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Business Segment
 12 Months Ended
Dec. 31, 2014
Segment Reporting [Abstract]  
Business Segments
BUSINESS SEGMENTS
The Company’s reportable segments consist of “Community Banking," “National Lending,” and “Other.”
As a result of the CapitalSource Inc. merger, Pacific Western Bank established the CapitalSource Division, which we also refer to as the National Lending segment. The CapitalSource Division, or National Lending segment, includes the lending operations gained through the CapitalSource Inc. merger, Pacific Western Equipment Finance, and the CapitalSource Business Finance Group (formerly BFI Business Finance and First Community Financial). We reorganized our asset-based lending and leasing operations when we established the CapitalSource Division. We combined BFI Business Finance and First Community Financial to form the CapitalSource Business Finance Group, and we sold Celtic Capital Corporation in July 2014.
The CapitalSource Division lends throughout the United States, providing middle-market businesses asset-secured loans, equipment-secured loans, and cash flow loans and providing real estate investment firms real estate loans secured by various property types. The CapitalSource Division’s loan and lease origination efforts are conducted through offices located in Chevy Chase, Maryland; Los Angeles and San Jose, California; St. Louis, Missouri; Denver, Colorado; Chicago, Illinois; New York, New York; and Midvale, Utah.
The Community Banking and National Lending segments include all of the operations of Pacific Western Bank. The Community Banking segment includes the operations of Pacific Western Bank, excluding the CapitalSource Division, and includes lending and deposit gathering activities conducted primarily through its California-based branch offices and the Bank’s treasury management function and corporate overhead. The Other segment consists of holding company operations which result in expenses principally for compensation, facilities, professional services, interest on subordinated debentures, and the non-bank subsidiary operations including interest income from a loan portfolio and related loan servicing expense.
Transactions between segments consist primarily of borrowed funds and expense allocations for interest, deposit gathering, corporate overhead and credit loss provisions. Intersegment interest expense is allocated from the Community Banking segment to the National Lending segment based upon National Lending’s average interest-earning assets and operating leases, net of a capital allocation, and the Bank’s total cost of deposits. The Community Banking segment further allocates to the National Lending segment noninterest expense for deposit gathering and maintenance costs and the Bank’s corporate overhead. The provision for credit losses is allocated based on actual charge‑offs for the period as well as net portfolio growth and credit quality trends. All costs associated with investing the Bank’s excess liquidity and acquisition, integration and reorganization costs are housed in the Community Banking segment. Noninterest income and noninterest expense, including lending and loan servicing activity, directly attributable to a segment are assigned to such segment.
The following tables present information regarding our business segments as of and for the years indicated:
 
December 31, 2014
 
Community
 
National
 
 
 
Consolidated
Balance Sheet Data:
Banking
 
Lending
 
Other
 
Company
 
(In thousands)
Loans and leases, net of unearned income
$
3,401,129

 
$
8,455,849

 
$
25,454

 
$
11,882,432

Allowance for loan and lease losses
(48,253
)
 
(36,202
)
 
—

 
(84,455
)
Total loans and leases, net
$
3,352,876

 
$
8,419,647

 
$
25,454

 
$
11,797,977

Goodwill(1)
$
326,078

 
$
1,394,401

 
$
—

 
$
1,720,479

Core deposit and customer relationship intangibles, net
16,306

 
898

 
—

 
17,204

Total assets
6,512,313

 
9,483,601

 
238,886

 
16,234,800

Total deposits(2)
12,030,436

 
33,179

 
(308,487
)
 
11,755,128

________________________
(1)
The increase in the goodwill for the Community Banking segment and National Lending segment during 2014 was due primarily to $1.5 billion from the CapitalSource merger.
(2)
The negative balance for total deposits in the “Other” segment represents the elimination of holding company cash held in deposit accounts at the Bank.
 
December 31, 2013
 
Community
 
National
 
 
 
Consolidated
Balance Sheet Data:
Banking
 
Lending
 
Other
 
Company
 
(In thousands)
Loans and leases, net of unearned income
$
3,837,475

 
$
474,877

 
$
—

 
$
4,312,352

Allowance for loan and lease losses
(75,498
)
 
(6,536
)
 
—

 
(82,034
)
Total loans and leases, net
$
3,761,977

 
$
468,341

 
$
—

 
$
4,230,318

Goodwill(1)
$
183,065

 
$
25,678

 
$
—

 
$
208,743

Core deposit and customer relationship intangibles, net
15,331

 
1,917

 
—

 
17,248

Total assets
6,004,067

 
519,675

 
9,621

 
6,533,363

Total deposits(2)
5,302,822

 
—

 
(21,835
)
 
5,280,987

________________________
(1)
The increase in the Community Banking segment's goodwill during 2013 was due primarily to $129.1 million from the FCAL acquisition.
(2)
The negative balance for total deposits in the “Other” segment represents the elimination of holding company cash held in deposit accounts at the Bank.
 
