			9,457			1,074			42,030
Loss from discontinued operations before income taxes		(42	)		—			—			(42	)
Income tax benefit		18			—			—			18
Net loss from discontinued operations		(24	)		—			—			(24	)
Net earnings	$	31,475		$	9,457		$	1,074		$	42,006

	Nine Months Ended September 30, 2012
	Banking			Asset Financing			Other			Consolidated Company
	(In thousands)
Interest income	$	189,886		$	32,527		$	—		$	222,413
Intersegment interest income (expense)		1,607			(1,607	)		—			—
Other interest expense		(12,002	)		(658	)		(2,889	)		(15,549	)
Net interest income		179,491			30,262			(2,889	)		206,864
Negative provision (provision) for credit losses		9,770			(1,284	)		—			8,486
Noninterest income		11,382			2,345			88			13,815
Intangible asset amortization		(4,855	)		(295	)		—			(5,150	)
Acquisition and integration costs		(2,951	)		(46	)		—			(2,997	)
Debt termination expense		(24,195	)		—			1,597			(22,598	)
Other noninterest expense		(116,366	)		(16,916	)		(4,110	)		(137,392	)
Total noninterest expense		(148,367	)		(17,257	)		(2,513	)		(168,137	)
Earnings (loss) before income taxes		52,276			14,066			(5,314	)		61,028
Income tax (expense) benefit		(20,412	)		(5,941	)		2,234			(24,119	)
Net earnings (loss)	$	31,864		$	8,125		$	(3,080	)	$	36,909

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ACQUISITIONS (Details 3) (FCAL, USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended	9 Months Ended
	Sep. 30, 2013	Sep. 30, 2013	Sep. 30, 2012
FCAL
Unaudited pro forma results of operations
Pro forma revenues (net interest income plus noninterest income)	$ 95,441	$ 250,155	$ 278,182
Pro forma net earnings from continuing operations	$ 19,880	$ 49,692	$ 47,039
Pro forma net earnings from continuing operations per share:
Basic (in dollars per share)	$ 0.44	$ 1.09	$ 1.04
Diluted (in dollars per share)	$ 0.44	$ 1.09	$ 1.04

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LOANS AND LEASES (Details 6) (USD $)	Sep. 30, 2013	Dec. 31, 2012	Sep. 30, 2012
Aging analysis of our loans and leases (excluding PCI loans) by portfolio segment and class
Total gross loans and leases	$ 4,384,312,000	$ 3,592,832,000	$ 3,651,181,000
Non-covered loans and leases that were greater than 90 days past due and still accruing interest	0	0
Nonaccrual loans and leases, 30 to 89 days past due	3,900,000	4,200,000
Nonaccrual loans, Current	36,600,000	28,600,000
Real estate mortgage
Aging analysis of our loans and leases (excluding PCI loans) by portfolio segment and class
Total gross loans and leases	2,971,381,000	2,422,570,000	1,950,777,000
Real estate construction
Aging analysis of our loans and leases (excluding PCI loans) by portfolio segment and class
Total gross loans and leases	201,524,000	154,604,000	152,748,000
Commercial
Aging analysis of our loans and leases (excluding PCI loans) by portfolio segment and class
Total gross loans and leases	929,434,000	800,959,000
Leases
Aging analysis of our loans and leases (excluding PCI loans) by portfolio segment and class
Total gross loans and leases	235,791,000	174,373,000
Consumer
Aging analysis of our loans and leases (excluding PCI loans) by portfolio segment and class
Total gross loans and leases	34,153,000	23,085,000
Foreign
Aging analysis of our loans and leases (excluding PCI loans) by portfolio segment and class
Total gross loans and leases	12,029,000	17,241,000
Non-PCI Loans
Aging analysis of our loans and leases (excluding PCI loans) by portfolio segment and class
30-59 Days Past Due	9,251,000	6,549,000
60-89 Days Past Due	3,133,000	1,030,000
Greater Than 90 Days Past Due	10,266,000	9,036,000
Total Past Due	22,650,000	16,615,000
Current	3,928,905,000	3,058,332,000
Total gross loans and leases	3,951,555,000	3,074,947,000	3,080,068,000
Nonaccrual loans and leases	50,800,000	41,800,000
Non-PCI Loans | Real estate mortgage
Aging analysis of our loans and leases (excluding PCI loans) by portfolio segment and class
30-59 Days Past Due	4,623,000	5,053,000
60-89 Days Past Due	486,000	54,000
Greater Than 90 Days Past Due	3,414,000	4,998,000
Total Past Due	8,523,000	10,105,000
Current	2,543,258,000	1,928,408,000
Total gross loans and leases	2,551,781,000	1,938,513,000	1,950,777,000
Non-PCI Loans | Hospitality
Aging analysis of our loans and leases (excluding PCI loans) by portfolio segment and class
Current	188,073,000	181,144,000
Total gross loans and leases	188,073,000	181,144,000
Non-PCI Loans | SBA 504
Aging analysis of our loans and leases (excluding PCI loans) by portfolio segment and class
30-59 Days Past Due		955,000
Greater Than 90 Days Past Due	120,000	1,727,000
Total Past Due	120,000	2,682,000
Current	48,006,000	51,476,000
Total gross loans and leases	48,126,000	54,158,000
Non-PCI Loans | Other
Aging analysis of our loans and leases (excluding PCI loans) by portfolio segment and class
30-59 Days Past Due	4,623,000	4,098,000
60-89 Days Past Due	486,000	54,000
Greater Than 90 Days Past Due	3,294,000	3,271,000
Total Past Due	8,403,000	7,423,000
Current	2,307,179,000	1,695,788,000
Total gross loans and leases	2,315,582,000	1,703,211,000
Non-PCI Loans | Real estate construction
Aging analysis of our loans and leases (excluding PCI loans) by portfolio segment and class
30-59 Days Past Due	571,000
Greater Than 90 Days Past Due		1,245,000
Total Past Due	571,000	1,245,000
Current	189,386,000	128,714,000
Total gross loans and leases	189,957,000	129,959,000	152,748,000
Non-PCI Loans | Residential
Aging analysis of our loans and leases (excluding PCI loans) by portfolio segment and class
Current	62,154,000	48,629,000
Total gross loans and leases	62,154,000	48,629,000
Non-PCI Loans | Commercial
Aging analysis of our loans and leases (excluding PCI loans) by portfolio segment and class
30-59 Days Past Due	571,000
Greater Than 90 Days Past Due		1,245,000
Total Past Due	571,000	1,245,000
Current	127,232,000	80,085,000
Total gross loans and leases	127,803,000	81,330,000
Non-PCI Loans | Commercial
Aging analysis of our loans and leases (excluding PCI loans) by portfolio segment and class
30-59 Days Past Due	3,894,000	1,248,000
60-89 Days Past Due	2,642,000	843,000
Greater Than 90 Days Past Due	6,430,000	2,549,000
Total Past Due	12,966,000	4,640,000
Current	915,203,000	787,248,000
Total gross loans and leases	928,169,000	791,888,000	777,365,000
Non-PCI Loans | Collateralized
Aging analysis of our loans and leases (excluding PCI loans) by portfolio segment and class
30-59 Days Past Due	2,250,000	964,000
60-89 Days Past Due	426,000	161,000
Greater Than 90 Days Past Due	6,004,000	872,000
Total Past Due	8,680,000	1,997,000
Current	553,813,000	455,098,000
Total gross loans and leases	562,493,000	457,095,000
Non-PCI Loans | Unsecured
Aging analysis of our loans and leases (excluding PCI loans) by portfolio segment and class
30-59 Days Past Due	82,000	3,000
60-89 Days Past Due	1,348,000	135,000
Greater Than 90 Days Past Due	225,000	230,000
Total Past Due	1,655,000	368,000
Current	104,571,000	69,670,000
Total gross loans and leases	106,226,000	70,038,000
Non-PCI Loans | Asset-based
Aging analysis of our loans and leases (excluding PCI loans) by portfolio segment and class
30-59 Days Past Due	1,490,000
Greater Than 90 Days Past Due		176,000
Total Past Due	1,490,000	176,000
Current	230,408,000	239,254,000
Total gross loans and leases	231,898,000	239,430,000
Non-PCI Loans | SBA 7(a)
Aging analysis of our loans and leases (excluding PCI loans) by portfolio segment and class
30-59 Days Past Due	72,000	281,000
60-89 Days Past Due	868,000	547,000
Greater Than 90 Days Past Due	201,000	1,271,000
Total Past Due	1,141,000	2,099,000
Current	26,411,000	23,226,000
Total gross loans and leases	27,552,000	25,325,000
Non-PCI Loans | Leases
Aging analysis of our loans and leases (excluding PCI loans) by portfolio segment and class
30-59 Days Past Due		225,000
60-89 Days Past Due		132,000
Greater Than 90 Days Past Due	244,000	244,000
Total Past Due	244,000	601,000
Current	235,547,000	173,772,000
Total gross loans and leases	235,791,000	174,373,000	161,934,000
Non-PCI Loans | Consumer
Aging analysis of our loans and leases (excluding PCI loans) by portfolio segment and class
30-59 Days Past Due	163,000	23,000
60-89 Days Past Due	5,000	1,000
Greater Than 90 Days Past Due	178,000
Total Past Due	346,000	24,000
Current	33,482,000	22,949,000
Total gross loans and leases	33,828,000	22,973,000	21,118,000
Non-PCI Loans | Foreign
Aging analysis of our loans and leases (excluding PCI loans) by portfolio segment and class
Current	12,029,000	17,241,000
Total gross loans and leases	$ 12,029,000	$ 17,241,000	$ 16,126,000

XML

FAIR VALUE MEASUREMENTS (Details) (Measured on a Recurring Basis:, USD $) In Thousands, unless otherwise specified	3 Months Ended
	Sep. 30, 2013
Assets measured and recorded at fair value on a recurring and nonrecurring basis
Liabilities at fair value	$ 0
Transfers of assets
Amounts transferred from Level 1 to Level 2	0
Amounts transferred from Level 2 to Level 1	0
Amounts transferred in Level 3	0
Amounts transferred out of Level 3	0
Total
Assets measured and recorded at fair value on a recurring and nonrecurring basis
Assets at fair value	1,512,147
Total | Government agency and government-sponsored enterprises residential mortgage-backed securities
Assets measured and recorded at fair value on a recurring and nonrecurring basis
Assets at fair value	913,322
Total | Covered private label CMOs
Assets measured and recorded at fair value on a recurring and nonrecurring basis
Assets at fair value	39,378
Total | Municipal securities
Assets measured and recorded at fair value on a recurring and nonrecurring basis
Assets at fair value	439,635
Total | Corporate securities
Assets measured and recorded at fair value on a recurring and nonrecurring basis
Assets at fair value	82,106
Total | Other securities
Assets measured and recorded at fair value on a recurring and nonrecurring basis
Assets at fair value	37,706
Level 1
Assets measured and recorded at fair value on a recurring and nonrecurring basis
Assets at fair value	514
Level 1 | Other securities
Assets measured and recorded at fair value on a recurring and nonrecurring basis
Assets at fair value	514
Level 2
Assets measured and recorded at fair value on a recurring and nonrecurring basis
Assets at fair value	1,472,255
Level 2 | Government agency and government-sponsored enterprises residential mortgage-backed securities
Assets measured and recorded at fair value on a recurring and nonrecurring basis
Assets at fair value	913,322
Level 2 | Municipal securities
Assets measured and recorded at fair value on a recurring and nonrecurring basis
Assets at fair value	439,635
Level 2 | Corporate securities
Assets measured and recorded at fair value on a recurring and nonrecurring basis
Assets at fair value	82,106
Level 2 | Other securities
Assets measured and recorded at fair value on a recurring and nonrecurring basis
Assets at fair value	37,192
Level 3
Assets measured and recorded at fair value on a recurring and nonrecurring basis
Assets at fair value	39,378
Level 3 | Covered private label CMOs
Assets measured and recorded at fair value on a recurring and nonrecurring basis
Assets at fair value	$ 39,378

XML

BUSINESS SEGMENTS (Tables)

9 Months Ended

Sep. 30, 2013

BUSINESS SEGMENTS

Schedule of information regarding business segments

	September 30, 2013
	Banking			Asset Financing			Other			Consolidated Company
	(In thousands)
Loans and leases, net of unearned income	$	3,912,885		$	470,508		$	—		$	4,383,393
Allowance for loan and lease losses		(76,496	)		(7,290	)		—			(83,786	)
Total loans and leases, net	$	3,836,389		$	463,218		$	—		$	4,299,607
Goodwill	$	190,184		$	25,678		$	—		$	215,862
Core deposit and customer relationship intangibles, net		16,604			2,074			—			18,678
Total assets		6,100,587			507,339			8,929			6,616,855
Total deposits(1)		5,467,568			—			(34,424	)		5,433,144

(1)

The negative balance in the "Other" segment represents the elimination of holding company cash held in deposit accounts at the Bank.

