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



FORM 10-Q

ý   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2014

OR

o

 

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                    to                  

Commission File Number: 00-30747

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

DELAWARE
(State or other jurisdiction of
incorporation or organization)
  33-0885320
(I.R.S. Employer
Identification Number)

10250 Constellation Blvd., Suite 1640
Los Angeles, California
(Address of principal executive offices)

 


90067
(Zip Code)

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



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

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

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

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

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

        As of May 6, 2014, there were 101,910,929 shares of the registrant's common stock outstanding, excluding 40,000 shares of unvested restricted stock.

   


Table of Contents


PACWEST BANCORP AND SUBSIDIARIES

MARCH 31, 2014 FORM 10-Q

TABLE OF CONTENTS

 
   
  Page  

PART I—FINANCIAL INFORMATION

    3  

ITEM 1.

 

Condensed Consolidated Financial Statements (Unaudited)

    3  

 

Condensed Consolidated Balance Sheets (Unaudited)

    3  

 

Condensed Consolidated Statements of Earnings (Unaudited)

    4  

 

Condensed Consolidated Statements of Comprehensive Income (Unaudited)

    5  

 

Condensed Consolidated Statement of Changes in Stockholders' Equity (Unaudited)

    6  

 

Condensed Consolidated Statements of Cash Flows (Unaudited)

    7  

 

Notes to Condensed Consolidated Financial Statements (Unaudited)

    8  

ITEM 2.

 

Management's Discussion and Analysis of Financial Condition and Results of Operations

    56  

ITEM 3.

 

Quantitative and Qualitative Disclosures About Market Risk

    104  

ITEM 4.

 

Controls and Procedures

    104  

PART II—OTHER INFORMATION

    105  

ITEM 1.

 

Legal Proceedings

    105  

ITEM 2.

 

Unregistered Sales of Equity Securities and Use of Proceeds

    107  

ITEM 6.

 

Exhibits

    108  

SIGNATURES

    109  

2


Table of Contents


PART I—FINANCIAL INFORMATION

ITEM 1.    Condensed Consolidated Financial Statements (Unaudited)

        


PACWEST BANCORP AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

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

(Unaudited)

 
  March 31,
2014
  December 31,
2013
 

ASSETS

             

Cash and due from banks

  $ 113,508   $ 96,424  

Interest-earning deposits in financial institutions

    228,579     50,998  
           

Total cash and cash equivalents

    342,087     147,422  
           

Securities available-for-sale, at fair value ($37,594 and $37,904 covered by FDIC loss sharing at March 31, 2014 and December 31, 2013)

    1,477,473     1,494,745  

Federal Home Loan Bank stock, at cost

    25,000     27,939  
           

Total investment securities

    1,502,473     1,522,684  
           

Loans and leases, net of unearned income ($398,365 and $448,418 covered by FDIC loss sharing at March 31, 2014 and December 31, 2013)

    4,161,067     4,312,352  

Allowance for loan and lease losses ($20,930 and $21,793 for loans covered by FDIC loss sharing at March 31, 2014 and December 31, 2013)

    (81,180 )   (82,034 )
           

Total loans and leases, net

    4,079,887     4,230,318  
           

Other real estate owned, net ($6,177 and $9,036 covered by FDIC loss sharing at March 31, 2014 and December 31, 2013)

    46,870     51,837  

Premises and equipment, net

    29,908     32,435  

FDIC loss sharing asset

    34,628     45,524  

Cash surrender value of life insurance

    77,955     77,489  

Goodwill

    208,743     208,743  

Core deposit and customer relationship intangibles, net

    15,884     17,248  

Other assets

    179,418     199,663  
           

Total assets

  $ 6,517,853   $ 6,533,363  
           
           

LIABILITIES

             

Noninterest-bearing deposits

  $ 2,391,609   $ 2,318,446  

Interest-bearing deposits

    2,977,799     2,962,541  
           

Total deposits

    5,369,408     5,280,987  

Borrowings

    5,748     113,726  

Subordinated debentures

    132,790     132,645  

Discontinued operations

    112,432     123,028  

Accrued interest payable and other liabilities

    63,773     73,884  
           

Total liabilities

    5,684,151     5,724,270  
           

Commitments and contingencies

             

