10-Q

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549  

Form 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2019

Commission File No. 001-36408

PACWEST BANCORP

(Exact name of registrant as specified in its charter)

Delaware	33-0885320
(State of Incorporation)	(I.R.S. Employer Identification No.)

9701 Wilshire Blvd., Suite 700

Beverly Hills, CA 90212

(Address of Principal Executive Offices, Including Zip Code)

(310) 887-8500

(Registrant's Telephone Number, Including Area Code)

Securities registered pursuant to Section 12(b) of the Act:

Common Stock, par value $0.01 per share	PACW	The Nasdaq Stock Market, LLC
(Title of Each Class)	(Trading Symbol)	(Name of Exchange on Which Registered)

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  ☑      No  ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such files). Yes  ☑      No  ☐

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

☑	Large accelerated filer	☐	Accelerated filer	☐	Non-accelerated filer
☐	Smaller reporting company	☐	Emerging growth company
☐	If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

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

As of October 30, 2019, there were 118,212,594 shares of the registrant's common stock outstanding, excluding 1,613,951 shares of unvested restricted stock.

1

PACWEST BANCORP

SEPTEMBER 30, 2019 QUARTERLY REPORT ON FORM 10-Q

TABLE OF CONTENTS

		Page
PART I. FINANCIAL INFORMATION
Item 1.	Condensed Consolidated Financial Statements (Unaudited)
	Condensed Consolidated Balance Sheets (Unaudited)	4
	Condensed Consolidated Statements of Earnings (Unaudited)	5
	Condensed Consolidated Statements of Comprehensive Income (Unaudited)	6
	Condensed Consolidated Statements of Changes in Stockholders' Equity (Unaudited)	7
	Condensed Consolidated Statements of Cash Flows (Unaudited)	9
	Notes to Condensed Consolidated Financial Statements (Unaudited)	11
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	48
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	80
Item 4.	Controls and Procedures	83
PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	84
Item 1A.	Risk Factors	84
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	84
Item 6.	Index to Exhibits	85
Signatures		86

2

PART I

Glossary of Acronyms, Abbreviations, and Terms

The acronyms, abbreviations, and terms listed below are used in various sections of this Form 10-Q, including "Item 1. Financial Statements" and "Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations."

AFX	American Financial Exchange	IPO	Initial Public Offering
ALLL	Allowance for Loan and Lease Losses	IRR	Interest Rate Risk
ALM	Asset Liability Management	LIBOR	London Inter-bank Offered Rate
ASC	Accounting Standards Codification	LIHTC	Low Income Housing Tax Credit
ASU	Accounting Standards Update	MBS	Mortgage-Backed Securities
Basel III	A comprehensive capital framework and rules for U.S. banking organizations approved by the FRB and the FDIC in 2013	MVE	Market Value of Equity
BHCA	Bank Holding Company Act of 1956, as amended	NII	Net Interest Income
BOLI	Bank Owned Life Insurance	NIM	Net Interest Margin
CDI	Core Deposit Intangible Assets	Non-PCI	Non-Purchased Credit Impaired
CECL	Current Expected Credit Loss	NSF	Non-Sufficient Funds
CET1	Common Equity Tier 1	OREO	Other Real Estate Owned
CMOs	Collateralized Mortgage Obligations	PD/LGD	Probability of Default/Loss Given Default
CPI	Consumer Price Index	PCI	Purchased Credit Impaired
CRA	Community Reinvestment Act	PRSUs	Performance-Based Restricted Stock Units
CRI	Customer Relationship Intangible Assets	PWAM	Pacific Western Asset Management Inc.
CUB	CU Bancorp (a company acquired on October 20, 2017)	ROU	Right-of-use
CU Bank	California United Bank (a wholly-owned subsidiary of CUB)	SBA	Small Business Administration
DBO	California Department of Business Oversight	SEC	Securities and Exchange Commission
DTAs	Deferred Tax Assets	Square 1	Square 1 Financial, Inc. (a company acquired on October 6, 2015)
Dodd-Frank Act	Dodd-Frank Wall Street Reform and Consumer Protection Act	Tax Equivalent Net Interest Income	Net interest income reflecting adjustments related to tax-exempt interest on certain loans and investment securities
Efficiency Ratio	Noninterest expense (less intangible asset amortization, net foreclosed assets income/expense, and acquisition, integration and reorganization costs) divided by net revenues (the sum of tax equivalent net interest income plus noninterest income, less gain/loss on sale of securities and gain/loss on sales of assets other than loans and leases)	Tax Equivalent NIM	NIM reflecting adjustments related to tax-exempt interest on certain loans and investment securities
FASB	Financial Accounting Standards Board	TCJA	Tax Cuts and Jobs Act
FDIC	Federal Deposit Insurance Corporation	TDRs	Troubled Debt Restructurings
FHLB	Federal Home Loan Bank of San Francisco	TRSAs	Time-Based Restricted Stock Awards
FRB	Board of Governors of the Federal Reserve System	U.S. GAAP	U.S. Generally Accepted Accounting Principles
FRBSF	Federal Reserve Bank of San Francisco	VIE	Variable Interest Entity

3

ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

PACWEST BANCORP AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

	September 30,			December 31,
	2019			2018
	(Unaudited)
	(Dollars in thousands, except par value amounts)
ASSETS:
Cash and due from banks	$	252,596		$	175,830
Interest-earning deposits in financial institutions	483,405			209,937
Total cash, cash equivalents, and restricted cash	736,001			385,767
Securities available-for-sale, at fair value	3,817,348			4,009,431
Federal Home Loan Bank stock, at cost	26,865			32,103
Total investment securities	3,844,213			4,041,534
Gross loans and leases held for investment	18,796,011			18,026,365
Deferred fees, net	(60,468		)	(68,652		)
Allowance for loan and lease losses	(138,552		)	(132,472		)
Total loans and leases held for investment, net	18,596,991			17,825,241
Equipment leased to others under operating leases	295,854			292,677
Premises and equipment, net	37,926			34,661
Foreclosed assets, net	1,366			5,299
Deferred tax asset, net	—			17,489
Goodwill	2,548,670			2,548,670
Core deposit and customer relationship intangibles, net	42,547			57,120
Other assets	621,059			522,896
Total assets	$	26,724,627		$	25,731,354
LIABILITIES:
Noninterest-bearing deposits	$	7,441,185		$	7,888,915
Interest-bearing deposits	12,292,018			10,981,586
Total deposits	19,733,203			18,870,501
Borrowings	1,253,031			1,371,114
Subordinated debentures	456,145			453,846
Accrued interest payable and other liabilities	362,140			210,305
Total liabilities	21,804,519			20,905,766
Commitments and contingencies
STOCKHOLDERS' EQUITY:
Preferred stock ($0.01 par value; 5,000,000 shares authorized; none issued and outstanding)	—			—
Common stock ($0.01 par value, 200,000,000 shares authorized at September 30, 2019 and
December 31, 2018; 121,911,989 and 125,079,705 shares issued, respectively, includes
1,619,355 and 1,344,656 shares of unvested restricted stock, respectively)	1,219			1,251
Additional paid-in capital	3,371,032			3,722,723
Retained earnings	1,534,367			1,182,674
Treasury stock, at cost (2,080,797 and 1,889,872 shares at September 30, 2019 and
December 31, 2018)	(82,397		)	(74,985		)
Accumulated other comprehensive income (loss), net	95,887			(6,075		)
Total stockholders' equity	4,920,108			4,825,588
Total liabilities and stockholders' equity	$	26,724,627		$	25,731,354

See Notes to Condensed Consolidated Financial Statements.

4

PACWEST BANCORP AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS

	Three Months Ended								Nine Months Ended
	September 30,		June 30,			September 30,			September 30,
	2019		2019			2018			2019			2018
	(Unaudited)
	(Dollars in thousands, except per share amounts)
Interest income:
Loans and leases	$	275,978	$	284,236		$	264,062		$	834,443		$	775,447
Investment securities	28,806		28,948			28,061			87,434			81,929
Deposits in financial institutions	2,424		1,349			519			4,423			1,555
Total interest income	307,208		314,533			292,642			926,300			858,931
Interest expense:
Deposits	40,703		38,720			21,121			113,658			51,306
Borrowings	6,852		7,210			3,814			21,772			7,383
Subordinated debentures	7,417		7,705			7,390			22,860			21,093
Total interest expense	54,972		53,635			32,325			158,290			79,782
Net interest income	252,236		260,898			260,317			768,010			779,149
Provision for credit losses	7,000		8,000			11,500			19,000			33,000
Net interest income after provision for credit losses	245,236		252,898			248,817			749,010			746,149
Noninterest income:
Other commissions and fees	10,855		11,590			12,397			33,453			34,429
Leased equipment income	9,615		9,182			9,120			28,079			28,497
Service charges on deposit accounts	3,525		3,771			3,979			11,026			12,418
Gain on sale of loans and leases	765		326			—			1,091			4,675
Gain on sale of securities	908		22,192			826			25,261			7,390
Other income	7,761		3,832			10,590			16,476			27,700
Total noninterest income	33,429		50,893			36,912			115,386			115,109
Noninterest expense:
Compensation	71,424		68,956			72,333			211,225			213,269
Occupancy	14,089		14,457			13,069			42,866			39,867
Data processing	7,044		6,817			6,740			20,786			20,295
Leased equipment depreciation	5,951		5,558			5,001			17,160			15,613
Intangible asset amortization	4,833		4,870			5,587			14,573			17,520
Other professional services	4,400		4,629			6,058			13,542			15,754
Insurance and assessments	4,100		4,098			5,446			12,236			16,503
Loan expense	3,628		3,451			2,249			9,964			7,578
Acquisition, integration and reorganization costs	—		—			800			618			800
Foreclosed assets expense (income), net	8		(146		)	(257		)	(109		)	(440		)
Other expense	11,332		12,737			11,127			35,662			35,238
Total noninterest expense	126,809		125,427			128,153			378,523			381,997
Earnings before income taxes	151,856		178,364			157,576			485,873			479,261
Income tax expense	41,830		50,239			41,289			135,118			128,963
Net earnings	$	110,026	$	128,125		$	116,287		$	350,755		$	350,298
Earnings per share:
Basic	$	0.92	$	1.07		$	0.94		$	2.91		$	2.79
Diluted	$	0.92	$	1.07		$	0.94		$	2.91		$	2.79

See Notes to Condensed Consolidated Financial Statements.

5

PACWEST BANCORP AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

	Three Months Ended									Nine Months Ended
	September 30,			June 30,			September 30,			September 30,
	2019			2019			2018			2019			2018
	(Unaudited)
	(In thousands)
Net earnings	$	110,026		$	128,125		$	116,287		$	350,755		$	350,298
Other comprehensive income (loss), net of tax:
Unrealized net holding gains (losses) on securities
available-for-sale arising during the period	32,759			72,168			(29,267		)	167,566			(106,261		)
Income tax (expense) benefit related to net unrealized
holding gains (losses) arising during the period	(9,287		)	(20,459		)	8,344			(47,504		)	30,377
Unrealized net holding gains (losses) on securities
available-for-sale, net of tax	23,472			51,709			(20,923		)	120,062			(75,884		)
Reclassification adjustment for net gains
included in net earnings (1)	(908		)	(22,192		)	(826		)	(25,261		)	(7,390		)
Income tax expense related to reclassification
adjustment	257			6,291			235			7,161			2,113
Reclassification adjustment for net gains
included in net earnings, net of tax	(651		)	(15,901		)	(591		)	(18,100		)	(5,277		)
Other comprehensive income (loss), net of tax	22,821			35,808			(21,514		)	101,962			(81,161		)
Comprehensive income	$	132,847		$	163,933		$	94,773		$	452,717		$	269,137

^{___________________________________} 

(1) Entire amounts are recognized in "Gain on sale of securities" on the Condensed Consolidated Statements of Earnings.

See Notes to Condensed Consolidated Financial Statements.

6

PACWEST BANCORP AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

	Nine Months Ended September 30, 2019
	Common Stock													Accumulated
						Additional								Other
			Par			Paid-in			Retained		Treasury			Comprehensive
	Shares		Value			Capital			Earnings		Stock			Income (Loss)			Total
	(Unaudited)
	(Dollars in thousands)
Balance, December 31, 2018	123,189,833		$	1,251		$	3,722,723		$	1,182,674	$	(74,985	)	$	(6,075	)	$	4,825,588
Cumulative effect of change in
accounting principle (1)	—		—			—			938		—			—			938
Net earnings	—		—			—			112,604		—			—			112,604
Other comprehensive income - net
unrealized gain on securities
available-for-sale, net of tax	—		—			—			—		—			43,333			43,333
Restricted stock awarded and
earned stock compensation,
net of shares forfeited	195,536		2			5,806			—		—			—			5,808
Restricted stock surrendered	(113,544	)	—			—			—		(4,522		)	—			(4,522		)
Common stock repurchased under
Stock Repurchase Program	(3,070,676	)	(31		)	(119,556		)	—		—			—			(119,587		)
Cash dividends paid:
Common stock, $0.60/share	—		—			(73,180		)	—		—			—			(73,180		)
Balance, March 31, 2019	120,201,149		$	1,222		$	3,535,793		$	1,296,216	$	(79,507	)	$	37,258		$	4,790,982
Net earnings	—		—			—			128,125		—			—			128,125
Other comprehensive income - net
unrealized gain on securities
available-for-sale, net of tax	—		—			—			—		—			35,808			35,808
Restricted stock awarded and
earned stock compensation,
net of shares forfeited	619,653		6			6,715			—		—			—			6,721
Restricted stock surrendered	(74,429	)	—			—			—		(2,788		)	—			(2,788		)
Common stock repurchased under
Stock Repurchase Program	(917,269	)	(9		)	(34,920		)	—		—			—			(34,929		)
Cash dividends paid:
Common stock, $0.60/share	—		—			(71,909		)	—		—			—			(71,909		)
Balance, June 30, 2019	119,829,104		$	1,219		$	3,435,679		$	1,424,341	$	(82,295	)	$	73,066		$	4,852,010
Net earnings	—		—			—			110,026		—			—			110,026
Other comprehensive income - net
unrealized gain on securities
available-for-sale, net of tax	—		—			—			—		—			22,821			22,821
Restricted stock awarded and
earned stock compensation,
net of shares forfeited	5,040		—			7,305			—		—			—			7,305
Restricted stock surrendered	(2,952	)	—			—			—		(102		)	—			(102		)
Cash dividends paid:
Common stock, $0.60/share	—		—			(71,952		)	—		—			—			(71,952		)
Balance, September 30, 2019	119,831,192		$	1,219		$	3,371,032		$	1,534,367	$	(82,397	)	$	95,887		$	4,920,108

________________________

(1) Impact due to adoption on January 1, 2019 of ASU 2016-02, "Leases (Topic 842)," and the related amendments.

See Notes to Condensed Consolidated Financial Statements.

7

PACWEST BANCORP AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

	Nine Months Ended September 30, 2018
	Common Stock														Accumulated
						Additional									Other
			Par			Paid-in			Retained			Treasury			Comprehensive
	Shares		Value			Capital			Earnings			Stock			Income (Loss)			Total
	(Unaudited)
	(Dollars in thousands)
Balance, December 31, 2017	128,782,878		$	1,305		$	4,287,487		$	723,471		$	(65,836	)	$	31,171		$	4,977,598
Cumulative effect of changes in
accounting principles (2)	—		—			—			(6,136		)	—			6,136			—
Net earnings	—		—			—			118,276			—			—			118,276
Other comprehensive loss - net
unrealized loss on securities
available-for-sale, net of tax	—		—			—			—			—			(49,243		)	(49,243		)
Restricted stock awarded and
earned stock compensation,
net of shares forfeited	96,034		1			7,198			—			—			—			7,199
Restricted stock surrendered	(55,186	)	—			—			—			(2,858		)	—			(2,858		)
Common stock repurchased under
Stock Repurchase Program	(2,285,855	)	(23		)	(119,770		)	—			—			—			(119,793		)
Cash dividends paid:
Common stock, $0.50/share	—		—			(63,689		)	—			—			—			(63,689		)
Balance, March 31, 2018	126,537,871		$	1,283		$	4,111,226		$	835,611		$	(68,694	)	$	(11,936	)	$	4,867,490
Net earnings	—		—			—			115,735			—			—			115,735
Other comprehensive loss - net
unrealized loss on securities
available-for-sale, net of tax	—		—			—			—			—			(10,404		)	(10,404		)
Restricted stock awarded and
earned stock compensation,
net of shares forfeited	398,132		4			7,542			—			—			—			7,546
Restricted stock surrendered	(81,172	)	—			—			—			(4,332		)	—			(4,332		)
Common stock repurchased under
Stock Repurchase Program	(2,286,881	)	(23		)	(122,001		)	—			—			—			(122,024		)
Cash dividends paid:
Common stock, $0.60/share	—		—			(76,052		)	—			—			—			(76,052		)
Balance, June 30, 2018	124,567,950		$	1,264		$	3,920,715		$	951,346		$	(73,026	)	$	(22,340	)	$	4,777,959
Net earnings	—		—			—			116,287			—			—			116,287
Other comprehensive loss - net
unrealized loss on securities
available-for-sale, net of tax	—		—			—			—			—			(21,514		)	(21,514		)
Restricted stock awarded and
earned stock compensation,
net of shares forfeited	(3,803	)	—			8,137			—			—			—			8,137
Restricted stock surrendered	(4,199	)	—			—			—			(212		)	—			(212		)
Common stock repurchased under
Stock Repurchase Program	(1,276,498	)	(13		)	(64,564		)	—			—			—			(64,577		)
Cash dividends paid:
Common stock, $0.60/share	—		—			(74,395		)	—			—			—			(74,395		)
Balance, September 30, 2018	123,283,450		$	1,251		$	3,789,893		$	1,067,633		$	(73,238	)	$	(43,854	)	$	4,741,685

________________________

(2) Impact due to adoption on January 1, 2018 of ASU 2016-01, "Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities," and ASU 2018-02, "Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income."

See Notes to Condensed Consolidated Financial Statements.

8

PACWEST BANCORP AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

	Nine Months Ended
	September 30,
	2019			2018
	(Unaudited)
	(In thousands)
Cash flows from operating activities:
Net earnings	$	350,755		$	350,298
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization	28,266			25,788
Amortization of net premiums on securities available-for-sale	11,078			19,489
Amortization of intangible assets	14,573			17,520
Amortization of operating lease ROU assets	22,028			—
Provision for credit losses	19,000			33,000
(Gain) loss on sale of foreclosed assets	(406		)	35
Provision for losses on foreclosed assets	54			65
Gain on sale of loans and leases	(1,091		)	(4,675		)
Gain on sale of premises and equipment	(34		)	(13		)
Gain on sale of securities	(25,261		)	(7,390		)
Gain on BOLI death benefit	—			(437		)
Unrealized (gain) loss on derivatives and foreign currencies, net	(16		)	76
Earned stock compensation	19,834			22,882
Decrease (increase) in deferred income taxes, net	14,714			(8,790		)
Decrease in other assets	35,631			52,275
Decrease in accrued interest payable and other liabilities	(41,530		)	(36,303		)
Net cash provided by operating activities	447,595			463,820
Cash flows from investing activities:
Net increase in loans and leases	(894,624		)	(446,880		)
Proceeds from sales of loans and leases	102,507			646,587
Proceeds from maturities and paydowns of securities available-for-sale	238,487			231,474
Proceeds from sales of securities available-for-sale	1,554,805			500,101
Purchases of securities available-for-sale	(1,444,720		)	(910,298		)
Net redemptions (purchases) of Federal Home Loan Bank stock	5,238			(10,287		)
Proceeds from sales of foreclosed assets	4,322			57
Purchases of premises and equipment, net	(10,990		)	(9,250		)
Proceeds from sales of premises and equipment	60			49
Proceeds from BOLI death benefit	555			1,901
Net increase in equipment leased to others under operating leases	(19,981		)	(6,000		)
Net cash used in investing activities	(464,341		)	(2,546		)
Cash flows from financing activities:
Net decrease in noninterest-bearing deposits	(446,400		)	(671,016		)
Net increase (decrease) in interest-bearing deposits	1,310,432			(312,429		)
Net (decrease) increase in borrowings	(118,083		)	1,045,824
Net decrease in subordinated debentures	—			(12,372		)
Common stock repurchased and restricted stock surrendered	(161,928		)	(313,796		)
Cash dividends paid	(217,041		)	(214,136		)
Net cash provided by (used in) financing activities	366,980			(477,925		)
Net increase (decrease) in cash, cash equivalents, and restricted cash	350,234			(16,651		)
Cash, cash equivalents, and restricted cash, beginning of period	385,767			398,437
Cash, cash equivalents, and restricted cash, end of period	$	736,001		$	381,786

See Notes to Condensed Consolidated Financial Statements.

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PACWEST BANCORP AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

	Nine Months Ended
	September 30,
	2019		2018
	(Unaudited)
	(In thousands)
Supplemental disclosures of cash flow information:
Cash paid for interest	$	154,212	$	78,884
Cash paid for income taxes	89,505		62,525
Loans transferred to foreclosed assets	37		3,235
Transfers from loans held for investment to loans held for sale	25,124		—

See Notes to Condensed Consolidated Financial Statements.

10

PACWEST BANCORP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

NOTE 1.  ORGANIZATION    

PacWest Bancorp, a Delaware corporation, is a bank holding company registered under the BHCA, with our corporate headquarters located in Beverly Hills, California. Our principal business is to serve as the holding company for our wholly-owned subsidiary, Pacific Western Bank. References to "Pacific Western" or the "Bank" refer to Pacific Western Bank together with its wholly-owned subsidiaries. References to "we," "us," or the "Company" refer to PacWest Bancorp together with its subsidiaries on a consolidated basis. When we refer to "PacWest" or to the "holding company," we are referring to PacWest Bancorp, the parent company, on a stand-alone basis.

We are focused on relationship-based business banking to small, middle-market and venture-backed businesses nationwide. The Bank offers a broad range of loan and lease and deposit products and services through 74 full-service branches located in California, one branch located in Durham, North Carolina, and numerous loan production offices across the country through its Community Banking, National Lending and Venture Banking groups. Community Banking provides real estate loans, commercial loans, and comprehensive deposit and treasury management services to small and medium-sized businesses conducted primarily through our California-based branch offices. National Lending provides asset-based, equipment, and real estate loans and treasury management services to established middle-market businesses on a national basis. Venture Banking offers a comprehensive suite of financial services focused on entrepreneurial businesses and their venture capital and private equity investors, with offices located in key innovation hubs across the United States. In addition, we provide investment advisory and asset management services to select clients through Pacific Western Asset Management Inc., a wholly-owned subsidiary of the Bank and an SEC-registered investment adviser.

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 interest paid by the Bank on deposits and borrowings, compensation, occupancy, and general operating expenses.

We have completed 29 acquisitions from May 1, 2000 through September 30, 2019. 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 consolidated financial statements from their respective acquisition dates.

Significant Accounting Policies

Our accounting policies are described in Note 1. Nature of Operations and Summary of Significant Accounting Policies, of our audited consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2018 as filed with the Securities and Exchange Commission ("Form 10-K").

Accounting Standards Adopted in 2019

Effective January 1, 2019, the Company adopted ASU 2016-02, "Leases (Topic 842)," and the related amendments to this new standard issued in 2018. ASU 2016-02 supersedes Topic 840, “Leases,” and is intended to increase transparency and comparability among organizations by requiring the recognition of right-of-use (“ROU”) assets and lease liabilities by lessees for those leases classified as operating leases. Under the standard, disclosures are required to meet the objective of enabling users of the financial statements to assess the amount, timing, and uncertainty of cash flows arising from leases.

The Company adopted the new standard using the optional transition method under ASU 2018-11, “Leases (Topic 842): Targeted Improvements,” and recognized a cumulative effect adjustment to increase retained earnings by $938,000, net of taxes, without restating prior periods and applying the requirements of the new standard prospectively. The Company has elected the following practical expedients: (1) to not separate lease and non-lease components for facilities leases; (2) to not reassess whether any expired or existing contracts are or contain leases and to maintain existing lease classifications; (3) to not record short-term leases (initial term less than 12 months) on the balance sheet; and (4) to present sales tax on a net basis for those transactions in which the Company is the lessor.

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PACWEST BANCORP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

The standard had a more significant impact on our condensed consolidated balance sheet than on our condensed consolidated statement of earnings. The most significant impact was the recognition of ROU assets and lease liabilities for operating leases, while the accounting for leases as a lessor remained substantially unchanged. The ROU asset is included within "Other assets," while the ROU liability is included within "Accrued interest payable and other liabilities". See Note 8. Leases and Note 7. Other Assets for further details.

Effective January 1, 2019, the Company early-adopted any removed or modified disclosures as permitted by ASU 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework - Changes to Disclosure Requirements for Fair Value Measurements,” but will defer adoption of the additional disclosures until the effective date of January 1, 2020 as permitted in the transition guidance in ASU 2018-13.

Effective January 1, 2019, the Company early-adopted ASU 2018-15, “Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract (a consensus of the FASB Emerging Issues Task Force)," which aligns the requirements for capitalizing implementation costs in a cloud computing arrangement service contract with the requirements for capitalizing implementation costs incurred for an internal-use software license. The new guidance also prescribes the balance sheet, income statement, and cash flow classification of the capitalized implementation costs and related amortization expense, and requires additional quantitative and qualitative disclosures. The Company opted to apply ASU 2018-15 prospectively. The primary effect of the provisions is to capitalize eligible implementation costs during the application development phase and to amortize those costs over the life of the agreement. There was no impact to our condensed consolidated financial statements from the adoption of this new standard.

Basis of Presentation    

Our interim condensed consolidated financial statements are prepared in accordance with U.S. GAAP for interim financial information and pursuant to the requirements for reporting on Form 10-Q and Article 10 of Regulation S-X of the Securities Exchange Act of 1934. Accordingly, certain disclosures accompanying annual consolidated financial statements are omitted. In the opinion of management, all significant intercompany accounts and transactions have been eliminated and adjustments, consisting solely of normal recurring accruals and considered necessary for the fair presentation of financial statements for the interim periods, have been included. The current period's results of operations are not necessarily indicative of the results that ultimately may be achieved for the year. The interim condensed consolidated financial statements and notes thereto should be read in conjunction with the audited consolidated financial statements and notes thereto included in our Form 10-K.

Use of Estimates

We have made a number of estimates and assumptions related 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 U.S. 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 combination of the allowance for loan and lease losses and the reserve for unfunded loan commitments), the carrying value of intangible assets, the realization of deferred tax assets, and the fair value estimates of assets acquired and liabilities assumed in acquisitions. These estimates may be adjusted as more current information becomes available, and any adjustment may be significant.

Reclassifications

None.

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PACWEST BANCORP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

NOTE 2. RESTRICTED CASH BALANCES

The Company is required to maintain reserve balances with the FRBSF. Such reserve requirements are based on a percentage of deposit liabilities and may be satisfied by cash on hand. The average reserves required to be held at the FRBSF for the nine months ended September 30, 2019 and year ended December 31, 2018 were $118.2 million and $77.0 million. As of September 30, 2019 and December 31, 2018, we pledged cash collateral for our derivative contracts of $3.2 million and $2.6 million.

NOTE 3. INVESTMENT SECURITIES     

Securities Available-for-Sale

The following table presents amortized cost, gross unrealized gains and losses, and fair values of securities available-for-sale as of the dates indicated:

	September 30, 2019									December 31, 2018
			Gross		Gross							Gross		Gross
	Amortized		Unrealized		Unrealized			Fair		Amortized		Unrealized		Unrealized			Fair
Security Type	Cost		Gains		Losses			Value		Cost		Gains		Losses			Value
	(In thousands)
Agency residential CMOs	$	1,141,332	$	31,627	$	(404	)	$	1,172,555	$	634,774	$	3,448	$	(5,372	)	$	632,850
Agency commercial MBS	1,063,659		36,539		(181		)	1,100,017		1,133,846		383		(21,525		)	1,112,704
Municipal securities	675,645		46,336		—			721,981		1,298,514		21,000		(7,320		)	1,312,194
Agency residential MBS	313,935		10,995		(1		)	324,929		281,486		1,902		(2,300		)	281,088
Asset-backed securities	214,153		700		(702		)	214,151		81,762		104		(481		)	81,385
Collateralized loan obligations	114,149		23		(298		)	113,874		—		—		—			—
Private label residential CMOs	89,859		4,011		(2		)	93,868		101,313		1,985		(2,093		)	101,205
SBA securities	48,805		941		—			49,746		68,158		—		(1,111		)	67,047
Corporate debt securities	17,000		4,024		—			21,024		17,000		553		—			17,553
U.S. Treasury securities	4,984		219		—			5,203		401,056		2,437		(88		)	403,405
Total	$	3,683,521	$	135,415	$	(1,588	)	$	3,817,348	$	4,017,909	$	31,812	$	(40,290	)	$	4,009,431

See Note 11. Fair Value Measurements for information on fair value measurements and methodology.

As of September 30, 2019, securities available-for-sale with a fair value of $495.0 million were pledged as collateral for borrowings, public deposits, and other purposes as required by various statutes and agreements.

Realized Gains and Losses on Securities Available-for-Sale

During the three months ended September 30, 2019, we sold $143.4 million of securities available-for-sale for a gross realized gain of $1.2 million and a gross realized loss of $0.3 million. During the three months ended September 30, 2018, we sold $130.5 million of securities available-for-sale for a gross realized gain of $1.0 million and a gross realized loss of $0.1 million.

During the nine months ended September 30, 2019, we sold $1.5 billion of securities available-for-sale for a gross realized gain of $29.4 million and a gross realized loss of $4.1 million. During the nine months ended September 30, 2018, we sold $492.7 million of securities available-for-sale for a gross realized gain of $8.1 million and a gross realized loss of $0.7 million.

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PACWEST BANCORP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

Unrealized Losses on Securities Available-for-Sale

The following tables present the gross unrealized losses and fair values of securities available-for-sale that were in unrealized loss positions, for which other-than-temporary impairments have not been recognized in earnings, as of the dates indicated:

	September 30, 2019
	Less Than 12 Months					12 Months or More					Total
			Gross					Gross					Gross
	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
Security Type	Value		Losses			Value		Losses			Value		Losses
	(In thousands)
Agency residential CMOs	$	172,738	$	(389	)	$	2,127	$	(15	)	$	174,865	$	(404	)
Agency commercial MBS	176,063		(181		)	—		—			176,063		(181		)
Agency residential MBS	—		—			435		(1		)	435		(1		)
Asset-backed securities	115,481		(702		)	—		—			115,481		(702		)
Collateralized loan obligations	82,606		(298		)	—		—			82,606		(298		)
Private label residential CMOs	—		—			121		(2		)	121		(2		)
Total	$	546,888	$	(1,570	)	$	2,683	$	(18	)	$	549,571	$	(1,588	)

	December 31, 2018
	Less Than 12 Months					12 Months or More					Total
			Gross					Gross					Gross
	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
Security Type	Value		Losses			Value		Losses			Value		Losses
	(In thousands)
Agency residential CMOs	$	69,859	$	(326	)	$	164,097	$	(5,046	)	$	233,956	$	(5,372	)
Agency commercial MBS	40,641		(341		)	1,020,684		(21,184		)	1,061,325		(21,525		)
Municipal securities	52,386		(238		)	284,915		(7,082		)	337,301		(7,320		)
Agency residential MBS	60,164		(169		)	85,245		(2,131		)	145,409		(2,300		)
Asset-backed securities	11,548		(38		)	35,859		(443		)	47,407		(481		)
Private label residential CMOs	32,170		(831		)	49,237		(1,262		)	81,407		(2,093		)
SBA securities	249		(1		)	66,798		(1,110		)	67,047		(1,111		)
U.S. Treasury securities	49,729		(88		)	—		—			49,729		(88		)
Total	$	316,746	$	(2,032	)	$	1,706,835	$	(38,258	)	$	2,023,581	$	(40,290	)

We reviewed the securities that were in an unrealized loss position at September 30, 2019, and concluded their unrealized losses were a result of the level of market interest rates relative to the types of securities and pricing changes caused by shifting supply and demand dynamics and not a result of downgraded credit ratings or other indicators of deterioration of the underlying issuers' ability to repay. Accordingly, we determined the securities were temporarily impaired and we did not recognize such impairment in the condensed consolidated statements of earnings. Although we periodically sell securities for portfolio management purposes, we do not foresee having to sell any temporarily impaired securities strictly for liquidity needs and believe that it is more likely than not we would not be required to sell any temporarily impaired securities before recovery of their amortized cost.

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PACWEST BANCORP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

Contractual Maturities of Securities Available-for-Sale

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

	September 30, 2019
	Amortized		Fair
Maturities	Cost		Value
	(In thousands)
Due in one year or less	$	3,240	$	3,248
Due after one year through five years	227,670		232,238
Due after five years through ten years	1,020,128		1,056,640
Due after ten years	2,432,483		2,525,222
Total securities available-for-sale	$	3,683,521	$	3,817,348

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.

Interest Income on Investment Securities

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

	Three Months Ended						Nine Months Ended
	September 30,		June 30,		September 30,		September 30,
	2019		2019		2018		2019		2018
	(In thousands)
Taxable interest	$	22,829	$	20,944	$	17,618	$	63,515	$	49,323
Non-taxable interest	5,565		7,547		10,127		22,705		31,510
Dividend income	412		457		316		1,214		1,096
Total interest income on investment securities	$	28,806	$	28,948	$	28,061	$	87,434	$	81,929

15

PACWEST BANCORP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

NOTE 4.  LOANS AND LEASES

Our loans are carried at the principal amount outstanding, net of deferred fees and costs, and in the case of acquired and purchased loans, net of purchase discounts and premiums. Deferred fees and costs and purchase discounts and premiums on acquired non-impaired loans are recognized as an adjustment to interest income over the contractual life of the loans primarily using the effective interest method or taken into income when the related loans are paid off or included in the carrying amount of loans that are sold.

Loans and Leases Held for Investment

The following table summarizes the composition of our loans and leases held for investment as of the dates indicated:

	September 30,			December 31,
	2019			2018
	(In thousands)
Real estate mortgage	$	7,908,097		$	7,933,859
Real estate construction and land	2,581,317			2,262,710
Commercial	7,898,042			7,428,500
Consumer	408,555			401,296
Total gross loans and leases held for investment	18,796,011			18,026,365
Deferred fees, net	(60,468		)	(68,652		)
Total loans and leases held for investment, net of deferred fees	18,735,543			17,957,713
Allowance for loan and lease losses	(138,552		)	(132,472		)
Total loans and leases held for investment, net	$	18,596,991		$	17,825,241

The following tables present an aging analysis of our loans and leases held for investment, net of deferred fees, by loan portfolio segment and class as of the dates indicated:

	September 30, 2019
	30 - 89		90 or More
	Days		Days		Total
	Past Due		Past Due		Past Due		Current		Total
	(In thousands)
Real estate mortgage:
Commercial	$	2,867	$	7,137	$	10,004	$	4,290,562	$	4,300,566
Income producing and other residential	4,551		469		5,020		3,591,338		3,596,358
Total real estate mortgage	7,418		7,606		15,024		7,881,900		7,896,924
Real estate construction and land:
Commercial	—		—		—		1,009,362		1,009,362
Residential	2,622		—		2,622		1,539,490		1,542,112
Total real estate construction and land	2,622		—		2,622		2,548,852		2,551,474
Commercial:
Asset-based	48		662		710		3,810,031		3,810,741
Venture capital	—		—		—		2,209,649		2,209,649
Other commercial	6,742		2,241		8,983		1,849,184		1,858,167
Total commercial	6,790		2,903		9,693		7,868,864		7,878,557
Consumer	795		408		1,203		407,385		408,588
Total	$	17,625	$	10,917	$	28,542	$	18,707,001	$	18,735,543

16

PACWEST BANCORP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

	December 31, 2018
	30 - 89		90 or More
	Days		Days		Total
	Past Due		Past Due		Past Due		Current		Total
	(In thousands)
Real estate mortgage:
Commercial	$	3,487	$	7,541	$	11,028	$	4,813,270	$	4,824,298
Income producing and other residential	1,557		476		2,033		3,091,810		3,093,843
Total real estate mortgage	5,044		8,017		13,061		7,905,080		7,918,141
Real estate construction and land:
Commercial	—		442		442		912,141		912,583
Residential	1,527		—		1,527		1,319,546		1,321,073
Total real estate construction and land	1,527		442		1,969		2,231,687		2,233,656
Commercial:
Asset-based	47		646		693		3,304,728		3,305,421
Venture capital	4,705		—		4,705		2,034,043		2,038,748
Other commercial	5,181		1,285		6,466		2,053,960		2,060,426
Total commercial	9,933		1,931		11,864		7,392,731		7,404,595
Consumer	581		333		914		400,407		401,321
Total	$	17,085	$	10,723	$	27,808	$	17,929,905	$	17,957,713

It is our policy to discontinue accruing interest when principal or interest payments are past due 90 days or more (unless the loan is both well secured and in the process of collection) 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. Interest income on nonaccrual loans is recognized only to the extent cash is received and the principal balance of the loan is deemed collectable.

The following table presents our nonaccrual and performing loans and leases held for investment, net of deferred fees, by loan portfolio segment and class as of the dates indicated:  

	September 30, 2019						December 31, 2018
	Nonaccrual		Performing		Total		Nonaccrual		Performing		Total
	(In thousands)
Real estate mortgage:
Commercial	$	19,515	$	4,281,051	$	4,300,566	$	15,321	$	4,808,977	$	4,824,298
Income producing and other residential	2,868		3,593,490		3,596,358		2,524		3,091,319		3,093,843
Total real estate mortgage	22,383		7,874,541		7,896,924		17,845		7,900,296		7,918,141
Real estate construction and land:
Commercial	377		1,008,985		1,009,362		442		912,141		912,583
Residential	—		1,542,112		1,542,112		—		1,321,073		1,321,073
Total real estate construction and land	377		2,551,097		2,551,474		442		2,233,214		2,233,656
Commercial:
Asset-based	33,015		3,777,726		3,810,741		32,324		3,273,097		3,305,421
Venture capital	20,131		2,189,518		2,209,649		20,299		2,018,449		2,038,748
Other commercial	22,554		1,835,613		1,858,167		7,380		2,053,046		2,060,426
Total commercial	75,700		7,802,857		7,878,557		60,003		7,344,592		7,404,595
Consumer	653		407,935		408,588		1,043		400,278		401,321
Total	$	99,113	$	18,636,430	$	18,735,543	$	79,333	$	17,878,380	$	17,957,713

17

PACWEST BANCORP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

At September 30, 2019, nonaccrual loans and leases totaled $99.1 million and included $10.9 million of loans and leases 90 or more days past due, $6.3 million of loans and leases 30 to 89 days past due, and $81.9 million of loans and leases current with respect to contractual payments that were placed on nonaccrual status based on management’s judgment regarding their collectability. Nonaccrual loans and leases totaled $79.3 million at December 31, 2018, including $10.7 million of loans and leases 90 or more days past due, $6.6 million of loans and leases 30 to 89 days past due, and $62.0 million of current loans and leases that were placed on nonaccrual status based on management’s judgment regarding their collectability.

As of September 30, 2019, our three largest loan relationships on nonaccrual status had an aggregate carrying value of $53.4 million and represented 54% of total nonaccrual loans and leases.

The following tables present the credit risk rating categories for loans and leases held for investment, net of deferred fees, by loan portfolio segment and class as of the dates indicated. Classified loans and leases are those with a credit risk rating of either substandard or doubtful.

	September 30, 2019
	Classified		Special Mention		Pass		Total
	(In thousands)
Real estate mortgage:
Commercial	$	34,952	$	39,309	$	4,226,305	$	4,300,566
Income producing and other residential	8,670		1,005		3,586,683		3,596,358
Total real estate mortgage	43,622		40,314		7,812,988		7,896,924
Real estate construction and land:
Commercial	377		—		1,008,985		1,009,362
Residential	—		837		1,541,275		1,542,112
Total real estate construction and land	377		837		2,550,260		2,551,474
Commercial:
Asset-based	50,634		41,974		3,718,133		3,810,741
Venture capital	34,489		66,255		2,108,905		2,209,649
Other commercial	58,707		117,931		1,681,529		1,858,167
Total commercial	143,830		226,160		7,508,567		7,878,557
Consumer	778		614		407,196		408,588
Total	$	188,607	$	267,925	$	18,279,011	$	18,735,543

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PACWEST BANCORP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

	December 31, 2018
	Classified		Special Mention		Pass		Total
	(In thousands)
Real estate mortgage:
Commercial	$	57,734	$	74,785	$	4,691,779	$	4,824,298
Income producing and other residential	10,521		968		3,082,354		3,093,843
Total real estate mortgage	68,255		75,753		7,774,133		7,918,141
Real estate construction and land:
Commercial	442		7,041		905,100		912,583
Residential	—		1,527		1,319,546		1,321,073
Total real estate construction and land	442		8,568		2,224,646		2,233,656
Commercial:
Asset-based	45,957		48,338		3,211,126		3,305,421
Venture capital	28,731		77,588		1,932,429		2,038,748
Other commercial	92,526		50,136		1,917,764		2,060,426
Total commercial	167,214		176,062		7,061,319		7,404,595
Consumer	1,199		1,015		399,107		401,321
Total	$	237,110	$	261,398	$	17,459,205	$	17,957,713

Nonaccrual loans and leases and performing TDRs are considered impaired for reporting purposes. TDRs are a result of rate reductions, term extensions, fee concessions, and debt forgiveness, or a combination thereof.

The following table presents the composition of our impaired loans and leases held for investment, net of deferred fees, by loan portfolio segment as of the dates indicated:

	September 30, 2019						December 31, 2018
					Total						Total
	Nonaccrual				Impaired		Nonaccrual				Impaired
	Loans				Loans		Loans				Loans
	and		Performing		and		and		Performing		and
	Leases		TDRs		Leases		Leases		TDRs		Leases
	(In thousands)
Real estate mortgage	$	22,383	$	10,292	$	32,675	$	17,845	$	11,484	$	29,329
Real estate construction and land	377		4,980		5,357		442		5,420		5,862
Commercial	75,700		980		76,680		60,003		692		60,695
Consumer	653		77		730		1,043		105		1,148
Total	$	99,113	$	16,329	$	115,442	$	79,333	$	17,701	$	97,034

19

PACWEST BANCORP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

The following tables present information regarding our impaired loans and leases held for investment, net of deferred fees, by loan portfolio segment and class as of and for the dates indicated:

	September 30, 2019						December 31, 2018
			Unpaid						Unpaid
	Recorded		Principal		Related		Recorded		Principal		Related
Impaired Loans and Leases	Investment		Balance		Allowance		Investment		Balance		Allowance
	(In thousands)
With An Allowance Recorded:
Real estate mortgage:
Commercial	$	485	$	485	$	71	$	1,736	$	1,648	$	170
Income producing and other residential	2,032		2,030		177		2,569		2,563		247
Commercial:
Asset based	500		500		500		—		—		—
Venture capital	12,379		13,570		6,177		11,621		13,255		3,141
Other commercial	16,969		18,044		2,405		473		482		473
With No Related Allowance Recorded:
Real estate mortgage:
Commercial	$	22,503	$	37,568			$	17,783	$	32,035
Income producing and other residential	7,655		10,058				7,241		9,425
Real estate construction and land:
Commercial	5,357		5,402				5,862		5,870
Commercial:
Asset-based	32,515		50,633				32,324		38,100
Venture capital	7,752		39,440				8,678		41,335
Other commercial	6,565		24,868				7,599		25,740
Consumer	730		896				1,148		1,470
Total Loans and Leases With and
Without an Allowance Recorded:
Real estate mortgage	$	32,675	$	50,141	$	248	$	29,329	$	45,671	$	417
Real estate construction and land	5,357		5,402		—		5,862		5,870		—
Commercial	76,680		147,055		9,082		60,695		118,912		3,614
Consumer	730		896		—		1,148		1,470		—
Total	$	115,442	$	203,494	$	9,330	$	97,034	$	171,923	$	4,031

20

PACWEST BANCORP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

	Three Months Ended September 30,
	2019				2018
	Weighted		Interest		Weighted		Interest
	Average		Income		Average		Income
Impaired Loans and Leases	Balance(1)		Recognized		Balance(1)		Recognized
	(In thousands)
With An Allowance Recorded:
Real estate mortgage:
Commercial	$	485	$	8	$	1,781	$	18
Income producing and other residential	2,031		15		2,494		21
Commercial:
Asset-based	163		—		—		—
Venture capital	12,343		—		28,322		—
Other commercial	2,181		9		1,360		—
With No Related Allowance Recorded:
Real estate mortgage:
Commercial	$	19,745	$	56	$	34,155	$	129
Income producing and other residential	7,615		56		7,906		45
Real estate construction and land:
Commercial	5,357		98		5,533		95
Residential	—		—		—		—
Commercial:
Asset-based	30,880		—		34,618		—
Venture capital	7,752		—		1,421		—
Other commercial	6,096		6		8,108		25
Consumer	568		1		383		2
Total Loans and Leases With and
Without an Allowance Recorded:
Real estate mortgage	$	29,876	$	135	$	46,336	$	213
Real estate construction and land	5,357		98		5,533		95
Commercial	59,415		15		73,829		25
Consumer	568		1		383		2
Total	$	95,216	$	249	$	126,081	$	335

_________________________

(1) For loans and leases reported as impaired at September 30, 2019 and 2018, amounts were calculated based on the period of time such loans and leases were impaired during the reported period.

21

PACWEST BANCORP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

	Nine Months Ended September 30,
	2019				2018
	Weighted		Interest		Weighted		Interest
	Average		Income		Average		Income
Impaired Loans and Leases	Balance(1)		Recognized		Balance(1)		Recognized
	(In thousands)
With An Allowance Recorded:
Real estate mortgage:
Commercial	$	485	$	24	$	1,781	$	55
Income producing and other residential	2,031		44		2,494		62
Commercial:
Asset-based	55		—		—		—
Venture capital	9,201		—		17,459		—
Other commercial	1,125		26		688		—
With No Related Allowance Recorded:
Real estate mortgage:
Commercial	$	16,729	$	162	$	32,098	$	376
Income producing and other residential	7,488		163		7,845		132
Real estate construction and land:
Commercial	5,357		290		5,533		283
Commercial:
Asset-based	29,989		—		34,618		—
Venture capital	6,173		—		1,330		—
Other commercial	5,606		22		7,417		70
Consumer	493		4		373		6
Total Loans and Leases With and
Without an Allowance Recorded:
Real estate mortgage	$	26,733	$	393	$	44,218	$	625
Real estate construction and land	5,357		290		5,533		283
Commercial	52,149		48		61,512		70
Consumer	493		4		373		6
Total	$	84,732	$	735	$	111,636	$	984

_________________________

(1) For loans and leases reported as impaired at September 30, 2019 and 2018, amounts were calculated based on the period of time such loans and leases were impaired during the reported period.

22

PACWEST BANCORP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

The following table presents our troubled debt restructurings of loans held for investment by loan portfolio segment and class for the periods indicated:

	Three Months Ended September 30,
	2019					2018
		Pre-		Post-			Pre-		Post-
		Modification		Modification			Modification		Modification
	Number	Outstanding		Outstanding		Number	Outstanding		Outstanding
	of	Recorded		Recorded		of	Recorded		Recorded
Troubled Debt Restructurings	Loans	Investment		Investment		Loans	Investment		Investment
	(Dollars in thousands)
Real estate mortgage:
Commercial	—	$	—	$	—	4	$	2,889	$	712
Income producing and other residential	2	495		495		5	912		912
Commercial:
Asset-based	—	—		—		4	28,947		33,947
Venture capital	1	—		—		5	23,501		23,501
Other commercial	3	99		99		5	1,487		1,115
Total	6	$	594	$	594	23	$	57,736	$	60,187

	Nine Months Ended September 30,
	2019					2018
		Pre-		Post-			Pre-		Post-
		Modification		Modification			Modification		Modification
	Number	Outstanding		Outstanding		Number	Outstanding		Outstanding
	of	Recorded		Recorded		of	Recorded		Recorded
Troubled Debt Restructurings	Loans	Investment		Investment		Loans	Investment		Investment
	(Dollars in thousands)
Real estate mortgage:
Commercial	1	$	37	$	—	4	$	2,889	$	712
Income producing and other residential	7	1,280		1,280		8	2,616		1,557
Commercial:
Asset-based	1	620		620		4	28,947		33,947
Venture capital	11	16,076		16,214		9	28,737		28,737
Other commercial	14	792		792		9	13,301		12,929
Consumer	—	—		—		1	27		27
Total	34	$	18,805	$	18,906	35	$	76,517	$	77,909

During the three months ended September 30, 2019, there were three other commercial loans totaling $133,000 and one income producing and other residential loan for $254,000 restructured in the preceding 12-month period that subsequently defaulted. During the nine months ended September 30, 2019, there were two venture capital loans totaling $441,000, three other commercial loans totaling $133,000, and one income producing and other residential loan for $254,000 restructured in the preceding 12-month period that subsequently defaulted.

During the three months ended September 30, 2018, there were no loans restructured in the preceding 12-month period that subsequently defaulted. During the nine months ended September 30, 2018, there were no loans restructured in the preceding 12-month period that subsequently defaulted.

23

PACWEST BANCORP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

Leases Receivable

We provide equipment financing to our customers primarily with operating and direct financing leases. For direct financing leases, lease receivables are recorded on the balance sheet but the leased equipment is not, although we generally retain legal title to the leased equipment until the end of each lease. Direct financing leases are stated at the net amount of minimum lease payments receivable, plus any unguaranteed residual value, less the amount of unearned income and net acquisition discount at the reporting date. Direct lease origination costs are amortized using the effective interest method over the life of the leases. Direct financing leases are subject to our accounting for allowance for loan and lease losses. See Note 8. Leases for information regarding operating leases where we are the lessor.

The following table provides the components of leases receivable income for the period indicated:

	Three Months Ended		Nine Months Ended
	September 30, 2019		September 30, 2019
	(In thousands)
Component of leases receivable income:
Interest income on net investments in leases	$	2,648	$	8,674

The following table presents the components of leases receivable as of the date indicated:

	September 30, 2019
	(In thousands)
Net investment in direct financing leases:
Lease payments receivable	$	166,692
Unguaranteed residual assets	21,315
Deferred fees and other	747
Aggregate net investment in leases	$	188,754

The following table presents maturities of leases receivable as of the date indicated:

	September 30, 2019
	(In thousands)
Period Ending December 31,
2019	$	17,353
2020	72,465
2021	51,242
2022	19,819
2023	11,735
Thereafter	9,105
Total undiscounted cash flows	181,719
Less: Unearned income	(15,027		)
Present value of lease payments	$	166,692

24

PACWEST BANCORP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

Allowance for Loan and Lease Losses

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

	Three Months Ended September 30, 2019
				Real Estate
	Real Estate			Construction
	Mortgage			and Land		Commercial			Consumer			Total
	(In thousands)
Allowance for Loan and Lease Losses:
Balance, beginning of period	$	46,826		$	26,378	$	59,401		$	2,432		$	135,037
Charge-offs	(120		)	—		(6,021		)	(360		)	(6,501		)
Recoveries	95			—		1,898			23			2,016
Net charge-offs	(25		)	—		(4,123		)	(337		)	(4,485		)
(Negative provision) provision	(1,655		)	683		8,907			65			8,000
Balance, end of period	$	45,146		$	27,061	$	64,185		$	2,160		$	138,552

	Nine Months Ended September 30, 2019
				Real Estate
	Real Estate			Construction
	Mortgage			and Land			Commercial			Consumer			Total
	(In thousands)
Allowance for Loan and Lease Losses:
Balance, beginning of period	$	46,021		$	28,209		$	56,360		$	1,882		$	132,472
Charge-offs	(850		)	—			(25,951		)	(802		)	(27,603		)
Recoveries	478			—			11,084			121			11,683
Net charge-offs	(372		)	—			(14,867		)	(681		)	(15,920		)
(Negative provision) provision	(503		)	(1,148		)	22,692			959			22,000
Balance, end of period	$	45,146		$	27,061		$	64,185		$	2,160		$	138,552
Ending Allowance by
Impairment Methodology:
Individually evaluated for impairment	$	248		$	—		$	9,082		$	—		$	9,330
Collectively evaluated for impairment	$	44,898		$	27,061		$	55,103		$	2,160		$	129,222
Ending Loans and Leases by
Impairment Methodology:
Individually evaluated for impairment	$	29,808		$	5,357		$	75,455		$	—		$	110,620
Collectively evaluated for impairment	7,867,116			2,546,117			7,803,102			408,588			18,624,923
Ending balance	$	7,896,924		$	2,551,474		$	7,878,557		$	408,588		$	18,735,543

25

PACWEST BANCORP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

	Three Months Ended September 30, 2018
				Real Estate
	Real Estate			Construction
	Mortgage			and Land			Commercial			Consumer			Total
	(In thousands)
Allowance for Loan and Lease Losses:
Balance, beginning of period	$	45,467		$	26,210		$	58,806		$	1,656		$	132,139
Charge-offs	(726		)	—			(2,372		)	(210		)	(3,308		)
Recoveries	222			23			1,303			41			1,589
Net (charge-offs) recoveries	(504		)	23			(1,069		)	(169		)	(1,719		)
Provision (negative provision)	1,394			(47		)	9,907			246			11,500
Balance, end of period	$	46,357		$	26,186		$	67,644		$	1,733		$	141,920

	Nine Months Ended September 30, 2018
				Real Estate
	Real Estate			Construction
	Mortgage			and Land		Commercial			Consumer			Total
	(In thousands)
Allowance for Loan and Lease Losses:
Balance, beginning of period (1)	$	40,051		$	13,055	$	84,022		$	2,328		$	139,456
Charge-offs	(8,071		)	—		(25,321		)	(304		)	(33,696		)
Recoveries	1,999			49		7,702			136			9,886
Net (charge-offs) recoveries	(6,072		)	49		(17,619		)	(168		)	(23,810		)
Provision (negative provision)	12,378			13,082		1,241			(427		)	26,274
Balance, end of period	$	46,357		$	26,186	$	67,644		$	1,733		$	141,920
Ending Allowance by
Impairment Methodology:
Individually evaluated for impairment	$	496		$	—	$	20,363		$	—		$	20,859
Collectively evaluated for impairment	$	45,861		$	26,186	$	47,281		$	1,733		$	121,061
Ending Loans and Leases by
Impairment Methodology:
Individually evaluated for impairment	$	44,985		$	5,533	$	79,493		$	—		$	130,011
Collectively evaluated for impairment	7,633,675			1,995,424		7,072,565			398,471			17,100,135
Ending balance	$	7,678,660		$	2,000,957	$	7,152,058		$	398,471		$	17,230,146

_______________________________________ 

(1) The allowance for loan losses related to PCI loans of $6.4 million as of December 31, 2017 is reflected in the beginning balance of the allowance for loan and lease losses for the nine months ended September 30, 2018.

26

PACWEST BANCORP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

Allowance for Credit Losses

The allowance for credit losses is the combination of the allowance for loan and lease losses and the reserve for unfunded loan commitments. The reserve for unfunded loan commitments is included within "Accrued interest payable and other liabilities" on the condensed consolidated balance sheets. The following tables present a summary of the activity in the allowance for loan and lease losses and reserve for unfunded loan commitments for the periods indicated:

	Three Months Ended September 30, 2019
	Allowance for			Reserve for			Total
	Loan and			Unfunded Loan			Allowance for
	Lease Losses			Commitments			Credit Losses
	(In thousands)
Balance, beginning of period	$	135,037		$	34,861		$	169,898
Charge-offs	(6,501		)	—			(6,501		)
Recoveries	2,016			—			2,016
Net charge-offs	(4,485		)	—			(4,485		)
Provision (negative provision)	8,000			(1,000		)	7,000
Balance, end of period	$	138,552		$	33,861		$	172,413

	Nine Months Ended September 30, 2019
	Allowance for			Reserve for			Total
	Loan and			Unfunded Loan			Allowance for
	Lease Losses			Commitments			Credit Losses
	(In thousands)
Balance, beginning of period	$	132,472		$	36,861		$	169,333
Charge-offs	(27,603		)	—			(27,603		)
Recoveries	11,683			—			11,683
Net charge-offs	(15,920		)	—			(15,920		)
Provision (negative provision)	22,000			(3,000		)	19,000
Balance, end of period	$	138,552		$	33,861		$	172,413

	Three Months Ended September 30, 2018
	Allowance for			Reserve for		Total
	Loan and			Unfunded Loan		Allowance for
	Lease Losses			Commitments		Credit Losses
	(In thousands)
Balance, beginning of period	$	132,139		$	35,361	$	167,500
Charge-offs	(3,308		)	—		(3,308		)
Recoveries	1,589			—		1,589
Net charge-offs	(1,719		)	—		(1,719		)
Provision	11,500			—		11,500
Balance, end of period	$	141,920		$	35,361	$	177,281

27

PACWEST BANCORP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

	Nine Months Ended September 30, 2018
	Allowance for			Reserve for		Total
	Loan and			Unfunded Loan		Allowance for
	Lease Losses			Commitments		Credit Losses
	(In thousands)
Balance, beginning of period (1)	$	139,456		$	28,635	$	168,091
Charge-offs	(33,696		)	—		(33,696		)
Recoveries	9,886			—		9,886
Net charge-offs	(23,810		)	—		(23,810		)
Provision	26,274			6,726		33,000
Balance, end of period	$	141,920		$	35,361	$	177,281

_______________________________________ 

(1) The allowance for loan losses related to PCI loans of $6.4 million as of December 31, 2017 is reflected in the beginning balance of the allowance for loan and lease losses for the nine months ended September 30, 2018.

NOTE 5.  FORECLOSED ASSETS

The following table summarizes foreclosed assets as of the dates indicated:

	September 30,		December 31,
Property Type	2019		2018
	(In thousands)
Commercial real estate	$	199	$	2,004
Single-family residence	948		953
Construction and land development	219		219
Multi‑family	—		1,059
Total other real estate owned, net	1,366		4,235
Other foreclosed assets	—		1,064
Total foreclosed assets, net	$	1,366	$	5,299

The following table presents the changes in foreclosed assets, net of the valuation allowance, for the period indicated:

	Foreclosed
	Assets
	(In thousands)
Balance, December 31, 2018	$	5,299
Transfers to foreclosed assets from loans	37
Provision for losses	(54		)
Reductions related to sales	(3,916		)
Balance, September 30, 2019	$	1,366

28

PACWEST BANCORP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

NOTE 6.  GOODWILL AND OTHER INTANGIBLE ASSETS

Goodwill and other intangible assets arise from the acquisition method of accounting for business combinations. Goodwill and other intangible assets generated from business combinations and deemed to have indefinite lives are not subject to amortization and instead are tested for impairment at least annually. Goodwill represents the excess of the purchase price over the fair value of the net assets and other identifiable intangible assets acquired. Impairment exists when the carrying value of the goodwill exceeds its implied fair value. An impairment loss would be recognized in an amount equal to that excess as a charge to "Noninterest expense" in the condensed consolidated statements of earnings.

Our other intangible assets with definite lives include CDI and CRI. CDI and CRI are amortized over their respective estimated useful lives and reviewed for impairment at least quarterly. The amortization expense represents the estimated decline in the value of the underlying deposits or customer relationships acquired. The aggregate amortization expense is expected to be $18.7 million for 2019. The estimated aggregate amortization expense related to our current intangible assets for each of the next five years is $14.8 million for 2020, $10.8 million for 2021, $7.4 million for 2022, $3.8 million for 2023, and $1.7 million for 2024.

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,			June 30,			September 30,			September 30,
	2019			2019			2018			2019			2018
	(In thousands)
Gross Amount of CDI and CRI:
Balance, beginning of period	$	119,497		$	119,497		$	119,497		$	119,497		$	119,497
Fully amortized portion	(1,924		)	—			—			(1,924		)	—
Balance, end of period	117,573			119,497			119,497			117,573			119,497
Accumulated Amortization:
Balance, beginning of period	(72,117		)	(67,247		)	(51,804		)	(62,377		)	(39,871		)
Amortization	(4,833		)	(4,870		)	(5,587		)	(14,573		)	(17,520		)
Fully amortized portion	1,924			—			—			1,924			—
Balance, end of period	(75,026		)	(72,117		)	(57,391		)	(75,026		)	(57,391		)
Net CDI and CRI, end of period	$	42,547		$	47,380		$	62,106		$	42,547		$	62,106

29

PACWEST BANCORP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

NOTE 7.  OTHER ASSETS

The following table presents the detail of our other assets as of the dates indicated:

	September 30,		December 31,
Other Assets	2019		2018
	(In thousands)
Cash surrender value of BOLI	$	197,887	$	194,897
Operating lease ROU assets, net	134,122		—
Interest receivable	80,955		88,754
LIHTC investments	67,367		59,507
CRA investments (1)	62,269		59,062
Prepaid expenses	18,351		18,006
Taxes receivable	17,281		39,096
Equity investments without readily determinable fair values	14,828		14,758
Equity warrants	3,532		4,793
Equity investments with readily determinable fair values	4,715		4,891
Other receivables/assets	19,752		39,132
Total other assets	$	621,059	$	522,896

________________________

(1) Includes equity investments without readily determinable fair values of $15.7 million and $12.5 million at September 30, 2019 and December 31, 2018.