	September 30, 2012
	Banking			Asset Financing			Other			Consolidated Company
	(In thousands)
Loans and leases, net of unearned income	$	3,259,571		$	389,420		$	—		$	3,648,991
Allowance for loan and lease losses		(95,878	)		(3,968	)		—			(99,846	)
Total loans and leases, net	$	3,163,693		$	385,452		$	—		$	3,549,145
Goodwill	$	54,704		$	24,888		$	—		$	79,592
Core deposit and customer relationship intangibles, net		13,194			2,705			—			15,899
Total assets		5,080,308			440,690			17,504			5,538,502
Total deposits(1)		4,800,852			—			(13,504	)		4,787,348

(1)

The negative balance in the "Other" segment represents the elimination of holding company cash held in deposit accounts at the Bank.

	Three Months Ended September 30, 2013
	Banking			Asset Financing			Other			Consolidated Company
	(In thousands)
Interest income	$	72,873		$	12,285		$	—		$	85,158
Intersegment interest income (expense)		353			(353	)		—			—
Other interest expense		(1,692	)		(108	)		(1,069	)		(2,869	)
Net interest income		71,534			11,824			(1,069	)		82,289
Negative provision (provision) for credit losses		5,782			(1,615	)		—			4,167
Noninterest income		(1,566	)		1,443			5,250			5,127
Intangible asset amortization		(1,354	)		(158	)		—			(1,512	)
Acqusition and integration costs		(5,190	)		—			(260	)		(5,450	)
Other noninterest expense		(42,015	)		(5,822	)		(1,401	)		(49,238	)
Total noninterest expense		(48,559	)		(5,980	)		(1,661	)		(56,200	)
Earnings (loss) from continuing operations before income taxes		27,191			5,672			2,520			35,383
Income tax (expense) benefit		(9,996	)		(2,378	)		1,131			(11,243	)
Net earnings (loss) from continuing operations		17,195			3,294			3,651			24,140
Earnings from discontinued operations before income taxes		39			—			—			39
Income tax expense		(16	)		—			—			(16	)
Net earnings from discontinued operations		23			—			—			23
Net earnings	$	17,218		$	3,294		$	3,651		$	24,163

	Three Months Ended June 30, 2013
	Banking			Asset Financing			Other			Consolidated Company
	(In thousands)
Interest income	$	59,321		$	12,310		$	—		$	71,631
Intersegment interest income (expense)		460			(460	)		—			—
Other interest expense		(2,080	)		(196	)		(882	)		(3,158	)
Net interest income		57,701			11,654			(882	)		68,473
Negative provision (provision) for credit losses		2,607			(765	)		—			1,842
Noninterest income		(415	)		592			26			203
Intangible asset amortization		(1,127	)		(157	)		—			(1,284	)
Acquisition and integration costs		(17,997	)		—			—			(17,997	)
Other noninterest expense		(37,557	)		(5,980	)		(1,398	)		(44,935	)
Total noninterest expense		(56,681	)		(6,137	)		(1,398	)		(64,216	)
Earnings (loss) from continuing operations before income taxes		3,212			5,344			(2,254	)		6,302
Income tax (expense) benefit		(612	)		(2,237	)		943			(1,906	)
Net earnings (loss) from continuing operations		2,600			3,107			(1,311	)		4,396
Loss from discontinued operations before income taxes		(81	)		—			—			(81	)
Income tax benefit		34			—			—			34
Net loss from discontinued operations		(47	)		—			—			(47	)
Net earnings (loss)	$	2,553		$	3,107		$	(1,311	)	$	4,349

	Three Months Ended September 30, 2012
	Banking			Asset Financing			Other			Consolidated Company
	(In thousands)
Interest income	$	62,358		$	12,765		$	—		$	75,123
Intersegment interest income (expense)		454			(454	)		—			—
Other interest expense		(3,287	)		(215	)		(850	)		(4,352	)
Net interest income		59,525			12,096			(850	)		70,771
Negative provision (provision) for credit losses		3,325			(1,184	)		—			2,141
Noninterest income		5,191			466			25			5,682
Intangible asset amortization		(1,544	)		(134	)		—			(1,678	)
Acquisition and integration costs		(2,101	)		—			—			(2,101	)
Other noninterest expense		(40,776	)		(5,706	)		(1,396	)		(47,878	)
Total noninterest expense		(44,421	)		(5,840	)		(1,396	)		(51,657	)
Earnings (loss) before income taxes		23,620			5,538			(2,221	)		26,937
Income tax (expense) benefit		(9,491	)		(2,291	)		933			(10,849	)
Net earnings (loss)	$	14,129		$	3,247		$	(1,288	)	$	16,088

	Nine Months Ended September 30, 2013
	Banking			Asset Financing			Other			Consolidated Company
	(In thousands)
Interest income	$	189,101		$	36,957		$	—		$	226,058
Intersegment interest income (expense)		1,284			(1,284	)		—			—
Other interest expense		(6,422	)		(447	)		(2,734	)		(9,603	)
Net interest income		183,963			35,226			(2,734	)		216,455
Negative provision (provision) for credit losses		6,053			(3,181	)		—			2,872
Noninterest income		292			2,579			5,299			8,170
Intangible asset amortization		(3,474	)		(498	)		—			(3,972	)
Acquisition and integration costs		(23,879	)		—			(260	)		(24,139	)
Other noninterest expense		(114,418	)		(17,855	)		(4,215	)		(136,488	)
Total noninterest expense		(141,771	)		(18,353	)		(4,475	)		(164,599	)
Earnings (loss) from continuing operations before income taxes		48,537			16,271			(1,910	)		62,898
Income tax (expense) benefit		(17,038	)		(6,814	)		2,984			(20,868	)
Net earnings (loss) from continuing operations		31,499			9,457			1,074			42,030
Loss from discontinued operations before income taxes		(42	)		—			—			(42	)
Income tax benefit		18			—			—			18
Net loss from discontinued operations		(24	)		—			—			(24	)
Net earnings	$	31,475		$	9,457		$	1,074		$	42,006

	Nine Months Ended September 30, 2012
	Banking			Asset Financing			Other			Consolidated Company
	(In thousands)
Interest income	$	189,886		$	32,527		$	—		$	222,413
Intersegment interest income (expense)		1,607			(1,607	)		—			—
Other interest expense		(12,002	)		(658	)		(2,889	)		(15,549	)
Net interest income		179,491			30,262			(2,889	)		206,864
Negative provision (provision) for credit losses		9,770			(1,284	)		—			8,486
Noninterest income		11,382			2,345			88			13,815
Intangible asset amortization		(4,855	)		(295	)		—			(5,150	)
Acquisition and integration costs		(2,951	)		(46	)		—			(2,997	)
Debt termination expense		(24,195	)		—			1,597			(22,598	)
Other noninterest expense		(116,366	)		(16,916	)		(4,110	)		(137,392	)
Total noninterest expense		(148,367	)		(17,257	)		(2,513	)		(168,137	)
Earnings (loss) before income taxes		52,276			14,066			(5,314	)		61,028
Income tax (expense) benefit		(20,412	)		(5,941	)		2,234			(24,119	)
Net earnings (loss)	$	31,864		$	8,125		$	(3,080	)	$	36,909

XML

COMMITMENTS AND CONTINGENCIES (Tables)

9 Months Ended

Sep. 30, 2013

COMMITMENTS AND CONTINGENCIES

Summary of the financial instruments

	September 30, 2013		December 31, 2012
	(In thousands)
Loan commitments to extend credit	$	1,069,451	$	849,607
Standby letters of credit		39,586		27,534
Commitments to purchase equipment being acquired for lease to others		2,964		4,399
	$	1,112,001	$	881,540

XML

FAIR VALUE MEASUREMENTS (Tables)

9 Months Ended

Sep. 30, 2013

FAIR VALUE MEASUREMENTS

Schedule of information on the assets measured and recorded at fair value on a recurring basis

	Fair Value Measurement as of September 30, 2013
	Total		Level 1		Level 2		Level 3
	(In thousands)
Measured on a Recurring Basis:
Securities available-for-sale:
Government agency and government-sponsored enterprise residential mortgage-backed securities	$	913,322	$	—	$	913,322	$	—
Covered private label CMOs		39,378		—		—		39,378
Municipal securities		439,635		—		439,635		—
Corporate securities		82,106		—		82,106		—
Other securities		37,706		514		37,192		—
	$	1,512,147	$	514	$	1,472,255	$	39,378

Fair value measurements

Summary of activity for assets measured at fair value on a recurring basis that are categorized as Level 3

	Covered Private Label CMOs (Level 3)
	(In thousands)
Balance, December 31, 2012	$	44,684
Total realized in earnings		1,587
Decrease in unrealized gain in comprehensive income		(731	)
Net settlements		(6,162	)
Balance, September 30, 2013	$	39,378

Schedule of assets measured at fair value on a non-recurring basis

	Fair Value Measurement as of September 30, 2013
	Total		Level 1		Level 2		Level 3
	(In thousands)
Measured on a Non-Recurring Basis:
Non-PCI impaired loans	$	75,435	$	—	$	1,160	$	74,275
Non-covered other real estate owned		7,084		—		7,084		—
Covered other real estate owned		141		—		26		115
SBA loan servicing asset		853		—		—		853
	$	83,513	$	—	$	8,270	$	75,243

Schedule of gains and (losses) on assets measured at fair value on a non-recurring basis

	Three Months Ended September 30, 2013			Nine Months Ended September 30, 2013
	(In thousands)
Gain (Loss) on Assets Measured on a Non-Recurring Basis:
Non-PCI impaired loans	$	(545	)	$	(2,422	)
Non-covered other real estate owned		(643	)		(643	)
Covered other real estate owned		(65	)		(69	)
SBA loan servicing asset		—			12
Total net loss	$	(1,253	)	$	(3,122	)

Summary of carrying values and estimated fair values of certain financial instruments

	September 30, 2013
			Estimated Fair Value
	Carrying or Contract Amount
			Total		Level 1		Level 2		Level 3
	(In thousands)
Financial Assets:
Cash and due from banks	$	132,467	$	132,467	$	132,467	$	—	$	—
Interest-earning deposits in financial institutions		11,552		11,552		11,552		—		—
Securities available-for-sale		1,512,147		1,512,147		514		1,472,255		39,378
Investment in FHLB stock		34,095		34,095		—		34,095		—
Loans and leases, net		4,299,607		4,313,163		—		1,160		4,312,003
SBA loan servicing asset		853		853		—		—		853
Financial Liabilities:
Deposits:
Demand, money market, interest checking, and savings deposits		4,709,623		4,709,623		—		4,709,623		—
Time deposits		723,521		725,184		—		725,184		—
Borrowings		8,243		8,244		—		8,244		—
Subordinated debentures		132,500		132,365		—		132,365		—