STOCKHOLDERS' EQUITY

   
 
   
 
 

Preferred stock, $0.01 par value; authorized 5,000,000 shares; none issued and outstanding

         

Common stock, $0.01 par value; authorized 200,000,000 and 75,000,000 shares at March 31, 2014 and December 31, 2013, respectively; issued 46,532,624 and 46,526,124 shares, respectively (includes 1,087,436 and 1,216,524 shares of unvested restricted stock, respectively)

    465     465  

Additional paid-in capital

    1,278,152     1,286,737  

Accumulated deficit

    (429,342 )   (454,422 )

Treasury stock, at cost; 755,044 and 703,290 shares at March 31, 2014 and December 31, 2013

    (22,398 )   (20,340 )

Accumulated other comprehensive income

    6,825     (3,347 )
           

Total stockholders' equity

    833,702     809,093  
           

Total liabilities and stockholders' equity

  $ 6,517,853   $ 6,533,363  
           
           

   

See "Notes to Condensed Consolidated Financial Statements."

3


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PACWEST BANCORP AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS

(Dollars in Thousands, Except Per Share Data)

(Unaudited)

 
  Three Months Ended  
 
  March 31,
2014
  December 31,
2013
  March 31,
2013
 

Interest income:

                   

Loans and leases

  $ 77,463   $ 73,352   $ 61,010  

Investment securities

    10,823     10,422     8,216  

Deposits in financial institutions

    74     82     43  
               

Total interest income

    88,360     83,856     69,269  
               

Interest expense:

                   

Deposits

    1,225     1,450     2,649  

Borrowings

    79     86     144  

Subordinated debentures

    1,041     1,062     783  
               

Total interest expense

    2,345     2,598     3,576  
               

Net interest income

    86,015     81,258     65,693  
               

(Negative provision) provision for credit losses

    (644 )   (1,338 )   3,137  
               

Net interest income after negative provision for credit losses

    86,659     82,596     62,556  
               

Noninterest income:

                   

Service charges on deposit accounts

    3,002     3,197     2,863  

Other commissions and fees

    1,932     2,125     1,933  

Gain on sale of leases

    106     683     225  

Gain (loss) on sale of securities

    4,752     (272 )   409  

Increase in cash surrender value of life insurance

    466     448     433  

FDIC loss sharing expense, net

    (11,430 )   (10,593 )   (3,137 )

Other income

    5,863     486     114  
               

Total noninterest income

    4,691     (3,926 )   2,840  
               

Noninterest expense:

                   

Compensation

    28,627     27,697     25,350  

Accelerated vesting of restricted stock

        12,420      

Occupancy

    7,595     7,553     6,598  

Data processing

    2,540     2,216     2,233  

Other professional services

    2,286     2,314     2,097  

Business development

    934     992     736  

Communications

    737     860     613  

Insurance and assessments

    1,593     1,572     1,261  

Non-covered other real estate owned, net

    (246 )   25     313  

Covered other real estate owned, net

    (1,615 )   (594 )   (813 )

Intangible asset amortization

    1,364     1,430     1,176  

Acquisition and integration

    2,200     4,253     692  

Other expense

    4,854     5,350     3,927  
               

Total noninterest expense

    50,869     66,088     44,183  
               

Earnings from continuing operations before income taxes

    40,481     12,582     21,213  

Income tax expense

    (14,576 )   (9,135 )   (7,719 )
               

Net earnings from continuing operations

    25,905     3,447     13,494  
               

Loss from discontinued operations before income taxes

    (1,413 )   (578 )    

Income tax benefit

    588     240      
               

Net loss from discontinued operations

    (825 )   (338 )    
               

Net earnings

  $ 25,080   $ 3,109   $ 13,494  
               
               

Basic earnings per share:

                   

Net earnings from continuing operations

  $ 0.57   $ 0.07   $ 0.37  

Net earnings

  $ 0.55   $ 0.06   $ 0.37  

Diluted earnings per share:

                   

Net earnings from continuing operations

  $ 0.57   $ 0.07   $ 0.37  

Net earnings

  $ 0.55   $ 0.06   $ 0.37  

Dividends declared per share

  $ 0.25   $ 0.25   $ 0.25  

   

See "Notes to Condensed Consolidated Financial Statements."