The increase in the operating lease ROU assets in 2019 was due to the adoption of ASU 2016-02 effective January 1, 2019. See Note 8. Leases for further details.

Regarding our equity investments without readily determinable fair values, there were no impairments and no upward or downward adjustments during the nine months ended September 30, 2019. On a cumulative basis since January 1, 2018 and through September 30, 2019, we recorded impairments of $278,000 and upward adjustments of $286,000 to our equity investments without readily determinable fair values.

30

PACWEST BANCORP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

NOTE 8. LEASES

The Company adopted ASU 2016-02, "Leases (Topic 842)," effective January 1, 2019 and applied the guidance to all leases within the scope of Topic 842 as of that date. We have adopted the guidance using the optional transition method under ASU 2018-11, “Leases (Topic 842): Targeted Improvements,” and recognized a cumulative effect adjustment to retained earnings without prior periods restated, effectively applying the requirements of the new standard prospectively.

We determine if an arrangement is a lease at inception by assessing whether there is an identified asset, and whether the contract conveys the right to control the use of the identified asset for a period of time in exchange for consideration. Topic 842 also requires a lessee to classify a lease as either finance or operating. The Company only had operating leases as of September 30, 2019, related to our leased facilities which consisted of 75 full-service branch offices and 76 other offices.

ROU assets represent a lessee's right to use an underlying asset for the lease term and lease liabilities represent a lessee's obligation to make lease payments arising from the lease. On January 1, 2019, ROU assets and operating lease liabilities were initially recognized based on the present value of future minimum lease payments over the remaining lease terms. We used our incremental borrowing rates on January 1, 2019 to determine the present value of future payments. The ROU assets also include any prepaid lease payments and initial direct costs incurred less any lease incentives received. We amortize the operating lease ROU assets and record interest expense on the operating lease liabilities over the lease terms.

Our leases have remaining terms ranging from 1 to 27 years. Short-term leases (initial term of less than 12 months) are not recorded on the balance sheet and lease expense is recognized on a straight-line basis over the lease term. We have lease agreements with lease and non-lease components, which are accounted for as a single lease component. Most leases include one or more options to renew, with renewal terms that can extend the lease from one to ten years. The exercise of lease renewal options is at our sole discretion. Some of our leases also include termination options. We have determined that we do not meet the reasonably certain threshold to exercise any renewal or termination options, therefore our lease terms do not reflect any optional periods. We rent or sublease certain office space to third parties. Our subleases consist of operating leases for offices that we have fully or partially vacated.

Certain of our lease agreements also include rental payments that adjust periodically based on changes in the CPI. We initially measured our lease payments using the index at the lease commencement date. Subsequent increases in the CPI are treated as variable lease payments and recognized in the period in which the obligation for those payments is incurred. The ROU assets and lease liabilities are not re-measured as a result of changes in the CPI. Our lease agreements do not contain any purchase options, residual value guarantees, or restrictive covenants.

Operating Leases as a Lessee

Our lease expense is a component of "Occupancy expense" on our condensed consolidated statements of earnings. The following table presents the components of lease expense for the period indicated:

	Three Months Ended			Nine Months Ended
	September 30, 2019			September 30, 2019
	(In thousands)
Operating lease expense:
Fixed costs	$	8,347		$	25,183
Variable costs	7			77
Short-term lease costs	126			849
Sublease income	(1,010		)	(3,190		)
Net lease expense	$	7,470		$	22,919

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Notes to Condensed Consolidated Financial Statements (Unaudited)

The following table presents supplemental cash flow information related to leases for the period indicated:

	Nine Months Ended
	September 30, 2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	24,674
ROU assets obtained in exchange for lease obligations:
Operating leases	$	172,189

The following table presents supplemental balance sheet and other information related to operating leases as of the date indicated:

	September 30, 2019
	(Dollars in thousands)
Operating leases:
Operating lease right-of-use assets, net	$	134,122
Operating lease liabilities	$	149,185
Weighted average remaining lease term (in years)	4.8
Weighted average discount rate	2.79		%

The following table presents maturities of operating lease liabilities as of the date indicated:

	September 30, 2019
	(In thousands)
Period ending December 31,
2019	$	8,303
2020	32,345
2021	30,090
2022	24,304
2023	21,472
Thereafter	47,582
Total operating lease liabilities	164,096
Less: Imputed interest	(14,911		)
Present value of operating lease liabilities	$	149,185

Operating Leases as a Lessor

We provide equipment financing through operating leases where we facilitate the purchase of equipment leased to our customers. The equipment is on our balance sheet as "Equipment leased to others under operating leases" and is depreciated to its estimated residual value at the end of the lease term, shown as "Leased equipment depreciation" in the condensed consolidated statements of earnings, according to our fixed asset accounting policy. We receive periodic rental income payments under the leases, which are recorded as "Noninterest Income" in the condensed consolidated statements of earnings.

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PACWEST BANCORP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

The following table presents the rental payments to be received on operating leases as of the date indicated:

	September 30, 2019
	(In thousands)
Period Ending December 31,
2019	$	8,727
2020	35,447
2021	31,743
2022	25,199
2023	22,096
Thereafter	52,717
Total undiscounted cash flows	$	175,929

NOTE 9.  BORROWINGS AND SUBORDINATED DEBENTURES

Borrowings

The following table summarizes our borrowings as of the dates indicated:

	September 30, 2019				December 31, 2018
			Weighted				Weighted
			Average				Average
	Amount		Rate		Amount		Rate
	(Dollars in thousands)
Non‑recourse debt	$	31	7.50	%	$	114	7.50	%
FHLB secured advances	882,000		2.12	%	1,040,000		2.56	%
FHLB unsecured overnight advance	141,000		1.95	%	141,000		2.53	%
AFX borrowings	230,000		1.92	%	190,000		2.56	%
Total borrowings	$	1,253,031	2.06	%	$	1,371,114	2.56	%

The non‑recourse debt represents the payment stream of certain equipment leases sold to third parties. The debt is secured by the leased equipment and all interest rates are fixed. As of September 30, 2019, this debt had a weighted average remaining maturity of 0.3 years.

The Bank has established secured and unsecured lines of credit under which it may borrow funds from time to time on a term or overnight basis from the FHLB, the FRBSF, and other financial institutions.

FHLB Secured Line of Credit. The Bank had secured financing capacity with the FHLB as of September 30, 2019 of $4.3 billion, collateralized by a blanket lien on $6.1 billion of qualifying loans. As of September 30, 2019, the balance outstanding was $882.0 million, which consisted of a $582.0 million overnight borrowing and a $300.0 million two-month borrowing with a maturity date of October 4, 2019. As of December 31, 2018, the balance outstanding was a $1.0 billion overnight advance.

FRBSF Secured Line of Credit. The Bank has a secured line of credit with the FRBSF. As of September 30, 2019, the Bank had secured borrowing capacity of $2.1 billion collateralized by liens covering $2.8 billion of qualifying loans. As of September 30, 2019 and December 31, 2018, there were no balances outstanding.

FHLB Unsecured Line of Credit. The Bank has a $141.0 million unsecured line of credit with the FHLB for the purchase of overnight funds, of which $141.0 million was outstanding at September 30, 2019. At December 31, 2018, the balance outstanding was $141.0 million.

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PACWEST BANCORP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

Federal Funds Arrangements with Commercial Banks. As of September 30, 2019, the Bank had unsecured lines of credit of $180.0 million in the aggregate with several correspondent banks for the purchase of overnight funds, subject to availability of funds. These lines are renewable annually and have no unused commitment fees. As of September 30, 2019 and December 31, 2018, there were no balances outstanding. The Bank is a member of the AFX, through which it may either borrow or lend funds on an overnight or short-term basis with a group of pre-approved commercial banks. The availability of funds changes daily. As of September 30, 2019, the balance outstanding was $230.0 million, which consisted of $230.0 million in overnight borrowings. As of December 31, 2018, there were $190.0 million in overnight borrowings outstanding.

Subordinated Debentures

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

	September 30, 2019					December 31, 2018					Date	Maturity	Rate Index
Series	Amount			Rate		Amount			Rate		Issued	Date	(Quarterly Reset)
	(Dollars in thousands)
Trust V	$	10,310		5.24	%	$	10,310		5.89	%	8/15/2003	9/17/2033	3-month LIBOR + 3.10
Trust VI	10,310			5.17	%	10,310			5.84	%	9/3/2003	9/15/2033	3-month LIBOR + 3.05
Trust CII	5,155			5.09	%	5,155			5.74	%	9/17/2003	9/17/2033	3-month LIBOR + 2.95
Trust VII	61,856			5.02	%	61,856			5.27	%	2/5/2004	4/23/2034	3-month LIBOR + 2.75
Trust CIII	20,619			3.81	%	20,619			4.48	%	8/15/2005	9/15/2035	3-month LIBOR + 1.69
Trust FCCI	16,495			3.72	%	16,495			4.39	%	1/25/2007	3/15/2037	3-month LIBOR + 1.60
Trust FCBI	10,310			3.67	%	10,310			4.34	%	9/30/2005	12/15/2035	3-month LIBOR + 1.55
Trust CS 2005-1	82,475			4.07	%	82,475			4.74	%	11/21/2005	12/15/2035	3-month LIBOR + 1.95
Trust CS 2005-2	128,866			4.22	%	128,866			4.47	%	12/14/2005	1/30/2036	3-month LIBOR + 1.95
Trust CS 2006-1	51,545			4.22	%	51,545			4.47	%	2/22/2006	4/30/2036	3-month LIBOR + 1.95
Trust CS 2006-2	51,550			4.22	%	51,550			4.47	%	9/27/2006	10/30/2036	3-month LIBOR + 1.95
Trust CS 2006-3 (1)	28,092			1.68	%	29,556			1.73	%	9/29/2006	10/30/2036	3-month EURIBOR + 2.05
Trust CS 2006-4	16,470			4.22	%	16,470			4.47	%	12/5/2006	1/30/2037	3-month LIBOR + 1.95
Trust CS 2006-5	6,650			4.22	%	6,650			4.47	%	12/19/2006	1/30/2037	3-month LIBOR + 1.95
Trust CS 2007-2	39,177			4.22	%	39,177			4.47	%	6/13/2007	7/30/2037	3-month LIBOR + 1.95
Gross subordinated debentures	539,880			4.16	%	541,344			4.51	%
Unamortized discount (2)	(83,735		)			(87,498		)
Net subordinated debentures	$	456,145				$	453,846

___________________

(1) Denomination is in Euros with a value of €25.8 million.

(2) Amount represents the fair value adjustment on trust preferred securities assumed in acquisitions.

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PACWEST BANCORP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

NOTE 10.  COMMITMENTS AND CONTINGENCIES

The following table presents a summary of commitments described below as of the dates indicated:

	September 30,		December 31,
	2019		2018
	(In thousands)
Loan commitments to extend credit	$	7,790,796	$	7,528,248
Standby letters of credit	367,147		364,210
Commitments to contribute capital to low income housing project partnerships
and small business investment companies	116,012		101,991
Commitments to contribute capital to private equity funds	50		50
Total	$	8,274,005	$	7,994,499

The Company 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 and standby letters of credit. 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 that the Company has in particular classes of financial instruments.

Commitments to extend credit are contractual agreements to lend to our customers when customers are in compliance with their contractual credit agreements and when customers have contractual availability to borrow under such agreements. 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. We provide standby letters of credit in conjunction with several of our lending arrangements and property lease obligations. Most guarantees expire within one year from the date of issuance. If a borrower defaults on its commitments subject to any letter of credit issued under these arrangements, we would be required to meet the borrower's financial obligation but would seek repayment of that financial obligation from the borrower. In some cases, borrowers have pledged cash and investment securities as collateral with us under these arrangements.

In addition, the Company invests in low income housing project partnerships, which provide income tax credits, and in small business investment companies that call for capital contributions up to an amount specified in the partnership agreements. As of September 30, 2019 and December 31, 2018, we had commitments to contribute capital to these entities totaling $116.0 million and $102.0 million. We also had commitments to contribute up to an additional $50,000 to private equity funds at September 30, 2019 and December 31, 2018.

Legal Matters

In the ordinary course of our business, the Company is 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 currently available information, any resulting liability, in addition to amounts already accrued, and taking into consideration insurance which may be applicable, would not have a material adverse effect on the Company’s financial statements or operations.

35

PACWEST BANCORP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

NOTE 11.  FAIR VALUE MEASUREMENTS

ASC Topic 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 municipal securities, agency residential and commercial MBS, collateralized loan obligations, registered publicly rated private label CMOs, corporate debt securities, SBA securities, and asset-backed securitizations.

• 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 observable inputs from a pricing service not corroborated by observable market data, and includes our non-rated private label CMOs, non-rated private label asset-backed securities, and equity warrants.

The Company uses fair value to measure certain assets and liabilities on a recurring basis, primarily securities available‑for‑sale and derivatives. 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, CDI, and other long‑lived assets.

The following tables present information on the assets and liabilities measured and recorded at fair value on a recurring basis as of the dates indicated:

	Fair Value Measurements as of
	September 30, 2019
Measured on a Recurring Basis	Total		Level 1		Level 2		Level 3
	(In thousands)
Securities available‑for‑sale:
Agency residential CMOs	$	1,172,555	$	—	$	1,172,555	$	—
Agency commercial MBS	1,100,017		—		1,100,017		—
Municipal securities	721,981		—		721,981		—
Agency residential MBS	324,929		—		324,929		—
Asset-backed securities	214,151		—		182,783		31,368
Collateralized loan obligations	113,874		—		113,874		—
Private label residential CMOs	93,868		—		87,273		6,595
SBA securities	49,746		—		49,746		—
Corporate debt securities	21,024		—		21,024		—
U.S. Treasury securities	5,203		5,203		—		—
Total securities available-for-sale	3,817,348		5,203		3,774,182		37,963
Equity warrants	3,532		—		—		3,532
Other derivative assets	2,297		—		2,297		—
Equity investments with readily determinable fair values	4,715		4,715		—		—
Total recurring assets	$	3,827,892	$	9,918	$	3,776,479	$	41,495
Derivative liabilities	$	1,446	$	—	$	1,446	$	—

36

PACWEST BANCORP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

	Fair Value Measurements as of
	December 31, 2018
Measured on a Recurring Basis	Total		Level 1		Level 2		Level 3
	(In thousands)
Securities available‑for‑sale:
Municipal securities	$	1,312,194	$	—	$	1,312,194	$	—
Agency commercial MBS	1,112,704		—		1,112,704		—
Agency residential CMOs	632,850		—		632,850		—
U.S. Treasury securities	403,405		403,405		—		—
Agency residential MBS	281,088		—		281,088		—
Private label residential CMOs	101,205		—		93,917		7,288
Asset-backed securities	81,385		—		41,440		39,945
SBA securities	67,047		—		67,047		—
Corporate debt securities	17,553		—		17,553		—
Total securities available-for-sale	4,009,431		403,405		3,558,793		47,233
Equity warrants	4,793		—		—		4,793
Other derivative assets	3,292		—		3,292		—
Equity investments with readily determinable fair values	4,891		4,891		—		—
Total recurring assets	$	4,022,407	$	408,296	$	3,562,085	$	52,026
Derivative liabilities	$	142	$	—	$	142	$	—

During the nine months ended September 30, 2019, there was a $108,000 transfer from Level 3 equity warrants to Level 1 equity investments with readily determinable fair values measured on a recurring basis.

The following table presents information about quantitative inputs and assumptions used to determine the fair values provided by our third party pricing service for our Level 3 private label CMOs and asset-backed securities available-for-sale measured at fair value on a recurring basis as of the date indicated:

	September 30, 2019
	Private Label CMOs		Asset-Backed Securities
		Weighted	Input or	Weighted
	Range	Average	Range	Average
Unobservable Inputs	of Inputs	Input	of Inputs	Input
Voluntary annual prepayment speeds	2.9% - 18.2%	11.4%	12.0% - 15.0%	13.7%
Annual default rates (1)	0.0% - 11.1%	1.8%	2.0%	2.0%
Loss severity rates (1)	24.1% - 117.6%	58.5%	60.0%	60.0%
Discount rates	2.5% - 9.2%	6.3%	3.2% - 5.2%	4.3%

____________________

(1) The annual default rates and loss severity rates were the same for all of the asset-backed securities.

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PACWEST BANCORP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

The following table presents information about quantitative inputs and assumptions used in the modified Black-Scholes option pricing model to determine the fair value for our Level 3 equity warrants measured at fair value on a recurring basis as of the date indicated:

	September 30, 2019
	Equity Warrants
	Weighted
	Average
Unobservable Inputs	Input
Volatility	17.0%
Risk-free interest rate	1.6%
Remaining life assumption (in years)	3.27

The following table summarizes activity for our Level 3 private label CMOs available-for-sale, asset-backed securities available-for-sale, and equity warrants measured at fair value on a recurring basis for the period indicated:

	Private			Asset-Backed			Equity
	Label CMOs			Securities			Warrants
	(In thousands)
Balance, December 31, 2018	$	7,288		$	39,945		$	4,793
Total included in earnings	340			(66		)	7,429
Total included in other comprehensive income	(160		)	646			—
Issuances	—			—			226
Sales and dispositions (1)	—			—			(8,808		)
Net settlements	(873		)	(9,157		)	—
Transfers to Level 1	—			—			(108		)
Balance, September 30, 2019	$	6,595		$	31,368		$	3,532

______________________

(1) Includes the exercise of warrants that upon exercise become equity securities in public companies. These are often subject to lock-up restrictions that must be met before the equity security can be sold, during which time they are reported as equity investments with readily determinable fair values.

The following tables present assets measured at fair value on a non‑recurring basis as of the dates indicated:

	Fair Value Measurement as of
	September 30, 2019
Measured on a Non‑Recurring Basis	Total		Level 1		Level 2		Level 3
	(In thousands)
Impaired loans	$	29,552	$	—	$	2,962	$	26,590
OREO	128		—		—		128
Total non-recurring	$	29,680	$	—	$	2,962	$	26,718

	Fair Value Measurement as of
	December 31, 2018
Measured on a Non‑Recurring Basis	Total		Level 1		Level 2		Level 3
	(In thousands)
Impaired loans	$	24,432	$	—	$	1,800	$	22,632
OREO	1,136		—		1,136		—
Total non-recurring	$	25,568	$	—	$	2,936	$	22,632

38

PACWEST BANCORP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

The following table presents losses recognized on assets measured on a nonrecurring basis for the periods indicated:

	Three Months Ended				Nine Months Ended
Losses on Assets	September 30,				September 30,
Measured on a Non‑Recurring Basis	2019		2018		2019		2018
	(In thousands)
Impaired loans	$	8,339	$	14,347	$	10,091	$	31,351
OREO	54		—		54		65
Total losses	$	8,393	$	14,347	$	10,145	$	31,416

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

	September 30, 2019
			Valuation	Unobservable		Weighted
Asset	Fair Value		Technique	Inputs	Range	Average
	(In thousands)
Impaired loans	$	21,543	Discounted cash flows	Discount rates	3.75% - 8.77%	7.58%
Impaired loans	5,047		Third party appraisals	No discounts
OREO	128		Third party appraisals	Discount (1)	31.91%	31.91%
Total non-recurring Level 3	$	26,718

____________________

(1) Relates to one OREO property at September 30, 2019.

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

	September 30, 2019
	Carrying		Estimated Fair Value
	Amount		Total		Level 1		Level 2		Level 3
	(In thousands)
Financial Assets:
Cash and due from banks	$	252,596	$	252,596	$	252,596	$	—	$	—
Interest‑earning deposits in financial institutions	483,405		483,405		483,405		—		—
Securities available‑for‑sale	3,817,348		3,817,348		5,203		3,774,182		37,963
Investment in FHLB stock	26,865		26,865		—		26,865		—
Loans and leases held for investment, net	18,596,991		18,751,105		—		2,962		18,748,143
Equity warrants	3,532		3,532		—		—		3,532
Other derivative assets	2,297		2,297		—		2,297		—
Equity investments with readily determinable fair values	4,715		4,715		4,715		—		—
Financial Liabilities:
Core deposits	16,471,264		16,471,264		—		16,471,264		—
Non-core non-maturity deposits	479,732		479,732		—		479,732		—
Time deposits	2,782,207		2,781,713		—		2,781,713		—
Borrowings	1,253,031		1,253,031		953,000		300,031		—
Subordinated debentures	456,145		439,895		—		439,895		—
Derivative liabilities	1,446		1,446		—		1,446		—

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PACWEST BANCORP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

	December 31, 2018
	Carrying		Estimated Fair Value
	Amount		Total		Level 1		Level 2		Level 3
	(In thousands)
Financial Assets:
Cash and due from banks	$	175,830	$	175,830	$	175,830	$	—	$	—
Interest‑earning deposits in financial institutions	209,937		209,937		209,937		—		—
Securities available‑for‑sale	4,009,431		4,009,431		403,405		3,558,793		47,233
Investment in FHLB stock	32,103		32,103		—		32,103		—
Loans and leases held for investment, net	17,825,241		17,013,860		—		1,800		17,012,060
Equity warrants	4,793		4,793		—		—		4,793
Other derivative assets	3,292		3,292		—		3,292		—
Equity investments with readily determinable fair values	4,891		4,891		4,891		—		—
Financial Liabilities:
Core deposits	16,346,671		16,346,671		—		16,346,671		—
Non-core non-maturity deposits	518,192		518,192		—		518,192		—
Time deposits	2,005,638		2,017,137		—		2,017,137		—
Borrowings	1,371,114		1,371,114		1,371,000		114		—
Subordinated debentures	453,846		435,251		—		435,251		—
Derivative liabilities	142		142		—		142		—

For information regarding 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, as amended by ASU 2016-01 and ASU 2018-03), see Note 1. Nature of Operations and Summary of Significant Accounting Policies, and Note 13. Fair Value Measurements, to the Consolidated Financial Statements of the Company's 2018 Annual Report on Form 10-K.

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 reasonable 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, 2019, the amounts that will actually be realized or paid at settlement or maturity of the instruments could be significantly different.

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PACWEST BANCORP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

NOTE 12.  EARNINGS PER SHARE

The following table presents the computations of basic and diluted net earnings per share for the periods indicated:

	Three Months Ended									Nine Months Ended
	September 30,			June 30,			September 30,			September 30,
	2019			2019			2018			2019			2018
	(Dollars in thousands, except per share data)
Basic Earnings Per Share:
Net earnings	$	110,026		$	128,125		$	116,287		$	350,755		$	350,298
Less: Earnings allocated to unvested restricted stock(1)	(1,369		)	(1,190		)	(1,428		)	(3,725		)	(3,899		)
Net earnings allocated to common shares	$	108,657		$	126,935		$	114,859		$	347,030		$	346,399
Weighted-average basic shares and unvested restricted
stock outstanding	119,831			120,042			123,657			120,691			125,728
Less: Weighted-average unvested restricted stock
outstanding	(1,622		)	(1,462		)	(1,537		)	(1,480		)	(1,473		)
Weighted-average basic shares outstanding	118,209			118,580			122,120			119,211			124,255
Basic earnings per share	$	0.92		$	1.07		$	0.94		$	2.91		$	2.79
Diluted Earnings Per Share:
Net earnings allocated to common shares	$	108,657		$	126,935		$	114,859		$	347,030		$	346,399
Weighted-average diluted shares outstanding	118,209			118,580			122,120			119,211			124,255
Diluted earnings per share	$	0.92		$	1.07		$	0.94		$	2.91		$	2.79

________________________

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

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PACWEST BANCORP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

NOTE 13. REVENUE FROM CONTRACTS WITH CUSTOMERS

Disaggregation of Revenue

The following table presents interest income and noninterest income, the components of total revenue, as disclosed in the condensed consolidated statements of earnings and the related amounts which are from contracts with customers within the scope of Topic 606 for the periods indicated. As illustrated here, substantially all of our revenue is specifically excluded from the scope of Topic 606.

	Three Months Ended September 30, 2019				Three Months Ended September 30, 2018
	Total		Revenue from		Total		Revenue from
	Recorded		Contracts with		Recorded		Contracts with
	Revenue		Customers		Revenue		Customers
	(In thousands)
Total interest income	$	307,208	$	—	$	292,642	$	—
Noninterest income:
Service charges on deposit accounts	3,525		3,525		3,979		3,979
Other commissions and fees	10,855		4,965		12,397		4,767
Leased equipment income	9,615		—		9,120		—
Gain on sale of loans	765		—		—		—
Gain on sale of securities	908		—		826		—
Other income	7,761		428		10,590		444
Total noninterest income	33,429		8,918		36,912		9,190
Total revenue	$	340,637	$	8,918	$	329,554	$	9,190

The following table presents revenue from contracts with customers based on the timing of revenue recognition for the periods indicated:

	Three Months Ended
	September 30,
	2019		2018
	(In thousands)
Products and services transferred at a point in time	$	5,046	$	4,604
Products and services transferred over time	3,872		4,586
Total revenue from contracts with customers	$	8,918	$	9,190

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PACWEST BANCORP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

The following table presents interest income and noninterest income, the components of total revenue, as disclosed in the condensed consolidated statements of earnings and the related amounts which are from contracts with customers within the scope of Topic 606 for the periods indicated:

	Nine Months Ended September 30, 2019				Nine Months Ended September 30, 2018
	Total		Revenue from		Total		Revenue from
	Recorded		Contracts with		Recorded		Contracts with
	Revenue		Customers		Revenue		Customers
	(In thousands)
Total interest income	$	926,300	$	—	$	858,931	$	—
Noninterest income:
Service charges on deposit accounts	11,026		11,026		12,418		12,418
Other commissions and fees	33,453		14,661		34,429		14,519
Leased equipment income	28,079		—		28,497		—
Gain on sale of loans	1,091		—		4,675		—
Gain on sale of securities	25,261		—		7,390		—
Other income	16,476		1,253		27,700		1,341
Total noninterest income	115,386		26,940		115,109		28,278
Total revenue	$	1,041,686	$	26,940	$	974,040	$	28,278

The following table presents revenue from contracts with customers based on the timing of revenue recognition for the periods indicated:

	Nine Months Ended
	September 30,
	2019		2018
	(In thousands)
Products and services transferred at a point in time	$	14,579	$	14,195
Products and services transferred over time	12,361		14,083
Total revenue from contracts with customers	$	26,940	$	28,278

Contract Balances

The following table provides information about receivables, contract assets, and contract liabilities from contracts with customers:

	September 30, 2019		December 31, 2018
	(In thousands)
Receivables, which are included in "Other assets"	$	1,494	$	1,334
Contract assets, which are included in "Other assets"	$	—	$	—
Contract liabilities, which are included in "Accrued interest payable and other liabilities"	$	523	$	621

Contract liabilities relate to advance consideration received from customers for which revenue is recognized over the life of the contract. The change in contract liabilities for the nine months ended September 30, 2019 due to revenue recognized that was included in the contract liability balance at the beginning of the period was $98,000.

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PACWEST BANCORP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

NOTE 14.  STOCK-BASED COMPENSATION

The Company’s 2017 Stock Incentive Plan, or the 2017 Plan, permits stock-based compensation awards to officers, directors, employees, and consultants. The 2017 Plan authorized grants of stock‑based compensation instruments to purchase or issue up to 4,000,000 shares of Company common stock. As of September 30, 2019, there were 2,431,235 shares available for grant under the 2017 Plan. Though frozen for new issuances, certain awards issued under the 2003 Stock Incentive Plan, or the 2003 Plan, remain outstanding.

Restricted Stock

Restricted stock amortization totaled $7.3 million, $6.2 million, and $8.1 million for the three months ended September 30, 2019, June 30, 2019, and September 30, 2018, and $19.3 million and $22.3 million for the nine months ended September 30, 2019 and 2018. Such amounts are included in "Compensation expense" on the condensed consolidated statements of earnings. The amount of unrecognized compensation expense related to unvested TRSAs and PRSUs as of September 30, 2019 totaled $59.3 million.

Time-Based Restricted Stock Awards

At September 30, 2019, there were 1,619,355 shares of unvested TRSAs outstanding pursuant to the Company's 2003 and 2017 Stock Incentive Plans. The TRSAs generally vest ratably over a service period of three or four years from the date of the grant or immediately upon death of an employee. Compensation expense related to TRSAs 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.

Performance-Based Restricted Stock Units

At September 30, 2019, there were 276,386 units of unvested PRSUs that have been granted. The PRSUs will vest only if performance goals with respect to certain financial metrics are met over a three-year performance period. The PRSUs are not considered issued and outstanding until they vest. PRSUs are granted and initially expensed based on a target number. The number of shares that will ultimately vest based on actual performance will range from zero to a maximum of either 150% or 200% of target. Compensation expense related to PRSUs is based on the fair value of the underlying stock on the award date and is amortized over the vesting period using the straight-line method unless it is determined that: (1) attainment of the financial metrics is less than probable, in which case a portion of the amortization is suspended, or (2) attainment of the financial metrics is improbable, in which case a portion of the previously recognized amortization is reversed and also suspended. If it is determined that attainment of a financial measure higher than target is probable, the amortization will increase to up to 150% or 200% of the target amortization amount. Annual PRSU expense may vary during the three-year performance period based upon changes in management's estimate of the number of shares that may ultimately vest. In the case where the performance target for the PRSU is based on a market condition (such as total shareholder return), the amortization is neither reversed nor suspended if it is subsequently determined that the attainment of the performance target is less than probable or improbable and the employee continues to meet the service requirement of the award.

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PACWEST BANCORP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

NOTE 15.  RECENTLY ISSUED ACCOUNTING STANDARDS

		Effective	Effect on the Financial Statements
Standard	Description	Date	or Other Significant Matters
ASU 2016-13, "Measurement of Credit Losses on Financial Instruments," ASU 2018-19, “Codification Improvements to Topic 326, Financial Instruments - Credit Losses,” and ASU 2019-05, "Financial Instruments - Credit Losses (Topic 326): Targeted Transition Relief"	1. This Update changes the accounting and recognition of credit losses and impairment of financial assets recorded at amortized cost. Under the CECL model, the standard requires immediate recognition of estimated credit losses expected to occur over the remaining life of the asset. The forward-looking concept of CECL requires loss estimates for the remaining estimated life of the financial assets using historical experience, current conditions and reasonable and supportable forecasts. 2. The Update modifies the other-than-temporary impairment (OTTI) model for AFS debt securities to require an allowance for credit impairment instead of a direct write-down, which allows for reversal of credit improvements in future periods. 3. In addition, the Update eliminates the existing guidance for PCI loans, but requires an allowance for purchased financial assets with credit deterioration. 4. Receivables arising from operating leases are not within the scope of CECL. 5. The Update must be applied using the modified retrospective method with a cumulative-effect adjustment to retained earnings as of the beginning of the year of adoption. A prospective transition approach is required for available-for-sale debt securities for which an OTTI had been recognized before the adoption date. Early adoption is permitted.	January 1, 2020	1. The Company has established a multidisciplinary project team and implementation plan, selected a software solution, reached accounting decisions on various matters, developed a conceptual framework, and developed econometric regression models for the reasonable and supportable ("R&S") forecast period. 2. The Company continues to test and refine the CECL models and has completed four preliminary calculations with one more scheduled before adoption. The Company continues to perform testing and sensitivity analysis on its modeling assumptions and results. 3. Our planned approach for estimating expected life-time credit losses include the following key components for all loan portfolio segments: a. The use of a probability of default/loss given default methodology; b. A single scenario based on the consensus forecast from Moody's to develop an economic forecast for the R&S period; c. An initial R&S forecast period of four quarters for all loan portfolio segments, which reflects management's expectation of losses based on forward-looking economic scenarios over that time; d. A post-R&S reversion period of two quarters using a straight-line approach; e. A historical loss period of at least 40 quarters, which represents a full economic credit cycle; and f. Prepayments rates based on our historical experience. 4. We plan to adopt this new standard on January 1, 2020. Our latest estimate of the impact based on September 30, 2019 loan data and economic forecasts indicates that the allowance for credit losses would increase from 0% to 10% upon adoption. We have also updated our internal controls over financial reporting in preparation of adopting this new standard. 5. The current estimate and future calculations are highly dependent on loan composition, of which the vast majority is comprised of short-duration commercial loans; the macroeconomic conditions and forecasts; and other management assumptions and judgments.

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PACWEST BANCORP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

		Effective	Effect on the Financial Statements
Standard	Description	Date	or Other Significant Matters
ASU 2017-04, "Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment"	1. This Update simplifies goodwill impairment testing by eliminating the second step of the analysis under which the implied fair value of goodwill is determined as if the reporting unit were being acquired in a business combination. 2. The goodwill impairment test is performed by comparing the fair value of a reporting unit with its carrying amount, and an impairment charge would be recognized for any amount by which the carrying amount exceeds the reporting unit's fair value, to the extent that the loss recognized does not exceed the amount of goodwill allocated to that reporting unit. 3. The Update must be applied prospectively and early adoption is permitted.	January 1, 2020	The adoption of this guidance is not expected to have a material impact on the Company’s consolidated financial position or results of operations and we plan to adopt this standard on January 1, 2020.

		Effective	Effect on the Financial Statements
Standard	Description	Date	or Other Significant Matters
ASU 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework - Changes to Disclosure Requirements for Fair Value Measurements”	1. This Update modified the disclosure requirements in Topic 820 to add disclosures regarding changes in unrealized gains and losses, the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements and the narrative description of measurement uncertainty. 2. Certain disclosure requirements in Topic 820 are also removed or modified. Certain disclosures in ASU 2018-13 would need to be applied on a retrospective basis and others on a prospective basis and early adoption is permitted.	January 1, 2020	The adoption of this guidance will modify disclosures but will not have an impact on the Company’s consolidated financial position or results of operations. The Company has early adopted any removed or modified disclosures effective January 1, 2019 but will defer adoption of the additional disclosures until January 1, 2020 as permitted in the transition guidance of the standard.

46

PACWEST BANCORP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

		Effective	Effect on the Financial Statements
Standard	Description	Date	or Other Significant Matters
ASU 2019-04, "Codification Improvements to Topic 326, Financial Instruments - Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments"	1. This Update made clarifications and amendments to five topics: (i) Topic A: Codification Improvements Resulting from the June and November 2018 Credit Losses Transition Resource Group ("TRG") Meetings, (ii) Topic B: Codification Improvements to ASU 2016-13, (iii) Topic C: Codification Improvements to ASU 2017-12, "Derivatives and Hedging (Topic 815)" and Other Hedging Items, (iv) Topic D: Codification Improvements to ASU 2016-01, "Financial Instruments - Overall (Subtopic 825-10)," and (v) Topic E: Codification Improvements Resulting from the November 2018 Credit Losses TRG Meeting. 2. In addition to conforming amendments that correct for errors and oversights, the Update in Topics A, B, and E, which impacts CECL implementation, amends or clarifies guidance for accrued interest; transfers between classifications or categories of loans and debt securities; recoveries; effect of prepayments in determining the effective interest rate; estimated costs to sell when foreclosure is probable; vintage disclosure presentation related to line-of-credit arrangements converted to term loans; contractual extensions or renewals; and others. 3. Transition requirements for the amendments are the same as ASU 2016-13 for the Update in Topics A, B, and E. The Update in Topic C may be applied retrospectively as of the date of initial adoption of ASU 2017-12 or prospectively. The Update in Topic D must be applied on a modified retrospective method with a cumulative-effect adjustment to retained earnings as of the beginning of the year of adoption and early adoption is permitted.	January 1, 2020; except for Topic C - January 1, 2019	1. Impacts from the adoption of Topics A, B, and E within this Update will be considered in the Company's overall CECL implementation and we plan to adopt this Update concurrent with the adoption of ASU 2016-13. 2. The adoption of Topic D within this Update is not expected to have a material impact on the Company's consolidated financial position or results of operations and we plan to adopt this standard on January 1, 2020. 3. Topic C within this Update is not applicable to us and therefore there is no impact on the Company's consolidated financial position or results of operations.

NOTE 16.  SUBSEQUENT EVENTS

Common Stock Dividends

On November 1, 2019, the Company announced that the Board of Directors had declared a quarterly cash dividend of $0.60 per common share. The cash dividend is payable on November 29, 2019 to stockholders of record at the close of business on November 20, 2019.

The Company has evaluated events that have occurred subsequent to September 30, 2019 and have concluded there are no other subsequent events that would require recognition in the accompanying 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 Form 10-Q contains certain “forward-looking statements” about the Company and its subsidiaries within the meaning of the Private Securities Litigation Reform Act of 1995, including certain plans, strategies, goals, and projections and including statements about our expectations regarding our operating expenses, profitability, allowance for loan and lease losses, net interest margin, net interest income, deposit growth, loan and lease portfolio growth and production, acquisitions, maintaining capital adequacy, liquidity, goodwill, and interest rate risk management. All statements contained in this Form 10-Q that are not clearly historical in nature are forward-looking, and the words “anticipate,” “assume,” “intend,” “believe,” “forecast,” “expect,” “estimate,” “plan,” “continue,” “will,” “should,” “look forward” and similar expressions are generally intended to identify forward-looking statements. All forward-looking statements (including statements regarding future financial and operating results and future transactions and their results) involve risks, uncertainties and contingencies, many of which are beyond our control, which may cause actual results, performance, or achievements to differ materially from anticipated results, performance or achievements. Actual results could differ materially from those contained or implied by such forward-looking statements for a variety of factors, including without limitation:

• our ability to complete future acquisitions, and to successfully integrate such acquired entities or achieve expected benefits, synergies and/or operating efficiencies within expected time frames or at all;

• our ability to compete effectively against other financial service providers in our markets;

• the impact of changes in interest rates or levels of market activity, especially on the fair value of our loan and investment portfolios;

• deterioration, weaker than expected improvement, or other changes in the state of the economy or the markets in which we conduct business (including the levels of IPOs and mergers and acquisitions), which may affect the ability of borrowers to repay their loans and the value of real property or other property held as collateral for such loans;

• changes in credit quality and the effect of credit quality and the new CECL accounting standard on our provision for credit losses and allowance for loan and lease losses;

• our ability to attract deposits and other sources of funding or liquidity;

• the need to retain capital for strategic or regulatory reasons;

• compression of the net interest margin due to changes in the interest rate environment, forward yield curves, loan products offered, spreads on newly originated loans and leases, changes in our asset or liability mix, and/or changes to the cost of deposits and borrowings;

• reduced demand for our services due to strategic or regulatory reasons or reduced demand for our products due to legislative changes such as new rent control laws;

• our ability to successfully execute on initiatives relating to enhancements of our technology infrastructure, including client-facing systems and applications;

• legislative or regulatory requirements or changes, including an increase of capital requirements, and increased political and regulatory uncertainty;

• the impact on our reputation and business from our interactions with business partners, counterparties, service providers and other third parties;

• higher than anticipated increases in operating expenses;

• lower than expected dividends paid from the Bank to the holding company;

• the amount and exact timing of any common stock repurchases will depend upon market conditions and other factors;

• a deterioration in the overall macroeconomic conditions or the state of the banking industry that could warrant further analysis of the carrying value of goodwill and could result in an adjustment to its carrying value resulting in a non-cash charge;

• the effectiveness of our risk management framework and quantitative models;

• the costs and effects of legal, compliance, and regulatory actions, changes and developments, including the impact of adverse judgments or settlements in litigation, the initiation and resolution of regulatory or other governmental inquiries or investigations, and/or the results of regulatory examinations or reviews;

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• the impact of changes made to tax laws or regulations affecting our business, including the disallowance of tax benefits by tax authorities and/or changes in tax filing jurisdictions or entity classifications; and

• our success at managing risks involved in the foregoing items and all other risk factors described in our audited consolidated financial statements, and other risk factors described in this Form 10-Q and other documents filed or furnished by PacWest with the SEC.

All forward-looking statements included in this Form 10-Q are based on information available at the time the statement is made. We are under no obligation to (and expressly disclaim any such obligation to) update or alter our forward-looking statements, whether as a result of new information, future events or otherwise except as required by law.

Overview

PacWest Bancorp, a Delaware corporation, is a bank holding company registered under the BHCA, with our corporate headquarters located in Beverly Hills, California. Our principal business is to serve as the holding company for our wholly-owned subsidiary, Pacific Western Bank. References to "Pacific Western" or the "Bank" refer to Pacific Western Bank together with its wholly-owned subsidiaries. References to "we," "us," or the "Company" refer to PacWest Bancorp together with its subsidiaries on a consolidated basis. When we refer to "PacWest" or to the "holding company," we are referring to PacWest Bancorp, the parent company, on a stand-alone basis.

The Bank is focused on relationship-based business banking to small, middle-market, and venture-backed businesses nationwide. The Bank offers a broad range of loan and lease and deposit products and services through 74 full-service branches located in California, one branch located in Durham, North Carolina, and numerous loan production offices across the country through its Community Banking, National Lending and Venture Banking groups. Community Banking provides real estate loans, commercial loans, and comprehensive deposit and treasury management services to small and medium-sized businesses conducted primarily through our California-based branch offices. National Lending provides asset-based, equipment, and real estate loans and treasury management services to established middle-market businesses on a national basis. Venture Banking offers a comprehensive suite of financial services focused on entrepreneurial businesses and their venture capital and private equity investors, with offices located in key innovation hubs across the United States. In addition, we provide investment advisory and asset management services to select clients through Pacific Western Asset Management Inc., a wholly-owned subsidiary of the Bank and an SEC-registered investment adviser.

Over the last couple of years, one area of focus has been our credit de-risking strategy whereby we made decisions to reduce our exposures in certain lending portfolios while emphasizing growth in loan portfolios with favorable credit performance. These efforts included the following:

• Exited the healthcare, technology, and general cash flow lending origination businesses by selling $1.5 billion of cash flow loans at year-end 2017 and reducing the portfolio from approximately $2.4 billion at the end of 2016 to approximately $73 million as of September 30, 2019.

• Reduced our exposure to healthcare real estate by shrinking this portfolio from approximately $955 million at the end of 2016 to approximately $345 million as of September 30, 2019.

• Shifted our Venture Banking strategy to emphasize growth in equity fund loans which, as a percentage of our Venture Banking loan portfolio, increased from 16% as of the end of 2016 to 56% as of September 30, 2019.

• Ceased the origination of security monitoring cash flow loans and healthcare real estate loans in our National Lending group effective October 2019.

These efforts have resulted in lower loan yields as reductions in certain loan portfolios were replaced with loans with lower credit risk, such as multi-family and equity fund loans, thereby placing pressure on our net interest margin. However, these efforts have resulted in an improved credit risk profile as evidenced by the following:

• Classified loans and leases were reduced from 2.67% of loans and leases at December 31, 2016 to 1.01% as of September 30, 2019.

• Nonaccrual loans and leases were reduced from 1.11% of loans and leases at December 31, 2016 to 0.53% as of September 30, 2019.

• The provision for credit losses as a percentage of average loans and leases was reduced from 0.42% in 2016 (excluding PCI provision and average loans) to 0.14% annualized for the nine months ended September 30, 2019.

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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 in 2019, accounted for 86.9% of net revenue (net interest income plus noninterest income).

At September 30, 2019, we had total assets of $26.7 billion, including $18.7 billion of total loans and leases, net of deferred fees, and $3.82 billion of securities available-for-sale, compared to $25.7 billion of total assets, including $18.0 billion of total loans and leases, net of deferred fees, and $4.01 billion of securities available-for-sale at December 31, 2018. The $993.3 million increase in total assets since year-end was due primarily to increases of $777.8 million in loans and leases, $350.2 million in cash and cash equivalents, and $98.2 million in other assets, offset partially by a $192.1 million decrease in securities available-for-sale. The increase in loans and leases was driven mostly by increased balances on existing loans resulting primarily from disbursements on construction loans and equity fund loans. The increase in other assets was due mainly to an operating lease ROU asset recorded in connection with the adoption of ASU 2016-02, "Leases (Topic 842)," on January 1, 2019.

At September 30, 2019, we had total liabilities of $21.8 billion, including total deposits of $19.7 billion and borrowings of $1.3 billion, compared to $20.9 billion of total liabilities, including $18.9 billion of total deposits and $1.4 billion of borrowings at December 31, 2018. The $898.8 million increase in total liabilities since year-end was due mainly to increases of $776.6 million in time deposits, $124.6 million in core deposits, and $151.8 million in accrued interest payable and other liabilities, offset partially by a $118.1 million decrease in borrowings, primarily short-term FHLB advances, and a $38.5 million decrease in non-core non-maturity deposits. The increase in core deposits was due primarily to an $803.2 million increase in interest checking deposits, offset partially by decreases of $447.7 million in noninterest-bearing demand deposits, $173.5 million in money market deposits, and $57.3 million in savings deposits. The increase in accrued interest payable and other liabilities was due mainly to operating lease liabilities recorded in connection with the adoption of ASU 2016-02. At September 30, 2019, core deposits totaled $16.5 billion, or 84% of total deposits, including $7.4 billion of noninterest-bearing demand deposits, or 38% of total deposits.

At September 30, 2019, we had total stockholders' equity of $4.92 billion compared to $4.83 billion at December 31, 2018. The $94.5 million increase in stockholders' equity since year-end was due mainly to $350.8 million in net earnings and a $102.0 million increase in accumulated other comprehensive income, offset partially by $154.5 million of common stock repurchased under the Stock Repurchase Program and $217.0 million of cash dividends paid. Consolidated capital ratios remained strong with Tier 1 capital and total capital ratios of 9.55% and 12.16% at September 30, 2019.

Recent Events

Security Monitoring Cash Flow Loans

In late October 2019, we made the decision to no longer originate new security monitoring loans. New technology is disrupting the security alarm business causing increased customer acquisition costs and customer attrition thereby adversely impacting business models and valuations. As of September 30, 2019, the security monitoring loan portfolio is comprised of 38 loans, 38% of which are Shared National Credits, with a $618 million outstanding balance, $166 million in unfunded commitments, and a weighted average maturity of 28 months.

Stock Repurchase Program

On February 24, 2019, effective upon the maturity of the previous Stock Repurchase Program on February 28, 2019, PacWest's Board of Directors authorized a new Stock Repurchase Program for an aggregate purchase price not to exceed $225 million until February 29, 2020.

The amount and exact timing of any repurchases depends upon market conditions and other factors. The Stock Repurchase Program may be suspended or discontinued at any time. During the third quarter of 2019, no shares of common stock were repurchased. During the nine months ended September 30, 2019, we repurchased 3,987,945 shares of common stock for a total amount of $154.5 million at an average price of $38.75. All shares repurchased under the Stock Repurchase Program were retired upon settlement. At September 30, 2019, the remaining amount that could be used to repurchase shares under the Stock Repurchase Program was $124.7 million.

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Colorado Market Expansion

In the second quarter of 2019, we received approval to open a full-service branch office in Denver, Colorado, which opened on November 4, 2019.

Key Performance Indicators

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

The Level of 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 (annualized if related to a quarterly period) expressed as a percentage of average interest‑earning assets. Tax equivalent net interest income is net interest income increased by an adjustment for tax-exempt interest on certain loans and investment securities based on a 21% federal statutory tax rate. Tax equivalent net interest margin is calculated as tax equivalent net interest income divided by 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. Our primary interest‑earning assets are loans and investment securities, and our primary interest‑bearing liabilities are deposits. Contributing to our high net interest margin is our high yield on loans and leases and competitive cost of deposits. While our deposit balances will fluctuate depending on deposit holders’ perceptions of alternative yields available in the market, we seek to minimize the impact of these variances by attracting a high percentage of noninterest‑bearing deposits.

Loan and Lease Growth

We actively seek new lending opportunities under an array of lending products. Our lending activities include real estate mortgage loans, real estate construction and land loans, commercial loans and leases, and a small amount of consumer lending. Our commercial real estate loans and real estate construction loans are secured by a range of property types. Our commercial loans are diverse and generally include various asset-secured loans, equipment-secured loans and leases, venture capital loans to support venture capital firms’ operations and the operations of entrepreneurial companies during the various phases of their early life cycles and secured business loans originated through our Community Banking group. Our loan origination process emphasizes credit quality. To augment our internal loan production, we have historically purchased multi-family loans from other banks. We have also purchased single-family mortgage and construction loans and private student loans from third-party lenders. These loan purchases help us manage the concentrations in our portfolio as they diversify the geographic, interest-rate risk, credit risk, and product composition of our loan portfolio. Achieving net loan growth is subject to many factors, including maintaining strict credit standards, competition from other lenders, and borrowers that opt to prepay loans.

The Magnitude of Credit Losses

We emphasize credit quality in originating and monitoring our loans and leases, and we measure our success by the levels of our classified loans and leases, nonaccrual loans and leases, and net charge‑offs. We maintain an allowance for credit losses on loans and leases, which is the sum of the allowance for loan and lease losses and the 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 exposures. Loans and leases which are deemed uncollectable 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 loan and lease portfolio is based on our allowance methodology which considers various credit performance measures such as historical and current net charge‑offs, the levels and trends of classified loans and leases, the likelihood of loans defaulting based on the historical degree that similar loans defaulted and the resulting loss severity for these defaulted loans, and the overall level of outstanding loans and leases. For originated and acquired non‑impaired loans, a provision for credit losses may be recorded to reflect credit deterioration after the origination date or after the acquisition date, respectively.

51

We regularly review our loans and leases to determine whether there has been any deterioration in credit quality resulting from borrower operations or changes in collateral value or other factors which may affect collectability of our loans and leases. Changes in economic conditions, such as the rate of economic growth, the unemployment rate, rate of inflation, increases in the general level of interest rates, declines in real estate values, changes in commodity prices, and adverse conditions in borrowers’ businesses, could negatively impact our borrowers and cause us to adversely classify loans and leases. An increase in classified loans and leases generally results in increased provisions for credit losses and an increased allowance for credit losses. Any deterioration in the commercial real estate market may lead to increased provisions for credit losses because our loans are concentrated in commercial real estate loans.

The Level of Noninterest Expense

Our noninterest expense includes fixed and controllable overhead, the largest components of which are compensation and occupancy expense. It also includes costs that tend to vary based on the volume of activity, such as loan and lease production and the number and complexity of foreclosed assets. We measure success in controlling both fixed and variable costs through monitoring of the efficiency ratio. We calculate the efficiency ratio by dividing noninterest expense (less intangible asset amortization, net foreclosed assets expense (income), and acquisition, integration and reorganization costs) by net revenues (the sum of tax equivalent net interest income plus noninterest income, less gain (loss) on sale of securities and gain (loss) on sales of assets other than loans and leases).

The following table presents the calculation of our efficiency ratio for the periods indicated:

		Three Months Ended									Nine Months Ended
		September 30,			June 30,			September 30,			September 30,
Efficiency Ratio		2019			2019			2018			2019			2018
		(Dollars in thousands)
Noninterest expense		$	126,809		$	125,427		$	128,153		$	378,523		$	381,997
Less:	Intangible asset amortization	4,833			4,870			5,587			14,573			17,520
	Foreclosed assets expense (income), net	8			(146		)	(257		)	(109		)	(440		)
	Acquisition, integration and reorganization costs	—			—			800			618			800
Noninterest expense used for efficiency ratio		$	121,968		$	120,703		$	122,023		$	363,441		$	364,117
Net interest income (tax equivalent)		$	255,974		$	261,689		$	262,276		$	773,716		$	785,546
Noninterest income		33,429			50,893			36,912			115,386			115,109
Net revenues		289,403			312,582			299,188			889,102			900,655
Less:	Gain on sale of securities	908			22,192			826			25,261			7,390
Net revenues used for efficiency ratio		$	288,495		$	290,390		$	298,362		$	863,841		$	893,265
Efficiency ratio		42.3		%	41.6		%	40.9		%	42.1		%	40.8		%

Critical Accounting Policies and Estimates

Our accounting policies are fundamental to understanding management’s discussion and analysis of results of operations and financial condition. We identify critical policies and estimates as those that 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 and estimates relate to the allowance for credit losses on loans and leases held for investment, accounting for business combinations, and the realization of deferred income tax assets and liabilities. For further information, refer to our Annual Report on Form 10‑K for the year ended December 31, 2018.

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Non-GAAP Measurements

We use 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. The methodology for determining these non-GAAP measures may differ among companies. We used the following non-GAAP measures in this Form 10-Q:

• Return on average tangible equity, tangible common equity ratio, and tangible book value per share: Given that the use of these measures is prevalent among banking regulators, investors and analysts, we disclose them in addition to the related GAAP measures of return on average equity, equity to assets ratio, and book value per share, respectively. The reconciliations of these non-GAAP measurements to the GAAP measurements are presented in the following tables for and as of the periods presented.

		Three Months Ended									Nine Months Ended
		September 30,			June 30,			September 30,			September 30,
Return on Average Tangible Equity		2019			2019			2018			2019			2018
		(Dollars in thousands)
Net earnings		$	110,026		$	128,125		$	116,287		$	350,755		$	350,298
Average stockholders' equity		$	4,890,746		$	4,818,889		$	4,748,819		$	4,842,140		$	4,826,944
Less:	Average intangible assets	2,593,925			2,598,762			2,614,055			2,598,806			2,619,624
Average tangible common equity		$	2,296,821		$	2,220,127		$	2,134,764		$	2,243,334		$	2,207,320
Return on average equity (1)		8.93		%	10.66		%	9.72		%	9.68		%	9.70		%
Return on average tangible equity (2)		19.01		%	23.15		%	21.61		%	20.90		%	21.22		%

___________________________________

(1) Annualized net earnings divided by average stockholders' equity.

(2) Annualized net earnings divided by average tangible common equity.

Tangible Common Equity Ratio/	September 30,			December 31,
Tangible Book Value Per Share	2019			2018
	(Dollars in thousands, except per share data)
Stockholders’ equity	$	4,920,108		$	4,825,588
Less: Intangible assets	2,591,217			2,605,790
Tangible common equity	$	2,328,891		$	2,219,798
Total assets	$	26,724,627		$	25,731,354
Less: Intangible assets	2,591,217			2,605,790
Tangible assets	$	24,133,410		$	23,125,564
Equity to assets ratio	18.41		%	18.75		%
Tangible common equity ratio (1)	9.65		%	9.60		%
Book value per share	$	41.06		$	39.17
Tangible book value per share (2)	$	19.43		$	18.02
Shares outstanding	119,831,192			123,189,833

_______________________________________ 

(1) Tangible common equity divided by tangible assets.

(2) Tangible common equity divided by shares outstanding.

53

Results of Operations

Earnings Performance

The following table presents performance metrics for the periods indicated:

	Three Months Ended									Nine Months Ended
	September 30,			June 30,			September 30,			September 30,
	2019			2019			2018			2019			2018
	(Dollars in thousands, except per share data)
Earnings Summary:
Net interest income	$	252,236		$	260,898		$	260,317		$	768,010		$	779,149
Provision for credit losses	(7,000		)	(8,000		)	(11,500		)	(19,000		)	(33,000		)
Noninterest income	33,429			50,893			36,912			115,386			115,109
Noninterest expense	(126,809		)	(125,427		)	(128,153		)	(378,523		)	(381,997		)
Earnings before income taxes	151,856			178,364			157,576			485,873			479,261
Income tax expense	(41,830		)	(50,239		)	(41,289		)	(135,118		)	(128,963		)
Net earnings	$	110,026		$	128,125		$	116,287		$	350,755		$	350,298
Performance Measures:
Diluted earnings per share	$	0.92		$	1.07		$	0.94		$	2.91		$	2.79
Annualized return on:
Average assets	1.65		%	1.99		%	1.89		%	1.80		%	1.94		%
Average tangible equity (1)(2)	19.01		%	23.15		%	21.61		%	20.90		%	21.22		%
Net interest margin (tax equivalent)	4.46		%	4.72		%	4.99		%	4.62		%	5.09		%
Yield on average loans and leases (tax equivalent)	5.91		%	6.26		%	6.20		%	6.11		%	6.20		%
Cost of average total deposits	0.83		%	0.81		%	0.46		%	0.79		%	0.38		%
Efficiency ratio	42.3		%	41.6		%	40.9		%	42.1		%	40.8		%

_____________________________

(1) Calculation reduces average stockholder's equity by average intangible assets.

(2) See "- Non-GAAP Measurements."

Third Quarter of 2019 Compared to Second Quarter of 2019

Net earnings for the third quarter of 2019 were $110.0 million, or $0.92 per diluted share, compared to net earnings for the second quarter of 2019 of $128.1 million, or $1.07 per diluted share. The $18.1 million decrease in net earnings from the prior quarter was due primarily to lower noninterest income of $17.5 million, lower net interest income of $8.7 million, and higher noninterest expense of $1.4 million, offset partially by lower provision for credit losses of $1.0 million and lower income tax expense of $8.4 million. Noninterest income decreased due mainly to a $21.3 million decrease in the gain on sale of securities. Net interest income decreased due mostly to a lower yield on average loans and leases, offset partially by a higher balance of average loans and leases and one more day in the third quarter of 2019 compared to the second quarter of 2019. Noninterest expense increased due primarily to a $2.5 million increase in compensation expense, offset partially by a $1.4 million decrease in other expense. The provision for credit losses decreased due mainly to the continued positive trend in credit quality metrics.

54

Third Quarter of 2019 Compared to Third Quarter of 2018

Net earnings for the third quarter of 2019 were $110.0 million, or $0.92 per diluted share, compared to net earnings for the third quarter of 2018 of $116.3 million, or $0.94 per diluted share. The $6.3 million decrease in net earnings was due primarily to lower net interest income of $8.1 million and lower noninterest income of $3.5 million, offset partially by a lower provision for credit losses of $4.5 million and lower noninterest expense of $1.3 million. Net interest income decreased due to interest expense growth of $22.6 million exceeding interest income growth of $14.6 million. Noninterest income decreased due mostly to lower dividends and gains on equity investments of $2.9 million and lower other commissions and fees of $1.5 million. The provision for credit losses decreased due primarily to a lower specific provision for impaired loans and a lower provision for the reserve for unfunded loan commitments during the third quarter of 2019. Noninterest expense declined due mainly to lower other professional services expense of $1.7 million.

Nine Months Ended September 30, 2019 Compared to Nine Months Ended September 30, 2018

Net earnings for the nine months ended September 30, 2019 were $350.8 million, or $2.91 per diluted share, compared to net earnings for the nine months ended September 30, 2018 of $350.3 million, or $2.79 per diluted share. The $0.5 million increase in net earnings was due primarily to a lower provision for credit losses of $14.0 million, lower noninterest expense of $3.5 million, and higher noninterest income of $0.3 million, offset partially by lower net interest income of $11.1 million and higher income tax expense of $6.2 million. The provision for credit losses decreased due primarily to lower provisions for the reserve for unfunded loan commitments during the nine months ended September 30, 2019. Noninterest expense declined due mainly to lower insurance and assessments expense of $4.3 million and lower intangible asset amortization of $2.9 million, offset partially by higher occupancy expense of $3.0 million. Noninterest income increased due mostly to a higher gain on sale of securities of $17.9 million, offset partially by lower other income of $8.5 million, lower dividends and gains on equity investments of $4.9 million, and a lower gain on sale of loans of $3.6 million. Net interest income decreased due to interest expense growth of $78.5 million exceeding interest income growth of $67.4 million.

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Net Interest Income

The following tables summarize 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, presented on a tax equivalent basis, for the periods indicated:

	Three Months Ended
	September 30, 2019						June 30, 2019						September 30, 2018
			Interest		Yields				Interest		Yields				Interest		Yields
	Average		Income/		and		Average		Income/		and		Average		Income/		and
	Balance		Expense		Rates		Balance		Expense		Rates		Balance		Expense		Rates
	(Dollars in thousands)
ASSETS:
Loans and leases (1)(2)(3)	$	18,539,281	$	276,309	5.91	%	$	18,239,690	$	284,513	6.26	%	$	16,913,792	$	264,371	6.20	%
Investment securities (2)(4)(5)	3,809,243		32,213		3.36	%	3,790,436		29,462		3.12	%	3,844,201		29,711		3.07	%
Deposits in financial institutions	445,152		2,424		2.16	%	228,702		1,349		2.37	%	108,485		519		1.90	%
Total interest‑earning assets (2)	22,793,676		310,946		5.41	%	22,258,828		315,324		5.68	%	20,866,478		294,601		5.60	%
Other assets	3,612,927						3,590,361						3,491,293
Total assets	$	26,406,603					$	25,849,189					$	24,357,771
LIABILITIES AND
STOCKHOLDERS’ EQUITY:
Interest checking	$	3,598,698	11,942		1.32	%	$	3,242,960	10,644		1.32	%	$	2,433,837	5,135		0.84	%
Money market	5,121,856		14,807		1.15	%	5,046,021		14,604		1.16	%	5,270,297		10,689		0.80	%
Savings	515,649		218		0.17	%	525,648		227		0.17	%	629,241		233		0.15	%
Time	2,795,573		13,736		1.95	%	2,731,156		13,245		1.95	%	1,778,552		5,064		1.13	%
Total interest‑bearing deposits	12,031,776		40,703		1.34	%	11,545,785		38,720		1.35	%	10,111,927		21,121		0.83	%
Borrowings	1,181,313		6,852		2.30	%	1,142,223		7,210		2.53	%	720,449		3,814		2.10	%
Subordinated debentures	456,011		7,417		6.45	%	454,901		7,705		6.79	%	452,312		7,390		6.48	%
Total interest‑bearing liabilities	13,669,100		54,972		1.60	%	13,142,909		53,635		1.64	%	11,284,688		32,325		1.14	%
Noninterest‑bearing demand deposits	7,487,555						7,544,027						8,120,306
Other liabilities	359,202						343,364						203,958
Total liabilities	21,515,857						21,030,300						19,608,952
Stockholders’ equity	4,890,746						4,818,889						4,748,819
Total liabilities and
stockholders' equity	$	26,406,603					$	25,849,189					$	24,357,771
Net interest income (2)			$	255,974					$	261,689					$	262,276
Net interest rate spread (2)					3.81	%					4.04	%					4.46	%
Net interest margin (2)					4.46	%					4.72	%					4.99	%
Total deposits (6)	$	19,519,331	$	40,703	0.83	%	$	19,089,812	$	38,720	0.81	%	$	18,232,233	$	21,121	0.46	%

_____________________

(1) Includes nonaccrual loans and leases and loan fees. Includes tax-equivalent adjustments related to tax-exempt interest on loans.