	December 31, 2012
			Estimated Fair Value
	Carrying or Contract Amount
			Total		Level 1		Level 2		Level 3
	(In thousands)
Financial Assets:
Cash and due from banks	$	89,011	$	89,011	$	89,011	$	—	$	—
Interest-earning deposits in financial institutions		75,393		75,393		75,393		—		—
Securities available-for-sale		1,355,385		1,355,385		8,985		1,301,716		44,684
Investment in FHLB stock		37,126		37,126		—		37,126		—
Loans and leases, net		3,498,329		3,551,674		—		4,975		3,546,699
SBA loan servicing asset		1,000		1,000		—		—		1,000
Financial Liabilities:
Deposits:
Demand, money market, interest checking, and savings deposits		3,888,794		3,888,794		—		3,888,794		—
Time deposits		820,327		823,912		—		823,912		—
Borrowings		12,591		12,611		—		12,611		—
Subordinated debentures		108,250		108,186		—		108,186		—

Recurring basis

Fair value measurements

Schedule of information about quantitative unobservable inputs, assumptions and valuation methodology used to evaluate the fair values

Unobservable Inputs	Range of Inputs	Weighted Average Input
Voluntary annual prepayment speeds	0% - 32.6%		8.1	%
Annual default rates	0% - 46.2%		3.2	%
Loss severity rates	0% - 64.9%		35.3	%
Discount rates	0% - 13.5%		5.8	%

Nonrecurring basis

Fair value measurements

Schedule of information about quantitative unobservable inputs, assumptions and valuation methodology used to evaluate the fair values

Asset	Fair Value (in 000's)		Valuation Methodology	Unobservable Inputs	Range	Weighted Average
Impaired loans(1)	$	72,528	Discounted cash flow	Discount rates	4.06% - 8.81%		6.57	%
	$	490	Appraisals	No discounts
OREO(2)	$	115	Appraisals	Discount, including 8% for selling costs	30%		30	%
SBA loan servicing asset	$	853	Discounted cash flow	Prepayment speeds	3.40% - 16.34%			(3)
				Discount rates	9.63% - 13.26%			(3)

(1)

Excludes $1.3 million of impaired loans with balances of $250,000 or less.

(2)

As of September 30, 2013, there was one OREO measured at Level 3.

(3)

Not readily available.

XML

INVESTMENT SECURITIES

9 Months Ended

Sep. 30, 2013

INVESTMENT SECURITIES

INVESTMENT SECURITIES

NOTE 5—INVESTMENT SECURITIES

• Securities Available-for-Sale

        The following tables present amortized cost, gross unrealized gains and losses, and carrying value of securities available-for-sale as of the dates indicated:

	September 30, 2013
Security Type	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Carrying Value
	(In thousands)
Residential mortgage-backed securities:
Government agency and government-sponsored enterprise pass through securities	$	695,768	$	19,853	$	(1,659	)	$	713,962
Government agency and government-sponsored enterprise collateralized mortgage obligations		201,531		730		(2,901	)		199,360
Covered private label collateralized mortgage obligations		31,503		7,983		(108	)		39,378
Municipal securities		460,754		2,150		(23,269	)		439,635
Corporate debt securities		84,028		61		(1,983	)		82,106
Other securities		37,999		1		(294	)		37,706
Total securities available-for-sale	$	1,511,583	$	30,778	$	(30,214	)	$	1,512,147

	December 31, 2012
Security Type	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Carrying Value
	(In thousands)
Residential mortgage-backed securities:
Government agency and government-sponsored enterprise pass through securities	$	774,677	$	33,618	$	(453	)	$	807,842
Government agency and government-sponsored enterprise collateralized mortgage obligations		99,956		1,870		(132	)		101,694
Covered private label collateralized mortgage obligations		36,078		8,729		(123	)		44,684
Municipal securities		339,547		10,445		(1,951	)		348,041
Corporate debt securities		42,014		432		(81	)		42,365
Other securities		6,389		4,370		—			10,759
Total securities available-for-sale	$	1,298,661	$	59,464	$	(2,740	)	$	1,355,385

        The covered private label collateralized mortgage obligations ("CMO's") were acquired in the FDIC-assisted acquisition of Affinity Bank in August 2009 and are covered by an FDIC loss sharing agreement. The loss sharing provisions of this agreement expire in the third quarter of 2014 for non-single family covered assets such as these private label CMO's. Other securities consist primarily of asset backed securities and collateralized loan obligations. See Note 11, Fair Value Measurements, for information on fair value measurements and methodology.

        The following table presents the contractual maturity distribution of our available-for-sale securities portfolio based on amortized cost and carrying value as of the date indicated:

	September 30, 2013
Maturity	Amortized Cost		Carrying Value
	(In thousands)
Due in one year or less	$	3,774	$	3,775
Due after one year through five years		24,449		24,707
Due after five years through ten years		124,905		124,317
Due after ten years		1,358,455		1,359,348
Total securities available-for-sale	$	1,511,583	$	1,512,147

        Mortgage-backed securities have contractual terms to maturity, but require periodic payments to reduce principal. In addition, expected maturities may differ from contractual maturities because obligors and/or issuers may have the right to call or prepay obligations with or without call or prepayment penalties.

        At September 30, 2013, the estimated fair value of residential mortgage-backed debt securities issued by the Federal National Mortgage Association ("Fannie Mae") and the Federal Home Loan Mortgage Corporation ("Freddie Mac") that were held in our portfolio was approximately $774.8 million. We do not own any equity securities issued by Fannie Mae or Freddie Mac.

        As of September 30, 2013, securities available-for-sale with a carrying value of $201.9 million were pledged as collateral for borrowings, public deposits and other purposes as required by various statutes and agreements.

        There were no securities sold during the three months ended September 30, 2013. However, we recorded a $5.2 million non-taxable gain to recognize our previously-held equity interest in FCAL common stock at its fair value as of the acquisition date rather than at its historical cost. During the three months ended March 31, 2013, we sold $12.4 million in corporate debt securities for which we realized a $409,000 gross gain. These securities were sold as part of our investment portfolio risk management activities to reduce price volatility and duration.

        The following tables present, for those securities that were in a gross unrealized loss position, the carrying values and the gross unrealized losses on securities by length of time the securities were in an unrealized loss position as of the dates indicated:

	September 30, 2013
	Less Than 12 Months					12 months or Longer					Total
Security Type	Carrying Value		Gross Unrealized Losses			Carrying Value		Gross Unrealized Losses			Carrying Value		Gross Unrealized Losses
	(In thousands)
Residential mortgage-backed securities:
Government agency and government-sponsored enterprise pass through securities	$	124,088	$	(1,658	)	$	43	$	(1	)	$	124,131	$	(1,659	)
Government agency and government-sponsored enterprise collateralized mortgage obligations		139,846		(2,856	)		4,610		(45	)		144,456		(2,901	)
Covered private label collateralized mortgage obligations		543		(19	)		636		(89	)		1,179		(108	)
Municipal securities		323,419		(23,269	)		—		—			323,419		(23,269	)
Corporate debt securities		61,831		(1,983	)		—		—			61,831		(1,983	)
Other securities		33,942		(294	)		—		—			33,942		(294	)
Total	$	683,669	$	(30,079	)	$	5,289	$	(135	)	$	688,958	$	(30,214	)

	December 31, 2012
	Less Than 12 Months					12 months or Longer					Total
Security Type	Carrying Value		Gross Unrealized Losses			Carrying Value		Gross Unrealized Losses			Carrying Value		Gross Unrealized Losses
	(In thousands)
Residential mortgage-backed securities:
Government agency and government-sponsored enterprise pass through securities	$	67,299	$	(452	)	$	60	$	(1	)	$	67,359	$	(453	)
Government agency and government-sponsored enterprise collateralized mortgage obligations		18,317		(132	)		—		—			18,317		(132	)
Covered private label collateralized mortgage obligations		—		—			1,692		(123	)		1,692		(123	)
Municipal securities		90,303		(1,951	)		—		—			90,303		(1,951	)
Corporate debt securities		16,819		(81	)		—		—			16,819		(81	)
Total	$	192,738	$	(2,616	)	$	1,752	$	(124	)	$	194,490	$	(2,740	)

        We reviewed the securities that were in a continuous loss position less than 12 months and longer than 12 months at September 30, 2013, and concluded that their losses were a result of the level of market interest rates relative to the types of securities and not a result of the underlying issuers' ability to repay. Accordingly, we determined that the securities were temporarily impaired and we did not recognize such impairment in the condensed consolidated statements of earnings. Additionally, we have no plans to sell these securities and believe that it is more likely than not we would not be required to sell these securities before recovery of their amortized cost.

        The following table presents the composition of our interest income on investment securities:

	Three Months Ended						Nine Months Ended September 30,
	September 30, 2013		June 30, 2013		September 30, 2012
Securities Interest by Type:							2013		2012
	(In thousands)
Taxable interest	$	6,028	$	5,388	$	6,832	$	16,979	$	23,716
Nontaxable interest		3,302		2,716		1,458		8,443		3,572
Dividend income		541		310		56		1,079		196
Total interest income on investment securities	$	9,871	$	8,414	$	8,346	$	26,501	$	27,484

• FHLB Stock

        At September 30, 2013, the Company had a $34.1 million investment in Federal Home Loan Bank of San Francisco ("FHLB") stock carried at cost. During the third quarter of 2013, FHLB stock decreased $5.0 million due to redemptions by the FHLB. We evaluated the carrying value of our FHLB stock investment at September 30, 2013, and determined that it was not impaired. Our evaluation considered the long-term nature of the investment, the current financial and liquidity position of the FHLB, repurchase activity of excess stock by the FHLB at its carrying value, the return on the investment, and our intent and ability to hold this investment for a period of time sufficient to recover our recorded investment.

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FDIC LOSS SHARING ASSET (Details) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2013
Changes in the FDIC loss sharing asset
Balance, at the beginning of the period	$ 57,475
Addition from the FCAL acquisition	17,180
FDIC share of additional losses, net of recoveries	6,440
Cash received from FDIC	(6,724)
Net amortization	(18,718)
Balance, at the end of the period	55,653
FDIC loss sharing asset
FDIC loss sharing asset	55,653
True-up liability	6,581
Non-single family covered assets	461,280
Single family covered assets	132,730
Affinity
Changes in the FDIC loss sharing asset
Balance, at the end of the period	12,973
FDIC loss sharing asset
FDIC loss sharing asset	12,973
Non-single family covered assets	230,053
Single family covered assets	14,285
Los Padres Bank
Changes in the FDIC loss sharing asset
Balance, at the end of the period	27,717
FDIC loss sharing asset
FDIC loss sharing asset	27,717
Non-single family covered assets	157,504
Single family covered assets	77,126
Western Commercial Bank
Changes in the FDIC loss sharing asset
Balance, at the end of the period	2,153
FDIC loss sharing asset
FDIC loss sharing asset	2,153
True-up liability	1,510
Non-single family covered assets	21,844
San Luis Trust Bank
Changes in the FDIC loss sharing asset
Balance, at the end of the period	12,810
FDIC loss sharing asset
FDIC loss sharing asset	12,810
True-up liability	5,071
Non-single family covered assets	51,879
Single family covered assets	$ 41,319

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INVESTMENT SECURITIES (Tables)

9 Months Ended

Sep. 30, 2013

INVESTMENT SECURITIES

Schedule of amortized cost, gross unrealized gains and losses, and carrying value of securities available-for-sale

	September 30, 2013
Security Type	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Carrying Value
	(In thousands)
Residential mortgage-backed securities:
Government agency and government-sponsored enterprise pass through securities	$	695,768	$	19,853	$	(1,659	)	$	713,962
Government agency and government-sponsored enterprise collateralized mortgage obligations		201,531		730		(2,901	)		199,360
Covered private label collateralized mortgage obligations		31,503		7,983		(108	)		39,378
Municipal securities		460,754		2,150		(23,269	)		439,635
Corporate debt securities		84,028		61		(1,983	)		82,106
Other securities		37,999		1		(294	)		37,706
Total securities available-for-sale	$	1,511,583	$	30,778	$	(30,214	)	$	1,512,147

