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Acquisitions
12 Months Ended
Dec. 31, 2017
Business Combinations [Abstract]  
Acquisitions
NOTE 3.  ACQUISITIONS    
The following assets acquired and liabilities assumed of the acquired entities are presented at estimated fair value as of their respective acquisition dates:
 
Acquisition and Date Acquired
 
CU Bancorp
 
Square 1 Financial, Inc.
 
October 20, 2017
 
October 6, 2015
 
(In thousands)
Assets Acquired:
 
 
 
Cash and due from banks
$
51,857

 
$
24,867

Interest‑earning deposits in financial institutions
332,799

 
236,069

Securities available‑for‑sale
446,980

 
2,193,538

FHLB stock
11,902

 
2,787

Loans and leases
2,075,890

 
1,553,720

Premises and equipment
2,981

 
1,927

Goodwill
374,721

 
446,069

Core deposit and customer relationship intangibles
57,500

 
45,426

Other assets
103,498

 
106,757

Total assets acquired
$
3,458,128

 
$
4,611,160

 
 
 
 
Liabilities Assumed:
 
 
 
Noninterest‑bearing deposits
$
1,510,285

 
$
2,549,000

Interest‑bearing deposits
1,209,597

 
1,240,635

Borrowings
22,879

 

Subordinated debentures
12,372

 

Accrued interest payable and other liabilities
32,424

 
24,092

Total liabilities assumed
$
2,787,557

 
$
3,813,727

Total consideration paid
$
670,571

 
$
797,433

 
 
 
 
Summary of consideration:
 
 
 
Cash paid
$
224,338

 
$

PacWest common stock issued
446,233

 
797,433

Total
$
670,571

 
$
797,433


CU Bancorp Acquisition
On October 20, 2017, we completed the acquisition of CUB. As part of the acquisition, CU Bank, a wholly-owned subsidiary of CUB, was merged with and into PacWest's wholly-owned banking subsidiary, Pacific Western Bank.
Under the terms of the Agreement and Plan of Merger, each CUB common share, except dissenting shares, and each restricted stock award was converted into the right to receive 0.5308 of a share of PacWest common stock and $12.00 in cash, and each outstanding CUB stock option was settled in cash pursuant to terms of the Agreement and Plan of Merger. PacWest issued an aggregate of approximately 9.3 million shares of PacWest common stock and paid $224.3 million in cash to CUB common shareholders and equity award holders. Based on the closing price of PacWest’s common stock on October 20, 2017 of $47.99 per share, the aggregate consideration paid to CUB common shareholders and equity awards holders was $670.6 million. Former holders of CUB common stock as a group received shares of PacWest common stock in the acquisition constituting approximately 7% of the outstanding shares of PacWest common stock immediately after the acquisition.
CU Bank was a commercial bank headquartered in Los Angeles, California. We completed the acquisition to, among other things, enhance our Southern California community bank franchise by adding a $2.1 billion loan portfolio and $2.7 billion of core deposits.
The CUB acquisition has been accounted for under the acquisition method of accounting. We acquired $3.5 billion of assets and assumed $2.8 billion of liabilities upon closing of the acquisition. The assets and liabilities, both tangible and intangible, were recorded at their estimated fair values as of the acquisition date. We made significant estimates and exercised significant judgment in estimating fair values and accounting for such acquired assets and liabilities. 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. The fair value of the acquired net tax assets, once the final tax returns have been filed, may change. The application of the acquisition method of accounting resulted in goodwill of $374.7 million. All of the recognized goodwill is non-deductible for tax purposes.
Square 1 Financial, Inc. Acquisition
We acquired Square 1 on October 6, 2015. As part of the acquisition, Square 1 Bank, a wholly-owned subsidiary of Square 1, merged with and into Pacific Western. At closing, we formed the Square 1 Bank Division of Pacific Western to focus on providing a comprehensive suite of financial services to entrepreneurial businesses and their venture capital and private equity investors nationwide. When we refer to "Square 1," we are referring to the company acquired on October 6, 2015, and when we refer to the "Square 1 Bank Division," we are referring to a division of Pacific Western.
We completed this acquisition to increase our core deposits, expand our nationwide lending platform, and increase our presence in the technology and life-sciences credit markets. The Square 1 acquisition has been accounted for under the acquisition method of accounting. We acquired $4.6 billion of assets and assumed $3.8 billion of liabilities upon closing of the acquisition. The assets and liabilities, both tangible and intangible, were recorded at their estimated fair values as of the acquisition date. We made significant estimates and exercised significant judgment in estimating fair values and accounting for such acquired assets and liabilities. The application of the acquisition method of accounting resulted in goodwill of $446.1 million. All of the recognized goodwill is non-deductible for tax purposes.