(2) Tax equivalent.

(3) Includes discount accretion on acquired loans of $2.6 million, $3.5 million, and $6.1 million for the three months ended September 30, 2019, June 30, 2019, and September 30, 2018, respectively.

(4) Includes tax-equivalent adjustments of $3.4 million, $0.5 million, and $1.7 million for the three months ended September 30, 2019, June 30, 2019, and September 30, 2018, respectively, related to tax-exempt income on investment securities. The federal statutory tax rate utilized was 21%.

(5) Yield on average investment securities for the three months ended September 30, 2019 would be 3.12% excluding a year-to-date tax-equivalent income adjustment recorded in the three months ended September 30, 2019.

(6) Total deposits is the sum of total interest-bearing deposits and noninterest-bearing demand deposits. The cost of total deposits is calculated as annualized interest expense on total deposits divided by average total deposits.

56

	Nine Months Ended
	September 30, 2019						September 30, 2018
			Interest		Yields				Interest		Yields
	Average		Income/		and		Average		Income/		and
	Balance		Expense		Rates		Balance		Expense		Rates
	(Dollars in thousands)
ASSETS:
Loans and leases (1)(2)(3)	$	18,282,807	$	835,335	6.11	%	$	16,724,942	$	776,160	6.20	%
Investment securities (2)(4)	3,855,486		92,248		3.20	%	3,779,007		87,613		3.10	%
Deposits in financial institutions	263,155		4,423		2.25	%	123,622		1,555		1.68	%
Total interest‑earning assets (2)	22,401,448		932,006		5.56	%	20,627,571		865,328		5.61	%
Other assets	3,611,442						3,516,331
Total assets	$	26,012,890					$	24,143,902
LIABILITIES AND
STOCKHOLDERS’ EQUITY:
Interest checking deposits	$	3,296,533	31,907		1.29	%	$	2,330,310	12,117		0.70	%
Money market deposits	5,147,060		44,319		1.15	%	5,108,029		25,573		0.67	%
Savings deposits	531,306		687		0.17	%	656,703		736		0.15	%
Time deposits	2,606,417		36,745		1.88	%	1,830,444		12,880		0.94	%
Total interest‑bearing deposits	11,581,316		113,658		1.31	%	9,925,486		51,306		0.69	%
Borrowings	1,180,482		21,772		2.47	%	504,898		7,383		1.96	%
Subordinated debentures	455,045		22,860		6.72	%	455,277		21,093		6.19	%
Total interest‑bearing liabilities	13,216,843		158,290		1.60	%	10,885,661		79,782		0.98	%
Noninterest‑bearing demand deposits	7,603,993						8,227,576
Other liabilities	349,914						203,721
Total liabilities	21,170,750						19,316,958
Stockholders’ equity	4,842,140						4,826,944
Total liabilities and
stockholders' equity	$	26,012,890					$	24,143,902
Net interest income (2)			$	773,716					$	785,546
Net interest rate spread (2)					3.96	%					4.63	%
Net interest margin (2)					4.62	%					5.09	%
Total deposits (5)	$	19,185,309	$	113,658	0.79	%	$	18,153,062	$	51,306	0.38	%

_____________________

(1) Includes nonaccrual loans and leases and loan fees. Includes tax-equivalent adjustments related to tax-exempt interest on loans.

(2) Tax equivalent.

(3) Includes discount accretion on acquired loans of $9.1 million and $22.4 million for the nine months ended September 30, 2019 and 2018, respectively.

(4) Includes tax-equivalent adjustments of $4.8 million and $5.7 million for the nine months ended September 30, 2019 and 2018, respectively, related to tax-exempt income on investment securities. The federal statutory tax rate utilized was 21%.

(5) Total deposits is the sum of total interest-bearing deposits and noninterest-bearing demand deposits. The cost of total deposits is calculated as annualized interest expense on total deposits divided by average total deposits.

57

Third Quarter of 2019 Compared to Second Quarter of 2019

Net interest income decreased by $8.7 million to $252.2 million for the third quarter of 2019 compared to $260.9 million for the second quarter of 2019 due mainly to a lower yield on average loans and leases, offset partially by a higher balance of average loans and leases and one more day in the third quarter of 2019. The tax equivalent yield on average loans and leases was 5.91% for the third quarter of 2019 compared to 6.26% for the second quarter of 2019. The decrease in the yield on average loans and leases was due principally to lower coupon interest resulting from the repricing of variable-rate loans in addition to lower loan prepayment fees in the third quarter compared to the second quarter. The prepayment fees added five basis points to the third quarter yield on average loans and leases and 14 basis points to the second quarter yield on average loans and leases.

The tax equivalent NIM was 4.46% for the third quarter of 2019 compared to 4.72% for the second quarter of 2019. The decrease in the tax equivalent NIM was due mainly to lower coupon interest, lower loan prepayment fees, and lower loan fee income. The prepayment fees added four basis points to the third quarter NIM and 11 basis points to the second quarter NIM.

The cost of average total deposits increased to 0.83% for the third quarter of 2019 from 0.81% for the second quarter of 2019 due to a higher average balance of core interest-bearing deposits combined with a lower average balance of noninterest-bearing deposits. The cost of average interest-bearing deposits declined by one basis point in the third quarter and the cost of average total deposits for the month of September was 0.80%, reflecting actions taken to reduce certain deposit rates in light of the federal funds target rate cuts during the third quarter.

Third Quarter of 2019 Compared to Third Quarter of 2018

Net interest income decreased by $8.1 million to $252.2 million for the third quarter of 2019 compared to $260.3 million for the third quarter of 2018 due to interest expense growth exceeding interest income growth. Interest expense increased by $22.6 million due mainly to a higher cost and balance of average total deposits, a lower balance of average noninterest-bearing deposits, and a higher cost and balance of average borrowings. Interest income increased by $14.6 million due primarily to a higher balance of average loans and leases. The tax equivalent yield on average loans and leases was 5.91% for the third quarter of 2019 compared to 6.20% for the same quarter of 2018. The decrease in the yield on average loans and leases was due in part to lower discount accretion on acquired loans (five basis points in the third quarter of 2019 compared to 14 basis points in the third quarter of 2018). The decrease in loan yield was also influenced by the credit de-risking initiatives taken over the last couple of years which has seen the replacement of higher yielding loans, such as cash flow, with lower yielding multi-family and equity fund loans.

The tax equivalent NIM was 4.46% for the third quarter of 2019 compared to 4.99% for the same quarter last year. The decrease in the tax equivalent NIM was due mostly to higher deposit and borrowing costs, as well as the decrease in the yield on average loans and leases as described above. Total discount accretion on acquired loans contributed four basis points to the NIM for the third quarter of 2019 compared to 12 basis points for the third quarter of 2018.

The cost of average total deposits increased to 0.83% for the third quarter of 2019 from 0.46% for the third quarter of 2018 due mainly to higher rates paid on deposits in conjunction with increased market rates, along with a shift in our deposit mix resulting from increases in average interest-bearing deposits and a decrease in average noninterest-bearing demand deposits.

58

Nine Months Ended September 30, 2019 Compared to Nine Months Ended September 30, 2018

Net interest income decreased by $11.1 million to $768.0 million for the nine months ended September 30, 2019 compared to $779.1 million for the nine months ended September 30, 2018 due to interest expense growth exceeding interest income growth. Interest expense increased by $78.5 million due mainly to a higher cost and balance of average total deposits, a lower balance of average noninterest-bearing deposits, and a higher cost and balance of average borrowings. Interest income increased by $67.4 million due primarily to a higher balance of average loans and leases. The tax equivalent yield on average loans and leases was 6.11% for the nine months ended September 30, 2019 compared to 6.20% for the same period in 2018. The decrease in the yield on average loans and leases was due in part to lower discount accretion on acquired loans (six basis points for the nine months ended September 30, 2019 compared to 18 basis points for the nine months ended September 30, 2018). The decrease in loan yield was also influenced by the credit de-risking initiatives taken over the last couple of years which has seen the replacement of higher yielding loans, such as cash flow, with lower yielding multi-family and equity fund loans. These factors were partially offset by upward repricing of variable-rate loans attributable to four quarter point increases in the fed funds target rate during 2018 and in effect through the first half of 2019, only recently mitigated by two quarter point cuts to the fed funds target rate during the third quarter of 2019.

The tax equivalent NIM for the nine months ended September 30, 2019 was 4.62% compared to 5.09% for the same period last year. The decrease in the tax equivalent NIM was due mostly to higher deposit and borrowing costs, as well as the decrease in the yield on average loans and leases as described above. Total discount accretion on acquired loans contributed six basis points to the NIM for the nine months ended September 30, 2019 compared to 15 basis points for the nine months ended September 30, 2018.

The cost of average total deposits increased to 0.79% for the nine months ended September 30, 2019 from 0.38% for the nine months ended September 30, 2018 due mainly to higher rates paid on deposits in conjunction with increased market rates, along with a shift in our deposit mix resulting from increases in average interest-bearing deposits and a decrease in average noninterest-bearing demand deposits.

59

Provision for Credit Losses

The following table sets forth the details of the provision for credit losses on loans and leases held for investment and information regarding credit quality metrics for the periods indicated:

	Three Months Ended									Nine Months Ended
	September 30,			June 30,			September 30,			September 30,
	2019			2019			2018			2019			2018
	(Dollars in thousands)
Provision For Credit Losses:
Addition to allowance for loan and lease losses	$	8,000		$	10,000		$	11,500		$	22,000		$	26,274
(Reduction in) addition to reserve for unfunded
loan commitments	(1,000		)	(2,000		)	—			(3,000		)	6,726
Total provision for credit losses	$	7,000		$	8,000		$	11,500		$	19,000		$	33,000
Credit Quality Metrics:
Net charge‑offs on loans and leases held for
investment (1)	$	4,485		$	11,244		$	1,719		$	15,920		$	23,810
Annualized net charge‑offs to average loans and leases	0.10		%	0.25		%	0.04		%	0.12		%	0.19		%
At period end:
Allowance for credit losses	$	172,413		$	169,898		$	177,281
Allowance for credit losses to loans and leases
held for investment	0.92		%	0.92		%	1.03		%
Allowance for credit losses to nonaccrual
loans and leases held for investment	174.0		%	209.1		%	156.9		%
Nonaccrual loans and leases held for investment	$	99,113		$	81,265		$	112,972
Performing TDRs held for investment	16,329			16,464			22,106
Total impaired loans and leases	$	115,442		$	97,729		$	135,078
Classified loans and leases held for investment	$	188,607		$	190,979		$	260,459

______________________

(1) See "- Balance Sheet Analysis - Allowance for Credit Losses on Loans and Leases Held for Investment" for detail of charge-offs and recoveries by loan portfolio segment, class, and subclass for the periods presented.

Provisions for credit losses are charged to earnings for both on and off‑balance sheet credit exposures. The provision for credit losses on our loans and leases held for investment is based on our allowance methodology and is an expense that, in our judgment, is required to maintain an adequate allowance for credit losses.

The allowance for loan and lease losses has a general reserve component for loans and leases with no credit impairment and a specific reserve component for impaired loans and leases. Our allowance methodology for the general reserve component includes both quantitative and qualitative loss factors that are applied against the population of unimpaired loans and leases. The quantitative loss factors consider the likelihood of loans defaulting based on the historical degree that similar loans defaulted and the degree of credit losses based on the historical average degree of loss experienced for these similar loans and leases pooled both by loan or lease type and credit risk rating; loans with more adverse credit risk ratings have higher quantitative loss factors. The qualitative loss factors consider, among other things, current economic trends and forecasts, current collateral values and performance trends, credit performance trends, and the loan portfolio's current composition.

60

We recorded a provision for credit losses of $7.0 million in the third quarter of 2019, $8.0 million in the second quarter of 2019, and $11.5 million in the third quarter of 2018. The provision for credit losses was $19.0 million for the nine months ended September 30, 2019 compared to $33.0 million for the nine months ended September 30, 2018.

The $1.0 million decrease in the provision for credit losses for the third quarter of 2019 compared to the second quarter of 2019 was due mainly to higher specific provisions for credit losses on impaired loans during the second quarter of 2019, substantially all of which were charged off during the quarter.

The $4.5 million decrease in the provision for credit losses for the third quarter of 2019 compared to the third quarter of 2018 was due mainly to higher specific provisions for impaired loans in the third quarter of 2018 and a lower provision for the reserve for unfunded loan commitments during the third quarter of 2019.

The $14.0 million decrease in the provision for credit losses for the first nine months of 2019 compared to the same period last year was due primarily to lower provisions for the reserve for unfunded loan commitments during the first nine months of 2019 due to lower expected line utilization by borrowers in 2019 as compared to 2018.

Certain circumstances may lead to increased provisions for credit losses in the future. Examples of such circumstances are an increased amount of classified and/or impaired loans and leases, net loan and lease and unfunded commitment growth, and changes in economic conditions. Changes in economic conditions include the rate of economic growth, the unemployment rate, the rate of inflation, increases in the general level of interest rates, declines in real estate values, and adverse conditions in borrowers’ businesses. See further discussion in “- Balance Sheet Analysis - Allowance for Credit Losses on Loans and Leases Held for Investment” contained herein.

Noninterest Income

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

	Three Months Ended							Nine Months Ended
	September 30,		June 30,			September 30,		September 30,
Noninterest Income	2019		2019			2018		2019		2018
	(In thousands)
Other commissions and fees	$	10,855	$	11,590		$	12,397	$	33,453	$	34,429
Leased equipment income	9,615		9,182			9,120		28,079		28,497
Service charges on deposit accounts	3,525		3,771			3,979		11,026		12,418
Gain on sale of loans and leases	765		326			—		1,091		4,675
Gain on sale of securities	908		22,192			826		25,261		7,390
Other income:
Dividends and gains (losses) on equity investments	14		(83		)	2,895		227		5,138
Warrant income	3,936		1,214			3,818		7,429		5,291
Other	3,811		2,701			3,877		8,820		17,271
Total noninterest income	$	33,429	$	50,893		$	36,912	$	115,386	$	115,109

Third Quarter of 2019 Compared to Second Quarter of 2019

Noninterest income decreased by $17.5 million to $33.4 million for the third quarter of 2019 compared to $50.9 million for the second quarter of 2019 due mainly to a $21.3 million decrease in the gain on sale of securities attributable to a net gain of $0.9 million on sales of $143.4 million of securities in the third quarter of 2019 compared to a net gain of $22.2 million on sales of $980.4 million of securities in the second quarter of 2019 as we repositioned a portion of our securities portfolio in the second quarter of 2019 to shorten the duration of the portfolio, to enhance liquidity and to take advantage of municipal security price appreciation due to market dynamics from tax law changes. Partially offsetting the decrease in the gain on sale of securities was a $2.7 million increase in warrant income and a $1.1 million increase in other income for the third quarter of 2019. The increase in warrant income was due to higher gains resulting from exercised warrants due to the IPO or sale of the borrowers. The increase in other income was mainly due to higher gains from lease terminations.

61

Third Quarter of 2019 Compared to Third Quarter of 2018

Noninterest income decreased by $3.5 million to $33.4 million for the third quarter of 2019 compared to $36.9 million for the third quarter of 2018 due mainly to a $2.9 million decrease in dividends and gains on equity investments and a $1.5 million decrease in other commissions and fees. Dividends and gains on equity investments decreased due primarily to lower gains on the sale of equity investments. Other commissions and fees decreased due primarily to lower prepayment penalty fees of $1.8 million, offset partially by higher credit card fee income of $0.4 million.

Nine Months Ended September 30, 2019 Compared to Nine Months Ended September 30, 2018

Noninterest income increased by $0.3 million to $115.4 million for the nine months ended September 30, 2019 compared to $115.1 million for the nine months ended September 30, 2018 due mostly to a higher gain on sale of securities of $17.9 million, offset partially by decreases of $8.5 million in other income, $4.9 million in dividends and gains on equity investments, and $3.6 million in gain on sale of loans and leases. The increase in gain on sale of securities was attributable to a net gain of $25.3 million on sales of $1.5 billion of securities during the nine months ended September 30, 2019 compared to a net gain of $7.4 million on sales of $492.7 million of securities during the nine months ended September 30, 2018. The higher gain on sale of securities in 2019 is primarily due to the repositioning of a portion of our securities portfolio in the second quarter of 2019 to shorten the duration of the portfolio, to enhance liquidity and to take advantage of municipal security price appreciation due to market dynamics from tax law changes. Dividends and gains on equity investments decreased due primarily to lower gains on the sale of equity investments and lower dividends received in the first nine months of 2019 as compared to the same period in 2018. The decrease in gain on sale of loans was attributable to a net gain of $1.1 million on sales of $101.4 million of loans and leases during the nine months ended September 30, 2019 compared to a net gain of $4.7 million on sales of $641.9 million of loans and leases during the nine months ended September 30, 2018. The loans and leases sold during the first nine months of 2018 include the sale of a large nonaccrual loan for a $2.4 million gain and the settlement of our December 31, 2017 loans held for sale of $481.1 million for a $1.3 million gain.

Noninterest Expense

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

	Three Months Ended								Nine Months Ended
	September 30,		June 30,			September 30,			September 30,
Noninterest Expense	2019		2019			2018			2019			2018
	(In thousands)
Compensation	$	71,424	$	68,956		$	72,333		$	211,225		$	213,269
Occupancy	14,089		14,457			13,069			42,866			39,867
Data processing	7,044		6,817			6,740			20,786			20,295
Leased equipment depreciation	5,951		5,558			5,001			17,160			15,613
Intangible asset amortization	4,833		4,870			5,587			14,573			17,520
Other professional services	4,400		4,629			6,058			13,542			15,754
Insurance and assessments	4,100		4,098			5,446			12,236			16,503
Loan expense	3,628		3,451			2,249			9,964			7,578
Acquisition, integration and reorganization costs	—		—			800			618			800
Foreclosed assets expense (income), net	8		(146		)	(257		)	(109		)	(440		)
Other	11,332		12,737			11,127			35,662			35,238
Total noninterest expense	$	126,809	$	125,427		$	128,153		$	378,523		$	381,997

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Third Quarter of 2019 Compared to Second Quarter of 2019

Noninterest expense increased by $1.4 million to $126.8 million for the third quarter of 2019 compared to $125.4 million for the second quarter of 2019 attributable primarily to a $2.5 million increase in compensation expense, offset partially by a $1.4 million decrease in other expense. Compensation expense increased due mainly to higher incentives expense and higher stock compensation expense, partially offset by lower payroll taxes and benefits expense. Other expense decreased primarily due to lower business development expense and a loss on the early termination of an office lease in the second quarter.

Third Quarter of 2019 Compared to Third Quarter of 2018

Noninterest expense decreased by $1.3 million to $126.8 million for the third quarter of 2019 compared to $128.2 million for the third quarter of 2018 due mainly to decreases of $1.7 million in other professional services expense and $1.3 million in insurance and assessments expense, offset partially by a $1.4 million increase in loan expense. Other professional services expense declined due mainly to lower legal fees and lower professional fees for implementing new accounting standards. Insurance and assessments expense decreased due primarily to the ending in the fourth quarter of 2018 of a 4.5 basis point surcharge on the FDIC insurance assessments of depository institutions with more than $10 billion in total consolidated assets. Loan expense increased due mainly to higher loan servicing and workout expense.

Nine Months Ended September 30, 2019 Compared to Nine Months Ended September 30, 2018

Noninterest expense decreased by $3.5 million to $378.5 million for the nine months ended September 30, 2019 compared to $382.0 million for the nine months ended September 30, 2018 due mainly to decreases of $4.3 million in insurance and assessments expense and $2.9 million in intangible asset amortization, offset partially by an increase of $3.0 million in occupancy expense. Insurance and assessments expense decreased due primarily to the ending in the fourth quarter of 2018 of a 4.5 basis point surcharge on the FDIC insurance assessments of depository institutions with more than $10 billion in total consolidated assets. Intangible asset amortization declined due mostly to lower amortization on the Square 1 and CUB intangible assets. Occupancy expense increased due mainly to a greater number of properties leased in 2019 as compared to 2018 and due to operating lease ROU asset impairments recorded in 2019.

Income Taxes

The effective tax rate for the third quarter of 2019 was 27.5% compared to 28.2% for the second quarter of 2019 and 26.2% for the third quarter of 2018. The effective tax rate was 27.8% and 26.9% for the nine months ended September 30, 2019 and 2018. The Company’s blended statutory tax rate for federal and state is 28.3% and the effective tax rate for the full year 2019 is estimated to be in the range of 27-28%.

63

Balance Sheet Analysis

Securities Available-for-Sale

The following table presents the composition and durations of our securities available-for-sale as of the dates indicated:

	September 30, 2019					June 30, 2019					December 31, 2018
	Fair		% of		Duration	Fair		% of		Duration	Fair		% of		Duration
Security Type	Value		Total		(in years)	Value		Total		(in years)	Value		Total		(in years)
	(Dollars in thousands)
Agency residential CMOs	$	1,172,555	31	%	3.6	$	1,150,474	30	%	3.5	$	632,850	16	%	4.3
Agency commercial MBS	1,100,017		29	%	4.7	1,058,846		28	%	5.0	1,112,704		28	%	4.9
Municipal securities	721,981		19	%	7.5	736,570		19	%	7.3	1,312,194		33	%	7.3
Agency residential MBS	324,929		8	%	3.3	351,360		9	%	3.4	281,088		7	%	3.7
Asset-backed securities	214,151		6	%	0.9	227,121		6	%	0.9	81,385		2	%	2.4
Collateralized loan obligations	113,874		3	%	0.2	93,802		3	%	0.1	—		—	%	—
Private label residential CMOs	93,868		2	%	4.1	112,037		3	%	4.6	101,205		2	%	4.2
SBA securities	49,746		1	%	4.1	51,812		1	%	4.0	67,047		2	%	3.5
Corporate debt securities	21,024		1	%	11.3	20,034		1	%	11.4	17,553		—	%	11.0
U.S. Treasury securities	5,203		—	%	3.4	5,188		—	%	3.6	403,405		10	%	3.0
Total securities available-
for-sale	$	3,817,348	100	%	4.4	$	3,807,244	100	%	4.5	$	4,009,431	100	%	5.2

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

	September 30, 2019
	Fair		% of
Municipal Securities by State	Value		Total
	(Dollars in thousands)
California	$	192,704	27	%
Washington	115,579		16	%
Utah	56,603		8	%
New York	52,512		7	%
Texas	40,865		6	%
Florida	30,003		4	%
Idaho	28,182		4	%
Oregon	26,674		4	%
Illinois	25,046		3	%
Ohio	19,152		2	%
Total of ten largest states	587,320		81	%
All other states	134,661		19	%
Total municipal securities	$	721,981	100	%

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Loans and Leases Held for Investment

The following table presents the composition of our loans and leases held for investment, net of deferred fees, by loan portfolio segment, class, and subclass as of the dates indicated:

	September 30, 2019				June 30, 2019				December 31, 2018
			% of				% of				% of
Loan and Lease Portfolio	Amount		Total		Amount		Total		Amount		Total
	(Dollars in thousands)
Real estate mortgage:
Healthcare real estate	$	344,576	2	%	$	328,089	2	%	$	451,776	3	%
Hospitality	542,041		3	%	534,765		3	%	575,516		3	%
SBA program	556,160		3	%	557,070		3	%	559,113		3	%
Other commercial real estate	2,857,789		15	%	3,015,350		16	%	3,237,893		18	%
Total commercial real estate mortgage	4,300,566		23	%	4,435,274		24	%	4,824,298		27	%
Income producing and other residential	3,490,175		19	%	3,534,999		19	%	2,971,213		16	%
Other residential real estate	106,183		—	%	105,753		1	%	122,630		1	%
Total income producing and other
residential real estate mortgage	3,596,358		19	%	3,640,752		20	%	3,093,843		17	%
Total real estate mortgage	7,896,924		42	%	8,076,026		44	%	7,918,141		44	%
Real estate construction and land:
Commercial	1,009,362		6	%	972,891		5	%	912,583		5	%
Residential	1,542,112		8	%	1,403,239		8	%	1,321,073		8	%
Total real estate construction and land	2,551,474		14	%	2,376,130		13	%	2,233,656		13	%
Total real estate	10,448,398		56	%	10,452,156		57	%	10,151,797		57	%
Commercial:
Lender finance & timeshare	2,234,305		12	%	2,021,989		11	%	1,780,731		10	%
Equipment finance	784,944		4	%	764,662		4	%	734,331		4	%
Other asset-based	355,372		2	%	407,923		2	%	434,005		2	%
Premium finance	436,120		2	%	411,433		2	%	356,354		2	%
Total asset-based	3,810,741		20	%	3,606,007		19	%	3,305,421		18	%
Equity fund loans	1,246,695		7	%	1,115,677		6	%	797,500		4	%
Early stage	202,868		1	%	221,274		1	%	225,566		1	%
Expansion stage	674,751		4	%	785,003		4	%	908,047		5	%
Late stage	85,335		—	%	72,789		1	%	107,635		1	%
Total venture capital	2,209,649		12	%	2,194,743		12	%	2,038,748		11	%
Secured business loans	549,644		3	%	557,111		3	%	788,012		4	%
Security monitoring	618,404		3	%	630,210		3	%	643,369		4	%
Other lending	617,302		3	%	498,561		3	%	514,947		3	%
Cash flow	72,817		1	%	87,682		1	%	114,098		1	%
Total other commercial	1,858,167		10	%	1,773,564		10	%	2,060,426		12	%
Total commercial	7,878,557		42	%	7,574,314		41	%	7,404,595		41	%
Consumer	408,588		2	%	446,382		2	%	401,321		2	%
Total loans and leases held for investment,
net of deferred fees	$	18,735,543	100	%	$	18,472,852	100	%	$	17,957,713	100	%

 

65

The following table presents the geographic composition of our real estate loans held for investment, net of deferred fees, by the top 10 states and all other states combined (in the order presented for the current quarter-end) as of the dates indicated:

	September 30, 2019				December 31, 2018
			% of				% of
Real Estate Loans by State	Amount		Total		Amount		Total
	(Dollars in thousands)
California	$	6,416,436	61	%	$	5,798,045	57	%
New York	583,996		6	%	855,644		8	%
Florida	497,658		5	%	547,054		5	%
Washington	310,612		3	%	253,545		3	%
Texas	301,840		3	%	378,834		4	%
Oregon	269,159		3	%	227,067		2	%
Arizona	176,562		2	%	235,425		2	%
Virginia	175,208		2	%	206,920		2	%
New Jersey	152,016		1	%	179,045		2	%
District of Columbia	148,307		1	%	81,174		1	%
Total of 10 largest states	9,031,794		87	%	8,762,753		86	%
All other states	1,416,604		13	%	1,389,044		14	%
Total real estate loans held for investment, net of deferred fees	$	10,448,398	100	%	$	10,151,797	100	%

The following table presents a roll forward of loans and leases held for investment, net of deferred fees, for the periods indicated:

	Three Months Ended			Nine Months Ended
Roll Forward of Loans and Leases Held for Investment, Net of Deferred Fees (1)	September 30, 2019			September 30, 2019
	(Dollars in thousands)
Balance, beginning of period	$	18,472,852		$	17,957,713
Additions:
Production	1,230,817			3,841,954
Disbursements	1,288,111			3,774,830
Total production and disbursements	2,518,928			7,616,784
Reductions:
Payoffs	(1,390,883		)	(3,853,396		)
Paydowns	(837,551		)	(2,856,502		)
Total payoffs and paydowns	(2,228,434		)	(6,709,898		)
Sales	(21,302		)	(76,292		)
Transfers to foreclosed assets	—			(37		)
Charge-offs	(6,501		)	(27,603		)
Transfers to loans held for sale	—			(25,124		)
Total reductions	(2,256,237		)	(6,838,954		)
Net increase	262,691			777,830
Balance, end of period	$	18,735,543		$	18,735,543
Weighted average rate on production (2)	5.45		%	5.21		%

_______________________________________ 

(1) Includes direct financing leases but excludes equipment leased to others under operating leases.

(2) The weighted average rate on production presents contractual rates on a tax equivalent basis and does not include amortized fees. Amortized fees added approximately 30 basis points to loan yields for the nine months ended September 30, 2019.

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Allowance for Credit Losses on Loans and Leases Held for Investment

The allowance for credit losses on loans and leases held for investment 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 "Accrued interest payable and other liabilities" on the condensed consolidated balance sheets. For loans and leases acquired and measured at fair value and deemed non-impaired on the acquisition date, our allowance methodology measures deterioration in credit quality or other inherent risks related to these acquired assets that may occur after the acquisition date.

The allowance for credit 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 our review of the credit quality of the loan and lease portfolio, which includes loan and lease payment trends, borrowers' compliance with loan agreements, borrowers' current and budgeted financial performance, collateral valuation trends, and current economic factors and external conditions that may affect our borrowers' ability to make payments to us in accordance with contractual terms. Loans and leases that are deemed to be uncollectable 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 allowance for loan and lease losses has a general reserve component for unimpaired loans and leases and a specific reserve component for impaired loans and leases.

A loan or lease is considered impaired when it is probable that we will be unable to collect all amounts due according to the original contractual terms of the agreement. We assess our loans and leases for impairment on an ongoing basis using certain criteria such as payment performance, borrower reported financial results and budgets, and other external factors when appropriate. We measure impairment of a loan or lease based upon the fair value of the underlying collateral if the loan or lease is collateral-dependent or the present value of cash flows, discounted at the effective interest rate, if the loan or lease is not collateral-dependent. To the extent a loan or lease balance exceeds the estimated collectable value, a specific reserve or charge-off is recorded depending upon either the certainty of the estimate of loss or the fair value of the loan’s collateral if the loan is collateral-dependent. Impaired loans and leases with outstanding balances less than or equal to $250,000 may not be individually assessed for impairment but would be assessed with reserves based on the average loss severity on historical impaired loans with similar risk characteristics.

Our allowance methodology for the general reserve component includes both quantitative and qualitative loss factors which are applied to our population of unimpaired loans and leases to estimate our general reserves. The quantitative loss factors consider the likelihood of loans defaulting based on the historical degree that similar loans defaulted and the degree of credit losses based on the historical average degree of loss experienced for these similar loans and leases pooled both by loan or lease type and credit risk rating; loans with more adverse credit risk ratings have higher quantitative loss factors. The qualitative loss factors consider, among other things, current economic trends and forecasts, current collateral values and performance trends, credit performance trends, and the loan portfolio's current composition.

The qualitative criteria we consider when establishing the loss factors include the following:

• current economic trends and forecasts;

• current collateral values, performance trends, and overall outlook in the markets where we lend;

• legal and regulatory matters that could impact our borrowers’ ability to repay loans and leases;

• loan and lease portfolio composition and any loan concentrations;

• current lending policies and the effects of any new policies or policy amendments;

• loan and lease production volume and mix;

• loan and lease portfolio credit performance trends;

• results of independent credit reviews; and

• changes in management related to credit administration functions.

67

We estimate the reserve for unfunded loan commitments using the same loss factors as used for the allowance for loan and lease losses. The reserve for unfunded loan commitments is computed using expected future usage of the unfunded commitments based on historical usage of unfunded commitments for the various loan types.

The allowance for credit losses is directly correlated to the credit risk ratings of our loans. To ensure the accuracy of our credit risk ratings, an independent credit review function assesses the appropriateness of the credit risk ratings assigned to loans on a regular basis. The credit risk ratings assigned to every loan and lease are either “pass,” “special mention,” “substandard,” or “doubtful” and defined as follows:

• Pass: Loans and leases rated as "pass" are not adversely classified and collection and repayment in full are expected.

• Special Mention: Loans and leases rated 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 rated 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 rated as "doubtful" have all the weaknesses of those rated 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 with assigned credit risk ratings of "substandard" and "doubtful" together as "classified" loans and leases. For further information on classified loans and leases, see Note 4. Loans and Leases, of the Notes to Condensed Consolidated Financial Statements (Unaudited) contained in "Item 1. Condensed Consolidated Financial Statements (Unaudited)."

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 and lease 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 increases in the provisions for credit losses and the allowance for credit losses.

Management believes the allowance for credit losses is appropriate for the known and inherent risks in our loan and lease portfolio and 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 result in a significant impact to the Company's financial statements. In addition, current credit risk ratings are subject to change as we continue to monitor our loans and leases. To the extent we experience, for example, increased levels of borrower loan defaults, borrowers’ noncompliance with our loan agreements, adverse changes in collateral values, or changes in economic and business conditions that adversely affect our borrowers, our classified loans and leases may increase. Higher levels of classified loans and leases generally result in increased provisions for credit losses and an increased allowance for credit losses. Although we have established an allowance for credit losses that we consider appropriate, there can be no assurance that the established allowance will be sufficient to absorb future losses.

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

	September 30,			June 30,			December 31,			September 30,
Allowance for Credit Losses Data	2019			2019			2018			2018
	(Dollars in thousands)
Allowance for loan and lease losses	$	138,552		$	135,037		$	132,472		$	141,920
Reserve for unfunded loan commitments	33,861			34,861			36,861			35,361
Total allowance for credit losses	$	172,413		$	169,898		$	169,333		$	177,281
Allowance for credit losses to loans and leases held for investment	0.92		%	0.92		%	0.94		%	1.03		%
Allowance for credit losses to nonaccrual loans and leases held for investment	174.0		%	209.1		%	213.5		%	156.9		%

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The following table presents the changes in our allowance for credit losses on loans and leases held for investment for the periods indicated:

	Three Months Ended									Nine Months Ended
	September 30,			June 30,			September 30,			September 30,
Allowance for Credit Losses Roll Forward	2019			2019			2018			2019			2018
	(Dollars in thousands)
Balance, beginning of period (1)	$	169,898		$	173,142		$	167,500		$	169,333		$	168,091
Provision for credit losses:
Addition to allowance for loan and lease losses	8,000			10,000			11,500			22,000			26,274
(Reduction in) addition to reserve for unfunded
loan commitments	(1,000		)	(2,000		)	—			(3,000		)	6,726
Total provision for credit losses	7,000			8,000			11,500			19,000			33,000
Loans and leases charged off:
Real estate mortgage	(120		)	(534		)	(726		)	(850		)	(8,071		)
Real estate construction and land	—			—			—			—			—
Commercial	(6,021		)	(16,927		)	(2,373		)	(25,951		)	(25,321		)
Consumer	(360		)	(176		)	(209		)	(802		)	(304		)
Total loans and leases charged off	(6,501		)	(17,637		)	(3,308		)	(27,603		)	(33,696		)
Recoveries on loans charged off:
Real estate mortgage	95			240			223			478			1,999
Real estate construction and land	—			—			22			—			49
Commercial	1,898			6,080			1,303			11,084			7,702
Consumer	23			73			41			121			136
Total recoveries on loans charged off	2,016			6,393			1,589			11,683			9,886
Net charge-offs	(4,485		)	(11,244		)	(1,719		)	(15,920		)	(23,810		)
Balance, end of period	$	172,413		$	169,898		$	177,281		$	172,413		$	177,281
Annualized net charge-offs to average loans and leases	0.10		%	0.25		%	0.04		%	0.12		%	0.19		%

_________________________________________

(1) The allowance for credit losses related to PCI loans of $6.4 million as of December 31, 2017 is reflected in the beginning balance for the nine months ended September 30, 2018.

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The following table presents charge-offs by loan portfolio segment, class, and subclass for the periods indicated:

	Three Months Ended						Nine Months Ended
	September 30,		June 30,		September 30,		September 30,
Allowance for Credit Losses Charge-offs	2019		2019		2018		2019		2018
	(In thousands)
Real estate mortgage:
Healthcare real estate	$	—	$	—	$	—	$	—	$	—
Hospitality	—		—		—		—		—
SBA program	120		534		468		750		2,594
Other commercial real estate	—		—		258		9		5,271
Total commercial real estate mortgage	120		534		726		759		7,865
Income producing and other residential	—		—		—		—		145
Other residential real estate	—		—		—		91		61
Total income producing and other residential
real estate mortgage	—		—		—		91		206
Total real estate mortgage	120		534		726		850		8,071
Real estate construction and land:
Commercial	—		—		—		—		—
Residential	—		—		—		—		—
Total real estate construction and land	—		—		—		—		—
Commercial:
Lender finance & timeshare	—		—		—		—		8
Equipment finance	—		—		—		—		2,934
Other asset-based	—		11,800		673		11,800		1,033
Premium finance	—		—		—		—		—
Total asset-based	—		11,800		673		11,800		3,975
Expansion stage	2,919		1,463		1,142		4,586		5,811
Early stage	1,448		—		—		1,544		3,721
Equity fund loans	—		—		—		—		—
Late stage	—		—		—		—		—
Total venture capital	4,367		1,463		1,142		6,130		9,532
Security monitoring	—		—		—		1,707		—
Secured business loans	1,111		100		71		1,220		624
Other lending	437		1,182		487		2,133		1,251
Cash flow	106		2,382		—		2,961		9,939
Total other commercial	1,654		3,664		558		8,021		11,814
Total commercial	6,021		16,927		2,373		25,951		25,321
Consumer	360		176		209		802		304
Total charge-offs	$	6,501	$	17,637	$	3,308	$	27,603	$	33,696

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The following table presents recoveries by portfolio segment, class, and subclass for the periods indicated:

	Three Months Ended						Nine Months Ended
	September 30,		June 30,		September 30,		September 30,
Allowance for Credit Losses Recoveries	2019		2019		2018		2019		2018
	(In thousands)
Real estate mortgage:
Healthcare real estate	$	—	$	—	$	—	$	—	$	—
Hospitality	—		—		—		—		—
SBA program	77		88		18		198		294
Other commercial real estate	12		59		198		143		360
Total commercial real estate mortgage	89		147		216		341		654
Income producing and other residential	—		—		—		—		1,208
Other residential real estate	6		93		7		137		137
Total income producing and other residential
real estate mortgage	6		93		7		137		1,345
Total real estate mortgage	95		240		223		478		1,999
Real estate construction and land:
Commercial	—		—		22		—		42
Residential	—		—		—		—		7
Total real estate construction and land	—		—		22		—		49
Commercial:
Lender finance & timeshare	3		1		1		5		2
Equipment finance	—		—		—		11		90
Other asset-based	227		239		68		545		187
Premium finance	—		—		—		—		—
Total asset-based	230		240		69		561		279
Expansion stage	75		1,961		704		2,133		5,115
Early stage	353		2,862		281		5,370		563
Equity fund loans	—		—		—		—		—
Late stage	—		—		—		—		—
Total venture capital	428		4,823		985		7,503		5,678
Security monitoring	181		—		—		181		—
Secured business loans	731		818		160		2,176		553
Other lending	297		190		80		612		1,183
Cash flow	31		9		9		51		9
Total other commercial	1,240		1,017		249		3,020		1,745
Total commercial	1,898		6,080		1,303		11,084		7,702
Consumer	23		73		41		121		136
Total recoveries	$	2,016	$	6,393	$	1,589	$	11,683	$	9,886

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Deposits

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

	September 30, 2019				June 30, 2019				December 31, 2018
			% of				% of				% of
Deposit Composition	Amount		Total		Amount		Total		Amount		Total
	(Dollars in thousands)
Noninterest-bearing demand	$	7,441,185	38	%	$	7,299,213	39	%	$	7,888,915	42	%
Interest checking	3,645,660		18	%	3,220,353		17	%	2,842,463		15	%
Money market	4,870,344		25	%	4,578,083		24	%	5,043,871		27	%
Savings	514,075		3	%	519,839		3	%	571,422		3	%
Total core deposits	16,471,264		84	%	15,617,488		83	%	16,346,671		87	%
Non-core non-maturity deposits	479,732		2	%	436,833		2	%	518,192		3	%
Total non-maturity deposits	16,950,996		86	%	16,054,321		85	%	16,864,863		90	%
Time deposits $250,000 and under	2,282,976		12	%	2,284,023		12	%	1,593,453		8	%
Time deposits over $250,000	499,231		2	%	467,412		3	%	412,185		2	%
Total time deposits	2,782,207		14	%	2,751,435		15	%	2,005,638		10	%
Total deposits	$	19,733,203	100	%	$	18,805,756	100	%	$	18,870,501	100	%

During the third quarter of 2019, total deposits increased by $927.4 million to $19.7 billion, due mainly to increases of $853.8 million in core deposits, $42.9 million in non-core non-maturity deposits, and $30.8 million in time deposits. The increase in core deposits was due primarily to increases of $425.3 million in interest checking deposits, $292.3 million in money market deposits, and $142.0 million in noninterest-bearing demand deposits. At September 30, 2019, core deposits totaled $16.5 billion, or 84% of total deposits, including $7.4 billion of noninterest-bearing demand deposits, or 38% of total deposits.

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

	Time Deposits
	$250,000		Over
September 30, 2019	and Under		$250,000		Total
	(In thousands)
Maturities:
Due in three months or less	$	1,003,747	$	223,291	$	1,227,038
Due in over three months through six months	680,369		143,599		823,968
Due in over six months through twelve months	502,349		109,600		611,949
Total due within twelve months	2,186,465		476,490		2,662,955
Due in over 12 months through 24 months	77,660		20,060		97,720
Due in over 24 months	18,851		2,681		21,532
Total	$	2,282,976	$	499,231	$	2,782,207

Client Investment Funds

In addition to deposit products, we also offer select clients non-depository cash investment options through PWAM, our registered investment adviser subsidiary, and third-party money market sweep products. PWAM provides customized investment advisory and asset management solutions. At September 30, 2019, total off-balance sheet client investment funds were $1.8 billion, of which $1.5 billion was managed by PWAM. At December 31, 2018, total off-balance sheet client investment funds were $1.9 billion, of which $1.5 billion was managed by PWAM.

72

Credit Quality

Nonperforming Assets, Performing TDRs, and Classified Loans and Leases

The following table presents information on our nonperforming assets, performing TDRs, and classified loans and leases as of the dates indicated:

	September 30,			June 30,			December 31,			September 30,
	2019			2019			2018			2018
	(Dollars in thousands)
Nonaccrual loans and leases held for investment	$	99,113		$	81,265		$	79,333		$	112,972
Accruing loans contractually past due 90 days or more	—			—			—			—
Foreclosed assets, net	1,366			1,472			5,299			4,407
Total nonperforming assets	$	100,479		$	82,737		$	84,632		$	117,379
Performing TDRs held for investment	$	16,329		$	16,464		$	17,701		$	22,106
Classified loans and leases held for investment	$	188,607		$	190,979		$	237,110		$	260,459
Nonaccrual loans and leases held for investment to
loans and leases held for investment	0.53		%	0.44		%	0.44		%	0.66		%
Nonperforming assets to loans and leases held for investment
and foreclosed assets, net	0.54		%	0.45		%	0.47		%	0.68		%
Classified loans and leases held for investment
to loans and leases held for investment	1.01		%	1.03		%	1.32		%	1.51		%

Nonaccrual Loans and Leases Held for Investment

The following table presents our nonaccrual loans and leases held for investment and accruing loans and leases past due between 30 and 89 days by loan portfolio segment and class as of the dates indicated:

	Nonaccrual Loans and Leases								Accruing and
	September 30, 2019				June 30, 2019				30 - 89 Days Past Due
			% of				% of		September 30,		June 30,
			Loan				Loan		2019		2019
	Amount		Category		Amount		Category		Amount		Amount
	(Dollars in thousands)
Real estate mortgage:
Commercial	$	19,515	0.5	%	$	17,012	0.4	%	$	—	$	3,948
Income producing and other residential	2,868		0.1	%	2,883		0.1	%	3,750		3,262
Total real estate mortgage	22,383		0.3	%	19,895		0.2	%	3,750		7,210
Real estate construction and land:
Commercial	377		—	%	390		—	%	—		—
Residential	—		—	%	—		—	%	2,622		4,672
Total real estate construction and land	377		—	%	390		—	%	2,622		4,672
Commercial:
Asset-based	33,015		0.9	%	32,236		0.9	%	48		12,382
Venture capital	20,131		0.9	%	22,501		1.0	%	—		—
Other commercial	22,554		1.2	%	5,799		0.3	%	4,068		439
Total commercial	75,700		1.0	%	60,536		0.8	%	4,116		12,821
Consumer	653		0.2	%	444		0.1	%	795		964
Total held for investment	$	99,113	0.5	%	$	81,265	0.4	%	$	11,283	$	25,667

73

During the third quarter of 2019, nonaccrual loan and leases held for investment increased by $17.8 million to $99.1 million at September 30, 2019 due mainly to one previously classified $14.9 million security monitoring commercial loan moving to nonaccrual status. As of September 30, 2019, the Company's three largest loan relationships on nonaccrual status had an aggregate carrying value of $53.4 million and represented 54% of total nonaccrual loans and leases.

Foreclosed Assets

The following table presents foreclosed assets (primarily OREO) by property type as of the dates indicated:

	September 30,		June 30,		December 31,		September 30,
Property Type	2019		2019		2018		2018
	(In thousands)
Commercial real estate	$	199	$	253	$	2,004	$	2,176
Single-family residence	948		953		953		953
Construction and land development	219		219		219		219
Multi-family	—		—		1,059		1,059
Total OREO, net	1,366		1,425		4,235		4,407
Other foreclosed assets	—		47		1,064		—
Total foreclosed assets	$	1,366	$	1,472	$	5,299	$	4,407

During the third quarter of 2019, foreclosed assets decreased by $106,000 to $1.4 million at September 30, 2019 due mainly to increased reserves of $54,000 and sales of $52,000.

Performing TDRs Held for Investment

The following table presents our performing TDRs held for investment by loan portfolio segment as of the dates indicated:

	September 30, 2019			June 30, 2019			December 31, 2018
			Number			Number			Number
			of			of			of
Performing TDRs	Amount		Loans	Amount		Loans	Amount		Loans
	(Dollars in thousands)
Real estate mortgage	$	10,292	23	$	10,457	25	$	11,484	27
Real estate construction and land	4,980		2	4,986		2	5,420		2
Commercial	980		10	931		8	692		6
Consumer	77		2	90		3	105		3
Total performing TDRs held for investment	$	16,329	37	$	16,464	38	$	17,701	38

During the third quarter of 2019, performing TDRs held for investment decreased by $135,000 to $16.3 million at September 30, 2019 attributable primarily to $235,000 in payoffs and other reductions, offset partially by $100,000 in additions. The majority of the number of performing TDRs were on accrual status prior to the restructurings and have remained on accrual status after the restructurings due to the borrowers making payments before and after the restructurings.

74

Classified and Special Mention Loans and Leases Held for Investment

The following table presents the credit risk ratings of our loans and leases held for investment, net of deferred fees, as of the dates indicated:

	September 30,		June 30,		December 31,		September 30,
Loan and Lease Credit Risk Ratings	2019		2019		2018		2018
	(Dollars in thousands)
Pass	$	18,279,011	$	18,042,569	$	17,459,205	$	16,609,629
Special mention	267,925		239,304		261,398		360,058
Classified	188,607		190,979		237,110		260,459
Total loans and leases held for investment,
net of deferred fees	$	18,735,543	$	18,472,852	$	17,957,713	$	17,230,146

Classified and special mention loans and leases fluctuate from period to period as a result of loan repayments and downgrades or upgrades from our ongoing active portfolio monitoring.

During the third quarter of 2019, classified loans and leases decreased by $2.4 million to $188.6 million at September 30, 2019.

During the third quarter of 2019, special mention loans and leases increased by $28.6 million to $267.9 million at September 30, 2019. The increase in special mention loans and leases was due primarily to the downgrade of two security monitoring commercial loans totaling $49 million, offset partially by a net decrease from other activity.

Regulatory Matters

Capital

Bank regulatory agencies measure capital adequacy through standardized risk-based capital guidelines that compare different levels of capital (as defined by such guidelines) to risk-weighted assets and off-balance sheet obligations. At September 30, 2019, banks considered to be “well capitalized” must maintain a minimum Tier 1 leverage ratio of 5.00%, a minimum common equity Tier 1 risk-based capital ratio of 6.50%, a minimum Tier 1 risk-based capital ratio of 8.00%, and a minimum total risk-based capital ratio of 10.00%. 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 disallowed from regulatory capital. At September 30, 2019, such disallowed amounts were $319,000 for the Company and $32,000 for the Bank. No assurance can be given that the regulatory capital deferred tax asset limitation will not increase in the future or that the Company or Bank will not have increased deferred tax assets that are disallowed.

Basel III currently requires all banking organizations to maintain a 2.50% capital conservation buffer above the minimum risk-based capital requirements to avoid certain limitations on capital distributions, stock repurchases and discretionary bonus payments to executive officers. The capital conservation buffer is exclusively comprised of common equity tier 1 capital, and it applies to each of the three risk-based capital ratios but not to the leverage ratio. At September 30, 2019, the Company and Bank were in compliance with the capital conservation buffer requirement. Effective January 1, 2019, the common equity tier 1, tier 1, and total capital ratio minimums inclusive of the capital conservation buffer were 7.00%, 8.50%, and 10.50%.

75

The following tables present a comparison of our actual capital ratios to the minimum required ratios and well capitalized ratios as of the dates indicated:

		Minimum Required
			Plus Capital
		For Capital	Conservation	For Well
		Adequacy	Buffer Fully	Capitalized
	Actual	Purposes	Phased-In	Requirement
September 30, 2019
PacWest Bancorp Consolidated
Tier 1 capital (to average assets)	9.50%	4.00%	4.000%	N/A
CET1 capital (to risk weighted assets)	9.55%	4.50%	7.000%	N/A
Tier 1 capital (to risk weighted assets)	9.55%	6.00%	8.500%	N/A
Total capital (to risk weighted assets)	12.16%	8.00%	10.500%	N/A
Pacific Western Bank
Tier 1 capital (to average assets)	10.72%	4.00%	4.000%	5.00%
CET1 capital (to risk weighted assets)	10.79%	4.50%	7.000%	6.50%
Tier 1 capital (to risk weighted assets)	10.79%	6.00%	8.500%	8.00%
Total capital (to risk weighted assets)	11.52%	8.00%	10.500%	10.00%

		Minimum Required
			Plus Capital		Plus Capital
		For Capital	Conservation	For Well	Conservation
		Adequacy	Buffer	Capitalized	Buffer Fully
	Actual	Purposes	Phase-In (1)	Requirement	Phased-In
December 31, 2018
PacWest Bancorp Consolidated
Tier 1 capital (to average assets)	10.13%	4.00%	4.000%	N/A	4.00%
CET1 capital (to risk weighted assets)	10.01%	4.50%	6.375%	N/A	7.00%
Tier 1 capital (to risk weighted assets)	10.01%	6.00%	7.875%	N/A	8.50%
Total capital (to risk weighted assets)	12.72%	8.00%	9.875%	N/A	10.50%
Pacific Western Bank
Tier 1 capital (to average assets)	10.80%	4.00%	4.000%	5.00%	4.00%
CET1 capital (to risk weighted assets)	10.68%	4.50%	6.375%	6.50%	7.00%
Tier 1 capital (to risk weighted assets)	10.68%	6.00%	7.875%	8.00%	8.50%
Total capital (to risk weighted assets)	11.44%	8.00%	9.875%	10.00%	10.50%

_______________________________________ 

(1) Ratios for September 30, 2019 reflect the minimum required plus the fully phased-in capital conservation buffer of 2.50%; ratios for December 31, 2018 reflect the minimum required plus capital conservation buffer phase-in for 2018 of 1.875%.

Subordinated Debentures

We issued or assumed through mergers subordinated debentures to trusts that were established by us or entities we previously acquired, which, in turn, issued trust preferred securities. The carrying value of subordinated debentures totaled $456.1 million at September 30, 2019. At September 30, 2019, none of the trust preferred securities were included in the Company's Tier I capital under the phase-out limitations of Basel III, and $442.5 million were included in Tier II capital.

76

Dividends on Common Stock and Interest on Subordinated Debentures

As a bank holding company, PacWest is 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. Interest payments made by us on subordinated debentures are considered dividend payments under FRB regulations.

Liquidity

Liquidity Management

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 have unfunded commitments. We have an Executive Management Asset/Liability Management Committee ("Executive ALM Committee") that is comprised of members of senior management and is responsible for managing 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.

We manage our 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 securities available-for-sale, which we refer to as our primary liquidity. We also maintain available borrowing capacity under secured borrowing lines with the FHLB and the FRBSF, which we refer to as our secondary liquidity.

As a member of the FHLB, the Bank had secured borrowing capacity with the FHLB of $4.3 billion at September 30, 2019, of which $3.4 billion was available on that date. The FHLB secured credit line was collateralized by a blanket lien on $6.1 billion of certain qualifying loans. The Bank also had secured borrowing capacity with the FRBSF of $2.1 billion at September 30, 2019, all of which was available on that date. The FRBSF secured credit line was collateralized by liens on $2.8 billion of qualifying loans.

In addition to its secured lines of credit, the Bank also maintains unsecured lines of credit for the purpose of borrowing overnight funds, subject to availability, of $141.0 million with the FHLB and $180.0 million in the aggregate with several correspondent banks. As of September 30, 2019, there was a $141.0 million balance outstanding related to the FHLB unsecured line of credit. The Bank is a member of the AFX, through which it may either borrow or lend funds on an overnight or short-term basis with a group of pre-approved commercial banks. The availability of funds changes daily. As of September 30, 2019, the Bank had $230.0 million of borrowings outstanding through the AFX.

The following tables provide a summary of the Bank’s primary and secondary liquidity levels at the dates indicated:

	September 30,			June 30,			December 31,
Primary Liquidity - On-Balance Sheet	2019			2019			2018
	(Dollars in thousands)
Cash and due from banks	$	252,596		$	185,075		$	175,830
Interest-earning deposits in financial institutions	483,405			422,663			209,937
Securities available-for-sale	3,817,348			3,807,244			4,009,431
Less: pledged securities	(494,984		)	(493,795		)	(458,143		)
Total primary liquidity	$	4,058,365		$	3,921,187		$	3,937,055
Ratio of primary liquidity to total deposits	20.6		%	20.9		%	20.9		%

77

Secondary Liquidity - Off-Balance Sheet	September 30,			June 30,			December 31,
Available Secured Borrowing Capacity	2019			2019			2018
	(In thousands)
Secured borrowing capacity with the FHLB	$	4,279,424		$	4,236,046		$	3,746,970
Less: secured advances outstanding	(882,000		)	(1,522,000		)	(1,040,000		)
Available secured borrowing capacity with the FHLB	3,397,424			2,714,046			2,706,970
Available secured borrowing capacity with the FRBSF	2,108,982			1,991,861			2,003,269
Total secondary liquidity	$	5,506,406		$	4,705,907		$	4,710,239

During the three months ended September 30, 2019, the Company's primary liquidity increased by $137.2 million due mainly to increases of $67.5 million in cash and due from banks, $60.7 million in interest-earning deposits in financial institutions, and $10.1 million in securities available-for-sale. The Company's secondary liquidity increased by $800.5 million during the third quarter of 2019 due to a $640.0 million decrease in the amount borrowed from the secured borrowing line with the FHLB, a $117.1 million increase in the borrowing capacity on the secured credit line with the FRBSF, and a $43.4 million increase in the borrowing capacity on the secured borrowing line with the FHLB. The increases in the borrowing capacities with the FRBSF and FHLB in the third quarter were due primarily to increases in loan collateral pledged for the facilities.

In addition to our primary liquidity, we generate liquidity from cash flows from our loan and securities portfolios and from our large base of core deposits, defined as noninterest-bearing demand, interest checking, savings, and non-brokered money market accounts. At September 30, 2019, core deposits totaled $16.5 billion and represented 84% of the Company's total deposits. Core deposits are normally less volatile, often with customer relationships tied to other products offered by the Bank promoting long-standing relationships and stable funding sources. See "- Balance Sheet Analysis - Deposits" for additional information and detail of our core deposits.

Our deposit balances may decrease if interest rates increase significantly or if customers withdraw funds from the Bank. In order to address the Bank’s liquidity risk as deposit balances may fluctuate, the Bank maintains adequate levels of available liquidity on and off the balance sheet.

We use brokered deposits, the availability of which is uncertain and subject to competitive market forces and regulation, for liquidity management purposes. At September 30, 2019, brokered deposits totaled $1.8 billion, consisting primarily of $1.3 billion of brokered time deposits and $479.7 million of non-maturity brokered accounts. At December 31, 2018, brokered deposits totaled $1.3 billion, consisting mainly of $729.4 million of brokered time deposits and $518.2 million of non-maturity brokered accounts.

Our liquidity policy includes guidelines for On-Balance Sheet Liquidity (a measurement of primary liquidity to total deposits plus borrowings), Liquidity Buffer Coverage Ratio (the ratio of cash and unpledged securities to the estimated 30 day cash outflow in a defined stress scenario), Liquidity Stress Test Survival Horizon (the number of days that the Bank’s liquidity buffer plus available secured borrowing capacity is sufficient to offset cumulative cash outflow in a defined stress scenario), Loan to Funding Ratio (measurement of gross loans net of fees divided by deposits plus borrowings), Wholesale Funding Ratio (measurement of wholesale funding divided by interest-earning assets), and other guidelines developed for measuring and maintaining liquidity. As of September 30, 2019, we were in compliance with all of our established liquidity guidelines.

Holding Company Liquidity

PacWest acts a source of financial strength for the Bank which can also include being a source of liquidity. The primary sources of liquidity for the holding company include dividends from the Bank, intercompany tax payments from the Bank, and PacWest's ability to raise capital, issue subordinated debt, and secure outside borrowings. Our ability to obtain funds for the payment of dividends to our stockholders, the repurchase of shares of common stock, and other cash requirements is largely dependent upon the Bank’s earnings. The Bank is subject to restrictions under certain federal and state laws and regulations that limit its ability to transfer funds to the holding company through intercompany loans, advances, or cash dividends.

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Dividends paid by California state-chartered banks are regulated by the FDIC and the DBO under their general supervisory authority as it relates to a bank’s capital requirements. The Bank may declare a dividend without the approval of the DBO and FDIC as long as the total dividends declared in a calendar year do not exceed either the retained earnings or the total of net earnings for the three previous fiscal years less any dividends paid during such period. Dividends paid by the Bank during the three previous fiscal years exceeded the Bank's net earnings during that same period by $28.5 million. During the three and nine months ended September 30, 2019, PacWest received $79.0 million and $258.0 million in dividends from the Bank. Since the Bank had an accumulated deficit of $531.7 million at September 30, 2019, for the foreseeable future any dividends from the Bank to the holding company will continue to require DBO and FDIC approval.

At September 30, 2019, PacWest had $103.7 million in cash and due from banks, of which substantially all is on deposit at the Bank. We believe this amount of cash, along with anticipated future dividends from the Bank, will be sufficient to fund the holding company’s cash flow needs over the next 12 months, including any stock repurchases pursuant to the Company's Stock Repurchase Program, which terminates on February 29, 2020. See "- Recent Events - Stock Repurchase Program" for additional information.

Contractual Obligations

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

	September 30, 2019
			Due After		Due After
	Due		One Year		Three Years		Due
	Within		Through		Through		After
	One Year		Three Years		Five Years		Five Years		Total
	(In thousands)
Time deposits	$	2,662,955	$	115,024	$	4,228	$	—	$	2,782,207
Short-term borrowings	1,253,000		—		—		—		1,253,000
Long-term debt obligations (1)	31		—		—		539,880		539,911
Contractual interest (2)	17,919		2,391		135		—		20,445
Operating lease obligations	32,654		56,534		38,817		35,302		163,307
Other contractual obligations	64,522		58,426		14,347		24,856		162,151
Total	$	4,031,081	$	232,375	$	57,527	$	600,038	$	4,921,021

_______________________________________ 

(1) Excludes purchase accounting fair value adjustments.

(2) Excludes interest on subordinated debentures as these instruments are variable rate.