Year Ended December 31, 2014
 
Community
 
National
 
 
 
Consolidated
Results of Operations:
Banking
 
Lending
 
Other
 
Company
 
(In thousands)
Interest income
$
279,671

 
$
422,677

 
$
2,427

 
$
704,775

Interest expense
(27,598
)
 
(230
)
 
(14,570
)
 
(42,398
)
Intersegment interest income (expense)
15,716

 
(15,716
)
 
—

 
—

Net interest income (expense)
267,789

 
406,731

 
(12,143
)
 
662,377

Negative provision (provision) for credit losses
21,311

 
(32,810
)
 
—

 
(11,499
)
Gain on securities
4,841

 
—

 
—

 
4,841

FDIC loss sharing expense
(31,730
)
 
—

 
—

 
(31,730
)
Other noninterest income
25,168

 
34,215

 
9,693

 
69,076

Total noninterest income
(1,721
)
 
34,215

 
9,693

 
42,187

Foreclosed assets (expense) income, net
(5,685
)
 
(302
)
 
586

 
(5,401
)
Intangible asset amortization
(5,745
)
 
(523
)
 
—

 
(6,268
)
Acquisition, integration and reorganization costs
(89,888
)
 
(10,073
)
 
(1,055
)
 
(101,016
)
Other noninterest expense
(198,921
)
 
(80,418
)
 
(16,720
)
 
(296,059
)
Total noninterest expense
(300,239
)
 
(91,316
)
 
(17,189
)
 
(408,744
)
Intersegment noninterest income (expense)
71,897

 
(71,897
)
 
—

 
—

Total noninterest expense - adjusted
(228,342
)
 
(163,213
)
 
(17,189
)
 
(408,744
)
Earnings from continuing operations before taxes
59,037

 
244,923

 
(19,639
)
 
284,321

Income tax (expense) benefit
(27,370
)
 
(97,853
)
 
11,370

 
(113,853
)
Net earnings (loss) from continuing operations
31,667

 
147,070

 
(8,269
)
 
170,468

Loss from discontinued operations before taxes
(2,677
)
 
—

 
—

 
(2,677
)
Income tax benefit
1,114

 
—

 
—

 
1,114

Net loss from discontinued operations
(1,563
)
 
—

 
—

 
(1,563
)
Net earnings (loss)
$
30,104

 
$
147,070

 
$
(8,269
)
 
$
168,905


 
Year Ended December 31, 2013
 
Community
 
National
 
 
 
Consolidated
Results of Operations:
Banking
 
Lending
 
Other
 
Company
 
(In thousands)
Interest income
$
261,492

 
$
48,422

 
$
—

 
$
309,914

Interest expense
(7,873
)
 
(532
)
 
(3,796
)
 
(12,201
)
Intersegment interest income (expense)
1,525

 
(1,525
)
 
—

 
—

Net interest income
255,144

 
46,365

 
(3,796
)
 
297,713

Negative provision (provision) for credit losses
8,079

 
(3,869
)
 
—

 
4,210

Gain on securities
137

 
—

 
5,222

 
5,359

FDIC loss sharing expense
(26,172
)
 
—

 
—

 
(26,172
)
Other noninterest income
21,395

 
3,558

 
104

 
25,057

Total noninterest income
(4,640
)
 
3,558

 
5,326

 
4,244

Foreclosed assets income, net
1,503

 
—

 
—

 
1,503

Intangible asset amortization
(4,748
)
 
(654
)
 
—

 
(5,402
)
Acquisition, integration and reorganization costs
(40,552
)
 
—

 
(260
)
 
(40,812
)
Other noninterest expense
(156,600
)
 
(23,575
)
 
(5,801
)
 
(185,976
)
Total noninterest expense
(200,397
)
 
(24,229
)
 
(6,061
)
 
(230,687
)
Earnings (loss) from continuing operations before taxes
58,186

 
21,825

 
(4,531
)
 
75,480

Income tax (expense) benefit
(24,940
)
 
(9,101
)
 
4,038

 
(30,003
)
Net earnings from continuing operations
33,246

 
12,724

 
(493
)
 
45,477

Loss from discontinued operations before taxes
(620
)
 
—

 
—

 
(620
)
Income tax benefit
258

 
—

 
—

 
258

Net loss from discontinued operations
(362
)
 
—

 
—

 
(362
)
Net earnings (loss)
$
32,884

 
$
12,724

 
$
(493
)
 
$
45,115


 
Year Ended December 31, 2012
 
Community
 
National
 
 
 
Consolidated
Results of Operations:
Banking
 
Lending
 
Other
 
Company
 
(In thousands)
Interest income
$
251,720

 
$
44,395

 
$
—

 
$
296,115

Interest expense
(15,043
)
 
(884
)
 
(3,721
)
 
(19,648
)
Intersegment interest income (expense)
2,055

 
(2,055
)
 
—

 
—

Net interest income
238,732

 
41,456

 
(3,721
)
 
276,467

Negative provision (provision) for credit losses
14,585

 
(1,766
)
 
—

 
12,819

Gain on securities
1,239

 
—

 
—

 
1,239

FDIC loss sharing expense
(10,070
)
 
—

 
—

 
(10,070
)
Other noninterest income
20,572

 
4,017

 
114

 
24,703

Total noninterest income
11,741

 
4,017

 
114

 
15,872

Foreclosed assets expense, net
(10,931
)
 
—

 
—

 
(10,931
)
Intangible asset amortization
(5,898
)
 
(428
)
 
—

 
(6,326
)
Acquisition, integration and reorganization costs
(4,089
)
 
—

 
—

 
(4,089
)
Debt termination expense
(24,195
)
 
—

 
1,597

 
(22,598
)
Other noninterest expense
(138,640
)
 
(23,502
)
 
(5,576
)
 
(167,718
)
Total noninterest expense
(183,753
)
 
(23,930
)
 
(3,979
)
 
(211,662
)
Earnings (loss) before taxes
81,305

 
19,777

 
(7,586
)
 
93,496

Income tax (expense) benefit
(31,542
)
 
(8,327
)
 
3,174

 
(36,695
)
Net earnings (loss)
$
49,763

 
$
11,450

 
$
(4,412
)
 
$
56,801