	December 31, 2012
Security Type	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Carrying Value
	(In thousands)
Residential mortgage-backed securities:
Government agency and government-sponsored enterprise pass through securities	$	774,677	$	33,618	$	(453	)	$	807,842
Government agency and government-sponsored enterprise collateralized mortgage obligations		99,956		1,870		(132	)		101,694
Covered private label collateralized mortgage obligations		36,078		8,729		(123	)		44,684
Municipal securities		339,547		10,445		(1,951	)		348,041
Corporate debt securities		42,014		432		(81	)		42,365
Other securities		6,389		4,370		—			10,759
Total securities available-for-sale	$	1,298,661	$	59,464	$	(2,740	)	$	1,355,385

Schedule of contractual maturity distribution of the entity's available-for-sale securities portfolio based on amortized cost and carrying value

	September 30, 2013
Maturity	Amortized Cost		Carrying Value
	(In thousands)
Due in one year or less	$	3,774	$	3,775
Due after one year through five years		24,449		24,707
Due after five years through ten years		124,905		124,317
Due after ten years		1,358,455		1,359,348
Total securities available-for-sale	$	1,511,583	$	1,512,147

Schedule of carrying values and the gross unrealized losses on securities by length of time the securities were in an unrealized loss position

	September 30, 2013
	Less Than 12 Months					12 months or Longer					Total
Security Type	Carrying Value		Gross Unrealized Losses			Carrying Value		Gross Unrealized Losses			Carrying Value		Gross Unrealized Losses
	(In thousands)
Residential mortgage-backed securities:
Government agency and government-sponsored enterprise pass through securities	$	124,088	$	(1,658	)	$	43	$	(1	)	$	124,131	$	(1,659	)
Government agency and government-sponsored enterprise collateralized mortgage obligations		139,846		(2,856	)		4,610		(45	)		144,456		(2,901	)
Covered private label collateralized mortgage obligations		543		(19	)		636		(89	)		1,179		(108	)
Municipal securities		323,419		(23,269	)		—		—			323,419		(23,269	)
Corporate debt securities		61,831		(1,983	)		—		—			61,831		(1,983	)
Other securities		33,942		(294	)		—		—			33,942		(294	)
Total	$	683,669	$	(30,079	)	$	5,289	$	(135	)	$	688,958	$	(30,214	)

	December 31, 2012
	Less Than 12 Months					12 months or Longer					Total
Security Type	Carrying Value		Gross Unrealized Losses			Carrying Value		Gross Unrealized Losses			Carrying Value		Gross Unrealized Losses
	(In thousands)
Residential mortgage-backed securities:
Government agency and government-sponsored enterprise pass through securities	$	67,299	$	(452	)	$	60	$	(1	)	$	67,359	$	(453	)
Government agency and government-sponsored enterprise collateralized mortgage obligations		18,317		(132	)		—		—			18,317		(132	)
Covered private label collateralized mortgage obligations		—		—			1,692		(123	)		1,692		(123	)
Municipal securities		90,303		(1,951	)		—		—			90,303		(1,951	)
Corporate debt securities		16,819		(81	)		—		—			16,819		(81	)
Total	$	192,738	$	(2,616	)	$	1,752	$	(124	)	$	194,490	$	(2,740	)

Schedule of composition of our interest income on investment securities

	Three Months Ended						Nine Months Ended September 30,
	September 30, 2013		June 30, 2013		September 30, 2012
Securities Interest by Type:							2013		2012
	(In thousands)
Taxable interest	$	6,028	$	5,388	$	6,832	$	16,979	$	23,716
Nontaxable interest		3,302		2,716		1,458		8,443		3,572
Dividend income		541		310		56		1,079		196
Total interest income on investment securities	$	9,871	$	8,414	$	8,346	$	26,501	$	27,484

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ACQUISITIONS (Details) (USD $) In Thousands, unless otherwise specified				0 Months Ended			0 Months Ended
	Sep. 30, 2013	Dec. 31, 2012	Sep. 30, 2012	May 31, 2013 First California Financial Group	Aug. 03, 2012 American Perspective Bank	Aug. 01, 2012 American Perspective Bank	Apr. 03, 2012 Celtic Capital Corporation	Jan. 03, 2012 Pacific Western Equipment Finance
Assets Acquired:
Cash and due from banks				$ 6,124		$ 3,370	$ 3,435	$ 7,092
Interest-earning deposits in financial institutions				266,889		10,081
Investment securities available-for-sale				4,444		48,887
FHLB stock				9,518		1,412
Loans and leases				1,049,613		197,279	54,963	140,959
Other real estate owned				13,772		1,561
Premises and equipment				15,322
FDIC loss sharing asset				17,241
Cash surrender value of life insurance				13,265
Goodwill	215,862	79,866	79,592	136,189		15,047	6,645	19,033
Core deposit and customer relationship intangibles				7,927		1,924	1,300	1,700
Other intangible assets							670	1,420
Leases in process								19,162
Other assets				40,192		4,234	69	467
Total assets acquired				1,580,496		283,795	67,082	189,833
Liabilities Assumed:
Noninterest-bearing deposits				361,166		40,673
Interest-bearing deposits				739,713		178,891
Borrowings from parent								128,677
Other borrowings						5,315	46,804	15,839
Subordinated debentures				24,061
Discontinued operations				184,619
Accrued interest payable and other liabilities				19,369		840	2,278	10,317
Total liabilities assumed				1,328,928		225,719	49,082	154,833
Total consideration paid				251,568	58,076		18,000	35,000
Summary of consideration:
Cash paid					58,076		18,000	35,000
PacWest common stock issued				242,268
Cancellation of FCAL common stock owned by PacWest				9,300
Total consideration paid				$ 251,568	$ 58,076		$ 18,000	$ 35,000

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FDIC LOSS SHARING ASSET

9 Months Ended

Sep. 30, 2013

FDIC LOSS SHARING ASSET

FDIC LOSS SHARING ASSET

NOTE 8—FDIC LOSS SHARING ASSET

        The FDIC loss sharing asset relates to assets covered by the loss sharing agreements between the Bank and the FDIC arising from the acquisitions of Los Padres Bank and Affinity Bank and, through the FCAL acquisition, the assumption of the loss sharing agreements between First California Bank and the FDIC arising from FCB's acquisition of Western Commercial Bank ("Western Commercial") and San Luis Trust Bank ("San Luis"). The FDIC loss sharing asset related to Western Commercial and San Luis was measured at its fair value as of May 31, 2013 in conjunction with the FCAL acquisition. The FDIC loss sharing asset related to Los Padres and Affinity was measured at its estimated fair value at the respective acquisition dates.

        An increase in the expected amount of losses on the covered assets will increase the FDIC loss sharing asset; such increase is recognized through a credit to FDIC loss sharing income. Recoveries on previous losses paid to us by the FDIC reduce the FDIC loss sharing asset by a charge to FDIC loss sharing income. In addition, decreases in the expected amount of losses on covered assets will decrease the amount of funds expected to be collected from the FDIC and will therefore reduce the FDIC loss sharing asset through higher prospective amortization expense. The FDIC loss sharing asset is being amortized to its estimated value over the lesser of the term of the loss sharing agreements or the remaining contractual life of the assets covered by the loss sharing agreements.

        Both the Western Commercial and San Luis loss sharing agreements contain true-up provisions, under which we will owe the FDIC amounts at the end of the loss sharing agreements based on the performance of the covered assets. The true-up liability is included in other liabilities in the accompanying condensed consolidated balance sheets.

        The following table presents the changes in the FDIC loss sharing asset for the period indicated:

	FDIC Loss Sharing Asset
	(In thousands)
Balance, December 31, 2012	$	57,475
Addition from the FCAL acquisition		17,180
FDIC share of additional losses, net of recoveries		6,440
Cash received from FDIC		(6,724	)
Net amortization		(18,718	)
Balance, September 30, 2013	$	55,653

        The following table presents information about the composition of the FDIC loss sharing asset, the true-up liability, and the non-single family and the single family covered assets as of the date indicated:

	September 30, 2013
	Affinity Bank		Los Padres Bank		Western Commercial Bank		San Luis Trust Bank		Total
	(Dollars in thousands)
FDIC loss sharing asset	$	12,973	$	27,717	$	2,153	$	12,810	$	55,653
True-up liability		N/A		N/A	$	1,510	$	5,071	$	6,581
Non-single family covered assets(1)	$	230,053	$	157,504	$	21,844	$	51,879	$	461,280
Single family covered assets	$	14,285	$	77,126	$	—	$	41,319	$	132,730
Loss sharing expiration dates:
Non-single family		3rd Quarter 2014		3rd Quarter 2015		4th Quarter 2015		1st Quarter 2016
Single family		3rd Quarter 2019		3rd Quarter 2020		N/A		1st Quarter 2021
Loss recovery expiration dates:
Non-single family		3rd Quarter 2017		3rd Quarter 2018		4th Quarter 2018		1st Quarter 2019
Single family		3rd Quarter 2019		3rd Quarter 2020		N/A		1st Quarter 2021

(1)

Excludes securities.

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RELATED PARTY TRANSACTION (Details) (Castle Creek Financial, FCAL, USD $) In Millions, unless otherwise specified	0 Months Ended
	May 31, 2013
Castle Creek Financial | FCAL
Related party transaction
Related party expense	$ 1.3

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GOODWILL AND OTHER INTANGIBLE ASSETS

9 Months Ended

Sep. 30, 2013

GOODWILL AND OTHER INTANGIBLE ASSETS

GOODWILL AND OTHER INTANGIBLE ASSETS

NOTE 4—GOODWILL AND OTHER INTANGIBLE ASSETS

        Goodwill arises from the acquisition method of accounting for business combinations and represents the excess of the purchase price over the fair value of the net assets and other identifiable intangible assets acquired. Goodwill and other intangible assets deemed to have indefinite lives generated from purchase business combinations are not subject to amortization and are instead tested for impairment no less than annually. Impairment exists when the carrying value of goodwill exceeds its implied fair value. An impairment loss would be recognized in an amount equal to that excess and would be included in noninterest expense in the condensed consolidated statement of earnings.

        The following table presents the changes in the carrying amount of goodwill for the period indicated:

	Goodwill
	(In thousands)
Balance, December 31, 2012	$	79,866
Adjustment to APB goodwill		(193	)
Non-tax deductible addition from the FCAL acquisition		136,189
Balance, September 30, 2013	$	215,862

        Our intangible assets with definite lives are core deposit intangibles, or CDI, and customer relationship intangibles, or CRI. These intangible assets are amortized over their respective estimated useful lives to their estimated residual values and reviewed for impairment at least quarterly. The amortization expense represents the estimated decline in the value of the underlying deposits or loan customers acquired. The weighted average amortization period for the CDI addition from the FCAL acquisition is 3.1 years. The weighted average amortization period remaining for all of our CDI and CRI is 3.0 years. The aggregate CDI and CRI amortization expense is expected to be $5.4 million for 2013. The estimated aggregate amortization expense related to these intangible assets for each of the next five years is $5.3 million for 2014, $4.8 million for 2015, $3.0 million for 2016, $1.6 million for 2017, and $1.3 million for 2018.