Long-term debt obligations include subordinated debentures. Debt obligations are also discussed in Note 9. Borrowings and Subordinated Debentures, 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, 2018. The other contractual obligations relate to our minimum liability associated with our data and item processing contract with a third-party provider, commitments to contribute capital to investments in low income housing project partnerships and private equity funds, and commitments under deferred compensation arrangements.

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

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Off-Balance Sheet Arrangements

Our obligations also include off-balance sheet arrangements consisting of loan commitments, of which only a portion is expected to be funded, and standby letters of credit. At September 30, 2019, our loan commitments and standby letters of credit were $7.8 billion and $367.1 million. The loan commitments, a portion of which result in funded loans, increase our profitability through net interest income when drawn and unused commitment fees prior to being drawn. We manage our overall liquidity taking into consideration funded and unfunded commitments as a percentage of our liquidity sources. Our liquidity sources, as described in "- Liquidity - Liquidity Management," have been and are expected to be sufficient to meet the cash requirements of our lending activities. For further information on loan commitments, see Note 10. Commitments and Contingencies, of the Notes to Condensed Consolidated Financial Statements (Unaudited) contained in "Item 1. Condensed Consolidated Financial Statements (Unaudited)."

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

This analysis should be read in conjunction with text under the caption "Quantitative and Qualitative Disclosures About Market Risk" in our Annual Report on Form 10-K for the year ended December 31, 2018, 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.

Market Risk - Foreign Currency Exchange

We enter into foreign exchange contracts with our clients and counterparty banks primarily for the purpose of offsetting or hedging clients' foreign currency exposures arising out of commercial transactions, and we enter into cross currency swaps and foreign exchange forward contracts to hedge exposures to loans and debt instruments denominated in foreign currencies. We have experienced and will continue to experience fluctuations in our net earnings as a result of transaction gains or losses related to revaluing certain asset and liability balances that are denominated in currencies other than the U.S. Dollar, and the derivatives that hedge those exposures. As of September 30, 2019, the U.S. Dollar notional amounts of loans receivable and subordinated debentures payable denominated in foreign currencies were $52.7 million and $28.1 million, and the U.S. Dollar notional amounts of derivatives outstanding to hedge these foreign currency exposures were $55.5 million and $29.2 million. We recognized a foreign currency translation net gain of $8,000 for the nine months ended September 30, 2019 and a foreign currency translation net loss of $53,000 for the nine months ended September 30, 2018.

Asset/Liability Management and Interest Rate Sensitivity

Interest Rate Risk

We measure our IRR position on a monthly basis using two methods: (i) NII simulation analysis; and (ii) MVE modeling. The Executive ALM Committee and the Board Asset/Liability Management Committee review the results of these analyses quarterly. If hypothetical changes to interest rates cause changes to our simulated net present value of equity and/or 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 NII simulation model and MVE model prepared as of September 30, 2019, the results of which are presented below. Our NII simulation and MVE model indicate that our balance sheet is asset-sensitive. An asset-sensitive profile would suggest that a sudden sustained increase in rates would result in an increase in our estimated NII and MVE, while a liability-sensitive profile would suggest that these amounts would decrease.

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Net Interest Income Simulation

We used a NII simulation model to measure the estimated changes in NII that would result over the next 12 months from immediate and sustained changes in interest rates as of September 30, 2019. 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 or changes in the product mix of either our total 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 NII forecasted using both increasing and decreasing interest rate scenarios using the forward yield curve at September 30, 2019. In order to arrive at the base case, we extend our balance sheet at September 30, 2019 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, 2019. Based on such repricing, we calculate an estimated NII and NIM for each rate scenario.

The NII simulation model is dependent upon numerous assumptions. For example, the majority of our loans are variable rate, which are assumed to reprice in accordance with their contractual terms. Some loans and investment securities include the opportunity of prepayment (embedded options) and the simulation model uses prepayment assumptions to estimate these prepayments and reinvest these proceeds at current simulated yields. Our interest-bearing deposits reprice at our discretion and are assumed to reprice at a rate less than the change in market rates. The 12-month NII simulation model as of September 30, 2019 assumes interest-bearing deposits reprice at 32% of the change in market rates (this is commonly referred to as the "deposit beta"). The effects of certain balance sheet attributes, such as fixed‑rate loans, variable‑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 NII simulation model. Changes that could vary significantly from our assumptions include loan and deposit growth or contraction, loan and deposit pricing, changes in the mix of earning assets or funding sources, and future asset/liability management decisions, all of which may have significant effects on our net interest income.

The following table presents forecasted net interest income and net interest margin for the next 12 months using the static balance sheet and forward yield curve as the base scenario, with immediate and sustained parallel upward and downward movements in interest rates of 100, 200 and 300 basis points as of the date indicated:

	Forecasted			Forecasted	Forecasted
	Net Interest		Percentage	Net Interest	Net Interest
	Income		Change	Margin	Margin Change
September 30, 2019	(Tax Equivalent)		From Base	(Tax Equivalent)	From Base
	(Dollars in millions)
Interest Rate Scenario:
Up 300 basis points	$	1,153.0	17.6%	5.00%	0.75%
Up 200 basis points	$	1,094.0	11.5%	4.74%	0.49%
Up 100 basis points	$	1,033.3	5.4%	4.48%	0.23%
BASE CASE	$	980.8	—	4.25%	—
Down 25 basis points	$	967.1	(1.4)%	4.19%	(0.06)%
Down 50 basis points	$	957.1	(2.4)%	4.15%	(0.10)%
Down 100 basis points	$	937.1	(4.5)%	4.06%	(0.19)%

During the third quarter of 2019, total base case year 1 tax equivalent NII decreased by $9.7 million to $980.8 million at September 30, 2019 from $990.5 million at June 30, 2019. This decrease was attributable to a decline in short-term interest rates leading to lower loan yields.

In addition to parallel interest rate shock scenarios, we also model various alternative rate vectors that are viewed as more likely to occur in a typical monetary policy tightening cycle. The most favorable alternate rate vector that we model is the “Bear Flattener” scenario, when short-term rates increase faster than long-term rates, and the least favorable alternate rate vector that we model is the “Bull Steepener,” when short-term rates fall faster than long-term rates. In the “Bear Flattener” scenario, Year 1 tax equivalent NII increases by 6.7%, and in the “Bull Steepener” scenario, Year 1 tax equivalent NII decreases by 1.5%.

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Of the $18.8 billion of total loans at September 30, 2019, $11.3 billion have variable interest rate terms (excluding hybrid loans discussed below). Approximately $7.9 billion, or 70%, of the variable interest rate loans as of September 30, 2019 contained interest rate floor provisions, of which approximately $2.0 billion were "in-the-money," meaning the loan coupon will not adjust down if there are future decreases to the index interest rate. The cumulative amount of loans with "in-the-money" floors for assumed additional market rate decreases are as follows:

September 30, 2019
	Total Amount of
	Loans With
Basis Points of	"In-the-Money"
Rate Decreases	Loan Floors
(Dollars in millions)
50 bps	$3,354
100 bps	$4,949
150 bps	$6,751
200 bps	$7,679
250 bps	$7,878

Additionally, approximately $3.7 billion of variable-rate hybrid loans do not immediately reprice because the loans contain an initial fixed-rate period before they become variable. The cumulative amounts of hybrid loans that would switch from being fixed-rate to variable-rate because the initial fixed-rate term would expire were approximately $970 million, $1.3 billion, and $1.7 billion in the next one, two, and three years.

LIBOR is expected to be phased out after 2021, as such the Company is assessing the impacts of this transition and exploring alternatives to use in place of LIBOR.  The business processes impacted relate primarily to our variable-rate loans and our subordinated debentures, both of which are indexed to LIBOR.

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 our MVE 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 include various assumptions regarding cash flows and interest rates and are by their nature forward‑looking and inherently uncertain.

The MVE 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, 2019.

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The following table shows the projected change in the market value of equity for the set of rate scenarios presented as of the date indicated:

										Ratio of
	Projected		Dollar			Percentage		Percentage		Projected
	Market Value		Change			Change		of Total		Market Value
September 30, 2019	of Equity		From Base			From Base		Assets		to Book Value
	(Dollars in millions)
Interest Rate Scenario:
Up 300 basis points	$	7,791.4	$	694.7		9.8	%	29.2	%	158.4	%
Up 200 basis points	$	7,587.2	$	490.6		6.9	%	28.4	%	154.2	%
Up 100 basis points	$	7,350.4	$	253.8		3.6	%	27.5	%	149.4	%
BASE CASE	$	7,096.7	$	—		—	%	26.6	%	144.2	%
Down 100 basis points	$	6,754.2	$	(342.5	)	(4.8	)%	25.3	%	137.3	%
Down 200 basis points	$	6,132.2	$	(964.4	)	(13.6	)%	22.9	%	124.6	%
Down 300 basis points	$	5,792.1	$	(1,304.5	)	(18.4	)%	21.7	%	117.7	%

During the third quarter of 2019, total base case projected market value of equity increased by $1.5 billion to $7.1 billion. The overall MVE sensitivity reflects a more asset-sensitive profile. The increase in asset sensitivity of MVE is due to revised deposit attrition and pricing models implemented during the third quarter, which reflect longer deposit account average life and lower deposit pricing betas than the models used previously. The $1.5 billion increase in base case projected MVE was due primarily to: (1) a $765 million decrease in the mark-to-market adjustment for total deposits due to the longer average life and lower pricing beta assumed in the new deposit models, (2) a $623 million increase in the mark-to-market adjustment for loans and leases due to decreased credit spreads used for loan valuation and price appreciation from the decrease in market interest rates, and (3) a $68 million increase in the book value of stockholders' equity due mainly to $110.0 million of net earnings and a $22.8 million increase in accumulated other comprehensive income, offset partially by $72.0 million of cash dividends paid.

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

The information set forth in Note 10. Commitments and Contingencies in the Notes to Condensed Consolidated Financial Statements (Unaudited) is incorporated herein by reference.

In addition, 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, and taking into consideration insurance which may be applicable, would not have a material adverse effect on the Company’s financial statements or operations.

ITEM 1A. RISK FACTORS

For information regarding factors that could affect the Company's results of operations, financial condition and liquidity, see the risk factors disclosed in the "Risk Factors" section of our Annual Report on Form 10-K for the year ended December 31, 2018. See also "Forward-Looking Information" disclosed in Part I, Item 2 of this quarterly report on Form 10-Q.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

The following table presents stock purchases made during the third quarter of 2019:

				Total Number of	Maximum Dollar
				Shares Purchased	Value of Shares
	Total			as Part of	That May Yet
	Number of	Average		Publicly	Be Purchased
	Shares	Price Paid		Announced	Under the
Purchase Dates	Purchased (1)	Per Share		Program (2)	Program (2)
					(In thousands)
July 1 – July 31, 2019	—	$	—	—	$	124,707
August 1 – August 31, 2019	2,952	$	34.59	—	$	124,707
September 1 – September 30, 2019	—	$	—	—	$	124,707
Total	2,952	$	34.59	—

__________________________

(1) Includes shares repurchased pursuant to net settlement by employees in satisfaction of income tax withholding obligations incurred through the vesting of Company stock awards, and shares repurchased pursuant to the Company's publicly announced Stock Repurchase Program, described in (2) below.

(2) On February 24, 2019, effective upon the maturity of the current Stock Repurchase Program on February 28, 2019, PacWest's Board of Directors authorized a new Stock Repurchase Program to purchase shares of its common stock for an aggregate purchase price not to exceed $225 million until February 29, 2020. All shares repurchased under the Stock Repurchase Program were retired upon settlement.

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ITEM 6. INDEX TO EXHIBITS

Exhibit Number	Description
2.4	Agreement and Plan of Merger dated April 5, 2017 between PacWest Bancorp and CU Bancorp (Exhibit 2.1 to Form 8-K filed on April 6, 2017 and incorporated herein by reference).
3.1	Certificate of Incorporation, as amended, of PacWest Bancorp, a Delaware corporation, dated April 22, 2008 (Exhibit 3.1 to Form 8-K filed on May 14, 2008 and incorporated herein by this reference).
3.2	Certificate of Amendment of Certificate of Incorporation of PacWest Bancorp, a Delaware Corporation, dated May 14, 2010 (Exhibit 3.1 to Form 8-K filed on May 14, 2010 and incorporated herein by this reference).
3.5	Amended and Restated Bylaws of PacWest Bancorp, a Delaware corporation, dated November 5, 2014 (Exhibit 3.5 to Form 10-Q filed on November 10, 2014 and incorporated herein by this reference).
10.1	PacWest Bancorp 2003 Stock Incentive Plan, as amended and restated, dated May 16, 2016 (Exhibit 10.1 to Form 8-K filed on May 18, 2016 and incorporated herein by this reference).
10.2	Form of Stock Award Agreement pursuant to the Company's 2003 Stock Incentive Plan, as amended and restated (Exhibit 10.2 to Form 10-Q filed on November 7, 2016 and incorporated herein by this reference).
10.3	Form of Stock Unit Award Agreement pursuant to the Company's 2003 Stock Incentive Plan, as amended and restated (Exhibit 10.3 to Form 10-Q filed on November 7, 2016 and incorporated herein by this reference).
10.4	PacWest Bancorp 2017 Stock Incentive Plan, as amended, dated May 15, 2017 (Exhibit 10.1 to Form S-8 filed on May 15, 2017 and incorporated herein by this reference).
10.5	Form of Stock Unit Award Agreement and Grant Notice pursuant to the Company's 2017 Stock Incentive Plan, as amended (Exhibit 10.2 to Form 8-K filed on May 18, 2017 and incorporated herein by reference).
10.6	Form of Stock Award Agreement and Grant Notice pursuant to the Company's 2017 Stock Incentive Plan, as amended (Exhibit 10.3 to Form 8-K filed on May 18, 2017 and incorporated herein by reference).
10.7	Form of Stock Unit Award Agreement and Grant Notice pursuant to the Company's Stock Incentive Plan, as amended (Exhibit 10.7 to Form 10-Q filed on August 8, 2019 and incorporated herein by this reference).
10.8	Form of Stock Award Agreement and Grant Notice pursuant to the Company's Stock Incentive Plan, as amended (Exhibit 10.8 for Form 10-Q filed on August 8, 2019 and incorporated herein by this reference).
31.1	Section 302 Certification of Chief Executive Officer (Filed herewith).
31.2	Section 302 Certification of Chief Financial Officer (Filed herewith).
32.1	Section 906 Certification of Chief Executive Officer (Filed herewith).
32.2	Section 906 Certification of Chief Financial Officer (Filed herewith).
101	Interactive data files pursuant to Rule 405 of Regulation S-T: (i) the Condensed Consolidated Balance Sheets as of September 30, 2019 and December 31, 2018, (ii) the Condensed Consolidated Statements of Earnings for the three months ended September 30, 2019, June 30, 2019, and September 30, 2018, and nine months ended September 30, 2019 and 2018, (iii) the Condensed Consolidated Statements of Comprehensive Income for the three months ended September 30, 2019, June 30, 2019, and September 30, 2018, and nine months ended September 30, 2019 and 2018, (iv) the Condensed Consolidated Statements of Changes in Stockholders' Equity for the nine months ended September 30, 2019 and 2018, (v) the Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2019 and 2018, and (vi) the Notes to Condensed Consolidated Financial Statements (Filed herewith).

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Signatures

Pursuant to the requirements of Section 13 or 15(d) 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 6, 2019	/s/ Bart R. Olson
		Bart R. Olson
		Executive Vice President and Chief Accounting Officer

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EX-31.1

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, 2019 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 6, 2019	/s/ Matthew P. Wagner
		Matthew P. Wagner Chief Executive Officer

EX-31.2

Exhibit 31.2

Certification

Pursuant to Section 302 of the

Sarbanes-Oxley Act of 2002

I, Patrick J. Rusnak, certify that:

1. I have reviewed this report on Form 10-Q for the quarterly period ended September 30, 2019 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 6, 2019	/s/ Patrick J. Rusnak
		Patrick J. Rusnak Executive Vice President and Chief Financial Officer

EX-32.1

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 Annual Report on Form 10-Q for the quarterly period ended September 30, 2019 (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.

Date:	November 6, 2019	/s/ Matthew P. Wagner
		Matthew P. Wagner 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.

EX-32.2

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 Annual Report on Form 10-Q for the quarterly period September 30, 2019 (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.

Date:	November 6, 2019	/s/ Patrick J. Rusnak
		Patrick J. Rusnak Executive Vice President and 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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Condensed Consolidated Statements of Earnings - USD ($) $ in Thousands	3 Months Ended			9 Months Ended
	Sep. 30, 2019	Jun. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Interest expense:
Deposits	$ 40,703	$ 38,720	$ 21,121	$ 113,658	$ 51,306
Borrowings	6,852	7,210	3,814	21,772	7,383
Subordinated debentures	7,417	7,705	7,390	22,860	21,093
Total interest expense	54,972	53,635	32,325	158,290	79,782
Loans and leases	275,978	284,236	264,062	834,443	775,447
Investment securities	28,806	28,948	28,061	87,434	81,929
Deposits in financial institutions	2,424	1,349	519	4,423	1,555
Total interest income	307,208	314,533	292,642	926,300	858,931
Net interest income	252,236	260,898	260,317	768,010	779,149
Provision for credit losses	7,000	8,000	11,500	19,000	33,000
Net interest income after provision for credit losses	245,236	252,898	248,817	749,010	746,149
Noninterest income:
Other commissions and fees	10,855	11,590	12,397	33,453	34,429
Leased equipment income	9,615	9,182	9,120	28,079	28,497
Service charges on deposit accounts	3,525	3,771	3,979	11,026	12,418
Gain on sale of loans and leases	765	326	0	1,091	4,675
Gain on sale of securities	908	22,192	826	25,261	7,390
Other income	7,761	3,832	10,590	16,476	27,700
Total noninterest income	33,429	50,893	36,912	115,386	115,109
Noninterest expense:
Compensation	71,424	68,956	72,333	211,225	213,269
Occupancy	14,089	14,457	13,069	42,866	39,867
Data processing	7,044	6,817	6,740	20,786	20,295
Leased equipment depreciation	5,951	5,558	5,001	17,160	15,613
Intangible asset amortization	4,833	4,870	5,587	14,573	17,520
Other professional services	4,400	4,629	6,058	13,542	15,754
Insurance and assessments	4,100	4,098	5,446	12,236	16,503
Loan expense	3,628	3,451	2,249	9,964	7,578
Acquisition, integration and reorganization costs	0	0	800	618	800
Foreclosed assets expense (income), net	8	(146)	(257)	(109)	(440)
Other expense	11,332	12,737	11,127	35,662	35,238
Total noninterest expense	126,809	125,427	128,153	378,523	381,997
Earnings before income taxes	151,856	178,364	157,576	485,873	479,261
Income tax expense	(41,830)	(50,239)	(41,289)	(135,118)	(128,963)
Net earnings	$ 110,026	$ 128,125	$ 116,287	$ 350,755	$ 350,298
Earnings per share:
Net earnings (usd per share)	$ 0.92	$ 1.07	$ 0.94	$ 2.91	$ 2.79
Net earnings (usd per share)	$ 0.92	$ 1.07	$ 0.94	$ 2.91	$ 2.79

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Organization

9 Months Ended

Sep. 30, 2019

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Organization

ORGANIZATION    

PacWest Bancorp, a Delaware corporation, is a bank holding company registered under the BHCA, with our corporate headquarters located in Beverly Hills, California. Our principal business is to serve as the holding company for our wholly-owned subsidiary, Pacific Western Bank. References to "Pacific Western" or the "Bank" refer to Pacific Western Bank together with its wholly-owned subsidiaries. References to "we," "us," or the "Company" refer to PacWest Bancorp together with its subsidiaries on a consolidated basis. When we refer to "PacWest" or to the "holding company," we are referring to PacWest Bancorp, the parent company, on a stand-alone basis.

We are focused on relationship-based business banking to small, middle-market and venture-backed businesses nationwide. The Bank offers a broad range of loan and lease and deposit products and services through 74 full-service branches located in California, one branch located in Durham, North Carolina, and numerous loan production offices across the country through its Community Banking, National Lending and Venture Banking groups. Community Banking provides real estate loans, commercial loans, and comprehensive deposit and treasury management services to small and medium-sized businesses conducted primarily through our California-based branch offices. National Lending provides asset-based, equipment, and real estate loans and treasury management services to established middle-market businesses on a national basis. Venture Banking offers a comprehensive suite of financial services focused on entrepreneurial businesses and their venture capital and private equity investors, with offices located in key innovation hubs across the United States. In addition, we provide investment advisory and asset management services to select clients through Pacific Western Asset Management Inc., a wholly-owned subsidiary of the Bank and an SEC-registered investment adviser.

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 interest paid by the Bank on deposits and borrowings, compensation, occupancy, and general operating expenses.

We have completed 29 acquisitions from May 1, 2000 through September 30, 2019. 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 consolidated financial statements from their respective acquisition dates.

Significant Accounting Policies

Our accounting policies are described in Note 1. Nature of Operations and Summary of Significant Accounting Policies, of our audited consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2018 as filed with the Securities and Exchange Commission ("Form 10-K").

Accounting Standards Adopted in 2019

Effective January 1, 2019, the Company adopted ASU 2016-02, "Leases (Topic 842)," and the related amendments to this new standard issued in 2018. ASU 2016-02 supersedes Topic 840, “Leases,” and is intended to increase transparency and comparability among organizations by requiring the recognition of right-of-use (“ROU”) assets and lease liabilities by lessees for those leases classified as operating leases. Under the standard, disclosures are required to meet the objective of enabling users of the financial statements to assess the amount, timing, and uncertainty of cash flows arising from leases.

The Company adopted the new standard using the optional transition method under ASU 2018-11, “Leases (Topic 842): Targeted Improvements,” and recognized a cumulative effect adjustment to increase retained earnings by $938,000, net of taxes, without restating prior periods and applying the requirements of the new standard prospectively. The Company has elected the following practical expedients: (1) to not separate lease and non-lease components for facilities leases; (2) to not reassess whether any expired or existing contracts are or contain leases and to maintain existing lease classifications; (3) to not record short-term leases (initial term less than 12 months) on the balance sheet; and (4) to present sales tax on a net basis for those transactions in which the Company is the lessor.

The standard had a more significant impact on our condensed consolidated balance sheet than on our condensed consolidated statement of earnings. The most significant impact was the recognition of ROU assets and lease liabilities for operating leases, while the accounting for leases as a lessor remained substantially unchanged. The ROU asset is included within "Other assets," while the ROU liability is included within "Accrued interest payable and other liabilities". See Note 8. Leases and Note 7. Other Assets for further details.

Effective January 1, 2019, the Company early-adopted any removed or modified disclosures as permitted by ASU 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework - Changes to Disclosure Requirements for Fair Value Measurements,” but will defer adoption of the additional disclosures until the effective date of January 1, 2020 as permitted in the transition guidance in ASU 2018-13.

Effective January 1, 2019, the Company early-adopted ASU 2018-15, “Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract (a consensus of the FASB Emerging Issues Task Force)," which aligns the requirements for capitalizing implementation costs in a cloud computing arrangement service contract with the requirements for capitalizing implementation costs incurred for an internal-use software license. The new guidance also prescribes the balance sheet, income statement, and cash flow classification of the capitalized implementation costs and related amortization expense, and requires additional quantitative and qualitative disclosures. The Company opted to apply ASU 2018-15 prospectively. The primary effect of the provisions is to capitalize eligible implementation costs during the application development phase and to amortize those costs over the life of the agreement. There was no impact to our condensed consolidated financial statements from the adoption of this new standard.

Basis of Presentation    

Our interim condensed consolidated financial statements are prepared in accordance with U.S. GAAP for interim financial information and pursuant to the requirements for reporting on Form 10-Q and Article 10 of Regulation S-X of the Securities Exchange Act of 1934. Accordingly, certain disclosures accompanying annual consolidated financial statements are omitted. In the opinion of management, all significant intercompany accounts and transactions have been eliminated and adjustments, consisting solely of normal recurring accruals and considered necessary for the fair presentation of financial statements for the interim periods, have been included. The current period's results of operations are not necessarily indicative of the results that ultimately may be achieved for the year. The interim condensed consolidated financial statements and notes thereto should be read in conjunction with the audited consolidated financial statements and notes thereto included in our Form 10-K.

Use of Estimates

We have made a number of estimates and assumptions related 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 U.S. 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 combination of the allowance for loan and lease losses and the reserve for unfunded loan commitments), the carrying value of intangible assets, the realization of deferred tax assets, and the fair value estimates of assets acquired and liabilities assumed in acquisitions. These estimates may be adjusted as more current information becomes available, and any adjustment may be significant.

Reclassifications

None.

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Recently Issued Accounting Standards

9 Months Ended

Sep. 30, 2019

Recently Issued Accounting Standards [Abstract]

Recently Issued Accounting Standards

RECENTLY ISSUED ACCOUNTING STANDARDS

		Effective	Effect on the Financial Statements
Standard	Description	Date	or Other Significant Matters
ASU 2016-13, "Measurement of Credit Losses on Financial Instruments," ASU 2018-19, “Codification Improvements to Topic 326, Financial Instruments - Credit Losses,” and ASU 2019-05, "Financial Instruments - Credit Losses (Topic 326): Targeted Transition Relief"	1. This Update changes the accounting and recognition of credit losses and impairment of financial assets recorded at amortized cost. Under the CECL model, the standard requires immediate recognition of estimated credit losses expected to occur over the remaining life of the asset. The forward-looking concept of CECL requires loss estimates for the remaining estimated life of the financial assets using historical experience, current conditions and reasonable and supportable forecasts. 2. The Update modifies the other-than-temporary impairment (OTTI) model for AFS debt securities to require an allowance for credit impairment instead of a direct write-down, which allows for reversal of credit improvements in future periods. 3. In addition, the Update eliminates the existing guidance for PCI loans, but requires an allowance for purchased financial assets with credit deterioration. 4. Receivables arising from operating leases are not within the scope of CECL. 5. The Update must be applied using the modified retrospective method with a cumulative-effect adjustment to retained earnings as of the beginning of the year of adoption. A prospective transition approach is required for available-for-sale debt securities for which an OTTI had been recognized before the adoption date. Early adoption is permitted.	January 1, 2020	1. The Company has established a multidisciplinary project team and implementation plan, selected a software solution, reached accounting decisions on various matters, developed a conceptual framework, and developed econometric regression models for the reasonable and supportable ("R&S") forecast period. 2. The Company continues to test and refine the CECL models and has completed four preliminary calculations with one more scheduled before adoption. The Company continues to perform testing and sensitivity analysis on its modeling assumptions and results. 3. Our planned approach for estimating expected life-time credit losses include the following key components for all loan portfolio segments: a. The use of a probability of default/loss given default methodology; b. A single scenario based on the consensus forecast from Moody's to develop an economic forecast for the R&S period; c. An initial R&S forecast period of four quarters for all loan portfolio segments, which reflects management's expectation of losses based on forward-looking economic scenarios over that time; d. A post-R&S reversion period of two quarters using a straight-line approach; e. A historical loss period of at least 40 quarters, which represents a full economic credit cycle; and f. Prepayments rates based on our historical experience. 4. We plan to adopt this new standard on January 1, 2020. Our latest estimate of the impact based on September 30, 2019 loan data and economic forecasts indicates that the allowance for credit losses would increase from 0% to 10% upon adoption. We have also updated our internal controls over financial reporting in preparation of adopting this new standard. 5. The current estimate and future calculations are highly dependent on loan composition, of which the vast majority is comprised of short-duration commercial loans; the macroeconomic conditions and forecasts; and other management assumptions and judgments.

		Effective	Effect on the Financial Statements
Standard	Description	Date	or Other Significant Matters
ASU 2017-04, "Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment"	1. This Update simplifies goodwill impairment testing by eliminating the second step of the analysis under which the implied fair value of goodwill is determined as if the reporting unit were being acquired in a business combination. 2. The goodwill impairment test is performed by comparing the fair value of a reporting unit with its carrying amount, and an impairment charge would be recognized for any amount by which the carrying amount exceeds the reporting unit's fair value, to the extent that the loss recognized does not exceed the amount of goodwill allocated to that reporting unit. 3. The Update must be applied prospectively and early adoption is permitted.	January 1, 2020	The adoption of this guidance is not expected to have a material impact on the Company’s consolidated financial position or results of operations and we plan to adopt this standard on January 1, 2020.

		Effective	Effect on the Financial Statements
Standard	Description	Date	or Other Significant Matters
ASU 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework - Changes to Disclosure Requirements for Fair Value Measurements”	1. This Update modified the disclosure requirements in Topic 820 to add disclosures regarding changes in unrealized gains and losses, the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements and the narrative description of measurement uncertainty. 2. Certain disclosure requirements in Topic 820 are also removed or modified. Certain disclosures in ASU 2018-13 would need to be applied on a retrospective basis and others on a prospective basis and early adoption is permitted.	January 1, 2020	The adoption of this guidance will modify disclosures but will not have an impact on the Company’s consolidated financial position or results of operations. The Company has early adopted any removed or modified disclosures effective January 1, 2019 but will defer adoption of the additional disclosures until January 1, 2020 as permitted in the transition guidance of the standard.

		Effective	Effect on the Financial Statements
Standard	Description	Date	or Other Significant Matters
ASU 2019-04, "Codification Improvements to Topic 326, Financial Instruments - Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments"	1. This Update made clarifications and amendments to five topics: (i) Topic A: Codification Improvements Resulting from the June and November 2018 Credit Losses Transition Resource Group ("TRG") Meetings, (ii) Topic B: Codification Improvements to ASU 2016-13, (iii) Topic C: Codification Improvements to ASU 2017-12, "Derivatives and Hedging (Topic 815)" and Other Hedging Items, (iv) Topic D: Codification Improvements to ASU 2016-01, "Financial Instruments - Overall (Subtopic 825-10)," and (v) Topic E: Codification Improvements Resulting from the November 2018 Credit Losses TRG Meeting. 2. In addition to conforming amendments that correct for errors and oversights, the Update in Topics A, B, and E, which impacts CECL implementation, amends or clarifies guidance for accrued interest; transfers between classifications or categories of loans and debt securities; recoveries; effect of prepayments in determining the effective interest rate; estimated costs to sell when foreclosure is probable; vintage disclosure presentation related to line-of-credit arrangements converted to term loans; contractual extensions or renewals; and others. 3. Transition requirements for the amendments are the same as ASU 2016-13 for the Update in Topics A, B, and E. The Update in Topic C may be applied retrospectively as of the date of initial adoption of ASU 2017-12 or prospectively. The Update in Topic D must be applied on a modified retrospective method with a cumulative-effect adjustment to retained earnings as of the beginning of the year of adoption and early adoption is permitted.	January 1, 2020; except for Topic C - January 1, 2019	1. Impacts from the adoption of Topics A, B, and E within this Update will be considered in the Company's overall CECL implementation and we plan to adopt this Update concurrent with the adoption of ASU 2016-13. 2. The adoption of Topic D within this Update is not expected to have a material impact on the Company's consolidated financial position or results of operations and we plan to adopt this standard on January 1, 2020. 3. Topic C within this Update is not applicable to us and therefore there is no impact on the Company's consolidated financial position or results of operations.

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Investment Securities (Tables)

9 Months Ended

Sep. 30, 2019

Investments, Debt and Equity Securities [Abstract]

Schedule of available-for-sale securities reconciliation

The following table presents amortized cost, gross unrealized gains and losses, and fair values of securities available-for-sale as of the dates indicated:

	September 30, 2019									December 31, 2018
			Gross		Gross							Gross		Gross
	Amortized		Unrealized		Unrealized			Fair		Amortized		Unrealized		Unrealized			Fair
Security Type	Cost		Gains		Losses			Value		Cost		Gains		Losses			Value
	(In thousands)
Agency residential CMOs	$	1,141,332	$	31,627	$	(404	)	$	1,172,555	$	634,774	$	3,448	$	(5,372	)	$	632,850
Agency commercial MBS	1,063,659		36,539		(181		)	1,100,017		1,133,846		383		(21,525		)	1,112,704
Municipal securities	675,645		46,336		—			721,981		1,298,514		21,000		(7,320		)	1,312,194
Agency residential MBS	313,935		10,995		(1		)	324,929		281,486		1,902		(2,300		)	281,088
Asset-backed securities	214,153		700		(702		)	214,151		81,762		104		(481		)	81,385
Collateralized loan obligations	114,149		23		(298		)	113,874		—		—		—			—
Private label residential CMOs	89,859		4,011		(2		)	93,868		101,313		1,985		(2,093		)	101,205
SBA securities	48,805		941		—			49,746		68,158		—		(1,111		)	67,047
Corporate debt securities	17,000		4,024		—			21,024		17,000		553		—			17,553
U.S. Treasury securities	4,984		219		—			5,203		401,056		2,437		(88		)	403,405
Total	$	3,683,521	$	135,415	$	(1,588	)	$	3,817,348	$	4,017,909	$	31,812	$	(40,290	)	$	4,009,431

See Note 11. Fair Value Measurements for information on fair value measurements and methodology.

Unrealized losses on investment securities

The following tables present the gross unrealized losses and fair values of securities available-for-sale that were in unrealized loss positions, for which other-than-temporary impairments have not been recognized in earnings, as of the dates indicated:

	September 30, 2019
	Less Than 12 Months					12 Months or More					Total
			Gross					Gross					Gross
	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
Security Type	Value		Losses			Value		Losses			Value		Losses
	(In thousands)
Agency residential CMOs	$	172,738	$	(389	)	$	2,127	$	(15	)	$	174,865	$	(404	)
Agency commercial MBS	176,063		(181		)	—		—			176,063		(181		)
Agency residential MBS	—		—			435		(1		)	435		(1		)
Asset-backed securities	115,481		(702		)	—		—			115,481		(702		)
Collateralized loan obligations	82,606		(298		)	—		—			82,606		(298		)
Private label residential CMOs	—		—			121		(2		)	121		(2		)
Total	$	546,888	$	(1,570	)	$	2,683	$	(18	)	$	549,571	$	(1,588	)

	December 31, 2018
	Less Than 12 Months					12 Months or More					Total
			Gross					Gross					Gross
	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
Security Type	Value		Losses			Value		Losses			Value		Losses
	(In thousands)
Agency residential CMOs	$	69,859	$	(326	)	$	164,097	$	(5,046	)	$	233,956	$	(5,372	)
Agency commercial MBS	40,641		(341		)	1,020,684		(21,184		)	1,061,325		(21,525		)
Municipal securities	52,386		(238		)	284,915		(7,082		)	337,301		(7,320		)
Agency residential MBS	60,164		(169		)	85,245		(2,131		)	145,409		(2,300		)
Asset-backed securities	11,548		(38		)	35,859		(443		)	47,407		(481		)
Private label residential CMOs	32,170		(831		)	49,237		(1,262		)	81,407		(2,093		)
SBA securities	249		(1		)	66,798		(1,110		)	67,047		(1,111		)
U.S. Treasury securities	49,729		(88		)	—		—			49,729		(88		)
Total	$	316,746	$	(2,032	)	$	1,706,835	$	(38,258	)	$	2,023,581	$	(40,290	)

Investments classified by contractual maturity date

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

	September 30, 2019
	Amortized		Fair
Maturities	Cost		Value
	(In thousands)
Due in one year or less	$	3,240	$	3,248
Due after one year through five years	227,670		232,238
Due after five years through ten years	1,020,128		1,056,640
Due after ten years	2,432,483		2,525,222
Total securities available-for-sale	$	3,683,521	$	3,817,348

Investment income

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

	Three Months Ended						Nine Months Ended
	September 30,		June 30,		September 30,		September 30,
	2019		2019		2018		2019		2018
	(In thousands)
Taxable interest	$	22,829	$	20,944	$	17,618	$	63,515	$	49,323
Non-taxable interest	5,565		7,547		10,127		22,705		31,510
Dividend income	412		457		316		1,214		1,096
Total interest income on investment securities	$	28,806	$	28,948	$	28,061	$	87,434	$	81,929

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Loans and Leases (Details 2) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018	Sep. 30, 2018
Financing Receivable, Impaired [Line Items]
Nonaccrual	$ 99,113	$ 79,333
Loans held for investment	18,735,543	17,957,713
Non Purchased Credit Impaired Loans and Leases
Financing Receivable, Impaired [Line Items]
Nonaccrual		79,333
Loans held for investment	18,735,543	17,957,713	$ 17,230,146
Performing
Financing Receivable, Impaired [Line Items]
Loans held for investment	18,636,430
Performing | Non Purchased Credit Impaired Loans and Leases
Financing Receivable, Impaired [Line Items]
Loans held for investment		17,878,380
Real Estate Mortgage
Financing Receivable, Impaired [Line Items]
Nonaccrual	22,383
Loans held for investment	7,896,924	7,918,141
Real Estate Mortgage | Non Purchased Credit Impaired Loans and Leases
Financing Receivable, Impaired [Line Items]
Nonaccrual		17,845
Loans held for investment	7,896,924	7,918,141	7,678,660
Real Estate Mortgage | Performing
Financing Receivable, Impaired [Line Items]
Loans held for investment	7,874,541
Real Estate Mortgage | Performing | Non Purchased Credit Impaired Loans and Leases
Financing Receivable, Impaired [Line Items]
Loans held for investment		7,900,296
Real Estate Mortgage | Commercial
Financing Receivable, Impaired [Line Items]
Nonaccrual	19,515
Loans held for investment	4,300,566	4,824,298
Real Estate Mortgage | Commercial | Non Purchased Credit Impaired Loans and Leases
Financing Receivable, Impaired [Line Items]
Nonaccrual		15,321
Loans held for investment		4,824,298
Real Estate Mortgage | Commercial | Performing
Financing Receivable, Impaired [Line Items]
Loans held for investment	4,281,051
Real Estate Mortgage | Commercial | Performing | Non Purchased Credit Impaired Loans and Leases
Financing Receivable, Impaired [Line Items]
Loans held for investment		4,808,977
Real Estate Mortgage | Residential Real Estate
Financing Receivable, Impaired [Line Items]
Nonaccrual	2,868
Loans held for investment	3,596,358	3,093,843
Real Estate Mortgage | Residential Real Estate | Non Purchased Credit Impaired Loans and Leases
Financing Receivable, Impaired [Line Items]
Nonaccrual		2,524
Loans held for investment		3,093,843
Real Estate Mortgage | Residential Real Estate | Performing
Financing Receivable, Impaired [Line Items]
Loans held for investment	3,593,490
Real Estate Mortgage | Residential Real Estate | Performing | Non Purchased Credit Impaired Loans and Leases
Financing Receivable, Impaired [Line Items]
Loans held for investment		3,091,319
Real Estate Construction and Land
Financing Receivable, Impaired [Line Items]
Nonaccrual	377
Loans held for investment	2,551,474	2,233,656
Real Estate Construction and Land | Non Purchased Credit Impaired Loans and Leases
Financing Receivable, Impaired [Line Items]
Nonaccrual		442
Loans held for investment	2,551,474	2,233,656	2,000,957
Real Estate Construction and Land | Performing
Financing Receivable, Impaired [Line Items]
Loans held for investment	2,551,097
Real Estate Construction and Land | Performing | Non Purchased Credit Impaired Loans and Leases
Financing Receivable, Impaired [Line Items]
Loans held for investment		2,233,214
Real Estate Construction and Land | Commercial Real Estate Construction Loan Receivable
Financing Receivable, Impaired [Line Items]
Nonaccrual	377
Loans held for investment	1,009,362	912,583
Real Estate Construction and Land | Commercial Real Estate Construction Loan Receivable | Non Purchased Credit Impaired Loans and Leases
Financing Receivable, Impaired [Line Items]
Nonaccrual		442
Loans held for investment		912,583
Real Estate Construction and Land | Commercial Real Estate Construction Loan Receivable | Performing
Financing Receivable, Impaired [Line Items]
Loans held for investment	1,008,985
Real Estate Construction and Land | Commercial Real Estate Construction Loan Receivable | Performing | Non Purchased Credit Impaired Loans and Leases
Financing Receivable, Impaired [Line Items]
Loans held for investment		912,141
Real Estate Construction and Land | Residential Real Estate Construction Financing Receivable
Financing Receivable, Impaired [Line Items]
Nonaccrual	0
Loans held for investment	1,542,112	1,321,073
Real Estate Construction and Land | Residential Real Estate Construction Financing Receivable | Non Purchased Credit Impaired Loans and Leases
Financing Receivable, Impaired [Line Items]
Nonaccrual		0
Loans held for investment		1,321,073
Real Estate Construction and Land | Residential Real Estate Construction Financing Receivable | Performing
Financing Receivable, Impaired [Line Items]
Loans held for investment	1,542,112
Real Estate Construction and Land | Residential Real Estate Construction Financing Receivable | Performing | Non Purchased Credit Impaired Loans and Leases
Financing Receivable, Impaired [Line Items]
Loans held for investment		1,321,073
Commercial
Financing Receivable, Impaired [Line Items]
Nonaccrual	75,700
Loans held for investment	7,878,557	7,404,595
Commercial | Non Purchased Credit Impaired Loans and Leases
Financing Receivable, Impaired [Line Items]
Nonaccrual		60,003
Loans held for investment	7,878,557	7,404,595	7,152,058
Commercial | Performing
Financing Receivable, Impaired [Line Items]
Loans held for investment	7,802,857
Commercial | Performing | Non Purchased Credit Impaired Loans and Leases
Financing Receivable, Impaired [Line Items]
Loans held for investment		7,344,592
Commercial | Asset-based
Financing Receivable, Impaired [Line Items]
Nonaccrual	33,015
Loans held for investment	3,810,741	3,305,421
Commercial | Asset-based | Non Purchased Credit Impaired Loans and Leases
Financing Receivable, Impaired [Line Items]
Nonaccrual		32,324
Loans held for investment		3,305,421
Commercial | Asset-based | Performing
Financing Receivable, Impaired [Line Items]
Loans held for investment	3,777,726
Commercial | Asset-based | Performing | Non Purchased Credit Impaired Loans and Leases
Financing Receivable, Impaired [Line Items]
Loans held for investment		3,273,097
Commercial | Venture Capital Loans
Financing Receivable, Impaired [Line Items]
Nonaccrual	20,131
Loans held for investment	2,209,649	2,038,748
Commercial | Venture Capital Loans | Non Purchased Credit Impaired Loans and Leases
Financing Receivable, Impaired [Line Items]
Nonaccrual		20,299
Loans held for investment		2,038,748
Commercial | Venture Capital Loans | Performing
Financing Receivable, Impaired [Line Items]
Loans held for investment	2,189,518
Commercial | Venture Capital Loans | Performing | Non Purchased Credit Impaired Loans and Leases
Financing Receivable, Impaired [Line Items]
Loans held for investment		2,018,449
Commercial | Other Commercial
Financing Receivable, Impaired [Line Items]
Nonaccrual	22,554
Loans held for investment	1,858,167	2,060,426
Commercial | Other Commercial | Non Purchased Credit Impaired Loans and Leases
Financing Receivable, Impaired [Line Items]
Nonaccrual		7,380
Loans held for investment		2,060,426
Commercial | Other Commercial | Performing
Financing Receivable, Impaired [Line Items]
Loans held for investment	1,835,613
Commercial | Other Commercial | Performing | Non Purchased Credit Impaired Loans and Leases
Financing Receivable, Impaired [Line Items]
Loans held for investment		2,053,046
Consumer
Financing Receivable, Impaired [Line Items]
Nonaccrual	653
Loans held for investment		401,321
Consumer | Non Purchased Credit Impaired Loans and Leases
Financing Receivable, Impaired [Line Items]
Nonaccrual		1,043
Loans held for investment	408,588	401,321	$ 398,471
Consumer | Performing
Financing Receivable, Impaired [Line Items]
Loans held for investment	$ 407,935
Consumer | Performing | Non Purchased Credit Impaired Loans and Leases
Financing Receivable, Impaired [Line Items]
Loans held for investment		$ 400,278

XML

Investment Securities (Details 3) - USD ($) $ in Thousands	3 Months Ended			9 Months Ended
	Sep. 30, 2019	Jun. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Investments, Debt and Equity Securities [Abstract]
Taxable interest	$ 22,829	$ 20,944	$ 17,618	$ 63,515	$ 49,323
Non-taxable interest	5,565	7,547	10,127	22,705	31,510
Dividend income	412	457	316	1,214	1,096
Total interest income on investment securities	$ 28,806	$ 28,948	$ 28,061	$ 87,434	$ 81,929

XML

Other Assets (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Other Assets [Abstract]
Cash Surrender Value of Life Insurance	$ 197,887	$ 194,897
Finance Lease, Right-of-Use Asset	134,122	0
Interest and fees receivable income	80,955	88,754
Low Income Housing Tax Credit - LIHTC	67,367	59,507
Equity Method Investments, Other Asset Investments	62,269	59,062
Income Taxes Receivable	17,281	39,096
Prepaid Expense	18,351	18,006
Equity Investments Without Readily Determinable Fair Value	14,828	14,758
Equity Warrants	3,532	4,793
Equity Investments With Readily Determinable Fair Value	4,715	4,891
Other Assets, Miscellaneous	19,752	39,132
Other Assets	$ 621,059	$ 522,896

XML

Leases - Schedule of Supplemental Balance Sheet Information Related to Operating Leases (Details) $ in Thousands	Sep. 30, 2019 USD ($)
Operating leases:
Operating Lease, Right-of-Use Asset	$ 134,122
Operating Lease, Liability	$ 149,185
Weighted average remaining lease term (in years)	4 years 9 months 18 days
Weighted average discount rate	2.79%

XML

Borrowings and Subordinated Debentures (Details 1) $ in Thousands, € in Millions	9 Months Ended
	Sep. 30, 2019 USD ($)	Sep. 30, 2019 EUR (€)	Dec. 31, 2018 USD ($)
Subordinated Borrowing [Line Items]
Rate	2.06%	2.06%	2.56%
Net subordinated debentures	$ 456,145		$ 453,846
Trust Preferred Securities Two Thousand Six Series Three
Subordinated Borrowing [Line Items]
Denomination value | €		€ 25.8
London Interbank Offered Rate (LIBOR) | Subordinated Debt Trust V Due September 2033
Subordinated Borrowing [Line Items]
Rate Index (Quarterly Reset)	3.10%
London Interbank Offered Rate (LIBOR) | Subordinated Debt Trust VI Due September 2033
Subordinated Borrowing [Line Items]
Rate Index (Quarterly Reset)	3.05%
London Interbank Offered Rate (LIBOR) | Subordinated Debt Trust CII Due September 2033
Subordinated Borrowing [Line Items]
Rate Index (Quarterly Reset)	2.95%
London Interbank Offered Rate (LIBOR) | Subordinated Debt Trust VII Due April 2034
Subordinated Borrowing [Line Items]
Rate Index (Quarterly Reset)	2.75%
London Interbank Offered Rate (LIBOR) | Subordinated Debt Trust CIII Due September 2035
Subordinated Borrowing [Line Items]
Rate Index (Quarterly Reset)	1.69%
London Interbank Offered Rate (LIBOR) | Subordinated Debt Trust FCCI Due March 2037
Subordinated Borrowing [Line Items]
Rate Index (Quarterly Reset)	1.60%
London Interbank Offered Rate (LIBOR) | Subordinated Debt Trust FCBI Due December 2035
Subordinated Borrowing [Line Items]
Rate Index (Quarterly Reset)	1.55%
London Interbank Offered Rate (LIBOR) | Trust Preferred Securities Two Thousand Five Series One
Subordinated Borrowing [Line Items]
Rate Index (Quarterly Reset)	1.95%
London Interbank Offered Rate (LIBOR) | Trust Preferred Securities Two Thousand Five Series Two
Subordinated Borrowing [Line Items]
Rate Index (Quarterly Reset)	1.95%
London Interbank Offered Rate (LIBOR) | Two Thousand Six One Term Debt Securitization
Subordinated Borrowing [Line Items]
Rate Index (Quarterly Reset)	1.95%
London Interbank Offered Rate (LIBOR) | Two Thousand Six Two Term Debt Securitization
Subordinated Borrowing [Line Items]
Rate Index (Quarterly Reset)	1.95%
London Interbank Offered Rate (LIBOR) | Trust Preferred Securities Two Thousand Six Series Four
Subordinated Borrowing [Line Items]
Rate Index (Quarterly Reset)	1.95%
London Interbank Offered Rate (LIBOR) | Trust Preferred Securities Two Thousand Six Series Five
Subordinated Borrowing [Line Items]
Rate Index (Quarterly Reset)	1.95%
London Interbank Offered Rate (LIBOR) | Two Thousand Seven One Term Debt Securitization
Subordinated Borrowing [Line Items]
Rate Index (Quarterly Reset)	1.95%
Euribor Rate | Trust Preferred Securities Two Thousand Six Series Three
Subordinated Borrowing [Line Items]
Rate Index (Quarterly Reset)	2.05%
Subordinated Debentures
Subordinated Borrowing [Line Items]
Amount	$ 539,880		$ 541,344
Rate	4.16%	4.16%	4.51%
Unamortized discount	$ (83,735)		$ (87,498)
Subordinated Debentures | Subordinated Debt Trust V Due September 2033
Subordinated Borrowing [Line Items]
Amount	$ 10,310		$ 10,310
Rate	5.24%	5.24%	5.89%
Date Issued	Aug. 15, 2003
Maturity Date	Sep. 17, 2033
Description of variable rate basis	3-month LIBOR + 3.10
Subordinated Debentures | Subordinated Debt Trust VI Due September 2033
Subordinated Borrowing [Line Items]
Amount	$ 10,310		$ 10,310
Rate	5.17%	5.17%	5.84%
Date Issued	Sep. 03, 2003
Maturity Date	Sep. 15, 2033
Description of variable rate basis	3-month LIBOR + 3.05
Subordinated Debentures | Subordinated Debt Trust CII Due September 2033
Subordinated Borrowing [Line Items]
Amount	$ 5,155		$ 5,155
Rate	5.09%	5.09%	5.74%
Date Issued	Sep. 17, 2003
Maturity Date	Sep. 17, 2033
Description of variable rate basis	3-month LIBOR + 2.95
Subordinated Debentures | Subordinated Debt Trust VII Due April 2034
Subordinated Borrowing [Line Items]
Amount	$ 61,856		$ 61,856
Rate	5.02%	5.02%	5.27%
Date Issued	Feb. 05, 2004
Maturity Date	Apr. 23, 2034
Description of variable rate basis	3-month LIBOR + 2.75
Subordinated Debentures | Subordinated Debt Trust CIII Due September 2035
Subordinated Borrowing [Line Items]
Amount	$ 20,619		$ 20,619
Rate	3.81%	3.81%	4.48%
Date Issued	Aug. 15, 2005
Maturity Date	Sep. 15, 2035
Description of variable rate basis	3-month LIBOR + 1.69
Subordinated Debentures | Subordinated Debt Trust FCCI Due March 2037
Subordinated Borrowing [Line Items]
Amount	$ 16,495		$ 16,495
Rate	3.72%	3.72%	4.39%
Date Issued	Jan. 25, 2007
Maturity Date	Mar. 15, 2037
Description of variable rate basis	3-month LIBOR + 1.60
Subordinated Debentures | Subordinated Debt Trust FCBI Due December 2035
Subordinated Borrowing [Line Items]
Amount	$ 10,310		$ 10,310
Rate	3.67%	3.67%	4.34%
Date Issued	Sep. 30, 2005
Maturity Date	Dec. 15, 2035
Description of variable rate basis	3-month LIBOR + 1.55
Subordinated Debentures | Trust Preferred Securities Two Thousand Five Series One
Subordinated Borrowing [Line Items]
Amount	$ 82,475		$ 82,475
Rate	4.07%	4.07%	4.74%
Date Issued	Nov. 21, 2005
Maturity Date	Dec. 15, 2035
Description of variable rate basis	3-month LIBOR + 1.95
Subordinated Debentures | Trust Preferred Securities Two Thousand Five Series Two
Subordinated Borrowing [Line Items]
Amount	$ 128,866		$ 128,866
Rate	4.22%	4.22%	4.47%
Date Issued	Dec. 14, 2005
Maturity Date	Jan. 30, 2036
Description of variable rate basis	3-month LIBOR + 1.95
Subordinated Debentures | Two Thousand Six One Term Debt Securitization
Subordinated Borrowing [Line Items]
Amount	$ 51,545		$ 51,545
Rate	4.22%	4.22%	4.47%
Date Issued	Feb. 22, 2006
Maturity Date	Apr. 30, 2036
Description of variable rate basis	3-month LIBOR + 1.95
Subordinated Debentures | Two Thousand Six Two Term Debt Securitization
Subordinated Borrowing [Line Items]
Amount	$ 51,550		$ 51,550
Rate	4.22%	4.22%	4.47%
Date Issued	Sep. 27, 2006
Maturity Date	Oct. 30, 2036
Description of variable rate basis	3-month LIBOR + 1.95
Subordinated Debentures | Trust Preferred Securities Two Thousand Six Series Three
Subordinated Borrowing [Line Items]
Amount	$ 28,092		$ 29,556
Rate	1.68%	1.68%	1.73%
Date Issued	Sep. 29, 2006
Maturity Date	Oct. 30, 2036
Description of variable rate basis	3-month EURIBOR + 2.05
Subordinated Debentures | Trust Preferred Securities Two Thousand Six Series Four
Subordinated Borrowing [Line Items]
Amount	$ 16,470		$ 16,470
Rate	4.22%	4.22%	4.47%
Date Issued	Dec. 05, 2006
Maturity Date	Jan. 30, 2037
Description of variable rate basis	3-month LIBOR + 1.95
Subordinated Debentures | Trust Preferred Securities Two Thousand Six Series Five
Subordinated Borrowing [Line Items]
Amount	$ 6,650		$ 6,650
Rate	4.22%	4.22%	4.47%
Date Issued	Dec. 19, 2006
Maturity Date	Jan. 30, 2037
Description of variable rate basis	3-month LIBOR + 1.95
Subordinated Debentures | Two Thousand Seven One Term Debt Securitization
Subordinated Borrowing [Line Items]
Amount	$ 39,177		$ 39,177
Rate	4.22%	4.22%	4.47%
Date Issued	Jun. 13, 2007
Maturity Date	Jul. 30, 2037
Description of variable rate basis	3-month LIBOR + 1.95

XML

Loans and Leases (Details 7) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018
Direct Financing Lease, Lease Income [Abstract]
Interest income on net investments in leases	$ 2,648	$ 8,674
Direct Financing Lease, Net Investment in Leases [Abstract]
Lease payments receivable	166,692
Unguaranteed residual assets	21,315
Deferred fees and other	747
Aggregate net investment in leases	188,754
Sales-type and Direct Financing Leases, Lease Receivable, Rolling Maturity [Abstract]
2019	17,353
2020	72,465
2021	51,242
2022	19,819
2023	11,735
Thereafter	9,105
Total undiscounted cash flows	181,719
Less: Unearned income	(15,027)
Present value of lease payments	$ 166,692

XML

Foreclosed Assets (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Total other real estate owned, net	$ 1,366	$ 4,235
Other foreclosed assets	0	1,064
Foreclosed assets, net	1,366	5,299
Commercial real estate
Total other real estate owned, net	199	2,004
Single-family residence
Total other real estate owned, net	948	953
Construction and land development
Total other real estate owned, net	219	219
Multi‑family
Total other real estate owned, net	$ 0	$ 1,059

XML

Fair Value Measurements (Details 7) - Fair Value, Measurements, Nonrecurring $ in Thousands	9 Months Ended
	Sep. 30, 2019 USD ($)	Dec. 31, 2018 USD ($)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value	$ 29,680	$ 25,568
Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value	26,718	22,632
Non Purchased Credit Impaired Loans and Leases
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value	29,552	24,432
Non Purchased Credit Impaired Loans and Leases | Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value	26,590	$ 22,632
Discount Rates | Discounted Cash Flow | Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value	21,543
Discount Rates | Third party appraisals | Non Purchased Credit Impaired Loans and Leases | Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value	$ 128
Discount Rates | Weighted Average | Third party appraisals | Non Purchased Credit Impaired Loans and Leases | Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Discount rates	0.3191
No Discounts | Third party appraisals | Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value	$ 5,047
Measurement Input, Discount Rate | Minimum | Discounted Cash Flow | Non Purchased Credit Impaired Loans and Leases | Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Discount rates	0.0375
Measurement Input, Discount Rate | Maximum | Discounted Cash Flow | Non Purchased Credit Impaired Loans and Leases | Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Discount rates	0.0877
Measurement Input, Discount Rate | Weighted Average | Discounted Cash Flow | Non Purchased Credit Impaired Loans and Leases | Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Discount rates	0.0758
Measurement Input, Discount Rate | Discount Rates | Minimum | Discounted Cash Flow | Non Purchased Credit Impaired Loans and Leases | Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Discount rates	0.0375
Measurement Input, Discount Rate | Discount Rates | Maximum | Discounted Cash Flow | Non Purchased Credit Impaired Loans and Leases | Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Discount rates	0.0877
Measurement Input, Discount Rate | Discount Rates | Weighted Average | Discounted Cash Flow | Non Purchased Credit Impaired Loans and Leases | Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Discount rates	0.0758

XML

Revenue From Contracts With Customers (Details 2) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2019	Dec. 31, 2018
Revenue From Contracts With Customers [Abstract]
Receivables, which are included in Other assets	$ 1,494	$ 1,334
Contract assets, which are included in Other assets	0	0
Contract liabilities, which are included in Accrued interest payable and other liabilities	$ 523	$ 621

XML

Fair Value Measurements (Details 3)	9 Months Ended
	Sep. 30, 2019 USD ($)
Level 3
Level 3 CMO [Roll Forward]
Equity warrants, Balance, beginning of period	$ 4,793,000
Total included in earnings, Equity Warrants	7,429,000
Total included in other comprehensive income	0
Stock and Warrants Issued During Period, Value, Preferred Stock and Warrants	226,000
Sales, Equity Warrants	(8,808,000)
Net settlements, Equity Warrants	0
Fair Value, Measurements, Recurring
Level 3 CMO [Roll Forward]
Equity warrants, Balance, beginning of period	4,793,000
Equity warrants, Balance, end of period	3,532,000
Fair Value, Measurements, Recurring | Level 3
Level 3 CMO [Roll Forward]
Equity warrants, Balance, beginning of period	4,793,000
Equity warrants, Balance, end of period	3,532,000
Private Label CMOs | Fair Value, Measurements, Recurring | Level 3
Level 3 CMO [Roll Forward]
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset Value	7,288,000
Total included in earnings	340,000
Total included in other comprehensive income	(160,000)
Stock and Warrants Issued During Period, Value, Preferred Stock and Warrants	0
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Sales	0
Net settlements	(873,000)
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset Value	6,595,000
Asset-backed | Fair Value, Measurements, Recurring | Level 3
Level 3 CMO [Roll Forward]
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset Value	39,945,000
Total included in earnings	(66,000)
Total included in other comprehensive income	646,000
Stock and Warrants Issued During Period, Value, Preferred Stock and Warrants	0
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Sales	0
Net settlements	(9,157,000)
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset Value	31,368,000
Private label collateralized mortgage obligations
Level 3 CMO [Roll Forward]
Fair value transfers of assets measured on a recurring basis	0
Asset-backed Securities
Level 3 CMO [Roll Forward]
Fair value transfers of assets measured on a recurring basis	0
Warrant
Level 3 CMO [Roll Forward]
Fair value transfers of assets measured on a recurring basis	$ 108,000

XML

Commitments and Contingencies (Details Textual) - USD ($)	Sep. 30, 2019	Dec. 31, 2018
Commitments and Contingencies Disclosure [Abstract]
Commitment To Contribute Capital	$ 116,012,000	$ 101,991,000
Remaining minimum amount committed	$ 50,000	$ 50,000

XML

Fair Value Measurements (Details Textual)	9 Months Ended
	Sep. 30, 2019 USD ($)
Private label collateralized mortgage obligations
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Transfers out of Level 3	$ 0
Warrant
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Transfers out of Level 3	$ (108,000)

XML

Investment Securities

9 Months Ended

Sep. 30, 2019

Investments, Debt and Equity Securities [Abstract]

Investment Securities

INVESTMENT SECURITIES     

Securities Available-for-Sale

The following table presents amortized cost, gross unrealized gains and losses, and fair values of securities available-for-sale as of the dates indicated:

	September 30, 2019									December 31, 2018
			Gross		Gross							Gross		Gross
	Amortized		Unrealized		Unrealized			Fair		Amortized		Unrealized		Unrealized			Fair
Security Type	Cost		Gains		Losses			Value		Cost		Gains		Losses			Value
	(In thousands)
Agency residential CMOs	$	1,141,332	$	31,627	$	(404	)	$	1,172,555	$	634,774	$	3,448	$	(5,372	)	$	632,850
Agency commercial MBS	1,063,659		36,539		(181		)	1,100,017		1,133,846		383		(21,525		)	1,112,704
Municipal securities	675,645		46,336		—			721,981		1,298,514		21,000		(7,320		)	1,312,194
Agency residential MBS	313,935		10,995		(1		)	324,929		281,486		1,902		(2,300		)	281,088
Asset-backed securities	214,153		700		(702		)	214,151		81,762		104		(481		)	81,385
Collateralized loan obligations	114,149		23		(298		)	113,874		—		—		—			—
Private label residential CMOs	89,859		4,011		(2		)	93,868		101,313		1,985		(2,093		)	101,205
SBA securities	48,805		941		—			49,746		68,158		—		(1,111		)	67,047
Corporate debt securities	17,000		4,024		—			21,024		17,000		553		—			17,553
U.S. Treasury securities	4,984		219		—			5,203		401,056		2,437		(88		)	403,405
Total	$	3,683,521	$	135,415	$	(1,588	)	$	3,817,348	$	4,017,909	$	31,812	$	(40,290	)	$	4,009,431

See Note 11. Fair Value Measurements for information on fair value measurements and methodology.

