Acquisitions

The following assets acquired and liabilities assumed of CapitalSource Inc. are presented at their estimated fair values as of its April 7, 2014 acquisition date:



	CapitalSource Inc.
	(In thousands)
Assets Acquired:
Cash and due from banks	$	768,553
Interest‑earning deposits in financial institutions	60,612
Investment securities available‑for‑sale	382,797
FHLB stock	46,060
Loans and leases	6,877,427
Equipment leased to others under operating leases	160,015
Premises and equipment	12,663
Foreclosed assets	6,382
Income tax assets	304,856
Goodwill	1,526,282
Core deposit and customer relationship intangibles	6,720
Other assets	582,985
Total assets acquired	$	10,735,352
Liabilities Assumed:
Noninterest‑bearing deposits	$	4,631
Interest‑bearing deposits	6,236,419
Other borrowings	992,109
Subordinated debentures	300,918
Accrued interest payable and other liabilities	124,087
Total liabilities assumed	$	7,658,164
Total consideration paid	$	3,077,188
Summary of consideration:
Cash paid	$	483,118
PacWest common stock issued	2,594,070
Total	$	3,077,188

CapitalSource Inc. Merger

We acquired CapitalSource Inc. on April 7, 2014. As part of the merger, CapitalSource Bank (“CSB”), a wholly owned subsidiary of CapitalSource Inc., merged with and into Pacific Western Bank. We completed the merger in order to augment our loan and lease generation capabilities and to diversify our loan portfolio. At closing, we formed the CapitalSource Division within the Bank. The Bank provides a full spectrum of financing solutions across numerous industries and property types to middle market businesses nationwide marketed under the CapitalSource Division brand.

The CapitalSource Inc. merger 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 merger date. We made significant estimates and exercised significant judgment in estimating such fair values and accounting for the acquired assets and liabilities. The application of the acquisition method of accounting resulted in goodwill of $1.5 billion. All of the recognized goodwill was non‑deductible for tax purposes.

Acquisition-Related Charges

The costs shown for the 2014 periods relate to the CapitalSource merger completed on April 7, 2014. The costs shown for the 2015 periods relate to the Square 1 acquisition completed on October 6, 2015. The following table presents the components of acquisition, integration and reorganization costs for the periods indicated.



	Three Months Ended						Nine Months Ended
	September 30,		June 30,		September 30,		September 30,
	2015		2015		2014		2015		2014
	(In thousands)
Acquisition, Integration and Reorganization Costs:
Severance and employee-related	$	—	$	—	$	340	$	—	$	54,601
System conversion and integration	427		—		412		427		1,535
Asset write-downs, lease terminations and
other facilities-related	—		—		150		—		5,853
Investment banking deal costs	—		—		—		1,050		16,117
Other (legal, accounting, insurance, consulting)	320		900		4,291		2,170		15,529
Total acquisition, integration and
reorganization costs	$	747	$	900	$	5,193	$	3,647	$	93,635