        The following table presents the changes in CDI and CRI and the related accumulated amortization for the periods indicated:

	Three Months Ended									Nine Months Ended September 30,
	September 30, 2013			June 30, 2013			September 30, 2012
										2013			2012
	(In thousands)
Gross Amount of CDI and CRI:
Balance, beginning of period	$	53,339		$	45,412		$	62,272		$	45,412		$	67,100
Additions		—			7,927			1,924			7,927			4,924
Fully amortized portion		(4,376	)		—			(12,918	)		(4,376	)		(20,746	)
Removal due to branch sale		—			—			(5,866	)		—			(5,866	)
Balance, end of period		48,963			53,339			45,412			48,963			45,412
Accumulated Amortization:
Balance, beginning of period		(33,149	)		(31,865	)		(45,329	)		(30,689	)		(49,685	)
Amortization		(1,512	)		(1,284	)		(1,678	)		(3,972	)		(5,150	)
Fully amortized portion		4,376			—			12,918			4,376			20,746
Removal due to branch sale		—			—			4,576			—			4,576
Balance, end of period		(30,285	)		(33,149	)		(29,513	)		(30,285	)		(29,513	)
Net CDI and CRI, end of period	$	18,678		$	20,190		$	15,899		$	18,678		$	15,899

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CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (Parenthetical) (USD $)	9 Months Ended
	Sep. 30, 2013
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
Cash dividends paid, per share (in dollars per share)	$ 0.75

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LOANS AND LEASES (Details 4) (USD $)	Sep. 30, 2013	Jun. 30, 2013	Dec. 31, 2012	Sep. 30, 2012	Jun. 30, 2012	Dec. 31, 2011	May 31, 2013 FCAL	Sep. 30, 2013 Real estate mortgage	Dec. 31, 2012 Real estate mortgage	Sep. 30, 2012 Real estate mortgage	Sep. 30, 2013 Real estate construction	Dec. 31, 2012 Real estate construction	Sep. 30, 2012 Real estate construction	Sep. 30, 2013 Commercial	Dec. 31, 2012 Commercial	Sep. 30, 2013 Leases	Dec. 31, 2012 Leases	Sep. 30, 2013 Consumer	Dec. 31, 2012 Consumer	Sep. 30, 2013 Foreign	Dec. 31, 2012 Foreign	Sep. 30, 2013 Non-PCI Loans	Jun. 30, 2013 Non-PCI Loans	Dec. 31, 2012 Non-PCI Loans	Sep. 30, 2012 Non-PCI Loans	Jun. 30, 2012 Non-PCI Loans	Dec. 31, 2011 Non-PCI Loans	May 31, 2013 Non-PCI Loans FCAL	Sep. 30, 2013 Non-PCI Loans Real estate mortgage	Jun. 30, 2013 Non-PCI Loans Real estate mortgage	Dec. 31, 2012 Non-PCI Loans Real estate mortgage	Sep. 30, 2012 Non-PCI Loans Real estate mortgage	Jun. 30, 2012 Non-PCI Loans Real estate mortgage	Dec. 31, 2011 Non-PCI Loans Real estate mortgage	Sep. 30, 2013 Non-PCI Loans Real estate construction	Jun. 30, 2013 Non-PCI Loans Real estate construction	Dec. 31, 2012 Non-PCI Loans Real estate construction	Sep. 30, 2012 Non-PCI Loans Real estate construction	Jun. 30, 2012 Non-PCI Loans Real estate construction	Dec. 31, 2011 Non-PCI Loans Real estate construction	Sep. 30, 2013 Non-PCI Loans Commercial	Jun. 30, 2013 Non-PCI Loans Commercial	Dec. 31, 2012 Non-PCI Loans Commercial	Sep. 30, 2012 Non-PCI Loans Commercial	Jun. 30, 2012 Non-PCI Loans Commercial	Dec. 31, 2011 Non-PCI Loans Commercial	Sep. 30, 2013 Non-PCI Loans Leases	Jun. 30, 2013 Non-PCI Loans Leases	Dec. 31, 2012 Non-PCI Loans Leases	Sep. 30, 2012 Non-PCI Loans Leases	Jun. 30, 2012 Non-PCI Loans Leases	Sep. 30, 2013 Non-PCI Loans Consumer	Jun. 30, 2013 Non-PCI Loans Consumer	Dec. 31, 2012 Non-PCI Loans Consumer	Sep. 30, 2012 Non-PCI Loans Consumer	Jun. 30, 2012 Non-PCI Loans Consumer	Dec. 31, 2011 Non-PCI Loans Consumer	Sep. 30, 2013 Non-PCI Loans Foreign	Jun. 30, 2013 Non-PCI Loans Foreign	Dec. 31, 2012 Non-PCI Loans Foreign	Sep. 30, 2012 Non-PCI Loans Foreign	Jun. 30, 2012 Non-PCI Loans Foreign	Dec. 31, 2011 Non-PCI Loans Foreign	Sep. 30, 2013 PCI Loans	Jun. 30, 2013 PCI Loans	Dec. 31, 2012 PCI Loans	Sep. 30, 2012 PCI Loans	Jun. 30, 2012 PCI Loans	Dec. 31, 2011 PCI Loans	Sep. 30, 2013 PCI Loans Real estate mortgage	Dec. 31, 2012 PCI Loans Real estate mortgage	Sep. 30, 2013 PCI Loans Real estate construction	Dec. 31, 2012 PCI Loans Real estate construction	Sep. 30, 2013 PCI Loans Commercial	Dec. 31, 2012 PCI Loans Commercial	Sep. 30, 2013 PCI Loans Consumer	Dec. 31, 2012 PCI Loans Consumer
Composition of loans and leases
Total gross loans and leases	$ 4,384,312,000		$ 3,592,832,000	$ 3,651,181,000				$ 2,971,381,000	$ 2,422,570,000	$ 1,950,777,000	$ 201,524,000	$ 154,604,000	$ 152,748,000	$ 929,434,000	$ 800,959,000	$ 235,791,000	$ 174,373,000	$ 34,153,000	$ 23,085,000	$ 12,029,000	$ 17,241,000	$ 3,951,555,000		$ 3,074,947,000	$ 3,080,068,000				$ 2,551,781,000		$ 1,938,513,000	$ 1,950,777,000			$ 189,957,000		$ 129,959,000	$ 152,748,000			$ 928,169,000		$ 791,888,000	$ 777,365,000			$ 235,791,000		$ 174,373,000	$ 161,934,000		$ 33,828,000		$ 22,973,000	$ 21,118,000			$ 12,029,000		$ 17,241,000	$ 16,126,000			$ 432,757,000		$ 517,885,000	$ 571,113,000			$ 419,600,000	$ 484,057,000	$ 11,567,000	$ 24,645,000	$ 1,265,000	$ 9,071,000	$ 325,000	$ 112,000
Unearned income	(919,000)		(2,535,000)																			(919,000)		(2,535,000)
Total allowance for loans and lease losses	(83,786,000)	(90,643,000)	(91,968,000)	(99,846,000)	(103,524,000)	(116,588,000)																(60,551,000)	(63,246,000)	(65,899,000)	(69,142,000)	(72,061,000)	(85,313,000)		(29,606,000)	(31,804,000)	(38,700,000)	(38,737,000)	(42,236,000)	(50,205,000)	(3,545,000)	(3,432,000)	(3,221,000)	(6,597,000)	(5,496,000)	(8,697,000)	(23,069,000)	(24,165,000)	(20,661,000)	(21,020,000)	(21,979,000)	(23,308,000)	(2,336,000)	(2,096,000)	(1,493,000)	(1,127,000)	(498,000)	(1,939,000)	(1,667,000)	(1,726,000)	(1,554,000)	(1,735,000)	(2,768,000)	(56,000)	(82,000)	(98,000)	(107,000)	(117,000)	(335,000)	(23,235,000)	(27,397,000)	(26,069,000)	(30,704,000)	(31,463,000)	(31,275,000)
Total loans and leases, net	4,299,607,000		3,498,329,000	3,549,145,000																		3,890,085,000		3,006,513,000																																								409,522,000		491,816,000
Total gross loans and leases (as a percent)																						100.00%		100.00%					65.00%		63.00%				5.00%		4.00%				23.00%		25.00%				6.00%		6.00%			1.00%		1.00%						1.00%				100.00%		100.00%				97.00%	93.00%	3.00%	5.00%		2.00%
Fair Value of loans aquired							(44,146,000)																					1,000,000,000
Gross contractual amount							84,817,000																					1,300,000,000
Estimated contractual flows not expected																												$ 34,400,000

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INVESTMENT SECURITIES (Details) (USD $)	9 Months Ended			3 Months Ended	9 Months Ended									3 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Dec. 31, 2012	Sep. 30, 2013 First California Financial Group	Sep. 30, 2013 First California Financial Group	Sep. 30, 2013 Government agency and government-sponsored enterprise pass through securities	Dec. 31, 2012 Government agency and government-sponsored enterprise pass through securities	Sep. 30, 2013 Government agency and government-sponsored enterprise collateralized mortgage obligations	Dec. 31, 2012 Government agency and government-sponsored enterprise collateralized mortgage obligations	Sep. 30, 2013 Covered private label collateralized mortgage obligations	Dec. 31, 2012 Covered private label collateralized mortgage obligations	Sep. 30, 2013 Municipal securities	Dec. 31, 2012 Municipal securities	Mar. 31, 2013 Corporate debt securities	Sep. 30, 2013 Corporate debt securities	Dec. 31, 2012 Corporate debt securities	Sep. 30, 2013 Other securities	Dec. 31, 2012 Other securities	Sep. 30, 2013 Residential mortgage-backed securities issued by the Federal National Mortgage Association and federal Home Loan Mortgage Corporation
Amortized cost, gross unrealized gains and losses and estimated fair values of securities available-for-sale
Amortized Cost	$ 1,511,583,000		$ 1,298,661,000			$ 695,768,000	$ 774,677,000	$ 201,531,000	$ 99,956,000	$ 31,503,000	$ 36,078,000	$ 460,754,000	$ 339,547,000		$ 84,028,000	$ 42,014,000	$ 37,999,000	$ 6,389,000
Gross Unrealized Gains	30,778,000		59,464,000			19,853,000	33,618,000	730,000	1,870,000	7,983,000	8,729,000	2,150,000	10,445,000		61,000	432,000	1,000	4,370,000
Gross Unrealized Losses	(30,214,000)		(2,740,000)			(1,659,000)	(453,000)	(2,901,000)	(132,000)	(108,000)	(123,000)	(23,269,000)	(1,951,000)		(1,983,000)	(81,000)	(294,000)
Carrying Value	1,512,147,000		1,355,385,000			713,962,000	807,842,000	199,360,000	101,694,000	39,378,000	44,684,000	439,635,000	348,041,000		82,106,000	42,365,000	37,706,000	10,759,000	774,800,000
Non-taxable gain on previously-held equity interest				5,200,000	5,200,000
Proceeds from investment securities previously held in portfolio and/or obtained in acquisition	12,810,000	45,639,000												12,400,000
Gross realized gain														$ 409,000

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FDIC LOSS SHARING ASSET (Tables)

9 Months Ended

Sep. 30, 2013

FDIC LOSS SHARING ASSET

Schedule of changes in the FDIC loss sharing asset

	FDIC Loss Sharing Asset
	(In thousands)
Balance, December 31, 2012	$	57,475
Addition from the FCAL acquisition		17,180
FDIC share of additional losses, net of recoveries		6,440
Cash received from FDIC		(6,724	)
Net amortization		(18,718	)
Balance, September 30, 2013	$	55,653

Schedule of the composition of the FDIC loss sharing asset and true-up liability

	September 30, 2013
	Affinity Bank		Los Padres Bank		Western Commercial Bank		San Luis Trust Bank		Total
	(Dollars in thousands)
FDIC loss sharing asset	$	12,973	$	27,717	$	2,153	$	12,810	$	55,653
True-up liability		N/A		N/A	$	1,510	$	5,071	$	6,581
Non-single family covered assets(1)	$	230,053	$	157,504	$	21,844	$	51,879	$	461,280
Single family covered assets	$	14,285	$	77,126	$	—	$	41,319	$	132,730
Loss sharing expiration dates:
Non-single family		3rd Quarter 2014		3rd Quarter 2015		4th Quarter 2015		1st Quarter 2016
Single family		3rd Quarter 2019		3rd Quarter 2020		N/A		1st Quarter 2021
Loss recovery expiration dates:
Non-single family		3rd Quarter 2017		3rd Quarter 2018		4th Quarter 2018		1st Quarter 2019
Single family		3rd Quarter 2019		3rd Quarter 2020		N/A		1st Quarter 2021

(1)

Excludes securities.