As of September 30, 2019, securities available-for-sale with a fair value of $495.0 million were pledged as collateral for borrowings, public deposits, and other purposes as required by various statutes and agreements.

Realized Gains and Losses on Securities Available-for-Sale

During the three months ended September 30, 2019, we sold $143.4 million of securities available-for-sale for a gross realized gain of $1.2 million and a gross realized loss of $0.3 million. During the three months ended September 30, 2018, we sold $130.5 million of securities available-for-sale for a gross realized gain of $1.0 million and a gross realized loss of $0.1 million.

During the nine months ended September 30, 2019, we sold $1.5 billion of securities available-for-sale for a gross realized gain of $29.4 million and a gross realized loss of $4.1 million. During the nine months ended September 30, 2018, we sold $492.7 million of securities available-for-sale for a gross realized gain of $8.1 million and a gross realized loss of $0.7 million.

Unrealized Losses on Securities Available-for-Sale

The following tables present the gross unrealized losses and fair values of securities available-for-sale that were in unrealized loss positions, for which other-than-temporary impairments have not been recognized in earnings, as of the dates indicated:

	September 30, 2019
	Less Than 12 Months					12 Months or More					Total
			Gross					Gross					Gross
	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
Security Type	Value		Losses			Value		Losses			Value		Losses
	(In thousands)
Agency residential CMOs	$	172,738	$	(389	)	$	2,127	$	(15	)	$	174,865	$	(404	)
Agency commercial MBS	176,063		(181		)	—		—			176,063		(181		)
Agency residential MBS	—		—			435		(1		)	435		(1		)
Asset-backed securities	115,481		(702		)	—		—			115,481		(702		)
Collateralized loan obligations	82,606		(298		)	—		—			82,606		(298		)
Private label residential CMOs	—		—			121		(2		)	121		(2		)
Total	$	546,888	$	(1,570	)	$	2,683	$	(18	)	$	549,571	$	(1,588	)

	December 31, 2018
	Less Than 12 Months					12 Months or More					Total
			Gross					Gross					Gross
	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
Security Type	Value		Losses			Value		Losses			Value		Losses
	(In thousands)
Agency residential CMOs	$	69,859	$	(326	)	$	164,097	$	(5,046	)	$	233,956	$	(5,372	)
Agency commercial MBS	40,641		(341		)	1,020,684		(21,184		)	1,061,325		(21,525		)
Municipal securities	52,386		(238		)	284,915		(7,082		)	337,301		(7,320		)
Agency residential MBS	60,164		(169		)	85,245		(2,131		)	145,409		(2,300		)
Asset-backed securities	11,548		(38		)	35,859		(443		)	47,407		(481		)
Private label residential CMOs	32,170		(831		)	49,237		(1,262		)	81,407		(2,093		)
SBA securities	249		(1		)	66,798		(1,110		)	67,047		(1,111		)
U.S. Treasury securities	49,729		(88		)	—		—			49,729		(88		)
Total	$	316,746	$	(2,032	)	$	1,706,835	$	(38,258	)	$	2,023,581	$	(40,290	)

We reviewed the securities that were in an unrealized loss position at September 30, 2019, and concluded their unrealized losses were a result of the level of market interest rates relative to the types of securities and pricing changes caused by shifting supply and demand dynamics and not a result of downgraded credit ratings or other indicators of deterioration of the underlying issuers' ability to repay. Accordingly, we determined the securities were temporarily impaired and we did not recognize such impairment in the condensed consolidated statements of earnings. Although we periodically sell securities for portfolio management purposes, we do not foresee having to sell any temporarily impaired securities strictly for liquidity needs and believe that it is more likely than not we would not be required to sell any temporarily impaired securities before recovery of their amortized cost.

Contractual Maturities of Securities Available-for-Sale

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

	September 30, 2019
	Amortized		Fair
Maturities	Cost		Value
	(In thousands)
Due in one year or less	$	3,240	$	3,248
Due after one year through five years	227,670		232,238
Due after five years through ten years	1,020,128		1,056,640
Due after ten years	2,432,483		2,525,222
Total securities available-for-sale	$	3,683,521	$	3,817,348

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.

Interest Income on Investment Securities

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

	Three Months Ended						Nine Months Ended
	September 30,		June 30,		September 30,		September 30,
	2019		2019		2018		2019		2018
	(In thousands)
Taxable interest	$	22,829	$	20,944	$	17,618	$	63,515	$	49,323
Non-taxable interest	5,565		7,547		10,127		22,705		31,510
Dividend income	412		457		316		1,214		1,096
Total interest income on investment securities	$	28,806	$	28,948	$	28,061	$	87,434	$	81,929

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Other Assets

9 Months Ended

Sep. 30, 2019

Other Assets [Abstract]

Other Assets

OTHER ASSETS

The following table presents the detail of our other assets as of the dates indicated:

	September 30,		December 31,
Other Assets	2019		2018
	(In thousands)
Cash surrender value of BOLI	$	197,887	$	194,897
Operating lease ROU assets, net	134,122		—
Interest receivable	80,955		88,754
LIHTC investments	67,367		59,507
CRA investments (1)	62,269		59,062
Prepaid expenses	18,351		18,006
Taxes receivable	17,281		39,096
Equity investments without readily determinable fair values	14,828		14,758
Equity warrants	3,532		4,793
Equity investments with readily determinable fair values	4,715		4,891
Other receivables/assets	19,752		39,132
Total other assets	$	621,059	$	522,896

________________________

(1) Includes equity investments without readily determinable fair values of $15.7 million and $12.5 million at September 30, 2019 and December 31, 2018.

The increase in the operating lease ROU assets in 2019 was due to the adoption of ASU 2016-02 effective January 1, 2019. See Note 8. Leases for further details.

Regarding our equity investments without readily determinable fair values, there were no impairments and no upward or downward adjustments during the nine months ended September 30, 2019. On a cumulative basis since January 1, 2018 and through September 30, 2019, we recorded impairments of $278,000 and upward adjustments of $286,000 to our equity investments without readily determinable fair values.

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Fair Value Measurements

9 Months Ended

Sep. 30, 2019

Fair Value Disclosures [Abstract]

Fair Value Measurements

FAIR VALUE MEASUREMENTS

ASC Topic 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 municipal securities, agency residential and commercial MBS, collateralized loan obligations, registered publicly rated private label CMOs, corporate debt securities, SBA securities, and asset-backed securitizations.

• 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 observable inputs from a pricing service not corroborated by observable market data, and includes our non-rated private label CMOs, non-rated private label asset-backed securities, and equity warrants.

The Company uses fair value to measure certain assets and liabilities on a recurring basis, primarily securities available‑for‑sale and derivatives. 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, CDI, and other long‑lived assets.

The following tables present information on the assets and liabilities measured and recorded at fair value on a recurring basis as of the dates indicated:

	Fair Value Measurements as of
	September 30, 2019
Measured on a Recurring Basis	Total		Level 1		Level 2		Level 3
	(In thousands)
Securities available‑for‑sale:
Agency residential CMOs	$	1,172,555	$	—	$	1,172,555	$	—
Agency commercial MBS	1,100,017		—		1,100,017		—
Municipal securities	721,981		—		721,981		—
Agency residential MBS	324,929		—		324,929		—
Asset-backed securities	214,151		—		182,783		31,368
Collateralized loan obligations	113,874		—		113,874		—
Private label residential CMOs	93,868		—		87,273		6,595
SBA securities	49,746		—		49,746		—
Corporate debt securities	21,024		—		21,024		—
U.S. Treasury securities	5,203		5,203		—		—
Total securities available-for-sale	3,817,348		5,203		3,774,182		37,963
Equity warrants	3,532		—		—		3,532
Other derivative assets	2,297		—		2,297		—
Equity investments with readily determinable fair values	4,715		4,715		—		—
Total recurring assets	$	3,827,892	$	9,918	$	3,776,479	$	41,495
Derivative liabilities	$	1,446	$	—	$	1,446	$	—

	Fair Value Measurements as of
	December 31, 2018
Measured on a Recurring Basis	Total		Level 1		Level 2		Level 3
	(In thousands)
Securities available‑for‑sale:
Municipal securities	$	1,312,194	$	—	$	1,312,194	$	—
Agency commercial MBS	1,112,704		—		1,112,704		—
Agency residential CMOs	632,850		—		632,850		—
U.S. Treasury securities	403,405		403,405		—		—
Agency residential MBS	281,088		—		281,088		—
Private label residential CMOs	101,205		—		93,917		7,288
Asset-backed securities	81,385		—		41,440		39,945
SBA securities	67,047		—		67,047		—
Corporate debt securities	17,553		—		17,553		—
Total securities available-for-sale	4,009,431		403,405		3,558,793		47,233
Equity warrants	4,793		—		—		4,793
Other derivative assets	3,292		—		3,292		—
Equity investments with readily determinable fair values	4,891		4,891		—		—
Total recurring assets	$	4,022,407	$	408,296	$	3,562,085	$	52,026
Derivative liabilities	$	142	$	—	$	142	$	—

During the nine months ended September 30, 2019, there was a $108,000 transfer from Level 3 equity warrants to Level 1 equity investments with readily determinable fair values measured on a recurring basis.

The following table presents information about quantitative inputs and assumptions used to determine the fair values provided by our third party pricing service for our Level 3 private label CMOs and asset-backed securities available-for-sale measured at fair value on a recurring basis as of the date indicated:

	September 30, 2019
	Private Label CMOs		Asset-Backed Securities
		Weighted	Input or	Weighted
	Range	Average	Range	Average
Unobservable Inputs	of Inputs	Input	of Inputs	Input
Voluntary annual prepayment speeds	2.9% - 18.2%	11.4%	12.0% - 15.0%	13.7%
Annual default rates (1)	0.0% - 11.1%	1.8%	2.0%	2.0%
Loss severity rates (1)	24.1% - 117.6%	58.5%	60.0%	60.0%
Discount rates	2.5% - 9.2%	6.3%	3.2% - 5.2%	4.3%

____________________

(1) The annual default rates and loss severity rates were the same for all of the asset-backed securities.

The following table presents information about quantitative inputs and assumptions used in the modified Black-Scholes option pricing model to determine the fair value for our Level 3 equity warrants measured at fair value on a recurring basis as of the date indicated:

	September 30, 2019
	Equity Warrants
	Weighted
	Average
Unobservable Inputs	Input
Volatility	17.0%
Risk-free interest rate	1.6%
Remaining life assumption (in years)	3.27

The following table summarizes activity for our Level 3 private label CMOs available-for-sale, asset-backed securities available-for-sale, and equity warrants measured at fair value on a recurring basis for the period indicated:

	Private			Asset-Backed			Equity
	Label CMOs			Securities			Warrants
	(In thousands)
Balance, December 31, 2018	$	7,288		$	39,945		$	4,793
Total included in earnings	340			(66		)	7,429
Total included in other comprehensive income	(160		)	646			—
Issuances	—			—			226
Sales and dispositions (1)	—			—			(8,808		)
Net settlements	(873		)	(9,157		)	—
Transfers to Level 1	—			—			(108		)
Balance, September 30, 2019	$	6,595		$	31,368		$	3,532

______________________

(1) Includes the exercise of warrants that upon exercise become equity securities in public companies. These are often subject to lock-up restrictions that must be met before the equity security can be sold, during which time they are reported as equity investments with readily determinable fair values.

The following tables present assets measured at fair value on a non‑recurring basis as of the dates indicated:

	Fair Value Measurement as of
	September 30, 2019
Measured on a Non‑Recurring Basis	Total		Level 1		Level 2		Level 3
	(In thousands)
Impaired loans	$	29,552	$	—	$	2,962	$	26,590
OREO	128		—		—		128
Total non-recurring	$	29,680	$	—	$	2,962	$	26,718

	Fair Value Measurement as of
	December 31, 2018
Measured on a Non‑Recurring Basis	Total		Level 1		Level 2		Level 3
	(In thousands)
Impaired loans	$	24,432	$	—	$	1,800	$	22,632
OREO	1,136		—		1,136		—
Total non-recurring	$	25,568	$	—	$	2,936	$	22,632

The following table presents losses recognized on assets measured on a nonrecurring basis for the periods indicated:

	Three Months Ended				Nine Months Ended
Losses on Assets	September 30,				September 30,
Measured on a Non‑Recurring Basis	2019		2018		2019		2018
	(In thousands)
Impaired loans	$	8,339	$	14,347	$	10,091	$	31,351
OREO	54		—		54		65
Total losses	$	8,393	$	14,347	$	10,145	$	31,416

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

	September 30, 2019
			Valuation	Unobservable		Weighted
Asset	Fair Value		Technique	Inputs	Range	Average
	(In thousands)
Impaired loans	$	21,543	Discounted cash flows	Discount rates	3.75% - 8.77%	7.58%
Impaired loans	5,047		Third party appraisals	No discounts
OREO	128		Third party appraisals	Discount (1)	31.91%	31.91%
Total non-recurring Level 3	$	26,718

____________________

(1) Relates to one OREO property at September 30, 2019.

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

	September 30, 2019
	Carrying		Estimated Fair Value
	Amount		Total		Level 1		Level 2		Level 3
	(In thousands)
Financial Assets:
Cash and due from banks	$	252,596	$	252,596	$	252,596	$	—	$	—
Interest‑earning deposits in financial institutions	483,405		483,405		483,405		—		—
Securities available‑for‑sale	3,817,348		3,817,348		5,203		3,774,182		37,963
Investment in FHLB stock	26,865		26,865		—		26,865		—
Loans and leases held for investment, net	18,596,991		18,751,105		—		2,962		18,748,143
Equity warrants	3,532		3,532		—		—		3,532
Other derivative assets	2,297		2,297		—		2,297		—
Equity investments with readily determinable fair values	4,715		4,715		4,715		—		—
Financial Liabilities:
Core deposits	16,471,264		16,471,264		—		16,471,264		—
Non-core non-maturity deposits	479,732		479,732		—		479,732		—
Time deposits	2,782,207		2,781,713		—		2,781,713		—
Borrowings	1,253,031		1,253,031		953,000		300,031		—
Subordinated debentures	456,145		439,895		—		439,895		—
Derivative liabilities	1,446		1,446		—		1,446		—

	December 31, 2018
	Carrying		Estimated Fair Value
	Amount		Total		Level 1		Level 2		Level 3
	(In thousands)
Financial Assets:
Cash and due from banks	$	175,830	$	175,830	$	175,830	$	—	$	—
Interest‑earning deposits in financial institutions	209,937		209,937		209,937		—		—
Securities available‑for‑sale	4,009,431		4,009,431		403,405		3,558,793		47,233
Investment in FHLB stock	32,103		32,103		—		32,103		—
Loans and leases held for investment, net	17,825,241		17,013,860		—		1,800		17,012,060
Equity warrants	4,793		4,793		—		—		4,793
Other derivative assets	3,292		3,292		—		3,292		—
Equity investments with readily determinable fair values	4,891		4,891		4,891		—		—
Financial Liabilities:
Core deposits	16,346,671		16,346,671		—		16,346,671		—
Non-core non-maturity deposits	518,192		518,192		—		518,192		—
Time deposits	2,005,638		2,017,137		—		2,017,137		—
Borrowings	1,371,114		1,371,114		1,371,000		114		—
Subordinated debentures	453,846		435,251		—		435,251		—
Derivative liabilities	142		142		—		142		—

For information regarding 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, as amended by ASU 2016-01 and ASU 2018-03), see Note 1. Nature of Operations and Summary of Significant Accounting Policies, and Note 13. Fair Value Measurements, to the Consolidated Financial Statements of the Company's 2018 Annual Report on Form 10-K.

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 reasonable 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, 2019, the amounts that will actually be realized or paid at settlement or maturity of the instruments could be significantly different.

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Recently Issued Accounting Standards (Tables)

9 Months Ended

Sep. 30, 2019

Recently Issued Accounting Standards [Abstract]

Schedule of New Accounting Pronouncements and Changes in Accounting Principles

		Effective	Effect on the Financial Statements
Standard	Description	Date	or Other Significant Matters
ASU 2016-13, "Measurement of Credit Losses on Financial Instruments," ASU 2018-19, “Codification Improvements to Topic 326, Financial Instruments - Credit Losses,” and ASU 2019-05, "Financial Instruments - Credit Losses (Topic 326): Targeted Transition Relief"	1. This Update changes the accounting and recognition of credit losses and impairment of financial assets recorded at amortized cost. Under the CECL model, the standard requires immediate recognition of estimated credit losses expected to occur over the remaining life of the asset. The forward-looking concept of CECL requires loss estimates for the remaining estimated life of the financial assets using historical experience, current conditions and reasonable and supportable forecasts. 2. The Update modifies the other-than-temporary impairment (OTTI) model for AFS debt securities to require an allowance for credit impairment instead of a direct write-down, which allows for reversal of credit improvements in future periods. 3. In addition, the Update eliminates the existing guidance for PCI loans, but requires an allowance for purchased financial assets with credit deterioration. 4. Receivables arising from operating leases are not within the scope of CECL. 5. The Update must be applied using the modified retrospective method with a cumulative-effect adjustment to retained earnings as of the beginning of the year of adoption. A prospective transition approach is required for available-for-sale debt securities for which an OTTI had been recognized before the adoption date. Early adoption is permitted.	January 1, 2020	1. The Company has established a multidisciplinary project team and implementation plan, selected a software solution, reached accounting decisions on various matters, developed a conceptual framework, and developed econometric regression models for the reasonable and supportable ("R&S") forecast period. 2. The Company continues to test and refine the CECL models and has completed four preliminary calculations with one more scheduled before adoption. The Company continues to perform testing and sensitivity analysis on its modeling assumptions and results. 3. Our planned approach for estimating expected life-time credit losses include the following key components for all loan portfolio segments: a. The use of a probability of default/loss given default methodology; b. A single scenario based on the consensus forecast from Moody's to develop an economic forecast for the R&S period; c. An initial R&S forecast period of four quarters for all loan portfolio segments, which reflects management's expectation of losses based on forward-looking economic scenarios over that time; d. A post-R&S reversion period of two quarters using a straight-line approach; e. A historical loss period of at least 40 quarters, which represents a full economic credit cycle; and f. Prepayments rates based on our historical experience. 4. We plan to adopt this new standard on January 1, 2020. Our latest estimate of the impact based on September 30, 2019 loan data and economic forecasts indicates that the allowance for credit losses would increase from 0% to 10% upon adoption. We have also updated our internal controls over financial reporting in preparation of adopting this new standard. 5. The current estimate and future calculations are highly dependent on loan composition, of which the vast majority is comprised of short-duration commercial loans; the macroeconomic conditions and forecasts; and other management assumptions and judgments.

		Effective	Effect on the Financial Statements
Standard	Description	Date	or Other Significant Matters
ASU 2017-04, "Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment"	1. This Update simplifies goodwill impairment testing by eliminating the second step of the analysis under which the implied fair value of goodwill is determined as if the reporting unit were being acquired in a business combination. 2. The goodwill impairment test is performed by comparing the fair value of a reporting unit with its carrying amount, and an impairment charge would be recognized for any amount by which the carrying amount exceeds the reporting unit's fair value, to the extent that the loss recognized does not exceed the amount of goodwill allocated to that reporting unit. 3. The Update must be applied prospectively and early adoption is permitted.	January 1, 2020	The adoption of this guidance is not expected to have a material impact on the Company’s consolidated financial position or results of operations and we plan to adopt this standard on January 1, 2020.

		Effective	Effect on the Financial Statements
Standard	Description	Date	or Other Significant Matters
ASU 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework - Changes to Disclosure Requirements for Fair Value Measurements”	1. This Update modified the disclosure requirements in Topic 820 to add disclosures regarding changes in unrealized gains and losses, the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements and the narrative description of measurement uncertainty. 2. Certain disclosure requirements in Topic 820 are also removed or modified. Certain disclosures in ASU 2018-13 would need to be applied on a retrospective basis and others on a prospective basis and early adoption is permitted.	January 1, 2020	The adoption of this guidance will modify disclosures but will not have an impact on the Company’s consolidated financial position or results of operations. The Company has early adopted any removed or modified disclosures effective January 1, 2019 but will defer adoption of the additional disclosures until January 1, 2020 as permitted in the transition guidance of the standard.

		Effective	Effect on the Financial Statements
Standard	Description	Date	or Other Significant Matters
ASU 2019-04, "Codification Improvements to Topic 326, Financial Instruments - Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments"	1. This Update made clarifications and amendments to five topics: (i) Topic A: Codification Improvements Resulting from the June and November 2018 Credit Losses Transition Resource Group ("TRG") Meetings, (ii) Topic B: Codification Improvements to ASU 2016-13, (iii) Topic C: Codification Improvements to ASU 2017-12, "Derivatives and Hedging (Topic 815)" and Other Hedging Items, (iv) Topic D: Codification Improvements to ASU 2016-01, "Financial Instruments - Overall (Subtopic 825-10)," and (v) Topic E: Codification Improvements Resulting from the November 2018 Credit Losses TRG Meeting. 2. In addition to conforming amendments that correct for errors and oversights, the Update in Topics A, B, and E, which impacts CECL implementation, amends or clarifies guidance for accrued interest; transfers between classifications or categories of loans and debt securities; recoveries; effect of prepayments in determining the effective interest rate; estimated costs to sell when foreclosure is probable; vintage disclosure presentation related to line-of-credit arrangements converted to term loans; contractual extensions or renewals; and others. 3. Transition requirements for the amendments are the same as ASU 2016-13 for the Update in Topics A, B, and E. The Update in Topic C may be applied retrospectively as of the date of initial adoption of ASU 2017-12 or prospectively. The Update in Topic D must be applied on a modified retrospective method with a cumulative-effect adjustment to retained earnings as of the beginning of the year of adoption and early adoption is permitted.	January 1, 2020; except for Topic C - January 1, 2019	1. Impacts from the adoption of Topics A, B, and E within this Update will be considered in the Company's overall CECL implementation and we plan to adopt this Update concurrent with the adoption of ASU 2016-13. 2. The adoption of Topic D within this Update is not expected to have a material impact on the Company's consolidated financial position or results of operations and we plan to adopt this standard on January 1, 2020. 3. Topic C within this Update is not applicable to us and therefore there is no impact on the Company's consolidated financial position or results of operations.

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Commitments and Contingencies (Tables)

9 Months Ended

Sep. 30, 2019

Commitments and Contingencies Disclosure [Abstract]

Commitments disclosure

The following table presents a summary of commitments described below as of the dates indicated:

	September 30,		December 31,
	2019		2018
	(In thousands)
Loan commitments to extend credit	$	7,790,796	$	7,528,248
Standby letters of credit	367,147		364,210
Commitments to contribute capital to low income housing project partnerships
and small business investment companies	116,012		101,991
Commitments to contribute capital to private equity funds	50		50
Total	$	8,274,005	$	7,994,499

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Loans and Leases (Details 8) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018	Dec. 31, 2018
Allowance for Loan and Lease Losses [Roll Forward]
Balance, beginning of period	$ 135,037	$ 132,139	$ 132,472
Charge-offs	(6,501)	(3,308)	(27,603)
Recoveries	2,016	1,589	11,683
Allowance for Loan and Lease Losses, Net charge-offs	(4,485)	(1,719)	(15,920)
Provision	8,000	11,500	22,000
Balance, end of period	138,552	141,920	138,552	$ 141,920
The ending balance of the loan and lease portfolio is composed of loans and leases:
Ending balance of loans and leases	18,735,543		18,735,543		$ 17,957,713
Non Purchased Credit Impaired Loans and Leases
Allowance for Loan and Lease Losses [Roll Forward]
Balance, beginning of period	135,037	132,139	132,472	139,456
Charge-offs	(6,501)	(3,308)	(27,603)	(33,696)
Recoveries	2,016	1,589	11,683	9,886
Allowance for Loan and Lease Losses, Net charge-offs				(23,810)
Provision	8,000	11,500	22,000	26,274
Balance, end of period	138,552	141,920	138,552	141,920
Amount of the allowance applicable to loans and leases:
Individually evaluated for impairment	9,330	20,859	9,330	20,859
Collectively evaluated for impairment	129,222	121,061	129,222	121,061
The ending balance of the loan and lease portfolio is composed of loans and leases:
Individually evaluated for impairment	110,620	130,011	110,620	130,011
Collectively evaluated for impairment	18,624,923	17,100,135	18,624,923	17,100,135
Ending balance of loans and leases	18,735,543	17,230,146	18,735,543	17,230,146	17,957,713
Purchased Credit Impaired Loans and Leases
Allowance for Loan and Lease Losses [Roll Forward]
Balance, beginning of period				6,400
Real Estate Mortgage
Allowance for Loan and Lease Losses [Roll Forward]
Allowance for Loan and Lease Losses, Net charge-offs	(25)	(504)	(372)	(6,072)
The ending balance of the loan and lease portfolio is composed of loans and leases:
Ending balance of loans and leases	7,896,924		7,896,924		7,918,141
Real Estate Mortgage | Non Purchased Credit Impaired Loans and Leases
Allowance for Loan and Lease Losses [Roll Forward]
Balance, beginning of period	46,826	45,467	46,021	40,051
Charge-offs	(120)	(726)	(850)	(8,071)
Recoveries	95	222	478	1,999
Provision	(1,655)	1,394	(503)	12,378
Balance, end of period	45,146	46,357	45,146	46,357
Amount of the allowance applicable to loans and leases:
Individually evaluated for impairment	248	496	248	496
Collectively evaluated for impairment	44,898	45,861	44,898	45,861
The ending balance of the loan and lease portfolio is composed of loans and leases:
Individually evaluated for impairment	29,808	44,985	29,808	44,985
Collectively evaluated for impairment	7,867,116	7,633,675	7,867,116	7,633,675
Ending balance of loans and leases	7,896,924	7,678,660	7,896,924	7,678,660	7,918,141
Real Estate Construction and Land
Allowance for Loan and Lease Losses [Roll Forward]
Allowance for Loan and Lease Losses, Net charge-offs	0	23	0	49
The ending balance of the loan and lease portfolio is composed of loans and leases:
Ending balance of loans and leases	2,551,474		2,551,474		2,233,656
Real Estate Construction and Land | Non Purchased Credit Impaired Loans and Leases
Allowance for Loan and Lease Losses [Roll Forward]
Balance, beginning of period	26,378	26,210	28,209	13,055
Charge-offs	0	0	0	0
Recoveries	0	23	0	49
Provision	683	(47)	(1,148)	13,082
Balance, end of period	27,061	26,186	27,061	26,186
Amount of the allowance applicable to loans and leases:
Individually evaluated for impairment	0	0	0	0
Collectively evaluated for impairment	27,061	26,186	27,061	26,186
The ending balance of the loan and lease portfolio is composed of loans and leases:
Individually evaluated for impairment	5,357	5,533	5,357	5,533
Collectively evaluated for impairment	2,546,117	1,995,424	2,546,117	1,995,424
Ending balance of loans and leases	2,551,474	2,000,957	2,551,474	2,000,957	2,233,656
Commercial
Allowance for Loan and Lease Losses [Roll Forward]
Allowance for Loan and Lease Losses, Net charge-offs	(4,123)	(1,069)	(14,867)	(17,619)
The ending balance of the loan and lease portfolio is composed of loans and leases:
Ending balance of loans and leases	7,878,557		7,878,557		7,404,595
Commercial | Non Purchased Credit Impaired Loans and Leases
Allowance for Loan and Lease Losses [Roll Forward]
Balance, beginning of period	59,401	58,806	56,360	84,022
Charge-offs	(6,021)	(2,372)	(25,951)	(25,321)
Recoveries	1,898	1,303	11,084	7,702
Provision	8,907	9,907	22,692	1,241
Balance, end of period	64,185	67,644	64,185	67,644
Amount of the allowance applicable to loans and leases:
Individually evaluated for impairment	9,082	20,363	9,082	20,363
Collectively evaluated for impairment	55,103	47,281	55,103	47,281
The ending balance of the loan and lease portfolio is composed of loans and leases:
Individually evaluated for impairment	75,455	79,493	75,455	79,493
Collectively evaluated for impairment	7,803,102	7,072,565	7,803,102	7,072,565
Ending balance of loans and leases	7,878,557	7,152,058	7,878,557	7,152,058	7,404,595
Consumer
Allowance for Loan and Lease Losses [Roll Forward]
Allowance for Loan and Lease Losses, Net charge-offs	(337)	(169)	(681)	(168)
The ending balance of the loan and lease portfolio is composed of loans and leases:
Ending balance of loans and leases					401,321
Consumer | Non Purchased Credit Impaired Loans and Leases
Allowance for Loan and Lease Losses [Roll Forward]
Balance, beginning of period	2,432	1,656	1,882	2,328
Charge-offs	(360)	(210)	(802)	(304)
Recoveries	23	41	121	136
Provision	65	246	959	(427)
Balance, end of period	2,160	1,733	2,160	1,733
Amount of the allowance applicable to loans and leases:
Individually evaluated for impairment	0	0	0	0
Collectively evaluated for impairment	2,160	1,733	2,160	1,733
The ending balance of the loan and lease portfolio is composed of loans and leases:
Individually evaluated for impairment	0	0	0	0
Collectively evaluated for impairment	408,588	398,471	408,588	398,471
Ending balance of loans and leases	408,588	398,471	408,588	398,471	$ 401,321
Non Purchased Credit Impaired Loans and Leases
Allowance for Loan and Lease Losses [Roll Forward]
Allowance for Loan and Lease Losses, Net charge-offs	$ (4,485)	$ (1,719)	$ (15,920)	$ (23,810)

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Foreclosed Assets (Details 1) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018
Other Real Estate Owned Net Covered and NonCovered Including Foreclosed Assets [Abstract]
Balance, beginning of period	$ 5,299
Loans transferred to foreclosed assets	37	$ 3,235
Provision for losses	(54)
Reductions related to sales	(3,916)
Balance, end of period	$ 1,366

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Revenue From Contracts With Customers (Details 1) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Revenue From Contracts With Customers [Abstract]
Products and services transferred at a point in time	$ 5,046	$ 4,604	$ 14,579	$ 14,195
Products and services transferred over time	3,872	4,586	12,361	14,083
Total revenue from contracts with customers	$ 8,918	$ 9,190	$ 26,940	$ 28,278

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Fair Value Measurements (Details 2) - Weighted Average - Warrant - Fair Value, Measurements, Recurring - Level 3	9 Months Ended
	Sep. 30, 2019
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity Warrants, Measurement Input, Remaining Life	3 years 3 months 7 days
Measurement Input, Price Volatility
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Volatility	0.170
Measurement Input, Risk Free Interest Rate
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Volatility	0.016

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Commitments and Contingencies (Details) - USD ($)	Sep. 30, 2019	Dec. 31, 2018
Commitments and Contingencies Disclosure [Abstract]
Loans and Leases Commitments To Extend Credit	$ 7,790,796,000	$ 7,528,248,000
Guarantor Obligations, Maximum Exposure, Undiscounted	367,147,000	364,210,000
Commitment To Contribute Capital	116,012,000	101,991,000
Remaining minimum amount committed	50,000	50,000
Unused Commitments to Extend Credit	$ 8,274,005,000	$ 7,994,499,000

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Fair Value Measurements (Details 8) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Cash and due from banks	$ 252,596	$ 175,830
Interest-earning deposits in financial institutions	483,405	209,937
Securities available-for-sale, Carrying Amount	3,817,348	4,009,431
Investment in FHLB stock, Carrying Amount	26,865	32,103
Investment in FHLB stock, Fair Value	26,865	32,103
Loans and leases, net	18,596,991	17,825,241
Loans and leases held for investment, net	18,751,105
Warrants and Rights Outstanding		4,793
Other derivative assets, Carrying Amount	2,297	3,292
Equity Securities, FV-NI	4,715	4,891
Demand, interest checking, money market, and savings deposits	16,471,264	16,346,671
Interest-bearing Domestic Deposit, Brokered	479,732	518,192
Time deposits	2,782,207	2,005,638
Time deposits	2,781,713	2,017,137
Borrowings	1,253,031	1,371,114
Borrowings	1,253,031	1,371,114
Subordinated debentures	456,145	453,846
Subordinated debentures	439,895	435,251
Derivative Liability	1,446	142
Level 1
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Cash and due from banks	252,596	175,830
Interest-earning deposits in financial institutions	483,405	209,937
Investment in FHLB stock, Fair Value	0	0
Demand, interest checking, money market, and savings deposits	0	0
Interest-bearing Domestic Deposit, Brokered	0	0
Time deposits	0	0
Borrowings	953,000	1,371,000
Subordinated debentures	0	0
Level 2
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Cash and due from banks	0	0
Interest-earning deposits in financial institutions	0	0
Investment in FHLB stock, Fair Value	26,865	32,103
Demand, interest checking, money market, and savings deposits	16,471,264	16,346,671
Interest-bearing Domestic Deposit, Brokered	479,732	518,192
Time deposits	2,781,713	2,017,137
Borrowings	300,031	114
Subordinated debentures	439,895	435,251
Level 3
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Cash and due from banks	0	0
Interest-earning deposits in financial institutions	0	0
Investment in FHLB stock, Fair Value	0	0
Loans and leases held for investment, net	18,748,143
Equity warrants		4,793
Demand, interest checking, money market, and savings deposits	0	0
Interest-bearing Domestic Deposit, Brokered	0	0
Time deposits	0	0
Borrowings	0	0
Subordinated debentures	0	0
Fair Value, Measurements, Recurring
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Equity warrants	3,532	4,793
Other derivative assets, Fair Value	2,297	3,292
Derivative liabilities	1,446	142
Fair Value, Measurements, Recurring | Level 1
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Securities available-for-sale, Carrying Amount	5,203	403,405
Equity warrants	0	0
Other derivative assets, Fair Value	0	0
Equity Securities, FV-NI	4,715	4,891
Derivative liabilities	0	0
Fair Value, Measurements, Recurring | Level 2
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Securities available-for-sale, Carrying Amount	3,774,182	3,558,793
Equity warrants	0	0
Other derivative assets, Fair Value	2,297	3,292
Equity Securities, FV-NI	0	0
Derivative liabilities	1,446	142
Fair Value, Measurements, Recurring | Level 3
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Securities available-for-sale, Carrying Amount	37,963	47,233
Equity warrants	3,532	4,793
Other derivative assets, Fair Value	0	0
Equity Securities, FV-NI	0	0
Derivative liabilities	0	0
NonPCI and PCI Loans
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Loans and leases held for investment, net		17,013,860
NonPCI and PCI Loans | Level 1
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Loans and leases held for investment, net	0	0
NonPCI and PCI Loans | Level 2
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Loans and leases held for investment, net	$ 2,962	1,800
NonPCI and PCI Loans | Level 3
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Loans and leases held for investment, net		$ 17,012,060

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Fair Value Measurements (Details 6) - Non Purchased Credit Impaired Loans and Leases - Fair Value, Measurements, Nonrecurring - Level 3	9 Months Ended
	Sep. 30, 2019
Weighted Average | Discount Rates | Third party appraisals
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Discount rates	0.3191
Measurement Input, Discount Rate | Minimum | Discounted Cash Flow
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Discount rates	0.0375
Measurement Input, Discount Rate | Minimum | Discount Rates | Discounted Cash Flow
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Discount rates	0.0375
Measurement Input, Discount Rate | Maximum | Discounted Cash Flow
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Discount rates	0.0877
Measurement Input, Discount Rate | Maximum | Discount Rates | Discounted Cash Flow
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Discount rates	0.0877
Measurement Input, Discount Rate | Weighted Average | Discounted Cash Flow
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Discount rates	0.0758
Measurement Input, Discount Rate | Weighted Average | Discount Rates | Discounted Cash Flow
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Discount rates	0.0758

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Subsequent Events (Details Textuals) - $ / shares		3 Months Ended
	Nov. 01, 2019	Sep. 30, 2019	Sep. 30, 2018
Subsequent Event [Line Items]
Dividends declared per share (usd per share)		$ 0.60	$ 0.50
Subsequent Event | Dividend Declared
Subsequent Event [Line Items]
Dividends declared per share (usd per share)	$ 0.60

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Earnings Per Share

9 Months Ended

Sep. 30, 2019

Earnings Per Share [Abstract]

Earnings Per Share

EARNINGS PER SHARE

The following table presents the computations of basic and diluted net earnings per share for the periods indicated:

	Three Months Ended									Nine Months Ended
	September 30,			June 30,			September 30,			September 30,
	2019			2019			2018			2019			2018
	(Dollars in thousands, except per share data)
Basic Earnings Per Share:
Net earnings	$	110,026		$	128,125		$	116,287		$	350,755		$	350,298
Less: Earnings allocated to unvested restricted stock(1)	(1,369		)	(1,190		)	(1,428		)	(3,725		)	(3,899		)
Net earnings allocated to common shares	$	108,657		$	126,935		$	114,859		$	347,030		$	346,399
Weighted-average basic shares and unvested restricted
stock outstanding	119,831			120,042			123,657			120,691			125,728
Less: Weighted-average unvested restricted stock
outstanding	(1,622		)	(1,462		)	(1,537		)	(1,480		)	(1,473		)
Weighted-average basic shares outstanding	118,209			118,580			122,120			119,211			124,255
Basic earnings per share	$	0.92		$	1.07		$	0.94		$	2.91		$	2.79
Diluted Earnings Per Share:
Net earnings allocated to common shares	$	108,657		$	126,935		$	114,859		$	347,030		$	346,399
Weighted-average diluted shares outstanding	118,209			118,580			122,120			119,211			124,255
Diluted earnings per share	$	0.92		$	1.07		$	0.94		$	2.91		$	2.79

________________________

(1)

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

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Loans and Leases

9 Months Ended

Sep. 30, 2019

Receivables [Abstract]

Loans and Leases

LOANS AND LEASES

Our loans are carried at the principal amount outstanding, net of deferred fees and costs, and in the case of acquired and purchased loans, net of purchase discounts and premiums. Deferred fees and costs and purchase discounts and premiums on acquired non-impaired loans are recognized as an adjustment to interest income over the contractual life of the loans primarily using the effective interest method or taken into income when the related loans are paid off or included in the carrying amount of loans that are sold.

Loans and Leases Held for Investment

The following table summarizes the composition of our loans and leases held for investment as of the dates indicated:

	September 30,			December 31,
	2019			2018
	(In thousands)
Real estate mortgage	$	7,908,097		$	7,933,859
Real estate construction and land	2,581,317			2,262,710
Commercial	7,898,042			7,428,500
Consumer	408,555			401,296
Total gross loans and leases held for investment	18,796,011			18,026,365
Deferred fees, net	(60,468		)	(68,652		)
Total loans and leases held for investment, net of deferred fees	18,735,543			17,957,713
Allowance for loan and lease losses	(138,552		)	(132,472		)
Total loans and leases held for investment, net	$	18,596,991		$	17,825,241

The following tables present an aging analysis of our loans and leases held for investment, net of deferred fees, by loan portfolio segment and class as of the dates indicated:

	September 30, 2019
	30 - 89		90 or More
	Days		Days		Total
	Past Due		Past Due		Past Due		Current		Total
	(In thousands)
Real estate mortgage:
Commercial	$	2,867	$	7,137	$	10,004	$	4,290,562	$	4,300,566
Income producing and other residential	4,551		469		5,020		3,591,338		3,596,358
Total real estate mortgage	7,418		7,606		15,024		7,881,900		7,896,924
Real estate construction and land:
Commercial	—		—		—		1,009,362		1,009,362
Residential	2,622		—		2,622		1,539,490		1,542,112
Total real estate construction and land	2,622		—		2,622		2,548,852		2,551,474
Commercial:
Asset-based	48		662		710		3,810,031		3,810,741
Venture capital	—		—		—		2,209,649		2,209,649
Other commercial	6,742		2,241		8,983		1,849,184		1,858,167
Total commercial	6,790		2,903		9,693		7,868,864		7,878,557
Consumer	795		408		1,203		407,385		408,588
Total	$	17,625	$	10,917	$	28,542	$	18,707,001	$	18,735,543

	December 31, 2018
	30 - 89		90 or More
	Days		Days		Total
	Past Due		Past Due		Past Due		Current		Total
	(In thousands)
Real estate mortgage:
Commercial	$	3,487	$	7,541	$	11,028	$	4,813,270	$	4,824,298
Income producing and other residential	1,557		476		2,033		3,091,810		3,093,843
Total real estate mortgage	5,044		8,017		13,061		7,905,080		7,918,141
Real estate construction and land:
Commercial	—		442		442		912,141		912,583
Residential	1,527		—		1,527		1,319,546		1,321,073
Total real estate construction and land	1,527		442		1,969		2,231,687		2,233,656
Commercial:
Asset-based	47		646		693		3,304,728		3,305,421
Venture capital	4,705		—		4,705		2,034,043		2,038,748
Other commercial	5,181		1,285		6,466		2,053,960		2,060,426
Total commercial	9,933		1,931		11,864		7,392,731		7,404,595
Consumer	581		333		914		400,407		401,321
Total	$	17,085	$	10,723	$	27,808	$	17,929,905	$	17,957,713

It is our policy to discontinue accruing interest when principal or interest payments are past due 90 days or more (unless the loan is both well secured and in the process of collection) 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. Interest income on nonaccrual loans is recognized only to the extent cash is received and the principal balance of the loan is deemed collectable.

The following table presents our nonaccrual and performing loans and leases held for investment, net of deferred fees, by loan portfolio segment and class as of the dates indicated:  

	September 30, 2019						December 31, 2018
	Nonaccrual		Performing		Total		Nonaccrual		Performing		Total
	(In thousands)
Real estate mortgage:
Commercial	$	19,515	$	4,281,051	$	4,300,566	$	15,321	$	4,808,977	$	4,824,298
Income producing and other residential	2,868		3,593,490		3,596,358		2,524		3,091,319		3,093,843
Total real estate mortgage	22,383		7,874,541		7,896,924		17,845		7,900,296		7,918,141
Real estate construction and land:
Commercial	377		1,008,985		1,009,362		442		912,141		912,583
Residential	—		1,542,112		1,542,112		—		1,321,073		1,321,073
Total real estate construction and land	377		2,551,097		2,551,474		442		2,233,214		2,233,656
Commercial:
Asset-based	33,015		3,777,726		3,810,741		32,324		3,273,097		3,305,421
Venture capital	20,131		2,189,518		2,209,649		20,299		2,018,449		2,038,748
Other commercial	22,554		1,835,613		1,858,167		7,380		2,053,046		2,060,426
Total commercial	75,700		7,802,857		7,878,557		60,003		7,344,592		7,404,595
Consumer	653		407,935		408,588		1,043		400,278		401,321
Total	$	99,113	$	18,636,430	$	18,735,543	$	79,333	$	17,878,380	$	17,957,713

At September 30, 2019, nonaccrual loans and leases totaled $99.1 million and included $10.9 million of loans and leases 90 or more days past due, $6.3 million of loans and leases 30 to 89 days past due, and $81.9 million of loans and leases current with respect to contractual payments that were placed on nonaccrual status based on management’s judgment regarding their collectability. Nonaccrual loans and leases totaled $79.3 million at December 31, 2018, including $10.7 million of loans and leases 90 or more days past due, $6.6 million of loans and leases 30 to 89 days past due, and $62.0 million of current loans and leases that were placed on nonaccrual status based on management’s judgment regarding their collectability.

As of September 30, 2019, our three largest loan relationships on nonaccrual status had an aggregate carrying value of $53.4 million and represented 54% of total nonaccrual loans and leases.

The following tables present the credit risk rating categories for loans and leases held for investment, net of deferred fees, by loan portfolio segment and class as of the dates indicated. Classified loans and leases are those with a credit risk rating of either substandard or doubtful.

	September 30, 2019
	Classified		Special Mention		Pass		Total
	(In thousands)
Real estate mortgage:
Commercial	$	34,952	$	39,309	$	4,226,305	$	4,300,566
Income producing and other residential	8,670		1,005		3,586,683		3,596,358
Total real estate mortgage	43,622		40,314		7,812,988		7,896,924
Real estate construction and land:
Commercial	377		—		1,008,985		1,009,362
Residential	—		837		1,541,275		1,542,112
Total real estate construction and land	377		837		2,550,260		2,551,474
Commercial:
Asset-based	50,634		41,974		3,718,133		3,810,741
Venture capital	34,489		66,255		2,108,905		2,209,649
Other commercial	58,707		117,931		1,681,529		1,858,167
Total commercial	143,830		226,160		7,508,567		7,878,557
Consumer	778		614		407,196		408,588
Total	$	188,607	$	267,925	$	18,279,011	$	18,735,543

	December 31, 2018
	Classified		Special Mention		Pass		Total
	(In thousands)
Real estate mortgage:
Commercial	$	57,734	$	74,785	$	4,691,779	$	4,824,298
Income producing and other residential	10,521		968		3,082,354		3,093,843
Total real estate mortgage	68,255		75,753		7,774,133		7,918,141
Real estate construction and land:
Commercial	442		7,041		905,100		912,583
Residential	—		1,527		1,319,546		1,321,073
Total real estate construction and land	442		8,568		2,224,646		2,233,656
Commercial:
Asset-based	45,957		48,338		3,211,126		3,305,421
Venture capital	28,731		77,588		1,932,429		2,038,748
Other commercial	92,526		50,136		1,917,764		2,060,426
Total commercial	167,214		176,062		7,061,319		7,404,595
Consumer	1,199		1,015		399,107		401,321
Total	$	237,110	$	261,398	$	17,459,205	$	17,957,713

Nonaccrual loans and leases and performing TDRs are considered impaired for reporting purposes. TDRs are a result of rate reductions, term extensions, fee concessions, and debt forgiveness, or a combination thereof.

The following table presents the composition of our impaired loans and leases held for investment, net of deferred fees, by loan portfolio segment as of the dates indicated:

	September 30, 2019						December 31, 2018
					Total						Total
	Nonaccrual				Impaired		Nonaccrual				Impaired
	Loans				Loans		Loans				Loans
	and		Performing		and		and		Performing		and
	Leases		TDRs		Leases		Leases		TDRs		Leases
	(In thousands)
Real estate mortgage	$	22,383	$	10,292	$	32,675	$	17,845	$	11,484	$	29,329
Real estate construction and land	377		4,980		5,357		442		5,420		5,862
Commercial	75,700		980		76,680		60,003		692		60,695
Consumer	653		77		730		1,043		105		1,148
Total	$	99,113	$	16,329	$	115,442	$	79,333	$	17,701	$	97,034

The following tables present information regarding our impaired loans and leases held for investment, net of deferred fees, by loan portfolio segment and class as of and for the dates indicated:

	September 30, 2019						December 31, 2018
			Unpaid						Unpaid
	Recorded		Principal		Related		Recorded		Principal		Related
Impaired Loans and Leases	Investment		Balance		Allowance		Investment		Balance		Allowance
	(In thousands)
With An Allowance Recorded:
Real estate mortgage:
Commercial	$	485	$	485	$	71	$	1,736	$	1,648	$	170
Income producing and other residential	2,032		2,030		177		2,569		2,563		247
Commercial:
Asset based	500		500		500		—		—		—
Venture capital	12,379		13,570		6,177		11,621		13,255		3,141
Other commercial	16,969		18,044		2,405		473		482		473
With No Related Allowance Recorded:
Real estate mortgage:
Commercial	$	22,503	$	37,568			$	17,783	$	32,035
Income producing and other residential	7,655		10,058				7,241		9,425
Real estate construction and land:
Commercial	5,357		5,402				5,862		5,870
Commercial:
Asset-based	32,515		50,633				32,324		38,100
Venture capital	7,752		39,440				8,678		41,335
Other commercial	6,565		24,868				7,599		25,740
Consumer	730		896				1,148		1,470
Total Loans and Leases With and
Without an Allowance Recorded:
Real estate mortgage	$	32,675	$	50,141	$	248	$	29,329	$	45,671	$	417
Real estate construction and land	5,357		5,402		—		5,862		5,870		—
Commercial	76,680		147,055		9,082		60,695		118,912		3,614
Consumer	730		896		—		1,148		1,470		—
Total	$	115,442	$	203,494	$	9,330	$	97,034	$	171,923	$	4,031

	Three Months Ended September 30,
	2019				2018
	Weighted		Interest		Weighted		Interest
	Average		Income		Average		Income
Impaired Loans and Leases	Balance(1)		Recognized		Balance(1)		Recognized
	(In thousands)
With An Allowance Recorded:
Real estate mortgage:
Commercial	$	485	$	8	$	1,781	$	18
Income producing and other residential	2,031		15		2,494		21
Commercial:
Asset-based	163		—		—		—
Venture capital	12,343		—		28,322		—
Other commercial	2,181		9		1,360		—
With No Related Allowance Recorded:
Real estate mortgage:
Commercial	$	19,745	$	56	$	34,155	$	129
Income producing and other residential	7,615		56		7,906		45
Real estate construction and land:
Commercial	5,357		98		5,533		95
Residential	—		—		—		—
Commercial:
Asset-based	30,880		—		34,618		—
Venture capital	7,752		—		1,421		—
Other commercial	6,096		6		8,108		25
Consumer	568		1		383		2
Total Loans and Leases With and
Without an Allowance Recorded:
Real estate mortgage	$	29,876	$	135	$	46,336	$	213
Real estate construction and land	5,357		98		5,533		95
Commercial	59,415		15		73,829		25
Consumer	568		1		383		2
Total	$	95,216	$	249	$	126,081	$	335

_________________________

(1) For loans and leases reported as impaired at September 30, 2019 and 2018, amounts were calculated based on the period of time such loans and leases were impaired during the reported period.

	Nine Months Ended September 30,
	2019				2018
	Weighted		Interest		Weighted		Interest
	Average		Income		Average		Income
Impaired Loans and Leases	Balance(1)		Recognized		Balance(1)		Recognized
	(In thousands)
With An Allowance Recorded:
Real estate mortgage:
Commercial	$	485	$	24	$	1,781	$	55
Income producing and other residential	2,031		44		2,494		62
Commercial:
Asset-based	55		—		—		—
Venture capital	9,201		—		17,459		—
Other commercial	1,125		26		688		—
With No Related Allowance Recorded:
Real estate mortgage:
Commercial	$	16,729	$	162	$	32,098	$	376
Income producing and other residential	7,488		163		7,845		132
Real estate construction and land:
Commercial	5,357		290		5,533		283
Commercial:
Asset-based	29,989		—		34,618		—
Venture capital	6,173		—		1,330		—
Other commercial	5,606		22		7,417		70
Consumer	493		4		373		6
Total Loans and Leases With and
Without an Allowance Recorded:
Real estate mortgage	$	26,733	$	393	$	44,218	$	625
Real estate construction and land	5,357		290		5,533		283
Commercial	52,149		48		61,512		70
Consumer	493		4		373		6
Total	$	84,732	$	735	$	111,636	$	984

_________________________

(1) For loans and leases reported as impaired at September 30, 2019 and 2018, amounts were calculated based on the period of time such loans and leases were impaired during the reported period.

The following table presents our troubled debt restructurings of loans held for investment by loan portfolio segment and class for the periods indicated:

	Three Months Ended September 30,
	2019					2018
		Pre-		Post-			Pre-		Post-
		Modification		Modification			Modification		Modification
	Number	Outstanding		Outstanding		Number	Outstanding		Outstanding
	of	Recorded		Recorded		of	Recorded		Recorded
Troubled Debt Restructurings	Loans	Investment		Investment		Loans	Investment		Investment
	(Dollars in thousands)
Real estate mortgage:
Commercial	—	$	—	$	—	4	$	2,889	$	712
Income producing and other residential	2	495		495		5	912		912
Commercial:
Asset-based	—	—		—		4	28,947		33,947
Venture capital	1	—		—		5	23,501		23,501
Other commercial	3	99		99		5	1,487		1,115
Total	6	$	594	$	594	23	$	57,736	$	60,187

	Nine Months Ended September 30,
	2019					2018
		Pre-		Post-			Pre-		Post-
		Modification		Modification			Modification		Modification
	Number	Outstanding		Outstanding		Number	Outstanding		Outstanding
	of	Recorded		Recorded		of	Recorded		Recorded
Troubled Debt Restructurings	Loans	Investment		Investment		Loans	Investment		Investment
	(Dollars in thousands)
Real estate mortgage:
Commercial	1	$	37	$	—	4	$	2,889	$	712
Income producing and other residential	7	1,280		1,280		8	2,616		1,557
Commercial:
Asset-based	1	620		620		4	28,947		33,947
Venture capital	11	16,076		16,214		9	28,737		28,737
Other commercial	14	792		792		9	13,301		12,929
Consumer	—	—		—		1	27		27
Total	34	$	18,805	$	18,906	35	$	76,517	$	77,909

During the three months ended September 30, 2019, there were three other commercial loans totaling $133,000 and one income producing and other residential loan for $254,000 restructured in the preceding 12-month period that subsequently defaulted. During the nine months ended September 30, 2019, there were two venture capital loans totaling $441,000, three other commercial loans totaling $133,000, and one income producing and other residential loan for $254,000 restructured in the preceding 12-month period that subsequently defaulted.

During the three months ended September 30, 2018, there were no loans restructured in the preceding 12-month period that subsequently defaulted. During the nine months ended September 30, 2018, there were no loans restructured in the preceding 12-month period that subsequently defaulted.

Leases Receivable

We provide equipment financing to our customers primarily with operating and direct financing leases. For direct financing leases, lease receivables are recorded on the balance sheet but the leased equipment is not, although we generally retain legal title to the leased equipment until the end of each lease. Direct financing leases are stated at the net amount of minimum lease payments receivable, plus any unguaranteed residual value, less the amount of unearned income and net acquisition discount at the reporting date. Direct lease origination costs are amortized using the effective interest method over the life of the leases. Direct financing leases are subject to our accounting for allowance for loan and lease losses. See Note 8. Leases for information regarding operating leases where we are the lessor.

The following table provides the components of leases receivable income for the period indicated:

	Three Months Ended		Nine Months Ended
	September 30, 2019		September 30, 2019
	(In thousands)
Component of leases receivable income:
Interest income on net investments in leases	$	2,648	$	8,674

The following table presents the components of leases receivable as of the date indicated:

	September 30, 2019
	(In thousands)
Net investment in direct financing leases:
Lease payments receivable	$	166,692
Unguaranteed residual assets	21,315
Deferred fees and other	747
Aggregate net investment in leases	$	188,754

The following table presents maturities of leases receivable as of the date indicated:

	September 30, 2019
	(In thousands)
Period Ending December 31,
2019	$	17,353
2020	72,465
2021	51,242
2022	19,819
2023	11,735
Thereafter	9,105
Total undiscounted cash flows	181,719
Less: Unearned income	(15,027		)
Present value of lease payments	$	166,692

Allowance for Loan and Lease Losses

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

	Three Months Ended September 30, 2019
				Real Estate
	Real Estate			Construction
	Mortgage			and Land		Commercial			Consumer			Total
	(In thousands)
Allowance for Loan and Lease Losses:
Balance, beginning of period	$	46,826		$	26,378	$	59,401		$	2,432		$	135,037
Charge-offs	(120		)	—		(6,021		)	(360		)	(6,501		)
Recoveries	95			—		1,898			23			2,016
Net charge-offs	(25		)	—		(4,123		)	(337		)	(4,485		)
(Negative provision) provision	(1,655		)	683		8,907			65			8,000
Balance, end of period	$	45,146		$	27,061	$	64,185		$	2,160		$	138,552

	Nine Months Ended September 30, 2019
				Real Estate
	Real Estate			Construction
	Mortgage			and Land			Commercial			Consumer			Total
	(In thousands)
Allowance for Loan and Lease Losses:
Balance, beginning of period	$	46,021		$	28,209		$	56,360		$	1,882		$	132,472
Charge-offs	(850		)	—			(25,951		)	(802		)	(27,603		)
Recoveries	478			—			11,084			121			11,683
Net charge-offs	(372		)	—			(14,867		)	(681		)	(15,920		)
(Negative provision) provision	(503		)	(1,148		)	22,692			959			22,000
Balance, end of period	$	45,146		$	27,061		$	64,185		$	2,160		$	138,552
Ending Allowance by
Impairment Methodology:
Individually evaluated for impairment	$	248		$	—		$	9,082		$	—		$	9,330
Collectively evaluated for impairment	$	44,898		$	27,061		$	55,103		$	2,160		$	129,222
Ending Loans and Leases by
Impairment Methodology:
Individually evaluated for impairment	$	29,808		$	5,357		$	75,455		$	—		$	110,620
Collectively evaluated for impairment	7,867,116			2,546,117			7,803,102			408,588			18,624,923
Ending balance	$	7,896,924		$	2,551,474		$	7,878,557		$	408,588		$	18,735,543

	Three Months Ended September 30, 2018
				Real Estate
	Real Estate			Construction
	Mortgage			and Land			Commercial			Consumer			Total
	(In thousands)
Allowance for Loan and Lease Losses:
Balance, beginning of period	$	45,467		$	26,210		$	58,806		$	1,656		$	132,139
Charge-offs	(726		)	—			(2,372		)	(210		)	(3,308		)
Recoveries	222			23			1,303			41			1,589
Net (charge-offs) recoveries	(504		)	23			(1,069		)	(169		)	(1,719		)
Provision (negative provision)	1,394			(47		)	9,907			246			11,500
Balance, end of period	$	46,357		$	26,186		$	67,644		$	1,733		$	141,920

	Nine Months Ended September 30, 2018
				Real Estate
	Real Estate			Construction
	Mortgage			and Land		Commercial			Consumer			Total
	(In thousands)
Allowance for Loan and Lease Losses:
Balance, beginning of period (1)	$	40,051		$	13,055	$	84,022		$	2,328		$	139,456
Charge-offs	(8,071		)	—		(25,321		)	(304		)	(33,696		)
Recoveries	1,999			49		7,702			136			9,886
Net (charge-offs) recoveries	(6,072		)	49		(17,619		)	(168		)	(23,810		)
Provision (negative provision)	12,378			13,082		1,241			(427		)	26,274
Balance, end of period	$	46,357		$	26,186	$	67,644		$	1,733		$	141,920
Ending Allowance by
Impairment Methodology:
Individually evaluated for impairment	$	496		$	—	$	20,363		$	—		$	20,859
Collectively evaluated for impairment	$	45,861		$	26,186	$	47,281		$	1,733		$	121,061
Ending Loans and Leases by
Impairment Methodology:
Individually evaluated for impairment	$	44,985		$	5,533	$	79,493		$	—		$	130,011
Collectively evaluated for impairment	7,633,675			1,995,424		7,072,565			398,471			17,100,135
Ending balance	$	7,678,660		$	2,000,957	$	7,152,058		$	398,471		$	17,230,146

_______________________________________ 

(1) The allowance for loan losses related to PCI loans of $6.4 million as of December 31, 2017 is reflected in the beginning balance of the allowance for loan and lease losses for the nine months ended September 30, 2018.

Allowance for Credit Losses

The allowance for credit losses is the combination of the allowance for loan and lease losses and the reserve for unfunded loan commitments. The reserve for unfunded loan commitments is included within "Accrued interest payable and other liabilities" on the condensed consolidated balance sheets. The following tables present a summary of the activity in the allowance for loan and lease losses and reserve for unfunded loan commitments for the periods indicated:

	Three Months Ended September 30, 2019
	Allowance for			Reserve for			Total
	Loan and			Unfunded Loan			Allowance for
	Lease Losses			Commitments			Credit Losses
	(In thousands)
Balance, beginning of period	$	135,037		$	34,861		$	169,898
Charge-offs	(6,501		)	—			(6,501		)
Recoveries	2,016			—			2,016
Net charge-offs	(4,485		)	—			(4,485		)
Provision (negative provision)	8,000			(1,000		)	7,000
Balance, end of period	$	138,552		$	33,861		$	172,413

	Nine Months Ended September 30, 2019
	Allowance for			Reserve for			Total
	Loan and			Unfunded Loan			Allowance for
	Lease Losses			Commitments			Credit Losses
	(In thousands)
Balance, beginning of period	$	132,472		$	36,861		$	169,333
Charge-offs	(27,603		)	—			(27,603		)
Recoveries	11,683			—			11,683
Net charge-offs	(15,920		)	—			(15,920		)
Provision (negative provision)	22,000			(3,000		)	19,000
Balance, end of period	$	138,552		$	33,861		$	172,413

	Three Months Ended September 30, 2018
	Allowance for			Reserve for		Total
	Loan and			Unfunded Loan		Allowance for
	Lease Losses			Commitments		Credit Losses
	(In thousands)
Balance, beginning of period	$	132,139		$	35,361	$	167,500
Charge-offs	(3,308		)	—		(3,308		)
Recoveries	1,589			—		1,589
Net charge-offs	(1,719		)	—		(1,719		)
Provision	11,500			—		11,500
Balance, end of period	$	141,920		$	35,361	$	177,281

	Nine Months Ended September 30, 2018
	Allowance for			Reserve for		Total
	Loan and			Unfunded Loan		Allowance for
	Lease Losses			Commitments		Credit Losses
	(In thousands)
Balance, beginning of period (1)	$	139,456		$	28,635	$	168,091
Charge-offs	(33,696		)	—		(33,696		)
Recoveries	9,886			—		9,886
Net charge-offs	(23,810		)	—		(23,810		)
Provision	26,274			6,726		33,000
Balance, end of period	$	141,920		$	35,361	$	177,281

_______________________________________ 

(1)

The allowance for loan losses related to PCI loans of $6.4 million as of December 31, 2017 is reflected in the beginning balance of the allowance for loan and lease losses for the nine months ended September 30, 2018.