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PACWEST BANCORP AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In Thousands)

(Unaudited)

 
  Three Months Ended  
 
  March 31,
2014
  December 31,
2013
  March 31,
2013
 

Net earnings

  $ 25,080   $ 3,109   $ 13,494  

Other comprehensive income (loss) related to unrealized gains (losses) on securities available-for-sale:

                   

Unrealized holding gains (losses) arising during the period

    22,291     (6,607 )   (6,410 )

Income tax benefit (expense) related to unrealized holding (losses) gains arising during the period

    (9,363 )   2,775     2,692  

Reclassification adjustment for (gain) loss included in net earnings

    (4,752 )   272     (409 )

Income tax (benefit) expense related to reclassification adjustment

    1,996     (114 )   172  
               

Other comprehensive income (loss)

    10,172     (3,674 )   (3,955 )
               

Comprehensive income (loss)

  $ 35,252   $ (565 ) $ 9,539  
               
               

   

See "Notes to Condensed Consolidated Financial Statements."

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PACWEST BANCORP AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY

(Dollars in Thousands, Except Share Data)

(Unaudited)

 
  Three Months Ended March 31, 2014  
 
  Common Stock    
   
   
   
 
 
   
   
  Accumulated
Other
Comprehensive
Income
   
 
 
  Shares   Par
Value
  Additional
Paid-in
Capital
  Accumulated
Deficit
  Treasury
Stock
  Total  

Balance, December 31, 2013

    45,822,834   $ 465   $ 1,286,737   $ (454,422 ) $ (20,340 ) $ (3,347 ) $ 809,093  

Net earnings

                25,080             25,080  

Other comprehensive income—net unrealized gain on securities available-for-sale, net of tax

                        10,172     10,172  

Restricted stock awarded and earned stock compensation, net of shares forfeited

    6,500         1,611                 1,611  

Restricted stock surrendered

    (51,754 )               (2,058 )       (2,058 )

Tax effect from vesting of restricted stock

            1,110                 1,110  

Cash dividends paid ($0.25 per share)

            (11,306 )               (11,306 )
                               

Balance, March 31, 2014

    45,777,580   $ 465   $ 1,278,152   $ (429,342 ) $ (22,398 ) $ 6,825   $ 833,702  
                               
                               

   

See "Notes to Condensed Consolidated Financial Statements."

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PACWEST BANCORP AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In Thousands)

(Unaudited)

 
  Three Months Ended
March 31,
 
 
  2014   2013  

Cash flows from operating activities:

             

Net earnings

  $ 25,080   $ 13,494  

Adjustments to reconcile net earnings to net cash provided by operating activities:

             

Depreciation and amortization

    6,653     7,292  

(Negative provision) provision for credit losses

    (644 )   3,137  

Gain on sale of other real estate owned

    (2,323 )   (1,910 )

Provision for losses on other real estate owned

    94     1,185  

Gain on sale of leases

    (106 )   (225 )

Gain on sale of premises and equipment

    (1,571 )    

Gain on sale of securities

    (4,752 )   (409 )

Earned stock compensation

    1,611     1,764  

Tax effect included in stockholders' equity of restricted stock vesting

    (1,110 )   (660 )

Decrease in accrued and deferred income taxes, net

    19,679     8,611  

Decrease in FDIC loss sharing asset

    10,896     1,635  

Increase in other assets

    (6,156 )   (486 )

Decrease in accrued interest payable and other liabilities

    (20,107 )   (7,601 )
           

Net cash provided by operating activities

    27,244     25,827  
           

Cash flows from investing activities:

             