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FAIR VALUE MEASUREMENTS (Details 2) (Private label CMOs, USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2013
Activity for assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3)
Balance at the beginning of the period	$ 44,684
Total realized in earnings	1,587
Decrease in unrealized gain in comprehensive income	(731)
Net settlements	(6,162)
Balance at the end of the period	$ 39,378
Recurring basis | Level 3 | Minimum
Information about quantitative unobservable inputs, assumptions and valuation methodology used to evaluate the fair values
Voluntary annual prepayment speeds (as a percent)	0.00%
Annual default rates (as a percent)	0.00%
Loss severity rates (as a percent)	0.00%
Discount rates (as a percent)	0.00%
Recurring basis | Level 3 | Maximum
Information about quantitative unobservable inputs, assumptions and valuation methodology used to evaluate the fair values
Voluntary annual prepayment speeds (as a percent)	32.60%
Annual default rates (as a percent)	46.20%
Loss severity rates (as a percent)	64.90%
Discount rates (as a percent)	13.50%
Recurring basis | Level 3 | Weighted average
Information about quantitative unobservable inputs, assumptions and valuation methodology used to evaluate the fair values
Voluntary annual prepayment speeds (as a percent)	8.10%
Annual default rates (as a percent)	3.20%
Loss severity rates (as a percent)	35.30%
Discount rates (as a percent)	5.80%

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LOANS AND LEASES (Details 11) (PCI Loans, USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2013
Covered loans
Changes in carrying amount
Balance at the beginning of the year	$ 491,816
Addition from the FCAL acquisition	24,341
Accretion	33,057
Payments received	(161,823)
Provision for credit losses	2,872
Balance at the end of the year	390,263
Changes in accretable yield
Balance at the beginning of the year	(196,022)
Addition from the FCAL acquisition	(2,424)
Accretion	33,057
Increase in expected cash flows, net	12,521
Balance at the end of the year	(152,868)
Non-Covered loans
Changes in carrying amount
Addition from the FCAL acquisition	19,805
Accretion	899
Payments received	(1,445)
Balance at the end of the year	19,259
Changes in accretable yield
Addition from the FCAL acquisition	(5,672)
Accretion	899
Increase in expected cash flows, net	(1,808)
Balance at the end of the year	$ (6,581)

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FAIR VALUE MEASUREMENTS

9 Months Ended

Sep. 30, 2013

FAIR VALUE MEASUREMENTS

FAIR VALUE MEASUREMENTS

NOTE 11—FAIR VALUE MEASUREMENTS

        ASC 820, "Fair Value Measurement," defines fair value, establishes a framework for measuring fair value including a three-level valuation hierarchy, and expands disclosures about fair value measurements. Fair value is defined as the exchange price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date reflecting assumptions that a market participant would use when pricing an asset or liability. The hierarchy uses three levels of inputs to measure the fair value of assets and liabilities as follows:

• •

  Level 1:    Quoted prices (unadjusted) for identical assets or liabilities in active markets.

  •

  Level 2:    Observable inputs other than Level 1, including quoted prices for similar assets and liabilities in active markets, quoted prices in less active markets, or other observable inputs that can be corroborated by observable market data, either directly or indirectly, for substantially the full term of the financial instrument. This category generally includes government agency and government-sponsored enterprise securities.

• •

  Level 3:    Inputs to a valuation methodology that are unobservable, supported by little or no market activity, and significant to the fair value measurement. These valuation methodologies generally include pricing models, discounted cash flow models, or a determination of fair value that requires significant management judgment or estimation. This category also includes unobservable inputs from a pricing service not corroborated by observable market data, and includes our covered private label CMOs.

        We use fair value to measure certain assets on a recurring basis, primarily securities available-for-sale; we have no liabilities being measured at fair value. For assets measured at the lower of cost or fair value, the fair value measurement criteria may or may not be met during a reporting period and such measurements are therefore considered "nonrecurring" for purposes of disclosing our fair value measurements. Fair value is used on a nonrecurring basis to adjust carrying values for impaired loans and other real estate owned and also to record impairment on certain assets, such as goodwill, core deposit intangibles, and other long-lived assets.

        The following table presents information on the assets measured and recorded at fair value on a recurring basis as of the date indicated:

	Fair Value Measurement as of September 30, 2013
	Total		Level 1		Level 2		Level 3
	(In thousands)
Measured on a Recurring Basis:
Securities available-for-sale:
Government agency and government-sponsored enterprise residential mortgage-backed securities	$	913,322	$	—	$	913,322	$	—
Covered private label CMOs		39,378		—		—		39,378
Municipal securities		439,635		—		439,635		—
Corporate securities		82,106		—		82,106		—
Other securities		37,706		514		37,192		—
	$	1,512,147	$	514	$	1,472,255	$	39,378

        There were no transfers of assets either between Level 1 and Level 2 nor in or out of Level 3 of the fair value hierarchy for assets measured on a recurring basis during the three months ended September 30, 2013.

        The following table presents information about quantitative inputs and assumptions used to evaluate the fair values provided by our third party pricing service for our Level 3 covered private label CMOs measured at fair value on a recurring basis as of September 30, 2013:

Unobservable Inputs	Range of Inputs	Weighted Average Input
Voluntary annual prepayment speeds	0% - 32.6%		8.1	%
Annual default rates	0% - 46.2%		3.2	%
Loss severity rates	0% - 64.9%		35.3	%
Discount rates	0% - 13.5%		5.8	%

        The following table summarizes activity for assets measured at fair value on a recurring basis that are categorized as Level 3 for the period indicated:

	Covered Private Label CMOs (Level 3)
	(In thousands)
Balance, December 31, 2012	$	44,684
Total realized in earnings		1,587
Decrease in unrealized gain in comprehensive income		(731	)
Net settlements		(6,162	)
Balance, September 30, 2013	$	39,378

        The following tables present assets measured at fair value on a non-recurring basis as of the date indicated and the gains and (losses) recognized on such assets for the period indicated:

	Fair Value Measurement as of September 30, 2013
	Total		Level 1		Level 2		Level 3
	(In thousands)
Measured on a Non-Recurring Basis:
Non-PCI impaired loans	$	75,435	$	—	$	1,160	$	74,275
Non-covered other real estate owned		7,084		—		7,084		—
Covered other real estate owned		141		—		26		115
SBA loan servicing asset		853		—		—		853
	$	83,513	$	—	$	8,270	$	75,243

	Three Months Ended September 30, 2013			Nine Months Ended September 30, 2013
	(In thousands)
Gain (Loss) on Assets Measured on a Non-Recurring Basis:
Non-PCI impaired loans	$	(545	)	$	(2,422	)
Non-covered other real estate owned		(643	)		(643	)
Covered other real estate owned		(65	)		(69	)
SBA loan servicing asset		—			12
Total net loss	$	(1,253	)	$	(3,122	)

        The following table presents the valuation methodology and unobservable inputs for Level 3 assets measured at fair value on a nonrecurring basis as of September 30, 2013:

Asset	Fair Value (in 000's)		Valuation Methodology	Unobservable Inputs	Range	Weighted Average
Impaired loans(1)	$	72,528	Discounted cash flow	Discount rates	4.06% - 8.81%		6.57	%
	$	490	Appraisals	No discounts
OREO(2)	$	115	Appraisals	Discount, including 8% for selling costs	30%		30	%
SBA loan servicing asset	$	853	Discounted cash flow	Prepayment speeds	3.40% - 16.34%			(3)
				Discount rates	9.63% - 13.26%			(3)

(1)

Excludes $1.3 million of impaired loans with balances of $250,000 or less.

(2)

As of September 30, 2013, there was one OREO measured at Level 3.

(3)

Not readily available.

        ASC Topic 825, "Financial Instruments," requires disclosure of the estimated fair value of certain financial instruments and the methods and significant assumptions used to estimate such fair values. Additionally, certain financial instruments and all nonfinancial instruments are excluded from the applicable disclosure requirements.

        The following tables present a summary of the carrying values and estimated fair values of certain financial instruments as of the dates indicated:

	September 30, 2013
			Estimated Fair Value
	Carrying or Contract Amount
			Total		Level 1		Level 2		Level 3
	(In thousands)
Financial Assets:
Cash and due from banks	$	132,467	$	132,467	$	132,467	$	—	$	—
Interest-earning deposits in financial institutions		11,552		11,552		11,552		—		—
Securities available-for-sale		1,512,147		1,512,147		514		1,472,255		39,378
Investment in FHLB stock		34,095		34,095		—		34,095		—
Loans and leases, net		4,299,607		4,313,163		—		1,160		4,312,003
SBA loan servicing asset		853		853		—		—		853
Financial Liabilities:
Deposits:
Demand, money market, interest checking, and savings deposits		4,709,623		4,709,623		—		4,709,623		—
Time deposits		723,521		725,184		—		725,184		—
Borrowings		8,243		8,244		—		8,244		—
Subordinated debentures		132,500		132,365		—		132,365		—

	December 31, 2012
			Estimated Fair Value
	Carrying or Contract Amount
			Total		Level 1		Level 2		Level 3
	(In thousands)
Financial Assets:
Cash and due from banks	$	89,011	$	89,011	$	89,011	$	—	$	—
Interest-earning deposits in financial institutions		75,393		75,393		75,393		—		—
Securities available-for-sale		1,355,385		1,355,385		8,985		1,301,716		44,684
Investment in FHLB stock		37,126		37,126		—		37,126		—
Loans and leases, net		3,498,329		3,551,674		—		4,975		3,546,699
SBA loan servicing asset		1,000		1,000		—		—		1,000
Financial Liabilities:
Deposits:
Demand, money market, interest checking, and savings deposits		3,888,794		3,888,794		—		3,888,794		—
Time deposits		820,327		823,912		—		823,912		—
Borrowings		12,591		12,611		—		12,611		—
Subordinated debentures		108,250		108,186		—		108,186		—

        The following is a description of the valuation methodologies used to measure our assets recorded at fair value (under ASC Topic 820) and for estimating fair value for financial instruments not recorded at fair value (under ASC Topic 825).

        Cash and due from banks.    The carrying amount is assumed to be the fair value because of the liquidity of these instruments.

        Interest-earning deposits in financial institutions.    The carrying amount is assumed to be the fair value given the short-term nature of these deposits.

        Securities available-for-sale.    Securities available-for-sale are measured and carried at fair value on a recurring basis. Unrealized gains and losses on available-for-sale securities are reported as a component of accumulated other comprehensive income in the condensed consolidated balance sheets. See Note 5, Investment Securities, for further information on unrealized gains and losses on securities available-for-sale.

        Fair value for securities categorized as Level 1, which are primarily equity securities, are based on readily available quoted prices. In determining the fair value of the securities categorized as Level 2, we obtain a report from a nationally recognized broker-dealer detailing the fair value of each investment security we hold as of each reporting date. The broker-dealer uses observable market information to value our securities, with the primary source being a nationally recognized pricing service. We review the market prices provided by the broker-dealer for our securities for reasonableness based on our understanding of the marketplace and we consider any credit issues related to the securities. As we have not made any adjustments to the market quotes provided to us and they are based on observable market data, they have been categorized as Level 2 within the fair value hierarchy.

        Our covered private label CMOs are categorized as Level 3 due in part to the inactive market for such securities. There is a wide range of prices quoted for private label CMOs among independent third party pricing services and this range reflects the significant judgment being exercised over the assumptions and variables that determine the pricing of such securities. We consider this subjectivity to be a significant unobservable input and have concluded that the covered private label CMOs should be categorized as a Level 3 measured asset. Our fair value estimate was based on prices provided to us by a nationally recognized pricing service which we also use to determine the fair value of the majority of our securities portfolio. We determined the reasonableness of the fair values by reviewing assumptions at the individual security level about prepayment, default expectations, estimated severity loss factors, and discount rates, all of which are not directly observable in the market. Significant changes in default expectations, severity loss factors, or discount rates, which occur all together or in isolation, would result in different fair value measurements.