XML

Leases

9 Months Ended

Sep. 30, 2019

Leases [Abstract]

Leases

LEASES

The Company adopted ASU 2016-02, "Leases (Topic 842)," effective January 1, 2019 and applied the guidance to all leases within the scope of Topic 842 as of that date. We have adopted the guidance using the optional transition method under ASU 2018-11, “Leases (Topic 842): Targeted Improvements,” and recognized a cumulative effect adjustment to retained earnings without prior periods restated, effectively applying the requirements of the new standard prospectively.

We determine if an arrangement is a lease at inception by assessing whether there is an identified asset, and whether the contract conveys the right to control the use of the identified asset for a period of time in exchange for consideration. Topic 842 also requires a lessee to classify a lease as either finance or operating. The Company only had operating leases as of September 30, 2019, related to our leased facilities which consisted of 75 full-service branch offices and 76 other offices.

ROU assets represent a lessee's right to use an underlying asset for the lease term and lease liabilities represent a lessee's obligation to make lease payments arising from the lease. On January 1, 2019, ROU assets and operating lease liabilities were initially recognized based on the present value of future minimum lease payments over the remaining lease terms. We used our incremental borrowing rates on January 1, 2019 to determine the present value of future payments. The ROU assets also include any prepaid lease payments and initial direct costs incurred less any lease incentives received. We amortize the operating lease ROU assets and record interest expense on the operating lease liabilities over the lease terms.

Our leases have remaining terms ranging from 1 to 27 years. Short-term leases (initial term of less than 12 months) are not recorded on the balance sheet and lease expense is recognized on a straight-line basis over the lease term. We have lease agreements with lease and non-lease components, which are accounted for as a single lease component. Most leases include one or more options to renew, with renewal terms that can extend the lease from one to ten years. The exercise of lease renewal options is at our sole discretion. Some of our leases also include termination options. We have determined that we do not meet the reasonably certain threshold to exercise any renewal or termination options, therefore our lease terms do not reflect any optional periods. We rent or sublease certain office space to third parties. Our subleases consist of operating leases for offices that we have fully or partially vacated.

Certain of our lease agreements also include rental payments that adjust periodically based on changes in the CPI. We initially measured our lease payments using the index at the lease commencement date. Subsequent increases in the CPI are treated as variable lease payments and recognized in the period in which the obligation for those payments is incurred. The ROU assets and lease liabilities are not re-measured as a result of changes in the CPI. Our lease agreements do not contain any purchase options, residual value guarantees, or restrictive covenants.

Operating Leases as a Lessee

Our lease expense is a component of "Occupancy expense" on our condensed consolidated statements of earnings. The following table presents the components of lease expense for the period indicated:

	Three Months Ended			Nine Months Ended
	September 30, 2019			September 30, 2019
	(In thousands)
Operating lease expense:
Fixed costs	$	8,347		$	25,183
Variable costs	7			77
Short-term lease costs	126			849
Sublease income	(1,010		)	(3,190		)
Net lease expense	$	7,470		$	22,919

The following table presents supplemental cash flow information related to leases for the period indicated:

	Nine Months Ended
	September 30, 2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	24,674
ROU assets obtained in exchange for lease obligations:
Operating leases	$	172,189

The following table presents supplemental balance sheet and other information related to operating leases as of the date indicated:

	September 30, 2019
	(Dollars in thousands)
Operating leases:
Operating lease right-of-use assets, net	$	134,122
Operating lease liabilities	$	149,185
Weighted average remaining lease term (in years)	4.8
Weighted average discount rate	2.79		%

The following table presents maturities of operating lease liabilities as of the date indicated:

	September 30, 2019
	(In thousands)
Period ending December 31,
2019	$	8,303
2020	32,345
2021	30,090
2022	24,304
2023	21,472
Thereafter	47,582
Total operating lease liabilities	164,096
Less: Imputed interest	(14,911		)
Present value of operating lease liabilities	$	149,185

Operating Leases as a Lessor

We provide equipment financing through operating leases where we facilitate the purchase of equipment leased to our customers. The equipment is on our balance sheet as "Equipment leased to others under operating leases" and is depreciated to its estimated residual value at the end of the lease term, shown as "Leased equipment depreciation" in the condensed consolidated statements of earnings, according to our fixed asset accounting policy. We receive periodic rental income payments under the leases, which are recorded as "Noninterest Income" in the condensed consolidated statements of earnings.

The following table presents the rental payments to be received on operating leases as of the date indicated:

	September 30, 2019
	(In thousands)
Period Ending December 31,
2019	$	8,727
2020	35,447
2021	31,743
2022	25,199
2023	22,096
Thereafter	52,717
Total undiscounted cash flows	$	175,929

Leases

LEASES

The Company adopted ASU 2016-02, "Leases (Topic 842)," effective January 1, 2019 and applied the guidance to all leases within the scope of Topic 842 as of that date. We have adopted the guidance using the optional transition method under ASU 2018-11, “Leases (Topic 842): Targeted Improvements,” and recognized a cumulative effect adjustment to retained earnings without prior periods restated, effectively applying the requirements of the new standard prospectively.

We determine if an arrangement is a lease at inception by assessing whether there is an identified asset, and whether the contract conveys the right to control the use of the identified asset for a period of time in exchange for consideration. Topic 842 also requires a lessee to classify a lease as either finance or operating. The Company only had operating leases as of September 30, 2019, related to our leased facilities which consisted of 75 full-service branch offices and 76 other offices.

ROU assets represent a lessee's right to use an underlying asset for the lease term and lease liabilities represent a lessee's obligation to make lease payments arising from the lease. On January 1, 2019, ROU assets and operating lease liabilities were initially recognized based on the present value of future minimum lease payments over the remaining lease terms. We used our incremental borrowing rates on January 1, 2019 to determine the present value of future payments. The ROU assets also include any prepaid lease payments and initial direct costs incurred less any lease incentives received. We amortize the operating lease ROU assets and record interest expense on the operating lease liabilities over the lease terms.

Our leases have remaining terms ranging from 1 to 27 years. Short-term leases (initial term of less than 12 months) are not recorded on the balance sheet and lease expense is recognized on a straight-line basis over the lease term. We have lease agreements with lease and non-lease components, which are accounted for as a single lease component. Most leases include one or more options to renew, with renewal terms that can extend the lease from one to ten years. The exercise of lease renewal options is at our sole discretion. Some of our leases also include termination options. We have determined that we do not meet the reasonably certain threshold to exercise any renewal or termination options, therefore our lease terms do not reflect any optional periods. We rent or sublease certain office space to third parties. Our subleases consist of operating leases for offices that we have fully or partially vacated.

Certain of our lease agreements also include rental payments that adjust periodically based on changes in the CPI. We initially measured our lease payments using the index at the lease commencement date. Subsequent increases in the CPI are treated as variable lease payments and recognized in the period in which the obligation for those payments is incurred. The ROU assets and lease liabilities are not re-measured as a result of changes in the CPI. Our lease agreements do not contain any purchase options, residual value guarantees, or restrictive covenants.

Operating Leases as a Lessee

Our lease expense is a component of "Occupancy expense" on our condensed consolidated statements of earnings. The following table presents the components of lease expense for the period indicated:

	Three Months Ended			Nine Months Ended
	September 30, 2019			September 30, 2019
	(In thousands)
Operating lease expense:
Fixed costs	$	8,347		$	25,183
Variable costs	7			77
Short-term lease costs	126			849
Sublease income	(1,010		)	(3,190		)
Net lease expense	$	7,470		$	22,919

The following table presents supplemental cash flow information related to leases for the period indicated:

	Nine Months Ended
	September 30, 2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	24,674
ROU assets obtained in exchange for lease obligations:
Operating leases	$	172,189

The following table presents supplemental balance sheet and other information related to operating leases as of the date indicated:

	September 30, 2019
	(Dollars in thousands)
Operating leases:
Operating lease right-of-use assets, net	$	134,122
Operating lease liabilities	$	149,185
Weighted average remaining lease term (in years)	4.8
Weighted average discount rate	2.79		%

The following table presents maturities of operating lease liabilities as of the date indicated:

	September 30, 2019
	(In thousands)
Period ending December 31,
2019	$	8,303
2020	32,345
2021	30,090
2022	24,304
2023	21,472
Thereafter	47,582
Total operating lease liabilities	164,096
Less: Imputed interest	(14,911		)
Present value of operating lease liabilities	$	149,185

Operating Leases as a Lessor

We provide equipment financing through operating leases where we facilitate the purchase of equipment leased to our customers. The equipment is on our balance sheet as "Equipment leased to others under operating leases" and is depreciated to its estimated residual value at the end of the lease term, shown as "Leased equipment depreciation" in the condensed consolidated statements of earnings, according to our fixed asset accounting policy. We receive periodic rental income payments under the leases, which are recorded as "Noninterest Income" in the condensed consolidated statements of earnings.

The following table presents the rental payments to be received on operating leases as of the date indicated:

	September 30, 2019
	(In thousands)
Period Ending December 31,
2019	$	8,727
2020	35,447
2021	31,743
2022	25,199
2023	22,096
Thereafter	52,717
Total undiscounted cash flows	$	175,929

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Revenue From Contracts With Customers (Tables)

9 Months Ended

Sep. 30, 2019

Revenue From Contracts With Customers [Abstract]

Revenue From Contracts With Customers

As illustrated here, substantially all of our revenue is specifically excluded from the scope of Topic 606.

	Three Months Ended September 30, 2019				Three Months Ended September 30, 2018
	Total		Revenue from		Total		Revenue from
	Recorded		Contracts with		Recorded		Contracts with
	Revenue		Customers		Revenue		Customers
	(In thousands)
Total interest income	$	307,208	$	—	$	292,642	$	—
Noninterest income:
Service charges on deposit accounts	3,525		3,525		3,979		3,979
Other commissions and fees	10,855		4,965		12,397		4,767
Leased equipment income	9,615		—		9,120		—
Gain on sale of loans	765		—		—		—
Gain on sale of securities	908		—		826		—
Other income	7,761		428		10,590		444
Total noninterest income	33,429		8,918		36,912		9,190
Total revenue	$	340,637	$	8,918	$	329,554	$	9,190

Revenue Recognition of Contracts With Customers

The following table presents revenue from contracts with customers based on the timing of revenue recognition for the periods indicated:

	Three Months Ended
	September 30,
	2019		2018
	(In thousands)
Products and services transferred at a point in time	$	5,046	$	4,604
Products and services transferred over time	3,872		4,586
Total revenue from contracts with customers	$	8,918	$	9,190

Contract with Customer, Asset and Liability

The following table provides information about receivables, contract assets, and contract liabilities from contracts with customers:

	September 30, 2019		December 31, 2018
	(In thousands)
Receivables, which are included in "Other assets"	$	1,494	$	1,334
Contract assets, which are included in "Other assets"	$	—	$	—
Contract liabilities, which are included in "Accrued interest payable and other liabilities"	$	523	$	621

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Borrowings and Subordinated Debentures (Tables)

9 Months Ended

Sep. 30, 2019

Debt Disclosure [Abstract]

Schedule of debt

The following table summarizes our borrowings as of the dates indicated:

	September 30, 2019				December 31, 2018
			Weighted				Weighted
			Average				Average
	Amount		Rate		Amount		Rate
	(Dollars in thousands)
Non‑recourse debt	$	31	7.50	%	$	114	7.50	%
FHLB secured advances	882,000		2.12	%	1,040,000		2.56	%
FHLB unsecured overnight advance	141,000		1.95	%	141,000		2.53	%
AFX borrowings	230,000		1.92	%	190,000		2.56	%
Total borrowings	$	1,253,031	2.06	%	$	1,371,114	2.56	%

Borrowings subordinated debentures and brokered deposits disclosure

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

	September 30, 2019					December 31, 2018					Date	Maturity	Rate Index
Series	Amount			Rate		Amount			Rate		Issued	Date	(Quarterly Reset)
	(Dollars in thousands)
Trust V	$	10,310		5.24	%	$	10,310		5.89	%	8/15/2003	9/17/2033	3-month LIBOR + 3.10
Trust VI	10,310			5.17	%	10,310			5.84	%	9/3/2003	9/15/2033	3-month LIBOR + 3.05
Trust CII	5,155			5.09	%	5,155			5.74	%	9/17/2003	9/17/2033	3-month LIBOR + 2.95
Trust VII	61,856			5.02	%	61,856			5.27	%	2/5/2004	4/23/2034	3-month LIBOR + 2.75
Trust CIII	20,619			3.81	%	20,619			4.48	%	8/15/2005	9/15/2035	3-month LIBOR + 1.69
Trust FCCI	16,495			3.72	%	16,495			4.39	%	1/25/2007	3/15/2037	3-month LIBOR + 1.60
Trust FCBI	10,310			3.67	%	10,310			4.34	%	9/30/2005	12/15/2035	3-month LIBOR + 1.55
Trust CS 2005-1	82,475			4.07	%	82,475			4.74	%	11/21/2005	12/15/2035	3-month LIBOR + 1.95
Trust CS 2005-2	128,866			4.22	%	128,866			4.47	%	12/14/2005	1/30/2036	3-month LIBOR + 1.95
Trust CS 2006-1	51,545			4.22	%	51,545			4.47	%	2/22/2006	4/30/2036	3-month LIBOR + 1.95
Trust CS 2006-2	51,550			4.22	%	51,550			4.47	%	9/27/2006	10/30/2036	3-month LIBOR + 1.95
Trust CS 2006-3 (1)	28,092			1.68	%	29,556			1.73	%	9/29/2006	10/30/2036	3-month EURIBOR + 2.05
Trust CS 2006-4	16,470			4.22	%	16,470			4.47	%	12/5/2006	1/30/2037	3-month LIBOR + 1.95
Trust CS 2006-5	6,650			4.22	%	6,650			4.47	%	12/19/2006	1/30/2037	3-month LIBOR + 1.95
Trust CS 2007-2	39,177			4.22	%	39,177			4.47	%	6/13/2007	7/30/2037	3-month LIBOR + 1.95
Gross subordinated debentures	539,880			4.16	%	541,344			4.51	%
Unamortized discount (2)	(83,735		)			(87,498		)
Net subordinated debentures	$	456,145				$	453,846

___________________

(1) Denomination is in Euros with a value of €25.8 million.

(2)

Amount represents the fair value adjustment on trust preferred securities assumed in acquisitions.

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Restricted Cash Balances

9 Months Ended

Sep. 30, 2019

Restricted Cash [Abstract]

Restricted Cash Balances

RESTRICTED CASH BALANCES

The Company is required to maintain reserve balances with the FRBSF. Such reserve requirements are based on a percentage of deposit liabilities and may be satisfied by cash on hand. The average reserves required to be held at the FRBSF for the nine months ended September 30, 2019 and year ended December 31, 2018 were $118.2 million and $77.0 million. As of September 30, 2019 and December 31, 2018, we pledged cash collateral for our derivative contracts of $3.2 million and $2.6 million.

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Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands	3 Months Ended						9 Months Ended
	Sep. 30, 2019		Jun. 30, 2019		Sep. 30, 2018		Sep. 30, 2019	Sep. 30, 2018
Statement of Comprehensive Income [Abstract]
Net earnings	$ 110,026		$ 128,125		$ 116,287		$ 350,755	$ 350,298
Other comprehensive income (loss), net of tax:
Unrealized net holding gains (losses) on securities available-for-sale arising during the period	32,759		72,168		(29,267)		167,566	(106,261)
Income tax (expense) benefit related to unrealized holding gains (losses) arising during the period	(9,287)		(20,459)		8,344		(47,504)	30,377
Unrealized net holding gains (losses) on securities available-for-sale, net of tax	23,472		51,709		(20,923)		120,062	(75,884)
Reclassification adjustment for net (gains) losses included in net earnings	(908)	[1]	(22,192)	[1]	(826)	[1]	(25,261)	(7,390)
Income tax expense (benefit) related to reclassification adjustment	257		6,291		235		7,161	2,113
Reclassification adjustment for net (gains) losses included in net earnings, net of tax	(651)		(15,901)		(591)		(18,100)	(5,277)
Other comprehensive income (loss), net of tax	22,821		35,808		(21,514)		101,962	(81,161)
Comprehensive income	$ 132,847		$ 163,933		$ 94,773		$ 452,717	$ 269,137

[1] Entire amounts are recognized in "Gain on sale of securities" on the Condensed Consolidated Statements of Earnings.

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Cover Page - shares	9 Months Ended
	Sep. 30, 2019	Oct. 30, 2019
Cover page.
Title of 12(b) Security	Common Stock, par value $0.01 per share
Entity Address, City or Town	Beverly Hills
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	90212
City Area Code	310
Local Phone Number	887-8500
Entity Current Reporting Status	Yes
Trading Symbol	PACW
Entity Incorporation, State or Country Code	DE
Entity Registrant Name	PACWEST BANCORP
Entity Address, Address Line One	9701 Wilshire Blvd., Suite 700
Entity Central Index Key	0001102112
Document Period End Date	Sep. 30, 2019
Entity Filer Category	Large Accelerated Filer
Document Type	10-Q
Entity File Number	001-36408
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q3
Amendment Flag	false
Entity Common Stock, Shares Outstanding		118,212,594
Entity Tax Identification Number	33-0885320
Security Exchange Name	NASDAQ
Entity Interactive Data Current	Yes
Entity Shell Company	false
Document Quarterly Report	true
Document Transition Report	false
Entity Small Business	false
Entity Emerging Growth Company	false

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Subsequent Events

9 Months Ended

Sep. 30, 2019

Subsequent Events [Abstract]

Subsequent Events

SUBSEQUENT EVENTS

Common Stock Dividends

On November 1, 2019, the Company announced that the Board of Directors had declared a quarterly cash dividend of $0.60 per common share. The cash dividend is payable on November 29, 2019 to stockholders of record at the close of business on November 20, 2019.

The Company has evaluated events that have occurred subsequent to September 30, 2019 and have concluded there are no other subsequent events that would require recognition in the accompanying consolidated financial statements.

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Loans and Leases (Tables)

9 Months Ended

Sep. 30, 2019

Accounts, Notes, Loans and Financing Receivable [Line Items]

Schedule of composition of loans portfolio

The following table summarizes the composition of our loans and leases held for investment as of the dates indicated:

	September 30,			December 31,
	2019			2018
	(In thousands)
Real estate mortgage	$	7,908,097		$	7,933,859
Real estate construction and land	2,581,317			2,262,710
Commercial	7,898,042			7,428,500
Consumer	408,555			401,296
Total gross loans and leases held for investment	18,796,011			18,026,365
Deferred fees, net	(60,468		)	(68,652		)
Total loans and leases held for investment, net of deferred fees	18,735,543			17,957,713
Allowance for loan and lease losses	(138,552		)	(132,472		)
Total loans and leases held for investment, net	$	18,596,991		$	17,825,241

Delinquent loans in loan portfolio

The following tables present an aging analysis of our loans and leases held for investment, net of deferred fees, by loan portfolio segment and class as of the dates indicated:

	September 30, 2019
	30 - 89		90 or More
	Days		Days		Total
	Past Due		Past Due		Past Due		Current		Total
	(In thousands)
Real estate mortgage:
Commercial	$	2,867	$	7,137	$	10,004	$	4,290,562	$	4,300,566
Income producing and other residential	4,551		469		5,020		3,591,338		3,596,358
Total real estate mortgage	7,418		7,606		15,024		7,881,900		7,896,924
Real estate construction and land:
Commercial	—		—		—		1,009,362		1,009,362
Residential	2,622		—		2,622		1,539,490		1,542,112
Total real estate construction and land	2,622		—		2,622		2,548,852		2,551,474
Commercial:
Asset-based	48		662		710		3,810,031		3,810,741
Venture capital	—		—		—		2,209,649		2,209,649
Other commercial	6,742		2,241		8,983		1,849,184		1,858,167
Total commercial	6,790		2,903		9,693		7,868,864		7,878,557
Consumer	795		408		1,203		407,385		408,588
Total	$	17,625	$	10,917	$	28,542	$	18,707,001	$	18,735,543

	December 31, 2018
	30 - 89		90 or More
	Days		Days		Total
	Past Due		Past Due		Past Due		Current		Total
	(In thousands)
Real estate mortgage:
Commercial	$	3,487	$	7,541	$	11,028	$	4,813,270	$	4,824,298
Income producing and other residential	1,557		476		2,033		3,091,810		3,093,843
Total real estate mortgage	5,044		8,017		13,061		7,905,080		7,918,141
Real estate construction and land:
Commercial	—		442		442		912,141		912,583
Residential	1,527		—		1,527		1,319,546		1,321,073
Total real estate construction and land	1,527		442		1,969		2,231,687		2,233,656
Commercial:
Asset-based	47		646		693		3,304,728		3,305,421
Venture capital	4,705		—		4,705		2,034,043		2,038,748
Other commercial	5,181		1,285		6,466		2,053,960		2,060,426
Total commercial	9,933		1,931		11,864		7,392,731		7,404,595
Consumer	581		333		914		400,407		401,321
Total	$	17,085	$	10,723	$	27,808	$	17,929,905	$	17,957,713

Schedule of non accrual and performing restructured impaired financing receivables

The following table presents our nonaccrual and performing loans and leases held for investment, net of deferred fees, by loan portfolio segment and class as of the dates indicated:  

	September 30, 2019						December 31, 2018
	Nonaccrual		Performing		Total		Nonaccrual		Performing		Total
	(In thousands)
Real estate mortgage:
Commercial	$	19,515	$	4,281,051	$	4,300,566	$	15,321	$	4,808,977	$	4,824,298
Income producing and other residential	2,868		3,593,490		3,596,358		2,524		3,091,319		3,093,843
Total real estate mortgage	22,383		7,874,541		7,896,924		17,845		7,900,296		7,918,141
Real estate construction and land:
Commercial	377		1,008,985		1,009,362		442		912,141		912,583
Residential	—		1,542,112		1,542,112		—		1,321,073		1,321,073
Total real estate construction and land	377		2,551,097		2,551,474		442		2,233,214		2,233,656
Commercial:
Asset-based	33,015		3,777,726		3,810,741		32,324		3,273,097		3,305,421
Venture capital	20,131		2,189,518		2,209,649		20,299		2,018,449		2,038,748
Other commercial	22,554		1,835,613		1,858,167		7,380		2,053,046		2,060,426
Total commercial	75,700		7,802,857		7,878,557		60,003		7,344,592		7,404,595
Consumer	653		407,935		408,588		1,043		400,278		401,321
Total	$	99,113	$	18,636,430	$	18,735,543	$	79,333	$	17,878,380	$	17,957,713

The following table presents the composition of our impaired loans and leases held for investment, net of deferred fees, by loan portfolio segment as of the dates indicated:

	September 30, 2019						December 31, 2018
					Total						Total
	Nonaccrual				Impaired		Nonaccrual				Impaired
	Loans				Loans		Loans				Loans
	and		Performing		and		and		Performing		and
	Leases		TDRs		Leases		Leases		TDRs		Leases
	(In thousands)
Real estate mortgage	$	22,383	$	10,292	$	32,675	$	17,845	$	11,484	$	29,329
Real estate construction and land	377		4,980		5,357		442		5,420		5,862
Commercial	75,700		980		76,680		60,003		692		60,695
Consumer	653		77		730		1,043		105		1,148
Total	$	99,113	$	16,329	$	115,442	$	79,333	$	17,701	$	97,034

CV of loans held for investment by class by performing and nonperforming

The following tables present the credit risk rating categories for loans and leases held for investment, net of deferred fees, by loan portfolio segment and class as of the dates indicated. Classified loans and leases are those with a credit risk rating of either substandard or doubtful.

	September 30, 2019
	Classified		Special Mention		Pass		Total
	(In thousands)
Real estate mortgage:
Commercial	$	34,952	$	39,309	$	4,226,305	$	4,300,566
Income producing and other residential	8,670		1,005		3,586,683		3,596,358
Total real estate mortgage	43,622		40,314		7,812,988		7,896,924
Real estate construction and land:
Commercial	377		—		1,008,985		1,009,362
Residential	—		837		1,541,275		1,542,112
Total real estate construction and land	377		837		2,550,260		2,551,474
Commercial:
Asset-based	50,634		41,974		3,718,133		3,810,741
Venture capital	34,489		66,255		2,108,905		2,209,649
Other commercial	58,707		117,931		1,681,529		1,858,167
Total commercial	143,830		226,160		7,508,567		7,878,557
Consumer	778		614		407,196		408,588
Total	$	188,607	$	267,925	$	18,279,011	$	18,735,543

	December 31, 2018
	Classified		Special Mention		Pass		Total
	(In thousands)
Real estate mortgage:
Commercial	$	57,734	$	74,785	$	4,691,779	$	4,824,298
Income producing and other residential	10,521		968		3,082,354		3,093,843
Total real estate mortgage	68,255		75,753		7,774,133		7,918,141
Real estate construction and land:
Commercial	442		7,041		905,100		912,583
Residential	—		1,527		1,319,546		1,321,073
Total real estate construction and land	442		8,568		2,224,646		2,233,656
Commercial:
Asset-based	45,957		48,338		3,211,126		3,305,421
Venture capital	28,731		77,588		1,932,429		2,038,748
Other commercial	92,526		50,136		1,917,764		2,060,426
Total commercial	167,214		176,062		7,061,319		7,404,595
Consumer	1,199		1,015		399,107		401,321
Total	$	237,110	$	261,398	$	17,459,205	$	17,957,713

Impaired financing receivables, average balances and interest income recognized

The following tables present information regarding our impaired loans and leases held for investment, net of deferred fees, by loan portfolio segment and class as of and for the dates indicated:

	September 30, 2019						December 31, 2018
			Unpaid						Unpaid
	Recorded		Principal		Related		Recorded		Principal		Related
Impaired Loans and Leases	Investment		Balance		Allowance		Investment		Balance		Allowance
	(In thousands)
With An Allowance Recorded:
Real estate mortgage:
Commercial	$	485	$	485	$	71	$	1,736	$	1,648	$	170
Income producing and other residential	2,032		2,030		177		2,569		2,563		247
Commercial:
Asset based	500		500		500		—		—		—
Venture capital	12,379		13,570		6,177		11,621		13,255		3,141
Other commercial	16,969		18,044		2,405		473		482		473
With No Related Allowance Recorded:
Real estate mortgage:
Commercial	$	22,503	$	37,568			$	17,783	$	32,035
Income producing and other residential	7,655		10,058				7,241		9,425
Real estate construction and land:
Commercial	5,357		5,402				5,862		5,870
Commercial:
Asset-based	32,515		50,633				32,324		38,100
Venture capital	7,752		39,440				8,678		41,335
Other commercial	6,565		24,868				7,599		25,740
Consumer	730		896				1,148		1,470
Total Loans and Leases With and
Without an Allowance Recorded:
Real estate mortgage	$	32,675	$	50,141	$	248	$	29,329	$	45,671	$	417
Real estate construction and land	5,357		5,402		—		5,862		5,870		—
Commercial	76,680		147,055		9,082		60,695		118,912		3,614
Consumer	730		896		—		1,148		1,470		—
Total	$	115,442	$	203,494	$	9,330	$	97,034	$	171,923	$	4,031

	Three Months Ended September 30,
	2019				2018
	Weighted		Interest		Weighted		Interest
	Average		Income		Average		Income
Impaired Loans and Leases	Balance(1)		Recognized		Balance(1)		Recognized
	(In thousands)
With An Allowance Recorded:
Real estate mortgage:
Commercial	$	485	$	8	$	1,781	$	18
Income producing and other residential	2,031		15		2,494		21
Commercial:
Asset-based	163		—		—		—
Venture capital	12,343		—		28,322		—
Other commercial	2,181		9		1,360		—
With No Related Allowance Recorded:
Real estate mortgage:
Commercial	$	19,745	$	56	$	34,155	$	129
Income producing and other residential	7,615		56		7,906		45
Real estate construction and land:
Commercial	5,357		98		5,533		95
Residential	—		—		—		—
Commercial:
Asset-based	30,880		—		34,618		—
Venture capital	7,752		—		1,421		—
Other commercial	6,096		6		8,108		25
Consumer	568		1		383		2
Total Loans and Leases With and
Without an Allowance Recorded:
Real estate mortgage	$	29,876	$	135	$	46,336	$	213
Real estate construction and land	5,357		98		5,533		95
Commercial	59,415		15		73,829		25
Consumer	568		1		383		2
Total	$	95,216	$	249	$	126,081	$	335

_________________________

(1) For loans and leases reported as impaired at September 30, 2019 and 2018, amounts were calculated based on the period of time such loans and leases were impaired during the reported period.

	Nine Months Ended September 30,
	2019				2018
	Weighted		Interest		Weighted		Interest
	Average		Income		Average		Income
Impaired Loans and Leases	Balance(1)		Recognized		Balance(1)		Recognized
	(In thousands)
With An Allowance Recorded:
Real estate mortgage:
Commercial	$	485	$	24	$	1,781	$	55
Income producing and other residential	2,031		44		2,494		62
Commercial:
Asset-based	55		—		—		—
Venture capital	9,201		—		17,459		—
Other commercial	1,125		26		688		—
With No Related Allowance Recorded:
Real estate mortgage:
Commercial	$	16,729	$	162	$	32,098	$	376
Income producing and other residential	7,488		163		7,845		132
Real estate construction and land:
Commercial	5,357		290		5,533		283
Commercial:
Asset-based	29,989		—		34,618		—
Venture capital	6,173		—		1,330		—
Other commercial	5,606		22		7,417		70
Consumer	493		4		373		6
Total Loans and Leases With and
Without an Allowance Recorded:
Real estate mortgage	$	26,733	$	393	$	44,218	$	625
Real estate construction and land	5,357		290		5,533		283
Commercial	52,149		48		61,512		70
Consumer	493		4		373		6
Total	$	84,732	$	735	$	111,636	$	984

_________________________

(1)

For loans and leases reported as impaired at September 30, 2019 and 2018, amounts were calculated based on the period of time such loans and leases were impaired during the reported period.

Troubled debt restructurings on financing receivables

The following table presents our troubled debt restructurings of loans held for investment by loan portfolio segment and class for the periods indicated:

	Three Months Ended September 30,
	2019					2018
		Pre-		Post-			Pre-		Post-
		Modification		Modification			Modification		Modification
	Number	Outstanding		Outstanding		Number	Outstanding		Outstanding
	of	Recorded		Recorded		of	Recorded		Recorded
Troubled Debt Restructurings	Loans	Investment		Investment		Loans	Investment		Investment
	(Dollars in thousands)
Real estate mortgage:
Commercial	—	$	—	$	—	4	$	2,889	$	712
Income producing and other residential	2	495		495		5	912		912
Commercial:
Asset-based	—	—		—		4	28,947		33,947
Venture capital	1	—		—		5	23,501		23,501
Other commercial	3	99		99		5	1,487		1,115
Total	6	$	594	$	594	23	$	57,736	$	60,187

	Nine Months Ended September 30,
	2019					2018
		Pre-		Post-			Pre-		Post-
		Modification		Modification			Modification		Modification
	Number	Outstanding		Outstanding		Number	Outstanding		Outstanding
	of	Recorded		Recorded		of	Recorded		Recorded
Troubled Debt Restructurings	Loans	Investment		Investment		Loans	Investment		Investment
	(Dollars in thousands)
Real estate mortgage:
Commercial	1	$	37	$	—	4	$	2,889	$	712
Income producing and other residential	7	1,280		1,280		8	2,616		1,557
Commercial:
Asset-based	1	620		620		4	28,947		33,947
Venture capital	11	16,076		16,214		9	28,737		28,737
Other commercial	14	792		792		9	13,301		12,929
Consumer	—	—		—		1	27		27
Total	34	$	18,805	$	18,906	35	$	76,517	$	77,909

Allowance for credit losses on financing receivables

The following tables present a summary of the activity in the allowance for loan and lease losses and reserve for unfunded loan commitments for the periods indicated:

	Three Months Ended September 30, 2019
	Allowance for			Reserve for			Total
	Loan and			Unfunded Loan			Allowance for
	Lease Losses			Commitments			Credit Losses
	(In thousands)
Balance, beginning of period	$	135,037		$	34,861		$	169,898
Charge-offs	(6,501		)	—			(6,501		)
Recoveries	2,016			—			2,016
Net charge-offs	(4,485		)	—			(4,485		)
Provision (negative provision)	8,000			(1,000		)	7,000
Balance, end of period	$	138,552		$	33,861		$	172,413

	Nine Months Ended September 30, 2019
	Allowance for			Reserve for			Total
	Loan and			Unfunded Loan			Allowance for
	Lease Losses			Commitments			Credit Losses
	(In thousands)
Balance, beginning of period	$	132,472		$	36,861		$	169,333
Charge-offs	(27,603		)	—			(27,603		)
Recoveries	11,683			—			11,683
Net charge-offs	(15,920		)	—			(15,920		)
Provision (negative provision)	22,000			(3,000		)	19,000
Balance, end of period	$	138,552		$	33,861		$	172,413

	Three Months Ended September 30, 2018
	Allowance for			Reserve for		Total
	Loan and			Unfunded Loan		Allowance for
	Lease Losses			Commitments		Credit Losses
	(In thousands)
Balance, beginning of period	$	132,139		$	35,361	$	167,500
Charge-offs	(3,308		)	—		(3,308		)
Recoveries	1,589			—		1,589
Net charge-offs	(1,719		)	—		(1,719		)
Provision	11,500			—		11,500
Balance, end of period	$	141,920		$	35,361	$	177,281

	Nine Months Ended September 30, 2018
	Allowance for			Reserve for		Total
	Loan and			Unfunded Loan		Allowance for
	Lease Losses			Commitments		Credit Losses
	(In thousands)
Balance, beginning of period (1)	$	139,456		$	28,635	$	168,091
Charge-offs	(33,696		)	—		(33,696		)
Recoveries	9,886			—		9,886
Net charge-offs	(23,810		)	—		(23,810		)
Provision	26,274			6,726		33,000
Balance, end of period	$	141,920		$	35,361	$	177,281

_______________________________________ 

(1)

The allowance for loan losses related to PCI loans of $6.4 million as of December 31, 2017 is reflected in the beginning balance of the allowance for loan and lease losses for the nine months ended September 30, 2018.

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

	Three Months Ended September 30, 2019
				Real Estate
	Real Estate			Construction
	Mortgage			and Land		Commercial			Consumer			Total
	(In thousands)
Allowance for Loan and Lease Losses:
Balance, beginning of period	$	46,826		$	26,378	$	59,401		$	2,432		$	135,037
Charge-offs	(120		)	—		(6,021		)	(360		)	(6,501		)
Recoveries	95			—		1,898			23			2,016
Net charge-offs	(25		)	—		(4,123		)	(337		)	(4,485		)
(Negative provision) provision	(1,655		)	683		8,907			65			8,000
Balance, end of period	$	45,146		$	27,061	$	64,185		$	2,160		$	138,552

	Nine Months Ended September 30, 2019
				Real Estate
	Real Estate			Construction
	Mortgage			and Land			Commercial			Consumer			Total
	(In thousands)
Allowance for Loan and Lease Losses:
Balance, beginning of period	$	46,021		$	28,209		$	56,360		$	1,882		$	132,472
Charge-offs	(850		)	—			(25,951		)	(802		)	(27,603		)
Recoveries	478			—			11,084			121			11,683
Net charge-offs	(372		)	—			(14,867		)	(681		)	(15,920		)
(Negative provision) provision	(503		)	(1,148		)	22,692			959			22,000
Balance, end of period	$	45,146		$	27,061		$	64,185		$	2,160		$	138,552
Ending Allowance by
Impairment Methodology:
Individually evaluated for impairment	$	248		$	—		$	9,082		$	—		$	9,330
Collectively evaluated for impairment	$	44,898		$	27,061		$	55,103		$	2,160		$	129,222
Ending Loans and Leases by
Impairment Methodology:
Individually evaluated for impairment	$	29,808		$	5,357		$	75,455		$	—		$	110,620
Collectively evaluated for impairment	7,867,116			2,546,117			7,803,102			408,588			18,624,923
Ending balance	$	7,896,924		$	2,551,474		$	7,878,557		$	408,588		$	18,735,543

	Three Months Ended September 30, 2018
				Real Estate
	Real Estate			Construction
	Mortgage			and Land			Commercial			Consumer			Total
	(In thousands)
Allowance for Loan and Lease Losses:
Balance, beginning of period	$	45,467		$	26,210		$	58,806		$	1,656		$	132,139
Charge-offs	(726		)	—			(2,372		)	(210		)	(3,308		)
Recoveries	222			23			1,303			41			1,589
Net (charge-offs) recoveries	(504		)	23			(1,069		)	(169		)	(1,719		)
Provision (negative provision)	1,394			(47		)	9,907			246			11,500
Balance, end of period	$	46,357		$	26,186		$	67,644		$	1,733		$	141,920

	Nine Months Ended September 30, 2018
				Real Estate
	Real Estate			Construction
	Mortgage			and Land		Commercial			Consumer			Total
	(In thousands)
Allowance for Loan and Lease Losses:
Balance, beginning of period (1)	$	40,051		$	13,055	$	84,022		$	2,328		$	139,456
Charge-offs	(8,071		)	—		(25,321		)	(304		)	(33,696		)
Recoveries	1,999			49		7,702			136			9,886
Net (charge-offs) recoveries	(6,072		)	49		(17,619		)	(168		)	(23,810		)
Provision (negative provision)	12,378			13,082		1,241			(427		)	26,274
Balance, end of period	$	46,357		$	26,186	$	67,644		$	1,733		$	141,920
Ending Allowance by
Impairment Methodology:
Individually evaluated for impairment	$	496		$	—	$	20,363		$	—		$	20,859
Collectively evaluated for impairment	$	45,861		$	26,186	$	47,281		$	1,733		$	121,061
Ending Loans and Leases by
Impairment Methodology:
Individually evaluated for impairment	$	44,985		$	5,533	$	79,493		$	—		$	130,011
Collectively evaluated for impairment	7,633,675			1,995,424		7,072,565			398,471			17,100,135
Ending balance	$	7,678,660		$	2,000,957	$	7,152,058		$	398,471		$	17,230,146

_______________________________________ 

(1)

The allowance for loan losses related to PCI loans of $6.4 million as of December 31, 2017 is reflected in the beginning balance of the allowance for loan and lease losses for the nine months ended September 30, 2018.

Lease Income of Direct Financing Leases

The following table provides the components of leases receivable income for the period indicated:

	Three Months Ended		Nine Months Ended
	September 30, 2019		September 30, 2019
	(In thousands)
Component of leases receivable income:
Interest income on net investments in leases	$	2,648	$	8,674

Assets and Liabilities, Lessor

The following table presents the components of leases receivable as of the date indicated:

	September 30, 2019
	(In thousands)
Net investment in direct financing leases:
Lease payments receivable	$	166,692
Unguaranteed residual assets	21,315
Deferred fees and other	747
Aggregate net investment in leases	$	188,754

Sales-type and Direct Financing Leases, Lease Receivable, Maturity

The following table presents maturities of leases receivable as of the date indicated:

	September 30, 2019
	(In thousands)
Period Ending December 31,
2019	$	17,353
2020	72,465
2021	51,242
2022	19,819
2023	11,735
Thereafter	9,105
Total undiscounted cash flows	181,719
Less: Unearned income	(15,027		)
Present value of lease payments	$	166,692

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Loans and Leases (Details 1) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018	Sep. 30, 2018
Delinquent loans in loan portfolio
30-89 Days Past Due	$ 17,625	$ 6,600
90 or More Days Past Due	10,917	10,700
Total Past Due	28,542
Current	18,707,001
Loans held for investment, net	18,735,543	17,957,713
Non Purchased Credit Impaired Loans and Leases
Delinquent loans in loan portfolio
30-89 Days Past Due		17,085
90 or More Days Past Due		10,723
Total Past Due		27,808
Current		17,929,905
Loans held for investment, net	18,735,543	17,957,713	$ 17,230,146
Real Estate Mortgage
Delinquent loans in loan portfolio
30-89 Days Past Due	7,418
90 or More Days Past Due	7,606
Total Past Due	15,024
Current	7,881,900
Loans held for investment, net	7,896,924	7,918,141
Real Estate Mortgage | Non Purchased Credit Impaired Loans and Leases
Delinquent loans in loan portfolio
30-89 Days Past Due		5,044
90 or More Days Past Due		8,017
Total Past Due		13,061
Current		7,905,080
Loans held for investment, net	7,896,924	7,918,141	7,678,660
Real Estate Mortgage | Commercial
Delinquent loans in loan portfolio
30-89 Days Past Due	2,867
90 or More Days Past Due	7,137
Total Past Due	10,004
Current	4,290,562
Loans held for investment, net	4,300,566	4,824,298
Real Estate Mortgage | Commercial | Non Purchased Credit Impaired Loans and Leases
Delinquent loans in loan portfolio
30-89 Days Past Due		3,487
90 or More Days Past Due		7,541
Total Past Due		11,028
Current		4,813,270
Loans held for investment, net		4,824,298
Real Estate Mortgage | Residential Real Estate
Delinquent loans in loan portfolio
30-89 Days Past Due	4,551
90 or More Days Past Due	469
Total Past Due	5,020
Current	3,591,338
Loans held for investment, net	3,596,358	3,093,843
Real Estate Mortgage | Residential Real Estate | Non Purchased Credit Impaired Loans and Leases
Delinquent loans in loan portfolio
30-89 Days Past Due		1,557
90 or More Days Past Due		476
Total Past Due		2,033
Current		3,091,810
Loans held for investment, net		3,093,843
Real Estate Construction and Land
Delinquent loans in loan portfolio
30-89 Days Past Due	2,622
90 or More Days Past Due	0
Total Past Due	2,622
Current	2,548,852
Loans held for investment, net	2,551,474	2,233,656
Real Estate Construction and Land | Non Purchased Credit Impaired Loans and Leases
Delinquent loans in loan portfolio
30-89 Days Past Due		1,527
90 or More Days Past Due		442
Total Past Due		1,969
Current		2,231,687
Loans held for investment, net	2,551,474	2,233,656	2,000,957
Real Estate Construction and Land | Commercial Real Estate Construction Loan Receivable
Delinquent loans in loan portfolio
30-89 Days Past Due	0
90 or More Days Past Due	0
Total Past Due	0
Current	1,009,362
Loans held for investment, net	1,009,362	912,583
Real Estate Construction and Land | Commercial Real Estate Construction Loan Receivable | Non Purchased Credit Impaired Loans and Leases
Delinquent loans in loan portfolio
30-89 Days Past Due		0
90 or More Days Past Due		442
Total Past Due		442
Current		912,141
Loans held for investment, net		912,583
Real Estate Construction and Land | Residential Real Estate Construction Financing Receivable
Delinquent loans in loan portfolio
30-89 Days Past Due	2,622
90 or More Days Past Due	0
Total Past Due	2,622
Current	1,539,490
Loans held for investment, net	1,542,112	1,321,073
Real Estate Construction and Land | Residential Real Estate Construction Financing Receivable | Non Purchased Credit Impaired Loans and Leases
Delinquent loans in loan portfolio
30-89 Days Past Due		1,527
90 or More Days Past Due		0
Total Past Due		1,527
Current		1,319,546
Loans held for investment, net		1,321,073
Commercial
Delinquent loans in loan portfolio
30-89 Days Past Due	6,790
90 or More Days Past Due	2,903
Total Past Due	9,693
Current	7,868,864
Loans held for investment, net	7,878,557	7,404,595
Commercial | Non Purchased Credit Impaired Loans and Leases
Delinquent loans in loan portfolio
30-89 Days Past Due		9,933
90 or More Days Past Due		1,931
Total Past Due		11,864
Current		7,392,731
Loans held for investment, net	7,878,557	7,404,595	7,152,058
Commercial | Asset-based
Delinquent loans in loan portfolio
30-89 Days Past Due	48
90 or More Days Past Due	662
Total Past Due	710
Current	3,810,031
Loans held for investment, net	3,810,741	3,305,421
Commercial | Asset-based | Non Purchased Credit Impaired Loans and Leases
Delinquent loans in loan portfolio
30-89 Days Past Due		47
90 or More Days Past Due		646
Total Past Due		693
Current		3,304,728
Loans held for investment, net		3,305,421
Commercial | Venture Capital Loans
Delinquent loans in loan portfolio
30-89 Days Past Due	0
90 or More Days Past Due	0
Total Past Due	0
Current	2,209,649
Loans held for investment, net	2,209,649	2,038,748
Commercial | Venture Capital Loans | Non Purchased Credit Impaired Loans and Leases
Delinquent loans in loan portfolio
30-89 Days Past Due		4,705
90 or More Days Past Due		0
Total Past Due		4,705
Current		2,034,043
Loans held for investment, net		2,038,748
Commercial | Other Commercial
Delinquent loans in loan portfolio
30-89 Days Past Due	6,742
90 or More Days Past Due	2,241
Total Past Due	8,983
Current	1,849,184
Loans held for investment, net	1,858,167	2,060,426
Commercial | Other Commercial | Non Purchased Credit Impaired Loans and Leases
Delinquent loans in loan portfolio
30-89 Days Past Due		5,181
90 or More Days Past Due		1,285
Total Past Due		6,466
Current		2,053,960
Loans held for investment, net		2,060,426
Consumer
Delinquent loans in loan portfolio
30-89 Days Past Due	795
90 or More Days Past Due	408
Total Past Due	1,203
Current	407,385
Loans held for investment, net		401,321
Consumer | Non Purchased Credit Impaired Loans and Leases
Delinquent loans in loan portfolio
30-89 Days Past Due		581
90 or More Days Past Due		333
Total Past Due		914
Current		400,407
Loans held for investment, net	$ 408,588	$ 401,321	$ 398,471

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Investment Securities (Details 2) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Amortized Cost
Due in one year or less	$ 3,240
Due after one year through five years	227,670
Due after five years through ten years	1,020,128
Due after ten years	2,432,483
Total securities available-for-sale	3,683,521	$ 4,017,909
Fair Value
Due in one year or less	3,248
Due after one year through five years	232,238
Due after five years through ten years	1,056,640
Due after ten years	2,525,222
Total securities available-for-sale	$ 3,817,348	$ 4,009,431

XML

Borrowings and Subordinated Debentures (Details Textual) - USD ($)	9 Months Ended
	Sep. 30, 2019	Dec. 31, 2018
Non‑recourse debt
Debt Instrument [Line Items]
Weighted average remaining maturity period	3 months 18 days
Unused Lines of Credit
Debt Instrument [Line Items]
Amount outstanding	$ 0	$ 0
Current borrowing capacity	180,000,000.0
Unused commitment fees	0
AFX borrowings
Debt Instrument [Line Items]
Amount outstanding	230,000,000.0	190,000,000
Federal Reserve Bank Advances
Debt Instrument [Line Items]
Loans pledged as collateral	2,800,000,000
Amount outstanding	0	0
Federal Reserve Bank Advances | FHLB secured advances
Debt Instrument [Line Items]
Borrowing capacity description	2,100,000,000
Federal Home Loan Bank of San Francisco
Debt Instrument [Line Items]
Loans pledged as collateral	6,100,000,000
Federal Home Loan Bank of San Francisco | FHLB secured advances
Debt Instrument [Line Items]
Borrowing capacity description	4,300,000,000
Current outstanding	882,000,000.0	1,040,000,000
Federal Home Loan Bank of San Francisco | FHLB unsecured overnight advance
Debt Instrument [Line Items]
Current outstanding	141,000,000	141,000,000.0
Federal Home Loan Bank of San Francisco | Unused Lines of Credit
Debt Instrument [Line Items]
Borrowing capacity description	141,000,000.0
Maturity Overnight [Member] | AFX borrowings
Debt Instrument [Line Items]
Amount outstanding	230,000,000.0
Two-Month Borrowing [Member] | Federal Home Loan Bank of San Francisco
Debt Instrument [Line Items]
Current outstanding	300,000,000.0
Maturity Overnight [Member] | Federal Home Loan Bank of San Francisco
Debt Instrument [Line Items]
Current outstanding	$ 582,000,000.0	$ 1,000,000,000.0

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Other Assets (Details Textual) - USD ($)	3 Months Ended	9 Months Ended	18 Months Ended
	Sep. 30, 2019	Sep. 30, 2019	Jun. 30, 2019	Dec. 31, 2018
Other Investment Not Readily Marketable [Line Items]
Equity Investments Without Readily Determinable Fair Value	$ 14,828,000	$ 14,828,000		$ 14,758,000
Equity Investments Without Readily Determinable Fair Value Other than Non-temporary Impairments	0
Equity Method Investment, Amount Sold		0	$ 286,000
Equity Method Investment, Other than Temporary Impairment			$ 278,000
Community Reinvestment Act Investments [Member]
Other Investment Not Readily Marketable [Line Items]
Equity Investments Without Readily Determinable Fair Value	$ 15,700,000	$ 15,700,000		$ 12,500,000

XML

Leases - Schedule of Maturities of Operating Leases (Details) $ in Thousands	Sep. 30, 2019 USD ($)
Lessee, Operating Lease, Liability, Payment, Due [Abstract]
2019	$ 8,303
2020	32,345
2021	30,090
2022	24,304
2023	21,472
Thereafter	47,582
Total operating lease liabilities	164,096
Less: Imputed interest	(14,911)
Present value of operating lease liabilities	$ 149,185

XML

Revenue From Contracts With Customers (Details Textual)	Dec. 31, 2018 USD ($)
Revenue From Contracts With Customers [Abstract]
Contract with Customer, Liability	$ 98,000

XML

Fair Value Measurements (Details 4) - Fair Value, Measurements, Nonrecurring - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total recurring assets	$ 29,680	$ 25,568
Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total recurring assets	0	0
Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total recurring assets	2,962	2,936
Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total recurring assets	26,718	22,632
Non Purchased Credit Impaired Loans and Leases
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total recurring assets	29,552	24,432
Non Purchased Credit Impaired Loans and Leases | Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total recurring assets	0	0
Non Purchased Credit Impaired Loans and Leases | Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total recurring assets	2,962	1,800
Non Purchased Credit Impaired Loans and Leases | Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total recurring assets	26,590	22,632
Other real estate and foreclosed assets
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total recurring assets	128	1,136
Other real estate and foreclosed assets | Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total recurring assets	0	0
Other real estate and foreclosed assets | Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total recurring assets	0	1,136
Third party appraisals | Other real estate and foreclosed assets | Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total recurring assets	$ 128	$ 0

XML

Fair Value Measurements (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available‑for‑sale	$ 3,817,348	$ 4,009,431
Securities available-for-sale, at fair value	3,817,348	4,009,431
Equity Securities, FV-NI	4,715	4,891
Derivative Liability	1,446	142
Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity warrants		4,793
Government agency and government-sponsored enterprise pass through securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available‑for‑sale	324,929	281,088
Government agency and government-sponsored enterprise collateralized mortgage obligations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available‑for‑sale	1,172,555	632,850
Private label collateralized mortgage obligations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available‑for‑sale	93,868	101,205
Collateralized loan obligations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available‑for‑sale	113,874
Municipal securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available‑for‑sale	721,981	1,312,194
Government agency and government-sponsored enterprise commercial mortgage-backed securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available‑for‑sale	1,100,017	1,112,704
US Treasury Securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available‑for‑sale	5,203	403,405
Asset-backed Securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available‑for‑sale	214,151	81,385
SBA asset-backed securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available‑for‑sale	49,746	67,047
Corporate debt securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available‑for‑sale	21,024	17,553
Fair Value, Measurements, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available‑for‑sale	3,817,348
Equity warrants	3,532	4,793
Other derivative assets	2,297	3,292
Total recurring assets	3,827,892	4,022,407
Derivative liabilities	1,446	142
Fair Value, Measurements, Recurring | Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available-for-sale, at fair value	5,203	403,405
Equity warrants	0	0
Other derivative assets	0	0
Equity Securities, FV-NI	4,715	4,891
Total recurring assets	9,918	408,296
Derivative liabilities	0	0
Fair Value, Measurements, Recurring | Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available-for-sale, at fair value	3,774,182	3,558,793
Equity warrants	0	0
Other derivative assets	2,297	3,292
Equity Securities, FV-NI	0	0
Total recurring assets	3,776,479	3,562,085
Derivative liabilities	1,446	142
Fair Value, Measurements, Recurring | Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available-for-sale, at fair value	37,963	47,233
Equity warrants	3,532	4,793
Other derivative assets	0	0
Equity Securities, FV-NI	0	0
Total recurring assets	41,495	52,026
Derivative liabilities	0	0
Fair Value, Measurements, Recurring | Government agency and government-sponsored enterprise pass through securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available‑for‑sale	324,929	281,088
Fair Value, Measurements, Recurring | Government agency and government-sponsored enterprise pass through securities | Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available‑for‑sale	0	0
Fair Value, Measurements, Recurring | Government agency and government-sponsored enterprise pass through securities | Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available‑for‑sale	324,929	281,088
Fair Value, Measurements, Recurring | Government agency and government-sponsored enterprise pass through securities | Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available‑for‑sale	0	0
Fair Value, Measurements, Recurring | Government agency and government-sponsored enterprise collateralized mortgage obligations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available‑for‑sale	1,172,555	632,850
Fair Value, Measurements, Recurring | Government agency and government-sponsored enterprise collateralized mortgage obligations | Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available‑for‑sale	0	0
Fair Value, Measurements, Recurring | Government agency and government-sponsored enterprise collateralized mortgage obligations | Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available‑for‑sale	1,172,555	632,850
Fair Value, Measurements, Recurring | Government agency and government-sponsored enterprise collateralized mortgage obligations | Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available‑for‑sale	0	0
Fair Value, Measurements, Recurring | Private label collateralized mortgage obligations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available‑for‑sale	93,868	101,205
Fair Value, Measurements, Recurring | Private label collateralized mortgage obligations | Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available‑for‑sale	0	0
Fair Value, Measurements, Recurring | Private label collateralized mortgage obligations | Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available‑for‑sale	87,273	93,917
Fair Value, Measurements, Recurring | Private label collateralized mortgage obligations | Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available‑for‑sale	6,595	7,288
Fair Value, Measurements, Recurring | Collateralized loan obligations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available‑for‑sale	113,874
Fair Value, Measurements, Recurring | Collateralized loan obligations | Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available‑for‑sale	0
Fair Value, Measurements, Recurring | Collateralized loan obligations | Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available‑for‑sale	113,874
Fair Value, Measurements, Recurring | Collateralized loan obligations | Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available‑for‑sale	0
Fair Value, Measurements, Recurring | Municipal securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available‑for‑sale	721,981	1,312,194
Fair Value, Measurements, Recurring | Municipal securities | Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available‑for‑sale	0	0
Fair Value, Measurements, Recurring | Municipal securities | Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available‑for‑sale	721,981	1,312,194
Fair Value, Measurements, Recurring | Municipal securities | Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available‑for‑sale	0	0
Fair Value, Measurements, Recurring | Government agency and government-sponsored enterprise commercial mortgage-backed securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available‑for‑sale	1,100,017	1,112,704
Fair Value, Measurements, Recurring | Government agency and government-sponsored enterprise commercial mortgage-backed securities | Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available‑for‑sale	0	0
Fair Value, Measurements, Recurring | Government agency and government-sponsored enterprise commercial mortgage-backed securities | Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available‑for‑sale	1,100,017	1,112,704
Fair Value, Measurements, Recurring | Government agency and government-sponsored enterprise commercial mortgage-backed securities | Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available‑for‑sale	0	0
Fair Value, Measurements, Recurring | US Treasury Securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available‑for‑sale	5,203	403,405
Fair Value, Measurements, Recurring | US Treasury Securities | Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available‑for‑sale	5,203	403,405
Fair Value, Measurements, Recurring | US Treasury Securities | Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available‑for‑sale	0	0
Fair Value, Measurements, Recurring | US Treasury Securities | Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available‑for‑sale	0	0
Fair Value, Measurements, Recurring | Asset-backed Securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available‑for‑sale	214,151	81,385
Fair Value, Measurements, Recurring | Asset-backed Securities | Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available‑for‑sale	0	0
Fair Value, Measurements, Recurring | Asset-backed Securities | Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available‑for‑sale	182,783	41,440
Fair Value, Measurements, Recurring | Asset-backed Securities | Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available‑for‑sale	31,368	39,945
Fair Value, Measurements, Recurring | SBA asset-backed securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available‑for‑sale	49,746	67,047
Fair Value, Measurements, Recurring | SBA asset-backed securities | Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available‑for‑sale	0	0
Fair Value, Measurements, Recurring | SBA asset-backed securities | Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available‑for‑sale	49,746	67,047
Fair Value, Measurements, Recurring | SBA asset-backed securities | Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available‑for‑sale	0	0
Fair Value, Measurements, Recurring | Corporate debt securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available‑for‑sale	21,024	17,553
Fair Value, Measurements, Recurring | Corporate debt securities | Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available‑for‑sale	0	0
Fair Value, Measurements, Recurring | Corporate debt securities | Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available‑for‑sale	21,024	17,553
Fair Value, Measurements, Recurring | Corporate debt securities | Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available‑for‑sale	$ 0	$ 0

XML

Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended						9 Months Ended
	Sep. 30, 2019		Jun. 30, 2019		Sep. 30, 2018		Sep. 30, 2019	Sep. 30, 2018
Earnings Per Share [Abstract]
Net earnings from continuing operations	$ 110,026		$ 128,125		$ 116,287		$ 350,755	$ 350,298
Less: Earnings allocated to unvested restricted stock	(1,369)	[1]	(1,190)	[1]	(1,428)	[1]	(3,725)	(3,899)
Net earnings allocated to common shares	$ 108,657		$ 126,935		$ 114,859		$ 347,030	$ 346,399
Weighted-average basic shares and unvested restricted stock outstanding (shares)	119,831		120,042		123,657		120,691	125,728
Weighted-average unvested restricted stock outstanding (shares)	(1,622)		(1,462)		(1,537)		(1,480)	(1,473)
Weighted-average basic shares outstanding (shares)	118,209		118,580		122,120		119,211	124,255
Basic net income per share (usd per share)	$ 0.92		$ 1.07		$ 0.94		$ 2.91	$ 2.79
Net earnings from continuing operations allocated to common shares	$ 108,657		$ 126,935		$ 114,859		$ 347,030	$ 346,399
Diluted net income per share (usd per share)	$ 0.92		$ 1.07		$ 0.94		$ 2.91	$ 2.79

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

XML

Loans and Leases (Details 6) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019 USD ($) contract	Sep. 30, 2018 USD ($) contract	Sep. 30, 2019 USD ($) contract	Sep. 30, 2018 USD ($) contract
Financing Receivable, Troubled Debt Restructuring [Line Items]
Number of loans | contract	6	23	34	35
Pre-Modification Outstanding Recorded Investment	$ 594	$ 57,736	$ 18,805	$ 76,517
Post-Modification Outstanding Recorded Investment	$ 594	$ 60,187	$ 18,906	$ 77,909
Real Estate Mortgage | Commercial
Financing Receivable, Troubled Debt Restructuring [Line Items]
Number of loans | contract	0	4	1	4
Pre-Modification Outstanding Recorded Investment	$ 0	$ 2,889	$ 37	$ 2,889
Post-Modification Outstanding Recorded Investment	$ 0	$ 712	$ 0	$ 712
Real Estate Mortgage | Residential Real Estate
Financing Receivable, Troubled Debt Restructuring [Line Items]
Number of loans | contract	2	5	7	8
Pre-Modification Outstanding Recorded Investment	$ 495	$ 912	$ 1,280	$ 2,616
Post-Modification Outstanding Recorded Investment	$ 495	$ 912	$ 1,280	$ 1,557
Commercial
Financing Receivable, Troubled Debt Restructuring [Line Items]
Number of Loans | contract				0
Commercial | Other Commercial
Financing Receivable, Troubled Debt Restructuring [Line Items]
Number of Loans | contract	3		3
Commercial | Asset-based
Financing Receivable, Troubled Debt Restructuring [Line Items]
Number of loans | contract	0	4	1	4
Pre-Modification Outstanding Recorded Investment	$ 0	$ 28,947	$ 620	$ 28,947
Post-Modification Outstanding Recorded Investment	$ 0	$ 33,947	$ 620	$ 33,947
Commercial | Venture Capital Loans
Financing Receivable, Troubled Debt Restructuring [Line Items]
Number of loans | contract	1	5	11	9
Pre-Modification Outstanding Recorded Investment	$ 0	$ 23,501	$ 16,076	$ 28,737
Post-Modification Outstanding Recorded Investment	$ 0	$ 23,501	$ 16,214	$ 28,737
Commercial | Other Commercial
Financing Receivable, Troubled Debt Restructuring [Line Items]
Number of loans | contract	3	5	14	9
Pre-Modification Outstanding Recorded Investment	$ 99	$ 1,487	$ 792	$ 13,301
Post-Modification Outstanding Recorded Investment	$ 99	$ 1,115	$ 792	$ 12,929
Consumer
Financing Receivable, Troubled Debt Restructuring [Line Items]
Number of loans | contract			0	1
Pre-Modification Outstanding Recorded Investment			$ 0	$ 27
Post-Modification Outstanding Recorded Investment			$ 0	$ 27

XML

Loans and Leases (Details Textual)	3 Months Ended		9 Months Ended
	Sep. 30, 2019 USD ($) contract	Sep. 30, 2018 USD ($)	Sep. 30, 2019 USD ($) contract	Sep. 30, 2018 USD ($) contract	Dec. 31, 2018 USD ($)
Accounts, Notes, Loans and Financing Receivable [Line Items]
Pre-Modification Outstanding Recorded Investment	$ 594,000	$ 57,736,000	$ 18,805,000	$ 76,517,000
Post-Modification Outstanding Recorded Investment	594,000	60,187,000	18,906,000	$ 77,909,000
Nonaccrual loans and leases	99,113,000		99,113,000		$ 79,333,000
Receivable, 90 or more days past due	10,917,000		10,917,000		10,700,000
Receivable, 30-89 days past due	17,625,000		17,625,000		6,600,000
Financing receivable, nonaccrual status, current					62,000,000.0
Credit Concentration Risk
Accounts, Notes, Loans and Financing Receivable [Line Items]
Nonaccrual loans and leases	53,400,000		$ 53,400,000
Percentage of nonaccrual loans and leases			54.00%
Non Purchased Credit Impaired Loans and Leases
Accounts, Notes, Loans and Financing Receivable [Line Items]
Nonaccrual loans and leases					79,333,000
Receivable, 90 or more days past due					10,723,000
Receivable, 30-89 days past due					17,085,000
Nonaccrual
Accounts, Notes, Loans and Financing Receivable [Line Items]
Receivable, 90 or more days past due	10,900,000		$ 10,900,000
Receivable, 30-89 days past due	6,300,000		6,300,000
Financing receivable, nonaccrual status, current	81,900,000		81,900,000
Commercial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Number of Loans | contract				0
Nonaccrual loans and leases	75,700,000		75,700,000
Receivable, 90 or more days past due	2,903,000		2,903,000
Receivable, 30-89 days past due	6,790,000		6,790,000
Commercial | Non Purchased Credit Impaired Loans and Leases
Accounts, Notes, Loans and Financing Receivable [Line Items]
Nonaccrual loans and leases					60,003,000
Receivable, 90 or more days past due					1,931,000
Receivable, 30-89 days past due					9,933,000
Commercial | Venture Capital Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Pre-Modification Outstanding Recorded Investment	0	23,501,000	16,076,000	$ 28,737,000
Post-Modification Outstanding Recorded Investment	0	23,501,000	16,214,000	28,737,000
Nonaccrual loans and leases	20,131,000		20,131,000
Receivable, 90 or more days past due	0		0
Receivable, 30-89 days past due	0		0
Commercial | Venture Capital Loans | Non Purchased Credit Impaired Loans and Leases
Accounts, Notes, Loans and Financing Receivable [Line Items]
Nonaccrual loans and leases					20,299,000
Receivable, 90 or more days past due					0
Receivable, 30-89 days past due					4,705,000
Commercial | Other Commercial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Pre-Modification Outstanding Recorded Investment	99,000	1,487,000	792,000	13,301,000
Post-Modification Outstanding Recorded Investment	99,000	1,115,000	792,000	12,929,000
Nonaccrual loans and leases	22,554,000		22,554,000
Receivable, 90 or more days past due	2,241,000		2,241,000
Receivable, 30-89 days past due	6,742,000		6,742,000
Commercial | Other Commercial | Non Purchased Credit Impaired Loans and Leases
Accounts, Notes, Loans and Financing Receivable [Line Items]
Nonaccrual loans and leases					7,380,000
Receivable, 90 or more days past due					1,285,000
Receivable, 30-89 days past due					5,181,000
Commercial | Asset-based
Accounts, Notes, Loans and Financing Receivable [Line Items]
Pre-Modification Outstanding Recorded Investment	0	28,947,000	620,000	28,947,000
Post-Modification Outstanding Recorded Investment	0	$ 33,947,000	620,000	$ 33,947,000
Nonaccrual loans and leases	33,015,000		33,015,000
Receivable, 90 or more days past due	662,000		662,000
Receivable, 30-89 days past due	$ 48,000		$ 48,000
Commercial | Asset-based | Non Purchased Credit Impaired Loans and Leases
Accounts, Notes, Loans and Financing Receivable [Line Items]
Nonaccrual loans and leases					32,324,000
Receivable, 90 or more days past due					646,000
Receivable, 30-89 days past due					$ 47,000
Equipment Finance Commercial Financing Receivable | Venture Capital Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Number of Loans | contract			2
Financing Receivable, Troubled Debt Restructuring, Subsequent Default			$ 441,000
Other Commercial | Commercial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Number of Loans | contract	3		3
Financing Receivable, Troubled Debt Restructuring, Subsequent Default	$ 133,000		$ 133,000
Other Residential | Commercial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Number of Loans | contract	1
Financing Receivable, Troubled Debt Restructuring, Subsequent Default	$ 254,000

XML

Goodwill and Other Intangible Assets (Details Textual) - USD ($) $ in Thousands	3 Months Ended			9 Months Ended		12 Months Ended
	Sep. 30, 2019	Jun. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018	Dec. 31, 2019
Finite-Lived Intangible Assets [Line Items]
Intangible asset amortization	$ 4,833	$ 4,870	$ 5,587	$ 14,573	$ 17,520
Aggregate amortization expense 2019	14,800			14,800
Aggregate amortization expense 2020	10,800			10,800
Aggregate amortization expense 2021	7,400			7,400
Aggregate amortization expense 2022	3,800			3,800
Aggregate amortization expense 2023	$ 1,700			$ 1,700
Scenario, Forecast
Finite-Lived Intangible Assets [Line Items]
Intangible asset amortization						$ 18,700

XML

Organization (Details Textual) $ in Thousands			3 Months Ended	9 Months Ended
		Jan. 01, 2019 USD ($)	Mar. 31, 2018 USD ($)	Sep. 30, 2019 acquisition bank_branch
Business Acquisition [Line Items]
Number of Businesses Acquired | acquisition				29
Cumulative effect of change in accounting principle | $	[1]	$ 938	$ 0
CALIFORNIA
Business Acquisition [Line Items]
Retail Branch Locations				74
NORTH CAROLINA
Business Acquisition [Line Items]
Retail Branch Locations				1

[1] Impact due to adoption on January 1, 2019 of ASU 2016-02, "Leases (Topic 842)," and the related amendments.