Net decrease in loans and leases

    149,440     113,099  

Proceeds from sale of loans and leases

    1,128     3,054  

Securities available-for-sale:

             

Proceeds from maturities and paydowns

    33,860     100,980  

Proceeds from sales

    142,041     12,810  

Purchases

    (140,048 )   (132,446 )

Net redemptions of Federal Home Loan Bank stock

    2,939     3,726  

Proceeds from sales of other real estate owned

    7,209     8,847  

Purchases of premises and equipment, net

    (1,115 )   (742 )

Proceeds from sales of premises and equipment

    3,753      
           

Net cash provided by investing activities

    199,207     109,328  
           

Cash flows from financing activities:

             

Net increase (decrease) in deposits:

             

Noninterest-bearing

    73,163     2,022  

Interest-bearing

    15,258     (157,913 )

Net decrease in borrowings

    (107,953 )   (1,362 )

Restricted stock surrendered

    (2,058 )   (2,182 )

Tax effect included in stockholders' equity of restricted stock vesting

    1,110     660  

Cash dividends paid

    (11,306 )   (9,106 )
           

Net cash used in financing activities

    (31,786 )   (167,881 )
           

Net decrease in cash and cash equivalents

    194,665     (32,726 )

Cash and cash equivalents, beginning of period

    147,422     164,404  
           

Cash and cash equivalents, end of period

  $ 342,087   $ 131,678  
           
           

Supplemental disclosures of cash flow information:

             

Cash paid for interest

  $ 2,483   $ 4,063  

Cash received for income taxes, net of payments

    (5,693 )   (760 )

Loans transferred to other real estate owned

    13     4,980  

   

See "Notes to Condensed Consolidated Financial Statements."

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PACWEST BANCORP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(Unaudited)

NOTE 1—BASIS OF PRESENTATION

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

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

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

        We have completed 26 acquisitions from May 2000 through March 31, 2014, including the acquisition of First California Financial Group, Inc. ("FCAL") on May 31, 2013. Since 2000, our acquisitions have been accounted for using the acquisition method of accounting and accordingly, the operating results of the acquired entities have been included in the condensed consolidated financial statements from their respective acquisition dates. See Note 3, Acquisitions, for more information about the FCAL acquisition, and Note 18, Subsequent Events, for information regarding the completion of the CapitalSource Inc. ("CapitalSource") merger on April 7, 2014.

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

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

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PACWEST BANCORP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Continued)

(Unaudited)

NOTE 1—BASIS OF PRESENTATION (Continued)

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

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

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

NOTE 2—DISCONTINUED OPERATIONS

        In connection with the acquisition of FCAL on May 31, 2013, we acquired Electronic Payment Services ("EPS"), a division of the Bank that is being discontinued. Accordingly, all income and expense related to EPS have been removed from continuing operations and are included in the condensed consolidated statements of earnings under the caption "Loss from discontinued operations." For the three months ended March 31, 2014, revenues (net interest income plus noninterest income) and pre-tax loss for the EPS division were $3,000 and $1.4 million, respectively. Liabilities of the EPS division, which consist primarily of noninterest-bearing deposits, are included in the condensed consolidated balance sheets under the caption "Discontinued operations." For segment reporting purposes, the EPS division is included in our Banking Segment.

NOTE 3—ACQUISITIONS

        We completed the FCAL acquisition during the time period of January 1, 2013 to March 31, 2014, using the acquisition method of accounting, and accordingly, the operating results of FCAL have been included in our condensed consolidated financial statements from its May 31, 2013 date of acquisition.