        FHLB stock.    Investments in FHLB stock are recorded at cost and measured for impairment quarterly. Ownership of FHLB stock is restricted to member banks and the securities do not have a readily determinable market value. Purchases and sales of these securities are at par value with the issuer. The fair value of investments in FHLB stock is equal to the carrying amount.

        Impaired loans (excluding PCI loans).    Nonaccrual loans and performing restructured loans are considered impaired for reporting purposes and are measured and recorded at fair value on a non-recurring basis. Non-PCI nonaccrual loans with an unpaid principal balance over $250,000 and all performing restructured loans are reviewed individually for the amount of impairment, if any. Non-PCI nonaccrual loans with an unpaid principal balance of $250,000 or less are evaluated for impairment collectively.

        To the extent a loan is collateral dependent, we measure such impaired loan based on the estimated fair value of the underlying collateral. The fair value of each loan's collateral is generally based on estimated market prices from an independently prepared appraisal, which is then adjusted for the cost related to liquidating such collateral; such valuation inputs result in a nonrecurring fair value measurement that is categorized as a Level 2 measurement. The Level 2 measurement is based on appraisals obtained within the last 12 months and for which a charge-off was recognized or a change in the specific valuation allowance was made during the nine months ended September 30, 2013.

        When adjustments are made to an appraised value to reflect various factors such as the age of the appraisal or known changes in the market or the collateral, such valuation inputs are considered unobservable and the fair value measurement is categorized as a Level 3 measurement. The impaired loans categorized as Level 3 also include unsecured loans and other secured loans whose fair values are based significantly on unobservable inputs such as the strength of a guarantor, including an SBA government guarantee, cash flows discounted at the effective loan rate, and management's judgment.

        The Non-PCI impaired loan balances shown above represent those nonaccrual and restructured loans for which impairment was recognized during the nine months ended September 30, 2013. The amounts shown as net losses include the impairment recognized during the nine months ended September 30, 2013, for the loan balances shown. Of the $50.8 million of nonaccrual loans at September 30, 2013, $1.1 million were written down to their collateral fair values through charge-offs during the quarter.

        Other real estate owned.    The fair value of foreclosed real estate, both non-covered and covered, is generally based on estimated market prices from independently prepared current appraisals or negotiated sales prices with potential buyers, less estimated costs to sell; such valuation inputs result in a fair value measurement that is categorized as a Level 2 measurement on a nonrecurring basis. As a matter of policy, appraisals are required annually and may be updated more frequently as circumstances require in the opinion of management. The Level 2 measurement for OREO is based on appraisals obtained within the last 12 months and for which a write-down was recognized during the nine months ended September 30, 2013.

        When a current appraised value is not available or management determines the fair value of the collateral is further impaired below the appraised value as a result of known changes in the market or the collateral and there is no observable market price, such valuation inputs result in a fair value measurement that is categorized as a Level 3 measurement. To the extent a negotiated sales price or reduced listing price represents a significant discount to an observable market price, such valuation input would result in a fair value measurement that is also considered a Level 3 measurement. The OREO losses disclosed are write-downs based on either a recent appraisal obtained after foreclosure or an accepted purchase offer by an independent third party received after foreclosure.

        SBA servicing asset.    In accordance with ASC Topic 860, "Transfers and Servicing," the SBA servicing asset, included in other assets in the condensed consolidated balance sheets, is carried at its implied fair value. The fair value of the servicing asset is estimated by discounting future cash flows using market-based discount rates and prepayment speeds. The discount rate is based on the current U.S. Treasury yield curve, as published by the Department of the Treasury, plus a spread for the marketplace risk associated with these assets. We utilize estimated prepayment vectors using SBA prepayment information provided by Bloomberg for pools of similar assets to determine the timing of the cash flows. These nonrecurring valuation inputs are considered to be Level 3 inputs.

        Deposits.    Deposits are carried at historical cost. The fair value of deposits with no stated maturity, such as noninterest bearing demand deposits, interest checking, money market, and savings accounts, is equal to the amount payable on demand as of the balance sheet date and considered Level 2. The fair value of time deposits is based on the discounted value of contractual cash flows and considered Level 2. The discount rate is estimated using the rates currently offered for deposits of similar remaining maturities. No value has been separately assigned to the Company's long-term relationships with its deposit customers, such as a core deposit intangible.

        Borrowings.    Borrowings are carried at amortized cost. The fair value of fixed-rate borrowings is calculated by discounting scheduled cash flows through the estimated maturity dates or call dates, if applicable, using estimated market discount rates that reflect current rates offered for borrowings with similar remaining maturities and characteristics.

        Subordinated debentures.    Subordinated debentures are carried at amortized cost. The fair value of subordinated debentures with variable rates is determined using a market discount rate on the expected cash flows.

        Commitments to extend credit.    The majority of our commitments to extend credit carry current market interest rates if converted to loans. Because these commitments are generally unassignable by either the borrower or us, they only have value to the borrower and us. The estimated fair value approximates the recorded deferred fee amounts and is excluded from the table above because it is not material.

• Limitations

        Fair value estimates are made at a specific point in time and are based on relevant market information and information about the financial instrument. These estimates do not reflect income taxes or any premium or discount that could result from offering for sale at one time the Company's entire holdings of a particular financial instrument. Because no market exists for a portion of the Company's financial instruments, fair value estimates are based on what management believes to be conservative judgments regarding expected future cash flows, current economic conditions, risk characteristics of various financial instruments, and other factors. These estimated fair values are subjective in nature and involve uncertainties and matters of significant judgment and therefore cannot be determined with precision. Changes in assumptions could significantly affect the estimates. Since the fair values have been estimated as of September 30, 2013, the amounts that will actually be realized or paid at settlement or maturity of the instruments could be significantly different.

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OTHER REAL ESTATE OWNED (OREO)

9 Months Ended

Sep. 30, 2013

OTHER REAL ESTATE OWNED (OREO)

OTHER REAL ESTATE OWNED (OREO)

NOTE 7—OTHER REAL ESTATE OWNED (OREO)

        The following tables summarize OREO by property type at the dates indicated:

	September 30, 2013						December 31, 2012
Property Type	Non-Covered OREO		Covered OREO		Total OREO		Non-Covered OREO		Covered OREO		Total OREO
	(In thousands)
Commercial real estate	$	11,914	$	6,912	$	18,826	$	1,684	$	11,635	$	13,319
Construction and land development		32,025		4,106		36,131		31,888		6,708		38,596
Multi-family		—		989		989		—		4,239		4,239
Single family residence		19		7		26		—		260		260
Total OREO, net	$	43,958	$	12,014	$	55,972	$	33,572	$	22,842	$	56,414

        The following table presents a rollforward of OREO, net of the valuation allowance, for the periods indicated:

	Non-Covered OREO			Covered OREO			Total OREO
	(In thousands)
OREO Activity:
Balance, December 31, 2012	$	33,572		$	22,842		$	56,414
Foreclosures		3,500			1,480			4,980
Provision for losses		(92	)		(1,093	)		(1,185	)
Reductions related to sales		(1,019	)		(5,918	)		(6,937	)
Balance, March 31, 2013		35,961			17,311			53,272
Addition from the FCAL acquisition		10,092			3,680			13,772
Foreclosures		1,035			3,075			4,110
Payments to third parties(1)		14			—			14
Provision for losses		—			(292	)		(292	)
Reductions related to sales		(1,670	)		(4,660	)		(6,330	)
Balance, June 30, 2013		45,432			19,114			64,546
Foreclosures		3,196			468			3,664
Payments to third parties(1)		24			—			24
Provision for losses		(643	)		26			(617	)
Reductions related to sales		(4,051	)		(7,594	)		(11,645	)
Balance, September 30, 2013	$	43,958		$	12,014		$	55,972

(1)

Represents amounts due to participants and for guarantees, property taxes or other prior lien positions.

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FAIR VALUE MEASUREMENTS (Details 4) (USD $)	9 Months Ended
	Sep. 30, 2013
Information about quantitative unobservable inputs, assumptions and valuation methodology used to evaluate the fair values
Impaired loans with balances of $250,000 or less	$ 1,300,000
Nonrecurring basis | Level 3
Information about quantitative unobservable inputs, assumptions and valuation methodology used to evaluate the fair values
Fair Value	75,243,000
Nonrecurring basis | Level 3 | OREO
Information about quantitative unobservable inputs, assumptions and valuation methodology used to evaluate the fair values
Number of properties measured at Level 3	1
Nonrecurring basis | Level 3 | OREO | Appraisals
Information about quantitative unobservable inputs, assumptions and valuation methodology used to evaluate the fair values
Discount rates (as a percent)	30.00%
Selling costs (as a percent)	8.00%
Fair Value	115,000
Nonrecurring basis | Level 3 | Impaired loans excluding balances with $250,000 or less | Discounted cash flow
Information about quantitative unobservable inputs, assumptions and valuation methodology used to evaluate the fair values
Fair Value	72,528,000
Nonrecurring basis | Level 3 | Impaired loans excluding balances with $250,000 or less | Appraisals
Information about quantitative unobservable inputs, assumptions and valuation methodology used to evaluate the fair values
Fair Value	490,000
Nonrecurring basis | Level 3 | SBA loan servicing asset
Information about quantitative unobservable inputs, assumptions and valuation methodology used to evaluate the fair values
Fair Value	853,000
Nonrecurring basis | Level 3 | SBA loan servicing asset | Discounted cash flow
Information about quantitative unobservable inputs, assumptions and valuation methodology used to evaluate the fair values
Fair Value	$ 853,000
Nonrecurring basis | Level 3 | Minimum | Impaired loans excluding balances with $250,000 or less | Discounted cash flow
Information about quantitative unobservable inputs, assumptions and valuation methodology used to evaluate the fair values
Discount rates (as a percent)	4.06%
Nonrecurring basis | Level 3 | Minimum | SBA loan servicing asset | Discounted cash flow
Information about quantitative unobservable inputs, assumptions and valuation methodology used to evaluate the fair values
Discount rates (as a percent)	9.63%
Prepayment speeds (as a percent)	3.40%
Nonrecurring basis | Level 3 | Maximum | Impaired loans excluding balances with $250,000 or less | Discounted cash flow
Information about quantitative unobservable inputs, assumptions and valuation methodology used to evaluate the fair values
Discount rates (as a percent)	8.81%
Nonrecurring basis | Level 3 | Maximum | SBA loan servicing asset | Discounted cash flow
Information about quantitative unobservable inputs, assumptions and valuation methodology used to evaluate the fair values
Discount rates (as a percent)	13.26%
Prepayment speeds (as a percent)	16.34%
Nonrecurring basis | Level 3 | Weighted average | OREO | Appraisals
Information about quantitative unobservable inputs, assumptions and valuation methodology used to evaluate the fair values
Discount rates (as a percent)	30.00%
Nonrecurring basis | Level 3 | Weighted average | Impaired loans excluding balances with $250,000 or less | Discounted cash flow
Information about quantitative unobservable inputs, assumptions and valuation methodology used to evaluate the fair values
Discount rates (as a percent)	6.57%

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ACCUMULATED OTHER COMPREHENSIVE INCOME

9 Months Ended

Sep. 30, 2013

ACCUMULATED OTHER COMPREHENSIVE INCOME

ACCUMULATED OTHER COMPREHENSIVE INCOME

NOTE 14—ACCUMULATED OTHER COMPREHENSIVE INCOME

        The following table provides information about reclassification adjustments from accumulated other comprehensive income ("AOCI") for the period indicated:

	Nine Months Ended September 30, 2013
AOCI Component:	Amount Reclassified from AOCI(1)			Affected Line Item in the Statement Where Net Income is Presented
	(In thousands)
Unrealized gains (losses) on available-for-sale securities:
	$	409		Gain on sale of securities
		5,222		Acquisition-related securities gain(2)
		5,631		Total before tax
		(172	)	Income tax expense
Total reclassification for the period	$	5,459		Net of tax

(1)

Amounts in parentheses indicate debits to income.