XML

Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2019

Fair Value Disclosures [Abstract]

Fair value, assets measured on recurring basis

The following tables present information on the assets and liabilities measured and recorded at fair value on a recurring basis as of the dates indicated:

	Fair Value Measurements as of
	September 30, 2019
Measured on a Recurring Basis	Total		Level 1		Level 2		Level 3
	(In thousands)
Securities available‑for‑sale:
Agency residential CMOs	$	1,172,555	$	—	$	1,172,555	$	—
Agency commercial MBS	1,100,017		—		1,100,017		—
Municipal securities	721,981		—		721,981		—
Agency residential MBS	324,929		—		324,929		—
Asset-backed securities	214,151		—		182,783		31,368
Collateralized loan obligations	113,874		—		113,874		—
Private label residential CMOs	93,868		—		87,273		6,595
SBA securities	49,746		—		49,746		—
Corporate debt securities	21,024		—		21,024		—
U.S. Treasury securities	5,203		5,203		—		—
Total securities available-for-sale	3,817,348		5,203		3,774,182		37,963
Equity warrants	3,532		—		—		3,532
Other derivative assets	2,297		—		2,297		—
Equity investments with readily determinable fair values	4,715		4,715		—		—
Total recurring assets	$	3,827,892	$	9,918	$	3,776,479	$	41,495
Derivative liabilities	$	1,446	$	—	$	1,446	$	—

	Fair Value Measurements as of
	December 31, 2018
Measured on a Recurring Basis	Total		Level 1		Level 2		Level 3
	(In thousands)
Securities available‑for‑sale:
Municipal securities	$	1,312,194	$	—	$	1,312,194	$	—
Agency commercial MBS	1,112,704		—		1,112,704		—
Agency residential CMOs	632,850		—		632,850		—
U.S. Treasury securities	403,405		403,405		—		—
Agency residential MBS	281,088		—		281,088		—
Private label residential CMOs	101,205		—		93,917		7,288
Asset-backed securities	81,385		—		41,440		39,945
SBA securities	67,047		—		67,047		—
Corporate debt securities	17,553		—		17,553		—
Total securities available-for-sale	4,009,431		403,405		3,558,793		47,233
Equity warrants	4,793		—		—		4,793
Other derivative assets	3,292		—		3,292		—
Equity investments with readily determinable fair values	4,891		4,891		—		—
Total recurring assets	$	4,022,407	$	408,296	$	3,562,085	$	52,026
Derivative liabilities	$	142	$	—	$	142	$	—

Fair value, assets and liabilities measured on nonrecurring basis, valuation techniques

The following table presents information about quantitative inputs and assumptions used to determine the fair values provided by our third party pricing service for our Level 3 private label CMOs and asset-backed securities available-for-sale measured at fair value on a recurring basis as of the date indicated:

	September 30, 2019
	Private Label CMOs		Asset-Backed Securities
		Weighted	Input or	Weighted
	Range	Average	Range	Average
Unobservable Inputs	of Inputs	Input	of Inputs	Input
Voluntary annual prepayment speeds	2.9% - 18.2%	11.4%	12.0% - 15.0%	13.7%
Annual default rates (1)	0.0% - 11.1%	1.8%	2.0%	2.0%
Loss severity rates (1)	24.1% - 117.6%	58.5%	60.0%	60.0%
Discount rates	2.5% - 9.2%	6.3%	3.2% - 5.2%	4.3%

____________________

(1) The annual default rates and loss severity rates were the same for all of the asset-backed securities.

Fair value inputs, assets, quantitative information

The following table presents information about quantitative inputs and assumptions used in the modified Black-Scholes option pricing model to determine the fair value for our Level 3 equity warrants measured at fair value on a recurring basis as of the date indicated:

	September 30, 2019
	Equity Warrants
	Weighted
	Average
Unobservable Inputs	Input
Volatility	17.0%
Risk-free interest rate	1.6%
Remaining life assumption (in years)	3.27

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

	September 30, 2019
			Valuation	Unobservable		Weighted
Asset	Fair Value		Technique	Inputs	Range	Average
	(In thousands)
Impaired loans	$	21,543	Discounted cash flows	Discount rates	3.75% - 8.77%	7.58%
Impaired loans	5,047		Third party appraisals	No discounts
OREO	128		Third party appraisals	Discount (1)	31.91%	31.91%
Total non-recurring Level 3	$	26,718

____________________

(1)

Relates to one OREO property at September 30, 2019.

Fair value, assets measured on recurring basis, significant unobservable inputs (level 3) reconciliation

The following table summarizes activity for our Level 3 private label CMOs available-for-sale, asset-backed securities available-for-sale, and equity warrants measured at fair value on a recurring basis for the period indicated:

	Private			Asset-Backed			Equity
	Label CMOs			Securities			Warrants
	(In thousands)
Balance, December 31, 2018	$	7,288		$	39,945		$	4,793
Total included in earnings	340			(66		)	7,429
Total included in other comprehensive income	(160		)	646			—
Issuances	—			—			226
Sales and dispositions (1)	—			—			(8,808		)
Net settlements	(873		)	(9,157		)	—
Transfers to Level 1	—			—			(108		)
Balance, September 30, 2019	$	6,595		$	31,368		$	3,532

______________________

(1)

Includes the exercise of warrants that upon exercise become equity securities in public companies. These are often subject to lock-up restrictions that must be met before the equity security can be sold, during which time they are reported as equity investments with readily determinable fair values.

Assets carried at fair value on a nonrecurring basis

The following tables present assets measured at fair value on a non‑recurring basis as of the dates indicated:

	Fair Value Measurement as of
	September 30, 2019
Measured on a Non‑Recurring Basis	Total		Level 1		Level 2		Level 3
	(In thousands)
Impaired loans	$	29,552	$	—	$	2,962	$	26,590
OREO	128		—		—		128
Total non-recurring	$	29,680	$	—	$	2,962	$	26,718

	Fair Value Measurement as of
	December 31, 2018
Measured on a Non‑Recurring Basis	Total		Level 1		Level 2		Level 3
	(In thousands)
Impaired loans	$	24,432	$	—	$	1,800	$	22,632
OREO	1,136		—		1,136		—
Total non-recurring	$	25,568	$	—	$	2,936	$	22,632

Net losses (gains) on nonrecurring assets

The following table presents losses recognized on assets measured on a nonrecurring basis for the periods indicated:

	Three Months Ended				Nine Months Ended
Losses on Assets	September 30,				September 30,
Measured on a Non‑Recurring Basis	2019		2018		2019		2018
	(In thousands)
Impaired loans	$	8,339	$	14,347	$	10,091	$	31,351
OREO	54		—		54		65
Total losses	$	8,393	$	14,347	$	10,145	$	31,416

Fair value, by balance sheet grouping

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

	September 30, 2019
	Carrying		Estimated Fair Value
	Amount		Total		Level 1		Level 2		Level 3
	(In thousands)
Financial Assets:
Cash and due from banks	$	252,596	$	252,596	$	252,596	$	—	$	—
Interest‑earning deposits in financial institutions	483,405		483,405		483,405		—		—
Securities available‑for‑sale	3,817,348		3,817,348		5,203		3,774,182		37,963
Investment in FHLB stock	26,865		26,865		—		26,865		—
Loans and leases held for investment, net	18,596,991		18,751,105		—		2,962		18,748,143
Equity warrants	3,532		3,532		—		—		3,532
Other derivative assets	2,297		2,297		—		2,297		—
Equity investments with readily determinable fair values	4,715		4,715		4,715		—		—
Financial Liabilities:
Core deposits	16,471,264		16,471,264		—		16,471,264		—
Non-core non-maturity deposits	479,732		479,732		—		479,732		—
Time deposits	2,782,207		2,781,713		—		2,781,713		—
Borrowings	1,253,031		1,253,031		953,000		300,031		—
Subordinated debentures	456,145		439,895		—		439,895		—
Derivative liabilities	1,446		1,446		—		1,446		—

	December 31, 2018
	Carrying		Estimated Fair Value
	Amount		Total		Level 1		Level 2		Level 3
	(In thousands)
Financial Assets:
Cash and due from banks	$	175,830	$	175,830	$	175,830	$	—	$	—
Interest‑earning deposits in financial institutions	209,937		209,937		209,937		—		—
Securities available‑for‑sale	4,009,431		4,009,431		403,405		3,558,793		47,233
Investment in FHLB stock	32,103		32,103		—		32,103		—
Loans and leases held for investment, net	17,825,241		17,013,860		—		1,800		17,012,060
Equity warrants	4,793		4,793		—		—		4,793
Other derivative assets	3,292		3,292		—		3,292		—
Equity investments with readily determinable fair values	4,891		4,891		4,891		—		—
Financial Liabilities:
Core deposits	16,346,671		16,346,671		—		16,346,671		—
Non-core non-maturity deposits	518,192		518,192		—		518,192		—
Time deposits	2,005,638		2,017,137		—		2,017,137		—
Borrowings	1,371,114		1,371,114		1,371,000		114		—
Subordinated debentures	453,846		435,251		—		435,251		—
Derivative liabilities	142		142		—		142		—

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Other Assets (Tables)

9 Months Ended

Sep. 30, 2019

Other Assets [Abstract]

Schedule of Other Assets

The following table presents the detail of our other assets as of the dates indicated:

	September 30,		December 31,
Other Assets	2019		2018
	(In thousands)
Cash surrender value of BOLI	$	197,887	$	194,897
Operating lease ROU assets, net	134,122		—
Interest receivable	80,955		88,754
LIHTC investments	67,367		59,507
CRA investments (1)	62,269		59,062
Prepaid expenses	18,351		18,006
Taxes receivable	17,281		39,096
Equity investments without readily determinable fair values	14,828		14,758
Equity warrants	3,532		4,793
Equity investments with readily determinable fair values	4,715		4,891
Other receivables/assets	19,752		39,132
Total other assets	$	621,059	$	522,896

________________________

(1)

Includes equity investments without readily determinable fair values of $15.7 million and $12.5 million at September 30, 2019 and December 31, 2018.

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Goodwill and Other Intangible Assets

9 Months Ended

Sep. 30, 2019

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Other Intangible Assets

GOODWILL AND OTHER INTANGIBLE ASSETS

Goodwill and other intangible assets arise from the acquisition method of accounting for business combinations. Goodwill and other intangible assets generated from business combinations and deemed to have indefinite lives are not subject to amortization and instead are tested for impairment at least annually. Goodwill represents the excess of the purchase price over the fair value of the net assets and other identifiable intangible assets acquired. Impairment exists when the carrying value of the goodwill exceeds its implied fair value. An impairment loss would be recognized in an amount equal to that excess as a charge to "Noninterest expense" in the condensed consolidated statements of earnings.

Our other intangible assets with definite lives include CDI and CRI. CDI and CRI are amortized over their respective estimated useful lives and reviewed for impairment at least quarterly. The amortization expense represents the estimated decline in the value of the underlying deposits or customer relationships acquired. The aggregate amortization expense is expected to be $18.7 million for 2019. The estimated aggregate amortization expense related to our current intangible assets for each of the next five years is $14.8 million for 2020, $10.8 million for 2021, $7.4 million for 2022, $3.8 million for 2023, and $1.7 million for 2024.

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,			June 30,			September 30,			September 30,
	2019			2019			2018			2019			2018
	(In thousands)
Gross Amount of CDI and CRI:
Balance, beginning of period	$	119,497		$	119,497		$	119,497		$	119,497		$	119,497
Fully amortized portion	(1,924		)	—			—			(1,924		)	—
Balance, end of period	117,573			119,497			119,497			117,573			119,497
Accumulated Amortization:
Balance, beginning of period	(72,117		)	(67,247		)	(51,804		)	(62,377		)	(39,871		)
Amortization	(4,833		)	(4,870		)	(5,587		)	(14,573		)	(17,520		)
Fully amortized portion	1,924			—			—			1,924			—
Balance, end of period	(75,026		)	(72,117		)	(57,391		)	(75,026		)	(57,391		)
Net CDI and CRI, end of period	$	42,547		$	47,380		$	62,106		$	42,547		$	62,106

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Commitments and Contingencies

9 Months Ended

Sep. 30, 2019

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

COMMITMENTS AND CONTINGENCIES

The following table presents a summary of commitments described below as of the dates indicated:

	September 30,		December 31,
	2019		2018
	(In thousands)
Loan commitments to extend credit	$	7,790,796	$	7,528,248
Standby letters of credit	367,147		364,210
Commitments to contribute capital to low income housing project partnerships
and small business investment companies	116,012		101,991
Commitments to contribute capital to private equity funds	50		50
Total	$	8,274,005	$	7,994,499

The Company 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 and standby letters of credit. 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 that the Company has in particular classes of financial instruments.

Commitments to extend credit are contractual agreements to lend to our customers when customers are in compliance with their contractual credit agreements and when customers have contractual availability to borrow under such agreements. 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. We provide standby letters of credit in conjunction with several of our lending arrangements and property lease obligations. Most guarantees expire within one year from the date of issuance. If a borrower defaults on its commitments subject to any letter of credit issued under these arrangements, we would be required to meet the borrower's financial obligation but would seek repayment of that financial obligation from the borrower. In some cases, borrowers have pledged cash and investment securities as collateral with us under these arrangements.

In addition, the Company invests in low income housing project partnerships, which provide income tax credits, and in small business investment companies that call for capital contributions up to an amount specified in the partnership agreements. As of September 30, 2019 and December 31, 2018, we had commitments to contribute capital to these entities totaling $116.0 million and $102.0 million. We also had commitments to contribute up to an additional $50,000 to private equity funds at September 30, 2019 and December 31, 2018.

Legal Matters

In the ordinary course of our business, the Company is 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 currently available information, any resulting liability, in addition to amounts already accrued, and taking into consideration insurance which may be applicable, would not have a material adverse effect on the Company’s financial statements or operations.

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Stock-Based Compensation

9 Months Ended

Sep. 30, 2019

Share-based Payment Arrangement [Abstract]

Stock-Based Compensation

STOCK-BASED COMPENSATION

The Company’s 2017 Stock Incentive Plan, or the 2017 Plan, permits stock-based compensation awards to officers, directors, employees, and consultants. The 2017 Plan authorized grants of stock‑based compensation instruments to purchase or issue up to 4,000,000 shares of Company common stock. As of September 30, 2019, there were 2,431,235 shares available for grant under the 2017 Plan. Though frozen for new issuances, certain awards issued under the 2003 Stock Incentive Plan, or the 2003 Plan, remain outstanding.

Restricted Stock

Restricted stock amortization totaled $7.3 million, $6.2 million, and $8.1 million for the three months ended September 30, 2019, June 30, 2019, and September 30, 2018, and $19.3 million and $22.3 million for the nine months ended September 30, 2019 and 2018. Such amounts are included in "Compensation expense" on the condensed consolidated statements of earnings. The amount of unrecognized compensation expense related to unvested TRSAs and PRSUs as of September 30, 2019 totaled $59.3 million.

Time-Based Restricted Stock Awards

At September 30, 2019, there were 1,619,355 shares of unvested TRSAs outstanding pursuant to the Company's 2003 and 2017 Stock Incentive Plans. The TRSAs generally vest ratably over a service period of three or four years from the date of the grant or immediately upon death of an employee. Compensation expense related to TRSAs 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.

Performance-Based Restricted Stock Units

At September 30, 2019, there were 276,386 units of unvested PRSUs that have been granted. The PRSUs will vest only if performance goals with respect to certain financial metrics are met over a three-year performance period. The PRSUs are not considered issued and outstanding until they vest. PRSUs are granted and initially expensed based on a target number. The number of shares that will ultimately vest based on actual performance will range from zero to a maximum of either 150% or 200% of target. Compensation expense related to PRSUs is based on the fair value of the underlying stock on the award date and is amortized over the vesting period using the straight-line method unless it is determined that: (1) attainment of the financial metrics is less than probable, in which case a portion of the amortization is suspended, or (2) attainment of the financial metrics is improbable, in which case a portion of the previously recognized amortization is reversed and also suspended. If it is determined that attainment of a financial measure higher than target is probable, the amortization will increase to up to 150% or 200% of the target amortization amount. Annual PRSU expense may vary during the three-year performance period based upon changes in management's estimate of the number of shares that may ultimately vest. In the case where the performance target for the PRSU is based on a market condition (such as total shareholder return), the amortization is neither reversed nor suspended if it is subsequently determined that the attainment of the performance target is less than probable or improbable and the employee continues to meet the service requirement of the award.

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Fair Value Disclosures (Policies)

9 Months Ended

Sep. 30, 2019

Fair Value Disclosures [Abstract]

Fair Value Measurement, Policy

FAIR VALUE MEASUREMENTS

ASC Topic 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 municipal securities, agency residential and commercial MBS, collateralized loan obligations, registered publicly rated private label CMOs, corporate debt securities, SBA securities, and asset-backed securitizations.

• 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 observable inputs from a pricing service not corroborated by observable market data, and includes our non-rated private label CMOs, non-rated private label asset-backed securities, and equity warrants.

The Company uses fair value to measure certain assets and liabilities on a recurring basis, primarily securities available‑for‑sale and derivatives. 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, CDI, and other long‑lived assets.

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Goodwill and Other Intangible Assets (Tables)

9 Months Ended

Sep. 30, 2019

Goodwill and Intangible Assets Disclosure [Abstract]

Intangible assets disclosure

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,			June 30,			September 30,			September 30,
	2019			2019			2018			2019			2018
	(In thousands)
Gross Amount of CDI and CRI:
Balance, beginning of period	$	119,497		$	119,497		$	119,497		$	119,497		$	119,497
Fully amortized portion	(1,924		)	—			—			(1,924		)	—
Balance, end of period	117,573			119,497			119,497			117,573			119,497
Accumulated Amortization:
Balance, beginning of period	(72,117		)	(67,247		)	(51,804		)	(62,377		)	(39,871		)
Amortization	(4,833		)	(4,870		)	(5,587		)	(14,573		)	(17,520		)
Fully amortized portion	1,924			—			—			1,924			—
Balance, end of period	(75,026		)	(72,117		)	(57,391		)	(75,026		)	(57,391		)
Net CDI and CRI, end of period	$	42,547		$	47,380		$	62,106		$	42,547		$	62,106

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Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018
Cash flows from operating activities:
Net earnings	$ 350,755	$ 350,298
Depreciation and amortization	28,266	25,788
Amortization of net premiums on securities available-for-sale	11,078	19,489
Amortization of intangible assets	14,573	17,520
Amortization of operating lease ROU assets	22,028	0
Provision for credit losses	19,000	33,000
(Gain) loss on sale of foreclosed assets	(406)	35
Provision for losses on foreclosed assets	54	65
Gain on sale of loans and leases	(1,091)	(4,675)
Gain on sale of premises and equipment	(34)	(13)
Gain on sale of securities	(25,261)	(7,390)
Gain on BOLI death benefit	0	(437)
Unrealized (gain) loss on derivatives and foreign currencies, net	(16)	76
Earned stock compensation	19,834	22,882
Decrease (increase) in deferred income taxes, net	14,714	(8,790)
Decrease in other assets	35,631	52,275
Decrease in accrued interest payable and other liabilities	(41,530)	(36,303)
Net cash provided by operating activities	447,595	463,820
Cash flows from investing activities:
Net increase in loans and leases	(894,624)	(446,880)
Proceeds from sales of loans and leases	102,507	646,587
Proceeds from maturities and paydowns of securities available-for-sale	238,487	231,474
Proceeds from sales of securities available-for-sale	1,554,805	500,101
Purchases of securities available-for-sale	(1,444,720)	(910,298)
Net redemptions (purchases) of Federal Home Loan Bank stock	5,238	(10,287)
Proceeds from sales of foreclosed assets	4,322	57
Proceeds from sales of premises and equipment	60	49
Proceeds from BOLI death benefit	555	1,901
Purchases of premises and equipment, net	(10,990)	(9,250)
Net increase in equipment leased to others under operating leases	(19,981)	(6,000)
Net cash used in investing activities	(464,341)	(2,546)
Cash flows from financing activities:
Net decrease in noninterest-bearing deposits	(446,400)	(671,016)
Net increase (decrease) in interest-bearing deposits	1,310,432	(312,429)
Net (decrease) increase in borrowings	(118,083)	1,045,824
Net decrease in subordinated debentures	0	(12,372)
Common stock repurchased and restricted stock surrendered	(161,928)	(313,796)
Cash dividends paid	(217,041)	(214,136)
Net cash provided by (used in) financing activities	366,980	(477,925)
Net increase (decrease) in cash, cash equivalents, and restricted cash	350,234	(16,651)
Cash, cash equivalents, and restricted cash, beginning of period	385,767	398,437
Cash, cash equivalents, and restricted cash, end of period	736,001	381,786
Supplemental disclosures of cash flow information:
Cash paid for interest	154,212	78,884
Cash paid for income taxes	89,505	62,525
Loans transferred to foreclosed assets	37	3,235
Transfers from loans held for investment to loans held for sale	$ 25,124	$ 0

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Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Sep. 30, 2019	Dec. 31, 2018
Preferred stock par value (usd 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 (usd per share)	$ 0.01	$ 0.01
Common stock, shares authorized (shares)	200,000,000	200,000,000
Common stock issued (shares)	121,906,949	125,079,705
Unvested restricted shares (shares)	1,623,494	1,889,872
Treasury Stock (shares)	2,077,845	1,889,872

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Leases - Schedule of Occupancy Expense and Supplemental Cash Flow Information Related to Operating Leases (Details) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2019
Lease, Cost [Abstract]
Fixed costs	$ 8,347	$ 25,183
Variable costs	7	77
Short-term lease costs	126	849
Sublease income	(1,010)	(3,190)
Net lease expense	$ 7,470	22,919
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases		24,674
ROU assets obtained in exchange for lease obligations:
Operating leases		$ 172,189

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Borrowings and Subordinated Debentures (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Debt Instrument [Line Items]
Borrowings	$ 1,253,031	$ 1,371,114
Rate	2.06%	2.56%
Non‑recourse debt
Debt Instrument [Line Items]
Amount	$ 31	$ 114
Rate	7.50%	7.50%
AFX borrowings
Debt Instrument [Line Items]
Amount	$ 230,000	$ 190,000
Rate	1.92%	2.56%
Federal Home Loan Bank of San Francisco | FHLB secured advances
Debt Instrument [Line Items]
Amount	$ 882,000	$ 1,040,000
Rate	2.12%	2.56%
Federal Home Loan Bank of San Francisco | FHLB unsecured overnight advance
Debt Instrument [Line Items]
Amount	$ 141,000	$ 141,000
Rate	1.95%	2.53%

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Loans and Leases (Details 3) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018	Sep. 30, 2018
Financing Receivable, Past Due [Line Items]
Loans held for investment	$ 18,735,543	$ 17,957,713
Classified
Financing Receivable, Past Due [Line Items]
Loans held for investment	188,607	237,110
Special Mention
Financing Receivable, Past Due [Line Items]
Loans held for investment	267,925	261,398
Pass
Financing Receivable, Past Due [Line Items]
Loans held for investment	18,279,011	17,459,205
Non Purchased Credit Impaired Loans and Leases
Financing Receivable, Past Due [Line Items]
Loans held for investment	18,735,543	17,957,713	$ 17,230,146
Real Estate Mortgage
Financing Receivable, Past Due [Line Items]
Loans held for investment	7,896,924	7,918,141
Real Estate Mortgage | Classified
Financing Receivable, Past Due [Line Items]
Loans held for investment	43,622	68,255
Real Estate Mortgage | Special Mention
Financing Receivable, Past Due [Line Items]
Loans held for investment	40,314	75,753
Real Estate Mortgage | Pass
Financing Receivable, Past Due [Line Items]
Loans held for investment	7,812,988	7,774,133
Real Estate Mortgage | Non Purchased Credit Impaired Loans and Leases
Financing Receivable, Past Due [Line Items]
Loans held for investment	7,896,924	7,918,141	7,678,660
Real Estate Mortgage | Commercial
Financing Receivable, Past Due [Line Items]
Loans held for investment	4,300,566	4,824,298
Real Estate Mortgage | Commercial | Classified
Financing Receivable, Past Due [Line Items]
Loans held for investment	34,952	57,734
Real Estate Mortgage | Commercial | Special Mention
Financing Receivable, Past Due [Line Items]
Loans held for investment	39,309	74,785
Real Estate Mortgage | Commercial | Pass
Financing Receivable, Past Due [Line Items]
Loans held for investment	4,226,305	4,691,779
Real Estate Mortgage | Commercial | Non Purchased Credit Impaired Loans and Leases
Financing Receivable, Past Due [Line Items]
Loans held for investment		4,824,298
Real Estate Mortgage | Residential Real Estate
Financing Receivable, Past Due [Line Items]
Loans held for investment	3,596,358	3,093,843
Real Estate Mortgage | Residential Real Estate | Classified
Financing Receivable, Past Due [Line Items]
Loans held for investment	8,670	10,521
Real Estate Mortgage | Residential Real Estate | Special Mention
Financing Receivable, Past Due [Line Items]
Loans held for investment	1,005	968
Real Estate Mortgage | Residential Real Estate | Pass
Financing Receivable, Past Due [Line Items]
Loans held for investment	3,586,683	3,082,354
Real Estate Mortgage | Residential Real Estate | Non Purchased Credit Impaired Loans and Leases
Financing Receivable, Past Due [Line Items]
Loans held for investment		3,093,843
Real Estate Construction and Land
Financing Receivable, Past Due [Line Items]
Loans held for investment	2,551,474	2,233,656
Real Estate Construction and Land | Classified
Financing Receivable, Past Due [Line Items]
Loans held for investment	377	442
Real Estate Construction and Land | Special Mention
Financing Receivable, Past Due [Line Items]
Loans held for investment	837	8,568
Real Estate Construction and Land | Pass
Financing Receivable, Past Due [Line Items]
Loans held for investment	2,550,260	2,224,646
Real Estate Construction and Land | Non Purchased Credit Impaired Loans and Leases
Financing Receivable, Past Due [Line Items]
Loans held for investment	2,551,474	2,233,656	2,000,957
Real Estate Construction and Land | Commercial Real Estate Construction Loan Receivable
Financing Receivable, Past Due [Line Items]
Loans held for investment	1,009,362	912,583
Real Estate Construction and Land | Commercial Real Estate Construction Loan Receivable | Classified
Financing Receivable, Past Due [Line Items]
Loans held for investment	377	442
Real Estate Construction and Land | Commercial Real Estate Construction Loan Receivable | Special Mention
Financing Receivable, Past Due [Line Items]
Loans held for investment	0	7,041
Real Estate Construction and Land | Commercial Real Estate Construction Loan Receivable | Pass
Financing Receivable, Past Due [Line Items]
Loans held for investment	1,008,985	905,100
Real Estate Construction and Land | Commercial Real Estate Construction Loan Receivable | Non Purchased Credit Impaired Loans and Leases
Financing Receivable, Past Due [Line Items]
Loans held for investment		912,583
Real Estate Construction and Land | Residential Real Estate Construction Financing Receivable
Financing Receivable, Past Due [Line Items]
Loans held for investment	1,542,112	1,321,073
Real Estate Construction and Land | Residential Real Estate Construction Financing Receivable | Classified
Financing Receivable, Past Due [Line Items]
Loans held for investment	0	0
Real Estate Construction and Land | Residential Real Estate Construction Financing Receivable | Special Mention
Financing Receivable, Past Due [Line Items]
Loans held for investment	837	1,527
Real Estate Construction and Land | Residential Real Estate Construction Financing Receivable | Pass
Financing Receivable, Past Due [Line Items]
Loans held for investment	1,541,275	1,319,546
Real Estate Construction and Land | Residential Real Estate Construction Financing Receivable | Non Purchased Credit Impaired Loans and Leases
Financing Receivable, Past Due [Line Items]
Loans held for investment		1,321,073
Commercial
Financing Receivable, Past Due [Line Items]
Loans held for investment	7,878,557	7,404,595
Commercial | Classified
Financing Receivable, Past Due [Line Items]
Loans held for investment	143,830	167,214
Commercial | Special Mention
Financing Receivable, Past Due [Line Items]
Loans held for investment	226,160	176,062
Commercial | Pass
Financing Receivable, Past Due [Line Items]
Loans held for investment	7,508,567	7,061,319
Commercial | Non Purchased Credit Impaired Loans and Leases
Financing Receivable, Past Due [Line Items]
Loans held for investment	7,878,557	7,404,595	7,152,058
Commercial | Asset-based
Financing Receivable, Past Due [Line Items]
Loans held for investment	3,810,741	3,305,421
Commercial | Asset-based | Classified
Financing Receivable, Past Due [Line Items]
Loans held for investment	50,634	45,957
Commercial | Asset-based | Special Mention
Financing Receivable, Past Due [Line Items]
Loans held for investment	41,974	48,338
Commercial | Asset-based | Pass
Financing Receivable, Past Due [Line Items]
Loans held for investment	3,718,133	3,211,126
Commercial | Asset-based | Non Purchased Credit Impaired Loans and Leases
Financing Receivable, Past Due [Line Items]
Loans held for investment		3,305,421
Commercial | Venture Capital Loans
Financing Receivable, Past Due [Line Items]
Loans held for investment	2,209,649	2,038,748
Commercial | Venture Capital Loans | Classified
Financing Receivable, Past Due [Line Items]
Loans held for investment	34,489	28,731
Commercial | Venture Capital Loans | Special Mention
Financing Receivable, Past Due [Line Items]
Loans held for investment	66,255	77,588
Commercial | Venture Capital Loans | Pass
Financing Receivable, Past Due [Line Items]
Loans held for investment	2,108,905	1,932,429
Commercial | Venture Capital Loans | Non Purchased Credit Impaired Loans and Leases
Financing Receivable, Past Due [Line Items]
Loans held for investment		2,038,748
Commercial | Other Commercial
Financing Receivable, Past Due [Line Items]
Loans held for investment	1,858,167	2,060,426
Commercial | Other Commercial | Classified
Financing Receivable, Past Due [Line Items]
Loans held for investment	58,707	92,526
Commercial | Other Commercial | Special Mention
Financing Receivable, Past Due [Line Items]
Loans held for investment	117,931	50,136
Commercial | Other Commercial | Pass
Financing Receivable, Past Due [Line Items]
Loans held for investment	1,681,529	1,917,764
Commercial | Other Commercial | Non Purchased Credit Impaired Loans and Leases
Financing Receivable, Past Due [Line Items]
Loans held for investment		2,060,426
Consumer
Financing Receivable, Past Due [Line Items]
Loans held for investment		401,321
Consumer | Classified
Financing Receivable, Past Due [Line Items]
Loans held for investment	778	1,199
Consumer | Special Mention
Financing Receivable, Past Due [Line Items]
Loans held for investment	614	1,015
Consumer | Pass
Financing Receivable, Past Due [Line Items]
Loans held for investment	407,196	399,107
Consumer | Non Purchased Credit Impaired Loans and Leases
Financing Receivable, Past Due [Line Items]
Loans held for investment	$ 408,588	$ 401,321	$ 398,471

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Investment Securities (Details Textual) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Debt Securities, Available-for-sale [Line Items]
AFS securities pledged as collateral	$ 495,000		$ 495,000
Proceeds from sales of securities available-for-sale			$ 1,554,805	$ 500,101
Gross realized gains on sale of securities	1,200	$ 1,000
Gross realized losses on sale of securities	(300)	(100)
Available-for-sale Securities [Member]
Debt Securities, Available-for-sale [Line Items]
Proceeds from sales of securities available-for-sale	$ 143,400	$ 130,500

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Investment Securities (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Debt Securities, Available-for-sale [Line Items]
Total securities available-for-sale	$ 3,683,521	$ 4,017,909
Available-for-sale Securities, Gross Unrealized Gain	135,415	31,812
Available-for-sale Securities, Gross Unrealized Loss	(1,588)	(40,290)
Securities available‑for‑sale	3,817,348	4,009,431
Government agency and government-sponsored enterprise pass through securities
Debt Securities, Available-for-sale [Line Items]
Total securities available-for-sale	313,935	281,486
Available-for-sale Securities, Gross Unrealized Gain	10,995	1,902
Available-for-sale Securities, Gross Unrealized Loss	(1)	(2,300)
Securities available‑for‑sale	324,929	281,088
Government agency and government-sponsored enterprise collateralized mortgage obligations
Debt Securities, Available-for-sale [Line Items]
Total securities available-for-sale	1,141,332	634,774
Available-for-sale Securities, Gross Unrealized Gain	31,627	3,448
Available-for-sale Securities, Gross Unrealized Loss	(404)	(5,372)
Securities available‑for‑sale	1,172,555	632,850
Private label collateralized mortgage obligations
Debt Securities, Available-for-sale [Line Items]
Total securities available-for-sale	89,859	101,313
Available-for-sale Securities, Gross Unrealized Gain	4,011	1,985
Available-for-sale Securities, Gross Unrealized Loss	(2)	(2,093)
Securities available‑for‑sale	93,868	101,205
Municipal securities
Debt Securities, Available-for-sale [Line Items]
Total securities available-for-sale	675,645	1,298,514
Available-for-sale Securities, Gross Unrealized Gain	46,336	21,000
Available-for-sale Securities, Gross Unrealized Loss	0	(7,320)
Securities available‑for‑sale	721,981	1,312,194
Government agency and government-sponsored enterprise commercial mortgage-backed securities
Debt Securities, Available-for-sale [Line Items]
Total securities available-for-sale	1,063,659	1,133,846
Available-for-sale Securities, Gross Unrealized Gain	36,539	383
Available-for-sale Securities, Gross Unrealized Loss	(181)	(21,525)
Securities available‑for‑sale	1,100,017	1,112,704
US Treasury Securities
Debt Securities, Available-for-sale [Line Items]
Total securities available-for-sale	4,984	401,056
Available-for-sale Securities, Gross Unrealized Gain	219	2,437
Available-for-sale Securities, Gross Unrealized Loss	0	(88)
Securities available‑for‑sale	5,203	403,405
Asset-backed Securities
Debt Securities, Available-for-sale [Line Items]
Total securities available-for-sale	214,153	81,762
Available-for-sale Securities, Gross Unrealized Gain	700	104
Available-for-sale Securities, Gross Unrealized Loss	(702)	(481)
Securities available‑for‑sale	214,151	81,385
Collateralized loan obligations
Debt Securities, Available-for-sale [Line Items]
Total securities available-for-sale	114,149
Available-for-sale Securities, Gross Unrealized Gain	23
Available-for-sale Securities, Gross Unrealized Loss	(298)
Securities available‑for‑sale	113,874
SBA asset-backed securities
Debt Securities, Available-for-sale [Line Items]
Total securities available-for-sale	48,805	68,158
Available-for-sale Securities, Gross Unrealized Gain	941	0
Available-for-sale Securities, Gross Unrealized Loss	0	(1,111)
Securities available‑for‑sale	49,746	67,047
Corporate debt securities
Debt Securities, Available-for-sale [Line Items]
Total securities available-for-sale	17,000	17,000
Available-for-sale Securities, Gross Unrealized Gain	4,024	553
Available-for-sale Securities, Gross Unrealized Loss	0	0
Securities available‑for‑sale	$ 21,024	$ 17,553

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Foreclosed Assets (Tables)

9 Months Ended

Sep. 30, 2019

Other Real Estate Owned Net Covered and NonCovered Including Foreclosed Assets [Abstract]

Other real estate and foreclosed assets

The following table summarizes foreclosed assets as of the dates indicated:

	September 30,		December 31,
Property Type	2019		2018
	(In thousands)
Commercial real estate	$	199	$	2,004
Single-family residence	948		953
Construction and land development	219		219
Multi‑family	—		1,059
Total other real estate owned, net	1,366		4,235
Other foreclosed assets	—		1,064
Total foreclosed assets, net	$	1,366	$	5,299

Other foreclosed assets rollforward

The following table presents the changes in foreclosed assets, net of the valuation allowance, for the period indicated:

	Foreclosed
	Assets
	(In thousands)
Balance, December 31, 2018	$	5,299
Transfers to foreclosed assets from loans	37
Provision for losses	(54		)
Reductions related to sales	(3,916		)
Balance, September 30, 2019	$	1,366

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Revenue From Contracts With Customers

9 Months Ended

Sep. 30, 2019

Revenue From Contracts With Customers [Abstract]

Revenue from Contracts with Customers

REVENUE FROM CONTRACTS WITH CUSTOMERS

Disaggregation of Revenue

The following table presents interest income and noninterest income, the components of total revenue, as disclosed in the condensed consolidated statements of earnings and the related amounts which are from contracts with customers within the scope of Topic 606 for the periods indicated. As illustrated here, substantially all of our revenue is specifically excluded from the scope of Topic 606.

	Three Months Ended September 30, 2019				Three Months Ended September 30, 2018
	Total		Revenue from		Total		Revenue from
	Recorded		Contracts with		Recorded		Contracts with
	Revenue		Customers		Revenue		Customers
	(In thousands)
Total interest income	$	307,208	$	—	$	292,642	$	—
Noninterest income:
Service charges on deposit accounts	3,525		3,525		3,979		3,979
Other commissions and fees	10,855		4,965		12,397		4,767
Leased equipment income	9,615		—		9,120		—
Gain on sale of loans	765		—		—		—
Gain on sale of securities	908		—		826		—
Other income	7,761		428		10,590		444
Total noninterest income	33,429		8,918		36,912		9,190
Total revenue	$	340,637	$	8,918	$	329,554	$	9,190

The following table presents revenue from contracts with customers based on the timing of revenue recognition for the periods indicated:

	Three Months Ended
	September 30,
	2019		2018
	(In thousands)
Products and services transferred at a point in time	$	5,046	$	4,604
Products and services transferred over time	3,872		4,586
Total revenue from contracts with customers	$	8,918	$	9,190

The following table presents interest income and noninterest income, the components of total revenue, as disclosed in the condensed consolidated statements of earnings and the related amounts which are from contracts with customers within the scope of Topic 606 for the periods indicated:

	Nine Months Ended September 30, 2019				Nine Months Ended September 30, 2018
	Total		Revenue from		Total		Revenue from
	Recorded		Contracts with		Recorded		Contracts with
	Revenue		Customers		Revenue		Customers
	(In thousands)
Total interest income	$	926,300	$	—	$	858,931	$	—
Noninterest income:
Service charges on deposit accounts	11,026		11,026		12,418		12,418
Other commissions and fees	33,453		14,661		34,429		14,519
Leased equipment income	28,079		—		28,497		—
Gain on sale of loans	1,091		—		4,675		—
Gain on sale of securities	25,261		—		7,390		—
Other income	16,476		1,253		27,700		1,341
Total noninterest income	115,386		26,940		115,109		28,278
Total revenue	$	1,041,686	$	26,940	$	974,040	$	28,278

The following table presents revenue from contracts with customers based on the timing of revenue recognition for the periods indicated:

	Nine Months Ended
	September 30,
	2019		2018
	(In thousands)
Products and services transferred at a point in time	$	14,579	$	14,195
Products and services transferred over time	12,361		14,083
Total revenue from contracts with customers	$	26,940	$	28,278

Contract Balances

The following table provides information about receivables, contract assets, and contract liabilities from contracts with customers:

	September 30, 2019		December 31, 2018
	(In thousands)
Receivables, which are included in "Other assets"	$	1,494	$	1,334
Contract assets, which are included in "Other assets"	$	—	$	—
Contract liabilities, which are included in "Accrued interest payable and other liabilities"	$	523	$	621

Contract liabilities relate to advance consideration received from customers for which revenue is recognized over the life of the contract. The change in contract liabilities for the nine months ended September 30, 2019 due to revenue recognized that was included in the contract liability balance at the beginning of the period was $98,000.

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Organization Organization (Policies)

9 Months Ended

Sep. 30, 2019

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Significant Accounting Policies

Significant Accounting Policies

Our accounting policies are described in Note 1. Nature of Operations and Summary of Significant Accounting Policies, of our audited consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2018 as filed with the Securities and Exchange Commission ("Form 10-K").

Recently Issued Accounting Standards

ORGANIZATION    

PacWest Bancorp, a Delaware corporation, is a bank holding company registered under the BHCA, with our corporate headquarters located in Beverly Hills, California. Our principal business is to serve as the holding company for our wholly-owned subsidiary, Pacific Western Bank. References to "Pacific Western" or the "Bank" refer to Pacific Western Bank together with its wholly-owned subsidiaries. References to "we," "us," or the "Company" refer to PacWest Bancorp together with its subsidiaries on a consolidated basis. When we refer to "PacWest" or to the "holding company," we are referring to PacWest Bancorp, the parent company, on a stand-alone basis.

We are focused on relationship-based business banking to small, middle-market and venture-backed businesses nationwide. The Bank offers a broad range of loan and lease and deposit products and services through 74 full-service branches located in California, one branch located in Durham, North Carolina, and numerous loan production offices across the country through its Community Banking, National Lending and Venture Banking groups. Community Banking provides real estate loans, commercial loans, and comprehensive deposit and treasury management services to small and medium-sized businesses conducted primarily through our California-based branch offices. National Lending provides asset-based, equipment, and real estate loans and treasury management services to established middle-market businesses on a national basis. Venture Banking offers a comprehensive suite of financial services focused on entrepreneurial businesses and their venture capital and private equity investors, with offices located in key innovation hubs across the United States. In addition, we provide investment advisory and asset management services to select clients through Pacific Western Asset Management Inc., a wholly-owned subsidiary of the Bank and an SEC-registered investment adviser.

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 interest paid by the Bank on deposits and borrowings, compensation, occupancy, and general operating expenses.

We have completed 29 acquisitions from May 1, 2000 through September 30, 2019. 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 consolidated financial statements from their respective acquisition dates.

Significant Accounting Policies

Our accounting policies are described in Note 1. Nature of Operations and Summary of Significant Accounting Policies, of our audited consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2018 as filed with the Securities and Exchange Commission ("Form 10-K").

Accounting Standards Adopted in 2019

Effective January 1, 2019, the Company adopted ASU 2016-02, "Leases (Topic 842)," and the related amendments to this new standard issued in 2018. ASU 2016-02 supersedes Topic 840, “Leases,” and is intended to increase transparency and comparability among organizations by requiring the recognition of right-of-use (“ROU”) assets and lease liabilities by lessees for those leases classified as operating leases. Under the standard, disclosures are required to meet the objective of enabling users of the financial statements to assess the amount, timing, and uncertainty of cash flows arising from leases.

The Company adopted the new standard using the optional transition method under ASU 2018-11, “Leases (Topic 842): Targeted Improvements,” and recognized a cumulative effect adjustment to increase retained earnings by $938,000, net of taxes, without restating prior periods and applying the requirements of the new standard prospectively. The Company has elected the following practical expedients: (1) to not separate lease and non-lease components for facilities leases; (2) to not reassess whether any expired or existing contracts are or contain leases and to maintain existing lease classifications; (3) to not record short-term leases (initial term less than 12 months) on the balance sheet; and (4) to present sales tax on a net basis for those transactions in which the Company is the lessor.

The standard had a more significant impact on our condensed consolidated balance sheet than on our condensed consolidated statement of earnings. The most significant impact was the recognition of ROU assets and lease liabilities for operating leases, while the accounting for leases as a lessor remained substantially unchanged. The ROU asset is included within "Other assets," while the ROU liability is included within "Accrued interest payable and other liabilities". See Note 8. Leases and Note 7. Other Assets for further details.

Effective January 1, 2019, the Company early-adopted any removed or modified disclosures as permitted by ASU 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework - Changes to Disclosure Requirements for Fair Value Measurements,” but will defer adoption of the additional disclosures until the effective date of January 1, 2020 as permitted in the transition guidance in ASU 2018-13.

Effective January 1, 2019, the Company early-adopted ASU 2018-15, “Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract (a consensus of the FASB Emerging Issues Task Force)," which aligns the requirements for capitalizing implementation costs in a cloud computing arrangement service contract with the requirements for capitalizing implementation costs incurred for an internal-use software license. The new guidance also prescribes the balance sheet, income statement, and cash flow classification of the capitalized implementation costs and related amortization expense, and requires additional quantitative and qualitative disclosures. The Company opted to apply ASU 2018-15 prospectively. The primary effect of the provisions is to capitalize eligible implementation costs during the application development phase and to amortize those costs over the life of the agreement. There was no impact to our condensed consolidated financial statements from the adoption of this new standard.

RECENTLY ISSUED ACCOUNTING STANDARDS

		Effective	Effect on the Financial Statements
Standard	Description	Date	or Other Significant Matters
ASU 2016-13, "Measurement of Credit Losses on Financial Instruments," ASU 2018-19, “Codification Improvements to Topic 326, Financial Instruments - Credit Losses,” and ASU 2019-05, "Financial Instruments - Credit Losses (Topic 326): Targeted Transition Relief"	1. This Update changes the accounting and recognition of credit losses and impairment of financial assets recorded at amortized cost. Under the CECL model, the standard requires immediate recognition of estimated credit losses expected to occur over the remaining life of the asset. The forward-looking concept of CECL requires loss estimates for the remaining estimated life of the financial assets using historical experience, current conditions and reasonable and supportable forecasts. 2. The Update modifies the other-than-temporary impairment (OTTI) model for AFS debt securities to require an allowance for credit impairment instead of a direct write-down, which allows for reversal of credit improvements in future periods. 3. In addition, the Update eliminates the existing guidance for PCI loans, but requires an allowance for purchased financial assets with credit deterioration. 4. Receivables arising from operating leases are not within the scope of CECL. 5. The Update must be applied using the modified retrospective method with a cumulative-effect adjustment to retained earnings as of the beginning of the year of adoption. A prospective transition approach is required for available-for-sale debt securities for which an OTTI had been recognized before the adoption date. Early adoption is permitted.	January 1, 2020	1. The Company has established a multidisciplinary project team and implementation plan, selected a software solution, reached accounting decisions on various matters, developed a conceptual framework, and developed econometric regression models for the reasonable and supportable ("R&S") forecast period. 2. The Company continues to test and refine the CECL models and has completed four preliminary calculations with one more scheduled before adoption. The Company continues to perform testing and sensitivity analysis on its modeling assumptions and results. 3. Our planned approach for estimating expected life-time credit losses include the following key components for all loan portfolio segments: a. The use of a probability of default/loss given default methodology; b. A single scenario based on the consensus forecast from Moody's to develop an economic forecast for the R&S period; c. An initial R&S forecast period of four quarters for all loan portfolio segments, which reflects management's expectation of losses based on forward-looking economic scenarios over that time; d. A post-R&S reversion period of two quarters using a straight-line approach; e. A historical loss period of at least 40 quarters, which represents a full economic credit cycle; and f. Prepayments rates based on our historical experience. 4. We plan to adopt this new standard on January 1, 2020. Our latest estimate of the impact based on September 30, 2019 loan data and economic forecasts indicates that the allowance for credit losses would increase from 0% to 10% upon adoption. We have also updated our internal controls over financial reporting in preparation of adopting this new standard. 5. The current estimate and future calculations are highly dependent on loan composition, of which the vast majority is comprised of short-duration commercial loans; the macroeconomic conditions and forecasts; and other management assumptions and judgments.

		Effective	Effect on the Financial Statements
Standard	Description	Date	or Other Significant Matters
ASU 2017-04, "Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment"	1. This Update simplifies goodwill impairment testing by eliminating the second step of the analysis under which the implied fair value of goodwill is determined as if the reporting unit were being acquired in a business combination. 2. The goodwill impairment test is performed by comparing the fair value of a reporting unit with its carrying amount, and an impairment charge would be recognized for any amount by which the carrying amount exceeds the reporting unit's fair value, to the extent that the loss recognized does not exceed the amount of goodwill allocated to that reporting unit. 3. The Update must be applied prospectively and early adoption is permitted.	January 1, 2020	The adoption of this guidance is not expected to have a material impact on the Company’s consolidated financial position or results of operations and we plan to adopt this standard on January 1, 2020.

		Effective	Effect on the Financial Statements
Standard	Description	Date	or Other Significant Matters
ASU 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework - Changes to Disclosure Requirements for Fair Value Measurements”	1. This Update modified the disclosure requirements in Topic 820 to add disclosures regarding changes in unrealized gains and losses, the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements and the narrative description of measurement uncertainty. 2. Certain disclosure requirements in Topic 820 are also removed or modified. Certain disclosures in ASU 2018-13 would need to be applied on a retrospective basis and others on a prospective basis and early adoption is permitted.	January 1, 2020	The adoption of this guidance will modify disclosures but will not have an impact on the Company’s consolidated financial position or results of operations. The Company has early adopted any removed or modified disclosures effective January 1, 2019 but will defer adoption of the additional disclosures until January 1, 2020 as permitted in the transition guidance of the standard.

		Effective	Effect on the Financial Statements
Standard	Description	Date	or Other Significant Matters
ASU 2019-04, "Codification Improvements to Topic 326, Financial Instruments - Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments"	1. This Update made clarifications and amendments to five topics: (i) Topic A: Codification Improvements Resulting from the June and November 2018 Credit Losses Transition Resource Group ("TRG") Meetings, (ii) Topic B: Codification Improvements to ASU 2016-13, (iii) Topic C: Codification Improvements to ASU 2017-12, "Derivatives and Hedging (Topic 815)" and Other Hedging Items, (iv) Topic D: Codification Improvements to ASU 2016-01, "Financial Instruments - Overall (Subtopic 825-10)," and (v) Topic E: Codification Improvements Resulting from the November 2018 Credit Losses TRG Meeting. 2. In addition to conforming amendments that correct for errors and oversights, the Update in Topics A, B, and E, which impacts CECL implementation, amends or clarifies guidance for accrued interest; transfers between classifications or categories of loans and debt securities; recoveries; effect of prepayments in determining the effective interest rate; estimated costs to sell when foreclosure is probable; vintage disclosure presentation related to line-of-credit arrangements converted to term loans; contractual extensions or renewals; and others. 3. Transition requirements for the amendments are the same as ASU 2016-13 for the Update in Topics A, B, and E. The Update in Topic C may be applied retrospectively as of the date of initial adoption of ASU 2017-12 or prospectively. The Update in Topic D must be applied on a modified retrospective method with a cumulative-effect adjustment to retained earnings as of the beginning of the year of adoption and early adoption is permitted.	January 1, 2020; except for Topic C - January 1, 2019	1. Impacts from the adoption of Topics A, B, and E within this Update will be considered in the Company's overall CECL implementation and we plan to adopt this Update concurrent with the adoption of ASU 2016-13. 2. The adoption of Topic D within this Update is not expected to have a material impact on the Company's consolidated financial position or results of operations and we plan to adopt this standard on January 1, 2020. 3. Topic C within this Update is not applicable to us and therefore there is no impact on the Company's consolidated financial position or results of operations.

Basis of Presentation

Basis of Presentation    

Our interim condensed consolidated financial statements are prepared in accordance with U.S. GAAP for interim financial information and pursuant to the requirements for reporting on Form 10-Q and Article 10 of Regulation S-X of the Securities Exchange Act of 1934. Accordingly, certain disclosures accompanying annual consolidated financial statements are omitted. In the opinion of management, all significant intercompany accounts and transactions have been eliminated and adjustments, consisting solely of normal recurring accruals and considered necessary for the fair presentation of financial statements for the interim periods, have been included. The current period's results of operations are not necessarily indicative of the results that ultimately may be achieved for the year. The interim condensed consolidated financial statements and notes thereto should be read in conjunction with the audited consolidated financial statements and notes thereto included in our Form 10-K.

Use of Estimates

Use of Estimates

We have made a number of estimates and assumptions related 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 U.S. 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 combination of the allowance for loan and lease losses and the reserve for unfunded loan commitments), the carrying value of intangible assets, the realization of deferred tax assets, and the fair value estimates of assets acquired and liabilities assumed in acquisitions. These estimates may be adjusted as more current information becomes available, and any adjustment may be significant.

Reclassifications

Reclassifications

None.