(2)

Non-taxable gain on equity interest in FCAL common stock at its fair value as of the FCAL acquisition date.

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EARNINGS PER SHARE

9 Months Ended

Sep. 30, 2013

EARNINGS PER SHARE

EARNINGS PER SHARE

NOTE 12—EARNINGS PER SHARE

        The following is a summary of the calculation of basic and diluted net earnings per share for the periods indicated:

	Three Months Ended									Nine Months Ended September 30,
	September 30, 2013			June 30, 2013			September 30, 2012
										2013			2012
	(In thousands, except per share data)
Basic Earnings Per Share:
Net earnings from continuing operations	$	24,140		$	4,396		$	16,088		$	42,030		$	36,909
Less: earnings allocated to unvested restricted stock(1)		(786	)		(212	)		(574	)		(1,137	)		(1,170	)
Net earnings from continuing operations allocated to common shares		23,354			4,184			15,514			40,893			35,739
Net earnings (loss) from discontinued operations		23			(47	)		—			(24	)		—
Net earnings allocated to common shares	$	23,377		$	4,137		$	15,514		$	40,869		$	35,739
Weighted-average basic shares and unvested restricted stock outstanding		46,091			40,339			37,413			41,306			37,353
Less: weighted-average unvested restricted stock outstanding		(1,795	)		(1,597	)		(1,713	)		(1,663	)		(1,679	)
Weighted-average basic shares outstanding		44,296			38,742			35,700			39,643			35,674
Basic earnings per share:
Net earnings from continuing operations	$	0.53		$	0.11		$	0.43		$	1.03		$	1.00
Net earnings from discontinued operations		—			—			—			—			—
Net earnings	$	0.53		$	0.11		$	0.43		$	1.03		$	1.00
Diluted Earnings Per Share:
Net earnings from continuing operations allocated to common shares	$	23,354		$	4,184		$	15,514		$	40,893		$	35,739
Net earnings (loss) from discontinued operations		23			(47	)		—			(24	)		—
Net earnings allocated to common shares	$	23,377		$	4,137		$	15,514		$	40,869		$	35,739
Weighted-average basic shares outstanding		44,296			38,742			35,700			39,643			35,674
Diluted earnings per share:
Net earnings from continuing operations	$	0.53		$	0.11		$	0.43		$	1.03		$	1.00
Net earnings from discontinued operations		—			—			—			—			—
Net earnings	$	0.53		$	0.11		$	0.43		$	1.03		$	1.00

(1)

Represents cash dividends paid to holders of unvested restricted stock, net of estimated forfeitures, plus undistributed earnings amounts available to holders of unvested restricted stock, if any.

XML

Document and Entity Information	9 Months Ended
	Sep. 30, 2013	Nov. 04, 2013
Document and Entity Information
Entity Registrant Name	PACWEST BANCORP
Entity Central Index Key	0001102112
Document Type	10-Q
Document Period End Date	Sep. 30, 2013
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		44,316,774
Entity Common Stock, Shares Outstanding Unvested Restricted		1,763,544
Document Fiscal Year Focus	2013
Document Fiscal Period Focus	Q3

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STOCK COMPENSATION PLANS

9 Months Ended

Sep. 30, 2013

STOCK COMPENSATION PLANS

STOCK COMPENSATION PLANS

NOTE 13—STOCK COMPENSATION PLANS

        The Company's 2003 Stock Incentive Plan, or the 2003 Plan, permits stock based compensation awards to officers, directors, key employees and consultants. As of September 30, 2013, the 2003 Plan authorized grants of stock-based compensation instruments to purchase or issue up to 6,500,000 shares of authorized but unissued Company common stock, subject to adjustments provided by the 2003 Plan. As of September 30, 2013, there were 1,431,481 shares available for grant under the 2003 Plan.

• Restricted Stock

        At September 30, 2013, there were outstanding 916,462 shares of unvested time-based restricted common stock and 875,000 shares of unvested performance-based restricted common stock. The awarded shares of time-based restricted common stock vest over a service period of three to four years from the date of the grant. The awarded shares of performance-based restricted common stock vest in full on the date the Compensation, Nominating and Governance, or CNG, Committee of the Board of Directors, as Administrator of the 2003 Plan, determines that the Company achieved certain financial goals established by the CNG Committee as set forth in the grant documents. Both time-based and performance-based restricted common stock vest immediately upon a change in control of the Company as defined in the 2003 Plan and upon death of the employee.

        Compensation expense related to time-based restricted stock awards is based on the fair value of the underlying stock on the award date and is recognized over the vesting period using the straight-line method. Restricted stock amortization totaled $2.4 million, $2.0 million, and $1.4 million for the three months ended September 30, 2013, June 30, 2013, and September 30, 2012, respectively, and $6.1 million and $4.3 million for the nine months ended September 30, 2013 and 2012, respectively. Such amounts are included in compensation expense on the accompanying condensed consolidated statements of earnings.

        We are currently not recognizing any compensation expense for 575,000 of the 875,000 shares of performance-based restricted stock as management has concluded that it is improbable that the respective financial targets related to these outstanding stock awards will be met. If and when the attainment of such financial targets is deemed probable in future periods, a catch-up adjustment will be recorded and amortization of such performance-based restricted stock will begin again. The total amount of unrecognized compensation expense related to performance-based restricted stock for which amortization is not being recognized totaled $19.0 million at September 30, 2013. The amount of unrecognized compensation expense related to all unvested restricted stock as of September 30, 2013 totals $41.7 million.

        As noted above, both time-based and performance-based restricted stock vests upon a change in control of the Company. The CapitalSource, Inc. merger, expected to close in the first quarter of 2014, will trigger restricted stock vesting under the change in control provisions within the 2003 Plan. The remaining unamortized expense for all the performance-based and time-based awards will be recognized at that time. See also Note 18, Subsequent Events.

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OTHER REAL ESTATE OWNED (OREO) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended											3 Months Ended								3 Months Ended
	Sep. 30, 2013	Jun. 30, 2013	Mar. 31, 2013	Sep. 30, 2013 Commercial real estate	Dec. 31, 2012 Commercial real estate	Sep. 30, 2013 Construction and land development	Dec. 31, 2012 Construction and land development	Sep. 30, 2013 Multi-family	Dec. 31, 2012 Multi-family	Sep. 30, 2013 Single family residence	Dec. 31, 2012 Single family residence	Sep. 30, 2013 Non-Covered OREO	Jun. 30, 2013 Non-Covered OREO	Mar. 31, 2013 Non-Covered OREO	Sep. 30, 2013 Non-Covered OREO Commercial real estate	Dec. 31, 2012 Non-Covered OREO Commercial real estate	Sep. 30, 2013 Non-Covered OREO Construction and land development	Dec. 31, 2012 Non-Covered OREO Construction and land development	Sep. 30, 2013 Non-Covered OREO Single family residence	Sep. 30, 2013 Covered OREO	Jun. 30, 2013 Covered OREO	Mar. 31, 2013 Covered OREO	Sep. 30, 2013 Covered OREO Commercial real estate	Dec. 31, 2012 Covered OREO Commercial real estate	Sep. 30, 2013 Covered OREO Construction and land development	Dec. 31, 2012 Covered OREO Construction and land development	Sep. 30, 2013 Covered OREO Multi-family	Dec. 31, 2012 Covered OREO Multi-family	Sep. 30, 2013 Covered OREO Single family residence	Dec. 31, 2012 Covered OREO Single family residence
Roll Forward of OREO, net of the valuation allowance
Balance, at the beginning of the period	$ 64,546	$ 53,272	$ 56,414	$ 18,826	$ 13,319	$ 36,131	$ 38,596	$ 989	$ 4,239	$ 26	$ 260	$ 45,432	$ 35,961	$ 33,572	$ 11,914	$ 1,684	$ 32,025	$ 31,888	$ 19	$ 19,114	$ 17,311	$ 22,842	$ 6,912	$ 11,635	$ 4,106	$ 6,708	$ 989	$ 4,239	$ 7	$ 260
Addition from the FCAL acquisitions		13,772											10,092								3,680
Foreclosures	3,664	4,110	4,980									3,196	1,035	3,500						468	3,075	1,480
Payments to third parties	24	14										24	14
Provision for losses	(617)	(292)	(1,185)									(643)		(92)						26	(292)	(1,093)
Reductions related to sales	(11,645)	(6,330)	(6,937)									(4,051)	(1,670)	(1,019)						(7,594)	(4,660)	(5,918)
Balance, at the end of the period	$ 55,972	$ 64,546	$ 53,272	$ 18,826	$ 13,319	$ 36,131	$ 38,596	$ 989	$ 4,239	$ 26	$ 260	$ 43,958	$ 45,432	$ 35,961	$ 11,914	$ 1,684	$ 32,025	$ 31,888	$ 19	$ 12,014	$ 19,114	$ 17,311	$ 6,912	$ 11,635	$ 4,106	$ 6,708	$ 989	$ 4,239	$ 7	$ 260

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LOANS AND LEASES (Details 12) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2013	Dec. 31, 2012	Sep. 30, 2012
Credit risk rating categories for PCI loans by portfolio segment
Total PCI Loans	$ 4,384,312	$ 3,592,832	$ 3,651,181
Real estate mortgage
Credit risk rating categories for PCI loans by portfolio segment
Total PCI Loans	2,971,381	2,422,570	1,950,777
Real estate construction
Credit risk rating categories for PCI loans by portfolio segment
Total PCI Loans	201,524	154,604	152,748
Commercial
Credit risk rating categories for PCI loans by portfolio segment
Total PCI Loans	929,434	800,959
Consumer
Credit risk rating categories for PCI loans by portfolio segment
Total PCI Loans	34,153	23,085
PCI Loans
Credit risk rating categories for PCI loans by portfolio segment
Total PCI Loans	432,757	517,885	571,113
PCI Loans | Real estate mortgage
Credit risk rating categories for PCI loans by portfolio segment
Total PCI Loans	419,600	484,057
PCI Loans | Real estate construction
Credit risk rating categories for PCI loans by portfolio segment
Total PCI Loans	11,567	24,645
PCI Loans | Commercial
Credit risk rating categories for PCI loans by portfolio segment
Total PCI Loans	1,265	9,071
PCI Loans | Consumer
Credit risk rating categories for PCI loans by portfolio segment
Total PCI Loans	325	112
Nonclassified | PCI Loans
Credit risk rating categories for PCI loans by portfolio segment
Total PCI Loans	251,663	341,072
Nonclassified | PCI Loans | Real estate mortgage
Credit risk rating categories for PCI loans by portfolio segment
Total PCI Loans	246,718	331,341
Nonclassified | PCI Loans | Real estate construction
Credit risk rating categories for PCI loans by portfolio segment
Total PCI Loans	4,303	6,311
Nonclassified | PCI Loans | Commercial
Credit risk rating categories for PCI loans by portfolio segment
Total PCI Loans	642	3,420
Classified | PCI Loans
Credit risk rating categories for PCI loans by portfolio segment
Total PCI Loans	181,094	176,813
Classified | PCI Loans | Real estate mortgage
Credit risk rating categories for PCI loans by portfolio segment
Total PCI Loans	172,882	152,716
Classified | PCI Loans | Real estate construction
Credit risk rating categories for PCI loans by portfolio segment
Total PCI Loans	7,264	18,334
Classified | PCI Loans | Commercial
Credit risk rating categories for PCI loans by portfolio segment
Total PCI Loans	623	5,651
Classified | PCI Loans | Consumer
Credit risk rating categories for PCI loans by portfolio segment
Total PCI Loans	$ 325	$ 112