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Condensed Consolidated Statements of Changes in Stockholders' Equity - USD ($) $ in Thousands		Total	Common Stock	Additional Paid-in Capital	Retained Earnings	Treasury Stock	Shares Of Common Stock	Accumulated Other Comprehensive Income (Loss)
Beginning Period Balance at Dec. 31, 2017		$ 4,977,598	$ 1,305	$ 4,287,487	$ 723,471	$ (65,836)		$ 31,171
Shares outstanding, beginning balance (shares) at Dec. 31, 2017			128,782,878
Stockholders' Equity Disclosure [Rollforward]
Cumulative effect of change in accounting principle	[1]	0			(6,136)			6,136
Net earnings		118,276			118,276
Other comprehensive income - net unrealized gain on securities available-for-sale, net of tax		(49,243)						(49,243)
Restricted stock awarded and earned compensation, net of shares forfeited (shares)			96,034
Restricted stock awarded and earned stock compensation, net of shares forfeited		7,199	$ 1	7,198
Restricted stock surrendered (shares)			(55,186)				(2,285,855)
Restricted stock surrendered		(2,858)				(2,858)
Common stock repurchased under Stock Repurchase Program		(23)
Common stock repurchased under Stock Repurchase Program		(119,793)		(119,770)
Cash dividends paid		(63,689)		(63,689)
Ending Period Balance at Mar. 31, 2018		4,867,490	$ 1,283	4,111,226	835,611	(68,694)		(11,936)
Shares outstanding, ending balance (shares) at Mar. 31, 2018			126,537,871
Beginning Period Balance at Dec. 31, 2017		4,977,598	$ 1,305	4,287,487	723,471	(65,836)		31,171
Shares outstanding, beginning balance (shares) at Dec. 31, 2017			128,782,878
Stockholders' Equity Disclosure [Rollforward]
Net earnings		350,298
Ending Period Balance at Sep. 30, 2018		4,741,685	$ 1,251	3,789,893	1,067,633	(73,238)		(43,854)
Shares outstanding, ending balance (shares) at Sep. 30, 2018			123,283,450
Beginning Period Balance at Mar. 31, 2018		4,867,490	$ 1,283	4,111,226	835,611	(68,694)		(11,936)
Shares outstanding, beginning balance (shares) at Mar. 31, 2018			126,537,871
Stockholders' Equity Disclosure [Rollforward]
Net earnings		115,735			115,735
Other comprehensive income - net unrealized gain on securities available-for-sale, net of tax		(10,404)						(10,404)
Restricted stock awarded and earned compensation, net of shares forfeited (shares)			398,132
Restricted stock awarded and earned stock compensation, net of shares forfeited		7,546	$ 4	7,542
Restricted stock surrendered (shares)			(81,172)				(2,286,881)
Restricted stock surrendered		(4,332)				(4,332)
Common stock repurchased under Stock Repurchase Program		(23)
Common stock repurchased under Stock Repurchase Program		(122,024)		(122,001)
Cash dividends paid		(76,052)		(76,052)
Ending Period Balance at Jun. 30, 2018		$ 4,777,959	$ 1,264	3,920,715	951,346	(73,026)		(22,340)
Shares outstanding, ending balance (shares) at Jun. 30, 2018			124,567,950
Dividends declared per share (usd per share)		$ 0.50
Stockholders' Equity Disclosure [Rollforward]
Net earnings		$ 116,287			116,287
Other comprehensive income - net unrealized gain on securities available-for-sale, net of tax		(21,514)						(21,514)
Restricted stock awarded and earned compensation, net of shares forfeited (shares)			(3,803)
Restricted stock awarded and earned stock compensation, net of shares forfeited		8,137		8,137
Restricted stock surrendered (shares)			(4,199)				(1,276,498)
Restricted stock surrendered		(212)				(212)
Common stock repurchased under Stock Repurchase Program		(13)
Common stock repurchased under Stock Repurchase Program		(64,577)		(64,564)
Cash dividends paid		(74,395)		(74,395)
Ending Period Balance at Sep. 30, 2018		4,741,685	$ 1,251	3,789,893	1,067,633	(73,238)		(43,854)
Shares outstanding, ending balance (shares) at Sep. 30, 2018			123,283,450
Beginning Period Balance at Dec. 31, 2018		4,825,588	$ 1,251	3,722,723	1,182,674	(74,985)		(6,075)
Shares outstanding, beginning balance (shares) at Dec. 31, 2018			123,189,833
Stockholders' Equity Disclosure [Rollforward]
Net earnings		112,604			112,604
Other comprehensive income - net unrealized gain on securities available-for-sale, net of tax		43,333						43,333
Restricted stock awarded and earned compensation, net of shares forfeited (shares)			195,536
Restricted stock awarded and earned stock compensation, net of shares forfeited		5,808	$ 2	5,806
Restricted stock surrendered (shares)			(113,544)				(3,070,676)
Restricted stock surrendered		(4,522)				(4,522)
Common stock repurchased under Stock Repurchase Program		(31)
Common stock repurchased under Stock Repurchase Program		(119,587)		(119,556)
Cash dividends paid		(73,180)		(73,180)
Ending Period Balance at Mar. 31, 2019		4,790,982	$ 1,222	3,535,793	1,296,216	(79,507)		37,258
Shares outstanding, ending balance (shares) at Mar. 31, 2019			120,201,149
Beginning Period Balance at Dec. 31, 2018		4,825,588	$ 1,251	3,722,723	1,182,674	(74,985)		(6,075)
Shares outstanding, beginning balance (shares) at Dec. 31, 2018			123,189,833
Stockholders' Equity Disclosure [Rollforward]
Net earnings		350,755
Ending Period Balance at Sep. 30, 2019		4,920,108	$ 1,219	3,371,032	1,534,367	(82,397)		95,887
Shares outstanding, ending balance (shares) at Sep. 30, 2019			119,831,192
Beginning Period Balance at Mar. 31, 2019		4,790,982	$ 1,222	3,535,793	1,296,216	(79,507)		37,258
Shares outstanding, beginning balance (shares) at Mar. 31, 2019			120,201,149
Stockholders' Equity Disclosure [Rollforward]
Net earnings		128,125			128,125
Other comprehensive income - net unrealized gain on securities available-for-sale, net of tax		35,808						35,808
Restricted stock awarded and earned compensation, net of shares forfeited (shares)			619,653
Restricted stock awarded and earned stock compensation, net of shares forfeited		6,721	$ 6	6,715
Restricted stock surrendered (shares)			(74,429)				(917,269)
Restricted stock surrendered		(2,788)				(2,788)
Common stock repurchased under Stock Repurchase Program		(9)
Common stock repurchased under Stock Repurchase Program		(34,929)		(34,920)		0
Cash dividends paid		(71,909)		(71,909)
Ending Period Balance at Jun. 30, 2019		$ 4,852,010	$ 1,219	3,435,679	1,424,341	(82,295)		73,066
Shares outstanding, ending balance (shares) at Jun. 30, 2019			119,829,104
Dividends declared per share (usd per share)		$ 0.60
Stockholders' Equity Disclosure [Rollforward]
Net earnings		$ 110,026			110,026
Other comprehensive income - net unrealized gain on securities available-for-sale, net of tax		22,821						22,821
Restricted stock awarded and earned compensation, net of shares forfeited (shares)			5,040
Restricted stock awarded and earned stock compensation, net of shares forfeited		7,305	$ 0	7,305
Restricted stock surrendered (shares)			(2,952)
Restricted stock surrendered		(102)				(102)
Cash dividends paid		(71,952)		(71,952)
Ending Period Balance at Sep. 30, 2019		$ 4,920,108	$ 1,219	$ 3,371,032	$ 1,534,367	$ (82,397)		$ 95,887
Shares outstanding, ending balance (shares) at Sep. 30, 2019			119,831,192

[1] Impact due to adoption on January 1, 2019 of ASU 2016-02, "Leases (Topic 842)," and the related amendments.

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Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
ASSETS:
Cash and due from banks	$ 252,596	$ 175,830
Interest-earning deposits in financial institutions	483,405	209,937
Total cash, cash equivalents, and restricted cash	736,001	385,767
Securities available-for-sale, at fair value	3,817,348	4,009,431
Federal Home Loan Bank stock, at cost	26,865	32,103
Total investment securities	3,844,213	4,041,534
Gross loans and leases held for investment	18,796,011	18,026,365
Deferred fees, net	(60,468)	(68,652)
Allowance for loan and lease losses	(138,552)	(132,472)
Total loans and leases held for investment, net	18,596,991	17,825,241
Equipment leased to others under operating leases	295,854	292,677
Premises and equipment, net	37,926	34,661
Foreclosed assets, net	1,366	5,299
Deferred tax asset, net	0	17,489
Goodwill	2,548,670	2,548,670
Core deposit and customer relationship intangibles, net	42,547	57,120
Other assets	621,059	522,896
Total assets	26,724,627	25,731,354
LIABILITIES AND STOCKHOLDERS' EQUITY
Noninterest-bearing deposits	7,441,185	7,888,915
Interest-bearing deposits	12,292,018	10,981,586
Total deposits	19,733,203	18,870,501
Borrowings	1,253,031	1,371,114
Subordinated debentures	456,145	453,846
Accrued interest payable and other liabilities	362,140	210,305
Total liabilities	21,804,519	20,905,766
Commitments and contingencies
Preferred stock ($0.01 par value; 5,000,000 shares authorized; none issued and outstanding)	0	0
Common stock ($0.01 par value, 200,000,000 shares authorized at March 31, 2019 and December 31, 2018; 122,204,565 and 125,079,705 shares issued, respectively, including 1,241,543 and 1,888,872 shares of unvested restricted stock, respectively)	1,219	1,251
Additional paid-in capital	3,371,032	3,722,723
Retained earnings	1,534,367	1,182,674
December 31, 2018)	(82,397)	(74,985)
Accumulated other comprehensive income (loss), net	95,887	(6,075)
Total stockholders' equity	4,920,108	4,825,588
Total liabilities and stockholders' equity	$ 26,724,627	$ 25,731,354

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Leases - Narrative (Details)	9 Months Ended
	Sep. 30, 2019 bank_branch other_office
Lessee, Lease, Description [Line Items]
Number of full-service branch offices related to operating leases | bank_branch	75
Number of other offices related to operating leases | other_office	76
Minimum
Lessee, Lease, Description [Line Items]
Remaining lease term	1 year
Lease renewal term	1 year
Maximum
Lessee, Lease, Description [Line Items]
Remaining lease term	27 years
Lease renewal term	10 years

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Leases - Schedule of Payments to be Received on Operating Leases (Details) $ in Thousands	Sep. 30, 2019 USD ($)
Lessor, Operating Lease, Payments, Fiscal Year Maturity [Abstract]
2019	$ 8,727
2020	35,447
2021	31,743
2022	25,199
2023	22,096
Thereafter	52,717
Total undiscounted cash flows	$ 175,929

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Label	Element	Value
Retained Earnings [Member]
New Accounting Pronouncement or Change in Accounting Principle, Effect of Change on Net Income	us-gaap_NewAccountingPronouncementOrChangeInAccountingPrincipleEffectOfChangeOnNetIncome	$ 938,000	[1]

[1] Impact due to adoption on January 1, 2019 of ASU 2016-02, "Leases (Topic 842)," and the related amendments.

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Loans and Leases (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Jun. 30, 2019	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Dec. 31, 2017
Financing Receivable, Credit Quality Indicator [Line Items]
Gross loans and leases held for investment	$ 18,796,011		$ 18,026,365
Deferred fees, net	(60,468)		(68,652)
Loans held for investment, net	18,735,543		17,957,713
Allowance for loan and lease losses	(138,552)	$ (135,037)	(132,472)	$ (141,920)	$ (132,139)
Total loans and leases held for investment, net	18,596,991		17,825,241
Non Purchased Credit Impaired Loans and Leases
Financing Receivable, Credit Quality Indicator [Line Items]
Loans held for investment, net	18,735,543		17,957,713	17,230,146
Allowance for loan and lease losses	(138,552)	(135,037)	(132,472)	(141,920)	(132,139)	$ (139,456)
Real Estate Mortgage
Financing Receivable, Credit Quality Indicator [Line Items]
Gross loans and leases held for investment	7,908,097
Loans held for investment, net	7,896,924		7,918,141
Real Estate Mortgage | NonPCI and PCI Loans
Financing Receivable, Credit Quality Indicator [Line Items]
Gross loans and leases held for investment			7,933,859
Real Estate Mortgage | Non Purchased Credit Impaired Loans and Leases
Financing Receivable, Credit Quality Indicator [Line Items]
Loans held for investment, net	7,896,924		7,918,141	7,678,660
Allowance for loan and lease losses	(45,146)	(46,826)	(46,021)	(46,357)	(45,467)	(40,051)
Real Estate Construction and Land
Financing Receivable, Credit Quality Indicator [Line Items]
Gross loans and leases held for investment	2,581,317
Loans held for investment, net	2,551,474		2,233,656
Real Estate Construction and Land | NonPCI and PCI Loans
Financing Receivable, Credit Quality Indicator [Line Items]
Gross loans and leases held for investment			2,262,710
Real Estate Construction and Land | Non Purchased Credit Impaired Loans and Leases
Financing Receivable, Credit Quality Indicator [Line Items]
Loans held for investment, net	2,551,474		2,233,656	2,000,957
Allowance for loan and lease losses	(27,061)	(26,378)	(28,209)	(26,186)	(26,210)	(13,055)
Commercial
Financing Receivable, Credit Quality Indicator [Line Items]
Gross loans and leases held for investment	7,898,042
Loans held for investment, net	7,878,557		7,404,595
Commercial | NonPCI and PCI Loans
Financing Receivable, Credit Quality Indicator [Line Items]
Gross loans and leases held for investment			7,428,500
Commercial | Non Purchased Credit Impaired Loans and Leases
Financing Receivable, Credit Quality Indicator [Line Items]
Loans held for investment, net	7,878,557		7,404,595	7,152,058
Allowance for loan and lease losses	(64,185)	(59,401)	(56,360)	(67,644)	(58,806)	(84,022)
Consumer
Financing Receivable, Credit Quality Indicator [Line Items]
Gross loans and leases held for investment	408,555
Loans held for investment, net			401,321
Consumer | NonPCI and PCI Loans
Financing Receivable, Credit Quality Indicator [Line Items]
Gross loans and leases held for investment			401,296
Consumer | Non Purchased Credit Impaired Loans and Leases
Financing Receivable, Credit Quality Indicator [Line Items]
Loans held for investment, net	408,588		401,321	398,471
Allowance for loan and lease losses	$ (2,160)	$ (2,432)	$ (1,882)	$ (1,733)	$ (1,656)	$ (2,328)

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Investment Securities (Details 1) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Unrealized Losses on Securities Available-for-Sale, Less than 12 Months, Fair Value	$ 546,888	$ 316,746
Unrealized Losses on Securities Available-for-Sale, Less than 12 Months, Gross Unrealized Losses	(1,570)	(2,032)
Unrealized Losses on Securities Available-for-Sale, 12 Months or Longer, Fair Value	2,683	1,706,835
Unrealized Losses on Securities Available-for-Sale, 12 Months or Longer, Gross Unrealized Losses	(18)	(38,258)
Unrealized Losses on Securities Available-for-Sale, Fair Value	549,571	2,023,581
Unrealized Losses on Securities Available-for-Sale, Gross Unrealized Losses	(1,588)	(40,290)
Government agency and government-sponsored enterprise pass through securities
Unrealized Losses on Securities Available-for-Sale, Less than 12 Months, Fair Value	0	60,164
Unrealized Losses on Securities Available-for-Sale, Less than 12 Months, Gross Unrealized Losses	0	(169)
Unrealized Losses on Securities Available-for-Sale, 12 Months or Longer, Fair Value	435	85,245
Unrealized Losses on Securities Available-for-Sale, 12 Months or Longer, Gross Unrealized Losses	(1)	(2,131)
Unrealized Losses on Securities Available-for-Sale, Fair Value	435	145,409
Unrealized Losses on Securities Available-for-Sale, Gross Unrealized Losses	(1)	(2,300)
Government agency and government-sponsored enterprise collateralized mortgage obligations
Unrealized Losses on Securities Available-for-Sale, Less than 12 Months, Fair Value	172,738	69,859
Unrealized Losses on Securities Available-for-Sale, Less than 12 Months, Gross Unrealized Losses	(389)	(326)
Unrealized Losses on Securities Available-for-Sale, 12 Months or Longer, Fair Value	2,127	164,097
Unrealized Losses on Securities Available-for-Sale, 12 Months or Longer, Gross Unrealized Losses	(15)	(5,046)
Unrealized Losses on Securities Available-for-Sale, Fair Value	174,865	233,956
Unrealized Losses on Securities Available-for-Sale, Gross Unrealized Losses	(404)	(5,372)
Private label collateralized mortgage obligations
Unrealized Losses on Securities Available-for-Sale, Less than 12 Months, Fair Value	0	32,170
Unrealized Losses on Securities Available-for-Sale, Less than 12 Months, Gross Unrealized Losses	0	(831)
Unrealized Losses on Securities Available-for-Sale, 12 Months or Longer, Fair Value	121	49,237
Unrealized Losses on Securities Available-for-Sale, 12 Months or Longer, Gross Unrealized Losses	(2)	(1,262)
Unrealized Losses on Securities Available-for-Sale, Fair Value	121	81,407
Unrealized Losses on Securities Available-for-Sale, Gross Unrealized Losses	(2)	(2,093)
Collateralized loan obligations
Unrealized Losses on Securities Available-for-Sale, Less than 12 Months, Fair Value	82,606
Unrealized Losses on Securities Available-for-Sale, Less than 12 Months, Gross Unrealized Losses	(298)
Unrealized Losses on Securities Available-for-Sale, 12 Months or Longer, Fair Value	0
Unrealized Losses on Securities Available-for-Sale, 12 Months or Longer, Gross Unrealized Losses	0
Unrealized Losses on Securities Available-for-Sale, Fair Value	82,606
Unrealized Losses on Securities Available-for-Sale, Gross Unrealized Losses	(298)
Municipal securities
Unrealized Losses on Securities Available-for-Sale, Less than 12 Months, Fair Value		52,386
Unrealized Losses on Securities Available-for-Sale, Less than 12 Months, Gross Unrealized Losses		(238)
Unrealized Losses on Securities Available-for-Sale, 12 Months or Longer, Fair Value		284,915
Unrealized Losses on Securities Available-for-Sale, 12 Months or Longer, Gross Unrealized Losses		(7,082)
Unrealized Losses on Securities Available-for-Sale, Fair Value		337,301
Unrealized Losses on Securities Available-for-Sale, Gross Unrealized Losses		(7,320)
Government agency and government-sponsored enterprise commercial mortgage-backed securities
Unrealized Losses on Securities Available-for-Sale, Less than 12 Months, Fair Value	176,063	40,641
Unrealized Losses on Securities Available-for-Sale, Less than 12 Months, Gross Unrealized Losses	(181)	(341)
Unrealized Losses on Securities Available-for-Sale, 12 Months or Longer, Fair Value	0	1,020,684
Unrealized Losses on Securities Available-for-Sale, 12 Months or Longer, Gross Unrealized Losses	0	(21,184)
Unrealized Losses on Securities Available-for-Sale, Fair Value	176,063	1,061,325
Unrealized Losses on Securities Available-for-Sale, Gross Unrealized Losses	(181)	(21,525)
US Treasury Securities
Unrealized Losses on Securities Available-for-Sale, Less than 12 Months, Fair Value		49,729
Unrealized Losses on Securities Available-for-Sale, Less than 12 Months, Gross Unrealized Losses		(88)
Unrealized Losses on Securities Available-for-Sale, 12 Months or Longer, Fair Value		0
Unrealized Losses on Securities Available-for-Sale, 12 Months or Longer, Gross Unrealized Losses		0
Unrealized Losses on Securities Available-for-Sale, Fair Value		49,729
Unrealized Losses on Securities Available-for-Sale, Gross Unrealized Losses		(88)
Asset-backed Securities
Unrealized Losses on Securities Available-for-Sale, Less than 12 Months, Fair Value	115,481	11,548
Unrealized Losses on Securities Available-for-Sale, Less than 12 Months, Gross Unrealized Losses	(702)	(38)
Unrealized Losses on Securities Available-for-Sale, 12 Months or Longer, Fair Value	0	35,859
Unrealized Losses on Securities Available-for-Sale, 12 Months or Longer, Gross Unrealized Losses	0	(443)
Unrealized Losses on Securities Available-for-Sale, Fair Value	115,481	47,407
Unrealized Losses on Securities Available-for-Sale, Gross Unrealized Losses	$ (702)	(481)
SBA asset-backed securities
Unrealized Losses on Securities Available-for-Sale, Less than 12 Months, Fair Value		249
Unrealized Losses on Securities Available-for-Sale, Less than 12 Months, Gross Unrealized Losses		(1)
Unrealized Losses on Securities Available-for-Sale, 12 Months or Longer, Fair Value		66,798
Unrealized Losses on Securities Available-for-Sale, 12 Months or Longer, Gross Unrealized Losses		(1,110)
Unrealized Losses on Securities Available-for-Sale, Fair Value		67,047
Unrealized Losses on Securities Available-for-Sale, Gross Unrealized Losses		$ (1,111)

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Loans and Leases (Details 4) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Schedule Of Non Accrual and Performing Restructured Impaired Financing Receivables [Line Items]
Nonaccrual loans and leases	$ 99,113	$ 79,333
Performing Restructured Loans	16,329	17,701
Total Impaired Loans and Leases	115,442	97,034
Non Purchased Credit Impaired Loans and Leases
Schedule Of Non Accrual and Performing Restructured Impaired Financing Receivables [Line Items]
Nonaccrual loans and leases		79,333
Total Impaired Loans and Leases		97,034
Real Estate Mortgage
Schedule Of Non Accrual and Performing Restructured Impaired Financing Receivables [Line Items]
Nonaccrual loans and leases	22,383
Performing Restructured Loans	10,292
Total Impaired Loans and Leases	32,675
Real Estate Mortgage | Non Purchased Credit Impaired Loans and Leases
Schedule Of Non Accrual and Performing Restructured Impaired Financing Receivables [Line Items]
Nonaccrual loans and leases		17,845
Performing Restructured Loans		11,484
Total Impaired Loans and Leases		29,329
Real Estate Construction and Land
Schedule Of Non Accrual and Performing Restructured Impaired Financing Receivables [Line Items]
Nonaccrual loans and leases	377
Performing Restructured Loans	4,980
Total Impaired Loans and Leases	5,357
Real Estate Construction and Land | Non Purchased Credit Impaired Loans and Leases
Schedule Of Non Accrual and Performing Restructured Impaired Financing Receivables [Line Items]
Nonaccrual loans and leases		442
Performing Restructured Loans		5,420
Total Impaired Loans and Leases		5,862
Commercial
Schedule Of Non Accrual and Performing Restructured Impaired Financing Receivables [Line Items]
Nonaccrual loans and leases	75,700
Performing Restructured Loans	980
Total Impaired Loans and Leases	76,680
Commercial | Non Purchased Credit Impaired Loans and Leases
Schedule Of Non Accrual and Performing Restructured Impaired Financing Receivables [Line Items]
Nonaccrual loans and leases		60,003
Performing Restructured Loans		692
Total Impaired Loans and Leases		60,695
Consumer
Schedule Of Non Accrual and Performing Restructured Impaired Financing Receivables [Line Items]
Nonaccrual loans and leases	653
Performing Restructured Loans	77
Total Impaired Loans and Leases	$ 730
Consumer | Non Purchased Credit Impaired Loans and Leases
Schedule Of Non Accrual and Performing Restructured Impaired Financing Receivables [Line Items]
Nonaccrual loans and leases		1,043
Performing Restructured Loans		105
Total Impaired Loans and Leases		$ 1,148

XML

Stock-Based Compensation (Details Textual) - USD ($) $ in Millions	3 Months Ended			9 Months Ended
	Sep. 30, 2019	Jun. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018	Dec. 31, 2018
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unvested restricted shares (shares)	1,623,494			1,623,494		1,889,872
Vesting period of time-based restricted stock, lower limit					3 years
Vesting period of time-based restricted stock, higher limit					4 years
Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Performance vesting percentage				0.00%
Performance Target 1 | Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Performance vesting percentage				150.00%
Performance Target 2 | Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Performance vesting percentage				200.00%
Restricted Stock | Vesting Based On Service
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Allocated share-based compensation expense	$ 7.3	$ 6.2	$ 8.1	$ 19.3	$ 22.3
Restricted Stock Awards And Performance Based Restricted Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized share based compensation expense	$ 59.3			$ 59.3
Performance Shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unvested restricted shares (shares)	276,386			276,386
Performance period				3 years
PacWest 2003 Stock Incentive Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares authorized (shares)	4,000,000			4,000,000
Number of shares available for grant (shares)	2,431,235			2,431,235
PacWest 2003 Stock Incentive Plan | Time-Based Restricted Stock Awards
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unvested restricted shares (shares)	1,619,355			1,619,355
PacWest 2003 Stock Incentive Plan | Time-Based Restricted Stock Awards | Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Service period				3 years
PacWest 2003 Stock Incentive Plan | Time-Based Restricted Stock Awards | Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Service period				4 years

XML

Fair Value Measurements (Details 5) - Fair Value, Measurements, Nonrecurring - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total losses	$ 8,393	$ 14,347	$ 10,145	$ 31,416
Non Purchased Credit Impaired Loans and Leases
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total losses	8,339	14,347	10,091	31,351
Other real estate and foreclosed assets
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total losses	$ 54	$ 0	$ 54	$ 65

XML

Fair Value Measurements (Details 1) - Level 3 - Fair Value, Measurements, Recurring	9 Months Ended
	Sep. 30, 2019
Measurement Input, Prepayment Rate | Minimum | Covered Private Label Collateralized Mortgage Obligations Member [Domain]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Private Label Collateralized Mortgage Obligations, Measurement Input	0.029
Measurement Input, Prepayment Rate | Minimum | Private label collateralized mortgage obligations
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Private Label Collateralized Mortgage Obligations, Measurement Input	0.029
Measurement Input, Prepayment Rate | Minimum | Asset-backed Securities
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Asset-Backed Securities, Measurement Input	0.120
Measurement Input, Prepayment Rate | Maximum | Covered Private Label Collateralized Mortgage Obligations Member [Domain]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Private Label Collateralized Mortgage Obligations, Measurement Input	0.182
Measurement Input, Prepayment Rate | Maximum | Private label collateralized mortgage obligations
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Private Label Collateralized Mortgage Obligations, Measurement Input	0.1820
Measurement Input, Prepayment Rate | Maximum | Asset-backed Securities
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Asset-Backed Securities, Measurement Input	0.150
Measurement Input, Prepayment Rate | Weighted Average | Covered Private Label Collateralized Mortgage Obligations Member [Domain]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Private Label Collateralized Mortgage Obligations, Measurement Input	0.114
Measurement Input, Prepayment Rate | Weighted Average | Private label collateralized mortgage obligations
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Private Label Collateralized Mortgage Obligations, Measurement Input	0.114
Measurement Input, Prepayment Rate | Weighted Average | Asset-backed Securities
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Asset-Backed Securities, Measurement Input	0.137
Measurement Input, Default Rate | Minimum | Covered Private Label Collateralized Mortgage Obligations Member [Domain]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Private Label Collateralized Mortgage Obligations, Measurement Input	0.000
Measurement Input, Default Rate | Minimum | Private label collateralized mortgage obligations
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Private Label Collateralized Mortgage Obligations, Measurement Input	0.000
Measurement Input, Default Rate | Minimum | Asset-backed Securities
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Asset-Backed Securities, Measurement Input	0.020
Measurement Input, Default Rate | Maximum | Covered Private Label Collateralized Mortgage Obligations Member [Domain]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Private Label Collateralized Mortgage Obligations, Measurement Input	0.111
Measurement Input, Default Rate | Maximum | Private label collateralized mortgage obligations
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Private Label Collateralized Mortgage Obligations, Measurement Input	0.1110
Measurement Input, Default Rate | Maximum | Asset-backed Securities
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Asset-Backed Securities, Measurement Input	0.02
Measurement Input, Default Rate | Weighted Average | Covered Private Label Collateralized Mortgage Obligations Member [Domain]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Private Label Collateralized Mortgage Obligations, Measurement Input	0.018
Measurement Input, Default Rate | Weighted Average | Private label collateralized mortgage obligations
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Private Label Collateralized Mortgage Obligations, Measurement Input	0.018
Measurement Input, Default Rate | Weighted Average | Asset-backed Securities
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Asset-Backed Securities, Measurement Input	0.020
Measurement Input, Loss Severity | Minimum | Covered Private Label Collateralized Mortgage Obligations Member [Domain]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Private Label Collateralized Mortgage Obligations, Measurement Input	0.241
Measurement Input, Loss Severity | Minimum | Private label collateralized mortgage obligations
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Private Label Collateralized Mortgage Obligations, Measurement Input	0.241
Measurement Input, Loss Severity | Minimum | Asset-backed Securities
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Asset-Backed Securities, Measurement Input	0.600
Measurement Input, Loss Severity | Maximum | Covered Private Label Collateralized Mortgage Obligations Member [Domain]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Private Label Collateralized Mortgage Obligations, Measurement Input	1.176
Measurement Input, Loss Severity | Maximum | Private label collateralized mortgage obligations
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Private Label Collateralized Mortgage Obligations, Measurement Input	1.1760
Measurement Input, Loss Severity | Maximum | Asset-backed Securities
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Asset-Backed Securities, Measurement Input	0.60
Measurement Input, Loss Severity | Weighted Average | Covered Private Label Collateralized Mortgage Obligations Member [Domain]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Private Label Collateralized Mortgage Obligations, Measurement Input	0.585
Measurement Input, Loss Severity | Weighted Average | Private label collateralized mortgage obligations
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Private Label Collateralized Mortgage Obligations, Measurement Input	0.585
Measurement Input, Loss Severity | Weighted Average | Asset-backed Securities
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Asset-Backed Securities, Measurement Input	0.600
Measurement Input, Discount Rate | Minimum | Covered Private Label Collateralized Mortgage Obligations Member [Domain]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Private Label Collateralized Mortgage Obligations, Measurement Input	0.025
Measurement Input, Discount Rate | Minimum | Private label collateralized mortgage obligations
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Private Label Collateralized Mortgage Obligations, Measurement Input	0.025
Measurement Input, Discount Rate | Minimum | Asset-backed Securities
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Asset-Backed Securities, Measurement Input	0.032
Measurement Input, Discount Rate | Maximum | Covered Private Label Collateralized Mortgage Obligations Member [Domain]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Private Label Collateralized Mortgage Obligations, Measurement Input	0.093
Measurement Input, Discount Rate | Maximum | Private label collateralized mortgage obligations
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Private Label Collateralized Mortgage Obligations, Measurement Input	0.0920
Measurement Input, Discount Rate | Maximum | Asset-backed Securities
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Asset-Backed Securities, Measurement Input	0.052
Measurement Input, Discount Rate | Weighted Average | Covered Private Label Collateralized Mortgage Obligations Member [Domain]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Private Label Collateralized Mortgage Obligations, Measurement Input	0.063
Measurement Input, Discount Rate | Weighted Average | Private label collateralized mortgage obligations
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Private Label Collateralized Mortgage Obligations, Measurement Input	0.063
Measurement Input, Discount Rate | Weighted Average | Asset-backed Securities
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Asset-Backed Securities, Measurement Input	0.043

XML

Revenue From Contracts With Customers (Details) - USD ($) $ in Thousands	3 Months Ended			9 Months Ended
	Sep. 30, 2019	Jun. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Disaggregation of Revenue [Line Items]
Total interest income	$ 307,208	$ 314,533	$ 292,642	$ 926,300	$ 858,931
Service charges on deposit accounts	3,525	3,771	3,979	11,026	12,418
Other commissions and fees	10,855	11,590	12,397	33,453	34,429
Leased equipment income	9,615	9,182	9,120	28,079	28,497
Gain on sale of loans and leases	765	326	0	1,091	4,675
Gain on sale of securities	908	22,192	826	25,261	7,390
Other income	7,761	3,832	10,590	16,476	27,700
Total noninterest income	33,429	$ 50,893	36,912	115,386	115,109
Revenues	340,637		329,554	1,041,686	974,040
Service charges on deposit accounts	8,918		9,190	26,940	28,278
Interest Income
Disaggregation of Revenue [Line Items]
Service charges on deposit accounts	0		0	0	0
Service charges on deposit accounts
Disaggregation of Revenue [Line Items]
Service charges on deposit accounts	3,525		3,979	11,026	12,418
Other commissions and fees
Disaggregation of Revenue [Line Items]
Service charges on deposit accounts	4,965		4,767	14,661	14,519
Leased equipment income
Disaggregation of Revenue [Line Items]
Service charges on deposit accounts	0		0	0	0
Gain on sale of loans
Disaggregation of Revenue [Line Items]
Service charges on deposit accounts	0		0	0	0
Gain on sale of securities
Disaggregation of Revenue [Line Items]
Service charges on deposit accounts	0		0	0	0
Other income
Disaggregation of Revenue [Line Items]
Service charges on deposit accounts	428		444	1,253	1,341
Noninterest Income
Disaggregation of Revenue [Line Items]
Service charges on deposit accounts	$ 8,918		$ 9,190	$ 26,940	$ 28,278

XML

Goodwill and Other Intangible Assets (Details) - USD ($) $ in Thousands	3 Months Ended			9 Months Ended
	Sep. 30, 2019	Jun. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Finite-lived Intangible Assets [Roll Forward]
CDI and CRI Balance, beginning of period	$ 119,497	$ 119,497	$ 119,497	$ 119,497	$ 119,497
Fully amortized portion	(1,924)	0	0	(1,924)	0
CDI and CRI Balance, end of period	117,573	119,497	119,497	117,573	119,497
Accumulated Amortization, beginning of period	(72,117)	(67,247)	(51,804)	(62,377)	(39,871)
Amortization	(4,833)	(4,870)	(5,587)	(14,573)	(17,520)
Fully amortized portion	1,924	0	0	1,924	0
Accumulated Amortization, end of period	(75,026)	(72,117)	(57,391)	(75,026)	(57,391)
Net CDI and CRI, end of period	42,547	47,380	62,106	42,547	62,106
CDI and CRI [Member]
Finite-lived Intangible Assets [Roll Forward]
Fully amortized portion	(1,924)	0	0	(1,924)	0
Fully amortized portion	$ 1,924	$ 0	$ 0	$ 1,924	$ 0

XML

Loans and Leases (Details 5) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018	Dec. 31, 2018
Financing Receivable, Impaired [Line Items]
Impaired Financing Receivable, with Related Allowance, Related Allowance	$ 9,330		$ 9,330
Total Impaired Loans and Leases	115,442		115,442		$ 97,034
Impaired Financing Receivable, Unpaid Principal Balance	203,494		203,494
Impaired Financing Receivable, Average Recorded Investment	95,216		84,732
Impaired Financing Receivable, Interest Income, Accrual Method	249		735
Real Estate Mortgage
Financing Receivable, Impaired [Line Items]
Impaired Financing Receivable, with Related Allowance, Related Allowance	248		248
Total Impaired Loans and Leases	32,675		32,675
Impaired Financing Receivable, Unpaid Principal Balance	50,141		50,141
Impaired Financing Receivable, Average Recorded Investment	29,876		26,733
Impaired Financing Receivable, Interest Income, Accrual Method	135		393
Real Estate Construction and Land
Financing Receivable, Impaired [Line Items]
Impaired Financing Receivable, with Related Allowance, Related Allowance	0		0
Total Impaired Loans and Leases	5,357		5,357
Impaired Financing Receivable, Unpaid Principal Balance	5,402		5,402
Impaired Financing Receivable, Average Recorded Investment	5,357		5,357
Impaired Financing Receivable, Interest Income, Accrual Method	98		290
Commercial
Financing Receivable, Impaired [Line Items]
Impaired Financing Receivable, with Related Allowance, Related Allowance	9,082		9,082
Total Impaired Loans and Leases	76,680		76,680
Impaired Financing Receivable, Unpaid Principal Balance	147,055		147,055
Impaired Financing Receivable, Average Recorded Investment	59,415		52,149
Impaired Financing Receivable, Interest Income, Accrual Method	15		48
Consumer
Financing Receivable, Impaired [Line Items]
Impaired Financing Receivable, with Related Allowance, Related Allowance	0		0
Impaired Financing Receivable, with No Related Allowance, Recorded Investment	730		730
Impaired Financing Receivable, with No Related Allowance, Unpaid Principal Balance	896		896
Impaired Financing Receivable, with No Related Allowance, Average Recorded Investment	568		493
Impaired Financing Receivable, with No Related Allowance, Interest Income, Accrual Method	1		4
Total Impaired Loans and Leases	730		730
Impaired Financing Receivable, Unpaid Principal Balance	896		896
Impaired Financing Receivable, Average Recorded Investment	568		493
Impaired Financing Receivable, Interest Income, Accrual Method	1		4
Non Purchased Credit Impaired Loans and Leases
Financing Receivable, Impaired [Line Items]
Impaired Financing Receivable, with Related Allowance, Related Allowance					4,031
Total Impaired Loans and Leases					97,034
Impaired Financing Receivable, Unpaid Principal Balance					171,923
Impaired Financing Receivable, Average Recorded Investment		$ 126,081		$ 111,636
Impaired Financing Receivable, Interest Income, Accrual Method		335		984
Non Purchased Credit Impaired Loans and Leases | Real Estate Mortgage
Financing Receivable, Impaired [Line Items]
Impaired Financing Receivable, with Related Allowance, Related Allowance					417
Total Impaired Loans and Leases					29,329
Impaired Financing Receivable, Unpaid Principal Balance					45,671
Impaired Financing Receivable, Average Recorded Investment		46,336		44,218
Impaired Financing Receivable, Interest Income, Accrual Method		213		625
Non Purchased Credit Impaired Loans and Leases | Real Estate Construction and Land
Financing Receivable, Impaired [Line Items]
Impaired Financing Receivable, with Related Allowance, Related Allowance					0
Total Impaired Loans and Leases					5,862
Impaired Financing Receivable, Unpaid Principal Balance					5,870
Impaired Financing Receivable, Average Recorded Investment		5,533		5,533
Impaired Financing Receivable, Interest Income, Accrual Method		95		283
Non Purchased Credit Impaired Loans and Leases | Commercial
Financing Receivable, Impaired [Line Items]
Impaired Financing Receivable, with Related Allowance, Related Allowance					3,614
Total Impaired Loans and Leases					60,695
Impaired Financing Receivable, Unpaid Principal Balance					118,912
Impaired Financing Receivable, Average Recorded Investment		73,829		61,512
Impaired Financing Receivable, Interest Income, Accrual Method		25		70
Non Purchased Credit Impaired Loans and Leases | Consumer
Financing Receivable, Impaired [Line Items]
Impaired Financing Receivable, with Related Allowance, Related Allowance					0
Impaired Financing Receivable, with No Related Allowance, Recorded Investment					1,148
Impaired Financing Receivable, with No Related Allowance, Unpaid Principal Balance					1,470
Impaired Financing Receivable, with No Related Allowance, Average Recorded Investment		383		373
Impaired Financing Receivable, with No Related Allowance, Interest Income, Accrual Method		2		6
Total Impaired Loans and Leases					1,148
Impaired Financing Receivable, Unpaid Principal Balance					1,470
Impaired Financing Receivable, Average Recorded Investment		383		373
Impaired Financing Receivable, Interest Income, Accrual Method		2		6
Asset-based | Commercial
Financing Receivable, Impaired [Line Items]
Impaired Financing Receivable, with No Related Allowance, Recorded Investment	32,515		32,515
Impaired Financing Receivable, with No Related Allowance, Unpaid Principal Balance	50,633		50,633
Impaired Financing Receivable, with Related Allowance, Average Recorded Investment	163		55
Impaired Financing Receivable, with Related Allowance, Interest Income, Accrual Method	0		0
Impaired Financing Receivable, with No Related Allowance, Average Recorded Investment	30,880		29,989
Impaired Financing Receivable, with No Related Allowance, Interest Income, Accrual Method	0		0
Asset-based | Non Purchased Credit Impaired Loans and Leases | Commercial
Financing Receivable, Impaired [Line Items]
Impaired Financing Receivable, with Related Allowance, Recorded Investment	500		500		0
Impaired Financing Receivable, with Related Allowance, Unpaid Principal Balance	500		500		0
Impaired Financing Receivable, with Related Allowance, Related Allowance	500		500		0
Impaired Financing Receivable, with No Related Allowance, Recorded Investment					32,324
Impaired Financing Receivable, with No Related Allowance, Unpaid Principal Balance					38,100
Impaired Financing Receivable, with Related Allowance, Average Recorded Investment		0		0
Impaired Financing Receivable, with Related Allowance, Interest Income, Accrual Method		0		0
Impaired Financing Receivable, with No Related Allowance, Average Recorded Investment		34,618		34,618
Impaired Financing Receivable, with No Related Allowance, Interest Income, Accrual Method		0		0
Venture Capital Loans | Commercial
Financing Receivable, Impaired [Line Items]
Impaired Financing Receivable, with Related Allowance, Recorded Investment	12,379		12,379
Impaired Financing Receivable, with Related Allowance, Unpaid Principal Balance	13,570		13,570
Impaired Financing Receivable, with Related Allowance, Related Allowance	6,177		6,177
Impaired Financing Receivable, with No Related Allowance, Recorded Investment	7,752		7,752
Impaired Financing Receivable, with No Related Allowance, Unpaid Principal Balance	39,440		39,440
Impaired Financing Receivable, with Related Allowance, Average Recorded Investment	12,343		9,201
Impaired Financing Receivable, with Related Allowance, Interest Income, Accrual Method	0		0
Impaired Financing Receivable, with No Related Allowance, Average Recorded Investment	7,752		6,173
Impaired Financing Receivable, with No Related Allowance, Interest Income, Accrual Method	0		0
Venture Capital Loans | Non Purchased Credit Impaired Loans and Leases | Commercial
Financing Receivable, Impaired [Line Items]
Impaired Financing Receivable, with Related Allowance, Recorded Investment					11,621
Impaired Financing Receivable, with Related Allowance, Unpaid Principal Balance					13,255
Impaired Financing Receivable, with Related Allowance, Related Allowance					3,141
Impaired Financing Receivable, with No Related Allowance, Recorded Investment					8,678
Impaired Financing Receivable, with No Related Allowance, Unpaid Principal Balance					41,335
Impaired Financing Receivable, with Related Allowance, Average Recorded Investment		28,322		17,459
Impaired Financing Receivable, with Related Allowance, Interest Income, Accrual Method		0		0
Impaired Financing Receivable, with No Related Allowance, Average Recorded Investment		1,421		1,330
Impaired Financing Receivable, with No Related Allowance, Interest Income, Accrual Method		0		0
Other Commercial | Commercial
Financing Receivable, Impaired [Line Items]
Impaired Financing Receivable, with Related Allowance, Recorded Investment	16,969		16,969
Impaired Financing Receivable, with Related Allowance, Unpaid Principal Balance	18,044		18,044
Impaired Financing Receivable, with Related Allowance, Related Allowance	2,405		2,405
Impaired Financing Receivable, with No Related Allowance, Recorded Investment	6,565		6,565
Impaired Financing Receivable, with No Related Allowance, Unpaid Principal Balance	24,868		24,868
Impaired Financing Receivable, with Related Allowance, Average Recorded Investment	2,181		1,125
Impaired Financing Receivable, with Related Allowance, Interest Income, Accrual Method	9		26
Impaired Financing Receivable, with No Related Allowance, Average Recorded Investment	6,096		5,606
Impaired Financing Receivable, with No Related Allowance, Interest Income, Accrual Method	6		22
Other Commercial | Non Purchased Credit Impaired Loans and Leases | Commercial
Financing Receivable, Impaired [Line Items]
Impaired Financing Receivable, with Related Allowance, Recorded Investment					473
Impaired Financing Receivable, with Related Allowance, Unpaid Principal Balance					482
Impaired Financing Receivable, with Related Allowance, Related Allowance					473
Impaired Financing Receivable, with No Related Allowance, Recorded Investment					7,599
Impaired Financing Receivable, with No Related Allowance, Unpaid Principal Balance					25,740
Impaired Financing Receivable, with Related Allowance, Average Recorded Investment		1,360		688
Impaired Financing Receivable, with Related Allowance, Interest Income, Accrual Method		0		0
Impaired Financing Receivable, with No Related Allowance, Average Recorded Investment		8,108		7,417
Impaired Financing Receivable, with No Related Allowance, Interest Income, Accrual Method		25		70
Commercial Real Estate Construction Loan Receivable | Real Estate Construction and Land
Financing Receivable, Impaired [Line Items]
Impaired Financing Receivable, with No Related Allowance, Recorded Investment	5,357		5,357
Impaired Financing Receivable, with No Related Allowance, Unpaid Principal Balance	5,402		5,402
Impaired Financing Receivable, with No Related Allowance, Average Recorded Investment	5,357		5,357
Impaired Financing Receivable, with No Related Allowance, Interest Income, Accrual Method	98		290
Commercial Real Estate Construction Loan Receivable | Non Purchased Credit Impaired Loans and Leases | Real Estate Construction and Land
Financing Receivable, Impaired [Line Items]
Impaired Financing Receivable, with No Related Allowance, Recorded Investment					5,862
Impaired Financing Receivable, with No Related Allowance, Unpaid Principal Balance					5,870
Impaired Financing Receivable, with No Related Allowance, Average Recorded Investment		5,533		5,533
Impaired Financing Receivable, with No Related Allowance, Interest Income, Accrual Method		95		283
Residential Real Estate Construction Financing Receivable | Real Estate Construction and Land
Financing Receivable, Impaired [Line Items]
Impaired Financing Receivable, with No Related Allowance, Average Recorded Investment	0
Impaired Financing Receivable, with No Related Allowance, Interest Income, Accrual Method	0
Residential Real Estate Construction Financing Receivable | Non Purchased Credit Impaired Loans and Leases | Real Estate Construction and Land
Financing Receivable, Impaired [Line Items]
Impaired Financing Receivable, with No Related Allowance, Average Recorded Investment		0
Impaired Financing Receivable, with No Related Allowance, Interest Income, Accrual Method		0
Commercial | Real Estate Mortgage
Financing Receivable, Impaired [Line Items]
Impaired Financing Receivable, with Related Allowance, Recorded Investment	485		485
Impaired Financing Receivable, with Related Allowance, Unpaid Principal Balance	485		485
Impaired Financing Receivable, with Related Allowance, Related Allowance	71		71
Impaired Financing Receivable, with No Related Allowance, Recorded Investment	22,503		22,503
Impaired Financing Receivable, with No Related Allowance, Unpaid Principal Balance	37,568		37,568
Impaired Financing Receivable, with Related Allowance, Average Recorded Investment	485		485
Impaired Financing Receivable, with Related Allowance, Interest Income, Accrual Method	8		24
Impaired Financing Receivable, with No Related Allowance, Average Recorded Investment	19,745		16,729
Impaired Financing Receivable, with No Related Allowance, Interest Income, Accrual Method	56		162
Commercial | Non Purchased Credit Impaired Loans and Leases | Real Estate Mortgage
Financing Receivable, Impaired [Line Items]
Impaired Financing Receivable, with Related Allowance, Recorded Investment					1,736
Impaired Financing Receivable, with Related Allowance, Unpaid Principal Balance					1,648
Impaired Financing Receivable, with Related Allowance, Related Allowance					170
Impaired Financing Receivable, with No Related Allowance, Recorded Investment					17,783
Impaired Financing Receivable, with No Related Allowance, Unpaid Principal Balance					32,035
Impaired Financing Receivable, with Related Allowance, Average Recorded Investment		1,781		1,781
Impaired Financing Receivable, with Related Allowance, Interest Income, Accrual Method		18		55
Impaired Financing Receivable, with No Related Allowance, Average Recorded Investment		34,155		32,098
Impaired Financing Receivable, with No Related Allowance, Interest Income, Accrual Method		129		376
Residential Real Estate | Real Estate Mortgage
Financing Receivable, Impaired [Line Items]
Impaired Financing Receivable, with Related Allowance, Recorded Investment	2,032		2,032
Impaired Financing Receivable, with Related Allowance, Unpaid Principal Balance	2,030		2,030
Impaired Financing Receivable, with Related Allowance, Related Allowance	177		177
Impaired Financing Receivable, with No Related Allowance, Recorded Investment	7,655		7,655
Impaired Financing Receivable, with No Related Allowance, Unpaid Principal Balance	10,058		10,058
Impaired Financing Receivable, with Related Allowance, Average Recorded Investment	2,031		2,031
Impaired Financing Receivable, with Related Allowance, Interest Income, Accrual Method	15		44
Impaired Financing Receivable, with No Related Allowance, Average Recorded Investment	7,615		7,488
Impaired Financing Receivable, with No Related Allowance, Interest Income, Accrual Method	$ 56		$ 163
Residential Real Estate | Non Purchased Credit Impaired Loans and Leases | Real Estate Mortgage
Financing Receivable, Impaired [Line Items]
Impaired Financing Receivable, with Related Allowance, Recorded Investment					2,569
Impaired Financing Receivable, with Related Allowance, Unpaid Principal Balance					2,563
Impaired Financing Receivable, with Related Allowance, Related Allowance					247
Impaired Financing Receivable, with No Related Allowance, Recorded Investment					7,241
Impaired Financing Receivable, with No Related Allowance, Unpaid Principal Balance					$ 9,425
Impaired Financing Receivable, with Related Allowance, Average Recorded Investment		2,494		2,494
Impaired Financing Receivable, with Related Allowance, Interest Income, Accrual Method		21		62
Impaired Financing Receivable, with No Related Allowance, Average Recorded Investment		7,906		7,845
Impaired Financing Receivable, with No Related Allowance, Interest Income, Accrual Method		$ 45		$ 132

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Loans and Leases (Details 9) - USD ($) $ in Thousands	3 Months Ended			9 Months Ended
	Sep. 30, 2019	Jun. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Financing Receivable, Allowance for Credit Loss [Line Items]
Balance, beginning of period	$ 135,037		$ 132,139	$ 132,472
Reserve for Unfunded Loan Commitments, Balance, beginning of period	34,861		35,361	36,861	$ 28,635
Allowance for Credit Losses, Balance, beginning of period	169,898		167,500	169,333
Allowance for Loan and Lease Losses, Charge-offs	(6,501)		(3,308)	(27,603)
Reserve for Unfunded Loan Commitments, Charge-offs	0		0	0	0
Allowance for Credit Losses, Charge-offs	(6,501)		(3,308)	(27,603)
Allowance for Loan and Lease Loss, Recoveries	2,016		1,589	11,683
Reserve for Unfunded Loan Commitments, Recoveries	0		0	0	0
Allowance for Credit Losses, Recoveries	2,016		1,589	11,683
Allowance for Loan and Lease Losses, Net charge-offs	(4,485)		(1,719)	(15,920)
Reserve for Unfunded Loan Commitments, Net charge-offs	0		0	0	0
Allowance For Credit Losses, Net charge-offs	(4,485)		(1,719)	(15,920)
Allowance for Loan and Lease Losses, Provision (negative provision)	8,000		11,500	22,000
Reserve for Unfunded Commitments, Provision (negative provision)	1,000		0	3,000	(6,726)
Allowance for Credit Losses, Provision (negative provision)	7,000	$ 8,000	11,500	19,000	33,000
Balance, end of period	138,552	135,037	141,920	138,552	141,920
Reserve for Unfunded Loan Commitments, Balance, end of period	33,861	34,861	35,361	33,861	35,361
Allowance for Credit Losses, Balance, end of period	172,413	169,898	177,281	172,413	177,281
Non Purchased Credit Impaired Loans and Leases
Financing Receivable, Allowance for Credit Loss [Line Items]
Balance, beginning of period	135,037		132,139	132,472	139,456
Allowance for Credit Losses, Balance, beginning of period					168,091
Allowance for Loan and Lease Losses, Charge-offs	(6,501)		(3,308)	(27,603)	(33,696)
Allowance for Credit Losses, Charge-offs					(33,696)
Allowance for Loan and Lease Loss, Recoveries	2,016		1,589	11,683	9,886
Allowance for Credit Losses, Recoveries					9,886
Allowance for Loan and Lease Losses, Net charge-offs					(23,810)
Allowance For Credit Losses, Net charge-offs					(23,810)
Allowance for Loan and Lease Losses, Provision (negative provision)	8,000		11,500	22,000	26,274
Allowance for Credit Losses, Provision (negative provision)					33,000
Balance, end of period	$ 138,552	$ 135,037	141,920	$ 138,552	141,920
Allowance for Credit Losses, Balance, end of period			$ 177,281		177,281
Purchased Credit Impaired Loans and Leases
Financing Receivable, Allowance for Credit Loss [Line Items]
Balance, beginning of period					$ 6,400

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Earnings Per Share (Tables)

9 Months Ended

Sep. 30, 2019

Earnings Per Share [Abstract]

Net income per share

The following table presents the computations of basic and diluted net earnings per share for the periods indicated:

	Three Months Ended									Nine Months Ended
	September 30,			June 30,			September 30,			September 30,
	2019			2019			2018			2019			2018
	(Dollars in thousands, except per share data)
Basic Earnings Per Share:
Net earnings	$	110,026		$	128,125		$	116,287		$	350,755		$	350,298
Less: Earnings allocated to unvested restricted stock(1)	(1,369		)	(1,190		)	(1,428		)	(3,725		)	(3,899		)
Net earnings allocated to common shares	$	108,657		$	126,935		$	114,859		$	347,030		$	346,399
Weighted-average basic shares and unvested restricted
stock outstanding	119,831			120,042			123,657			120,691			125,728
Less: Weighted-average unvested restricted stock
outstanding	(1,622		)	(1,462		)	(1,537		)	(1,480		)	(1,473		)
Weighted-average basic shares outstanding	118,209			118,580			122,120			119,211			124,255
Basic earnings per share	$	0.92		$	1.07		$	0.94		$	2.91		$	2.79
Diluted Earnings Per Share:
Net earnings allocated to common shares	$	108,657		$	126,935		$	114,859		$	347,030		$	346,399
Weighted-average diluted shares outstanding	118,209			118,580			122,120			119,211			124,255
Diluted earnings per share	$	0.92		$	1.07		$	0.94		$	2.91		$	2.79

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(1)

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

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Leases (Tables)

9 Months Ended

Sep. 30, 2019

Leases [Abstract]

Schedule of Occupancy Expense and Supplemental Cash Flow Information Related to Operating Leases

The following table presents supplemental cash flow information related to leases for the period indicated:

	Nine Months Ended
	September 30, 2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	24,674
ROU assets obtained in exchange for lease obligations:
Operating leases	$	172,189

Our lease expense is a component of "Occupancy expense" on our condensed consolidated statements of earnings. The following table presents the components of lease expense for the period indicated:

	Three Months Ended			Nine Months Ended
	September 30, 2019			September 30, 2019
	(In thousands)
Operating lease expense:
Fixed costs	$	8,347		$	25,183
Variable costs	7			77
Short-term lease costs	126			849
Sublease income	(1,010		)	(3,190		)
Net lease expense	$	7,470		$	22,919

Schedule of Supplemental Balance Sheet Information Related to Operating Leases

The following table presents supplemental balance sheet and other information related to operating leases as of the date indicated:

	September 30, 2019
	(Dollars in thousands)
Operating leases:
Operating lease right-of-use assets, net	$	134,122
Operating lease liabilities	$	149,185
Weighted average remaining lease term (in years)	4.8
Weighted average discount rate	2.79		%

Schedule of Maturities of Operating Leases

The following table presents maturities of operating lease liabilities as of the date indicated:

	September 30, 2019
	(In thousands)
Period ending December 31,
2019	$	8,303
2020	32,345
2021	30,090
2022	24,304
2023	21,472
Thereafter	47,582
Total operating lease liabilities	164,096
Less: Imputed interest	(14,911		)
Present value of operating lease liabilities	$	149,185

Schedule of Payments to be Received on Operating Leases

The following table presents the rental payments to be received on operating leases as of the date indicated:

	September 30, 2019
	(In thousands)
Period Ending December 31,
2019	$	8,727
2020	35,447
2021	31,743
2022	25,199
2023	22,096
Thereafter	52,717
Total undiscounted cash flows	$	175,929

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Restricted Cash Balances (Details Textual) - USD ($) $ in Millions	Sep. 30, 2019	Dec. 31, 2018
Restricted Cash [Abstract]
Restricted Cash and Cash Equivalents	$ 118.2	$ 77.0
Pledged Cash for Derivative Contracts	$ 3.2	$ 2.6

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Foreclosed Assets

9 Months Ended

Sep. 30, 2019

Other Real Estate Owned Net Covered and NonCovered Including Foreclosed Assets [Abstract]

Foreclosed Assets

FORECLOSED ASSETS

The following table summarizes foreclosed assets as of the dates indicated:

	September 30,		December 31,
Property Type	2019		2018
	(In thousands)
Commercial real estate	$	199	$	2,004
Single-family residence	948		953
Construction and land development	219		219
Multi‑family	—		1,059
Total other real estate owned, net	1,366		4,235
Other foreclosed assets	—		1,064
Total foreclosed assets, net	$	1,366	$	5,299

The following table presents the changes in foreclosed assets, net of the valuation allowance, for the period indicated:

	Foreclosed
	Assets
	(In thousands)
Balance, December 31, 2018	$	5,299
Transfers to foreclosed assets from loans	37
Provision for losses	(54		)
Reductions related to sales	(3,916		)
Balance, September 30, 2019	$	1,366

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Borrowings and Subordinated Debentures

9 Months Ended

Sep. 30, 2019

Debt Disclosure [Abstract]

Borrowings and Subordinated Debentures

BORROWINGS AND SUBORDINATED DEBENTURES

Borrowings

The following table summarizes our borrowings as of the dates indicated:

	September 30, 2019				December 31, 2018
			Weighted				Weighted
			Average				Average
	Amount		Rate		Amount		Rate
	(Dollars in thousands)
Non‑recourse debt	$	31	7.50	%	$	114	7.50	%
FHLB secured advances	882,000		2.12	%	1,040,000		2.56	%
FHLB unsecured overnight advance	141,000		1.95	%	141,000		2.53	%
AFX borrowings	230,000		1.92	%	190,000		2.56	%
Total borrowings	$	1,253,031	2.06	%	$	1,371,114	2.56	%

The non‑recourse debt represents the payment stream of certain equipment leases sold to third parties. The debt is secured by the leased equipment and all interest rates are fixed. As of September 30, 2019, this debt had a weighted average remaining maturity of 0.3 years.

The Bank has established secured and unsecured lines of credit under which it may borrow funds from time to time on a term or overnight basis from the FHLB, the FRBSF, and other financial institutions.

FHLB Secured Line of Credit. The Bank had secured financing capacity with the FHLB as of September 30, 2019 of $4.3 billion, collateralized by a blanket lien on $6.1 billion of qualifying loans. As of September 30, 2019, the balance outstanding was $882.0 million, which consisted of a $582.0 million overnight borrowing and a $300.0 million two-month borrowing with a maturity date of October 4, 2019. As of December 31, 2018, the balance outstanding was a $1.0 billion overnight advance.

FRBSF Secured Line of Credit. The Bank has a secured line of credit with the FRBSF. As of September 30, 2019, the Bank had secured borrowing capacity of $2.1 billion collateralized by liens covering $2.8 billion of qualifying loans. As of September 30, 2019 and December 31, 2018, there were no balances outstanding.

FHLB Unsecured Line of Credit. The Bank has a $141.0 million unsecured line of credit with the FHLB for the purchase of overnight funds, of which $141.0 million was outstanding at September 30, 2019. At December 31, 2018, the balance outstanding was $141.0 million.

Federal Funds Arrangements with Commercial Banks. As of September 30, 2019, the Bank had unsecured lines of credit of $180.0 million in the aggregate with several correspondent banks for the purchase of overnight funds, subject to availability of funds. These lines are renewable annually and have no unused commitment fees. As of September 30, 2019 and December 31, 2018, there were no balances outstanding. The Bank is a member of the AFX, through which it may either borrow or lend funds on an overnight or short-term basis with a group of pre-approved commercial banks. The availability of funds changes daily. As of September 30, 2019, the balance outstanding was $230.0 million, which consisted of $230.0 million in overnight borrowings. As of December 31, 2018, there were $190.0 million in overnight borrowings outstanding.

Subordinated Debentures

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

	September 30, 2019					December 31, 2018					Date	Maturity	Rate Index
Series	Amount			Rate		Amount			Rate		Issued	Date	(Quarterly Reset)
	(Dollars in thousands)
Trust V	$	10,310		5.24	%	$	10,310		5.89	%	8/15/2003	9/17/2033	3-month LIBOR + 3.10
Trust VI	10,310			5.17	%	10,310			5.84	%	9/3/2003	9/15/2033	3-month LIBOR + 3.05
Trust CII	5,155			5.09	%	5,155			5.74	%	9/17/2003	9/17/2033	3-month LIBOR + 2.95
Trust VII	61,856			5.02	%	61,856			5.27	%	2/5/2004	4/23/2034	3-month LIBOR + 2.75
Trust CIII	20,619			3.81	%	20,619			4.48	%	8/15/2005	9/15/2035	3-month LIBOR + 1.69
Trust FCCI	16,495			3.72	%	16,495			4.39	%	1/25/2007	3/15/2037	3-month LIBOR + 1.60
Trust FCBI	10,310			3.67	%	10,310			4.34	%	9/30/2005	12/15/2035	3-month LIBOR + 1.55
Trust CS 2005-1	82,475			4.07	%	82,475			4.74	%	11/21/2005	12/15/2035	3-month LIBOR + 1.95
Trust CS 2005-2	128,866			4.22	%	128,866			4.47	%	12/14/2005	1/30/2036	3-month LIBOR + 1.95
Trust CS 2006-1	51,545			4.22	%	51,545			4.47	%	2/22/2006	4/30/2036	3-month LIBOR + 1.95
Trust CS 2006-2	51,550			4.22	%	51,550			4.47	%	9/27/2006	10/30/2036	3-month LIBOR + 1.95
Trust CS 2006-3 (1)	28,092			1.68	%	29,556			1.73	%	9/29/2006	10/30/2036	3-month EURIBOR + 2.05
Trust CS 2006-4	16,470			4.22	%	16,470			4.47	%	12/5/2006	1/30/2037	3-month LIBOR + 1.95
Trust CS 2006-5	6,650			4.22	%	6,650			4.47	%	12/19/2006	1/30/2037	3-month LIBOR + 1.95
Trust CS 2007-2	39,177			4.22	%	39,177			4.47	%	6/13/2007	7/30/2037	3-month LIBOR + 1.95
Gross subordinated debentures	539,880			4.16	%	541,344			4.51	%
Unamortized discount (2)	(83,735		)			(87,498		)
Net subordinated debentures	$	456,145				$	453,846

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(1) Denomination is in Euros with a value of €25.8 million.

(2)

Amount represents the fair value adjustment on trust preferred securities assumed in acquisitions.