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PACWEST BANCORP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Continued)

(Unaudited)

NOTE 3—ACQUISITIONS (Continued)

        The following table presents the balance sheet of FCAL at estimated fair value as of its acquisition date:

 
  May 31, 2013  
 
  (In thousands)
 

Assets Acquired:

       

Cash and due from banks

  $ 6,124  

Interest-earning deposits in financial institutions

    266,889  

Investment securities available-for-sale

    4,444  

FHLB stock

    9,518  

Loans and leases

    1,049,613  

Other real estate owned

    13,772  

Premises and equipment

    15,322  

FDIC loss sharing asset

    17,241  

Cash surrender value of life insurance

    13,265  

Goodwill

    129,070  

Core deposit and customer relationship intangibles

    7,927  

Other assets

    47,671  
       

Total assets acquired

  $ 1,580,856  
       
       

Liabilities Assumed:

       

Noninterest-bearing deposits

  $ 361,166  

Interest-bearing deposits

    739,713  

Subordinated debentures

    24,061  

Discontinued operations

    184,619  

Accrued interest payable and other liabilities

    19,729  
       

Total liabilities assumed

  $ 1,329,288  
       
       

Total consideration paid

  $ 251,568  
       
       

Summary of consideration:

       

PacWest common stock issued

  $ 242,268  

Cancellation of FCAL common stock owned by PacWest (at acquisition date fair value)

    9,300  
       

Total

  $ 251,568  
       
       

        On May 31, 2013, we completed the acquisition of First California Financial Group, Inc., or FCAL. As part of the acquisition, First California Bank or FCB, a wholly-owned subsidiary of FCAL, merged with and into Pacific Western.

        In the FCAL acquisition, each share of FCAL common stock was converted into the right to receive 0.2966 of a share of PacWest common stock. The exchange ratio was calculated based on the volume-weighted average share price of PacWest common stock for the 20 consecutive trading days

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PACWEST BANCORP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Continued)

(Unaudited)

NOTE 3—ACQUISITIONS (Continued)

ending on the second full trading day prior to the receipt of the last of the regulatory approvals required under the merger agreement. PacWest issued an aggregate of approximately 8.4 million shares of PacWest common stock to FCAL stockholders. In addition, 1,094,000 shares of FCAL common stock previously owned by PacWest at a cost of $4.1 million were cancelled in the transaction. These shares were carried in our securities available-for-sale portfolio at their estimated market value with their unrealized gain of $5.2 million included in stockholders' equity at May 31, 2013. Under acquisition accounting, this unrealized gain was recognized in earnings. Based on the closing price of PacWest's common stock on May 31, 2013 of $28.83 per share, the aggregate consideration paid to FCAL common stockholders, including the 1,094,000 shares of FCAL common stock owned by us and cancelled in the merger, was $251.6 million.

        The FCAL acquisition has been accounted for under the acquisition method of accounting. The assets and liabilities, both tangible and intangible, were recorded at their estimated fair values as of the May 31, 2013 acquisition date. The application of the acquisition method of accounting resulted in goodwill of $129.1 million. All of the recognized goodwill is expected to be non-deductible for tax purposes.

        FCB was a full-service commercial bank headquartered in Westlake Village, California. FCB provided a full range of banking services, including revolving lines of credit, term loans, commercial real estate loans, construction loans, consumer loans and home equity loans to individuals, professionals, and small to mid-sized businesses. FCB operated 15 branches throughout Southern California in the Los Angeles, Orange, Riverside, San Bernardino, San Diego, Ventura, and San Luis Obispo Counties. We made this acquisition to expand our presence in Southern California. We completed the conversion and integration of the FCB branches to Pacific Western's operating platform in June 2013 and as a result, we added seven locations to our branch network.

        See Note 18, Subsequent Events, for information regarding the completion of the CapitalSource Inc. merger on April 7, 2014.

NOTE 4—GOODWILL AND OTHER INTANGIBLE ASSETS

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

        Our intangible assets with definite lives are core deposit intangibles, or CDI, and customer relationship intangibles, or CRI. These intangible assets are amortized over their respective estimated useful lives to their estimated residual values and reviewed for impairment at least quarterly. The amortization expense represents the estimated decline in the value of the underlying deposits or loan customers acquired. The weighted average amortization period remaining for our CDI and CRI was 2.6 years. The aggregate CDI and CRI amortization expense is expected to be $5.3 million for 2014. The estimated aggregate amortization expense related to these intangible assets for each of the next five years is $4.8 million for 2015, $3.0 million for 2016, $1.6 million for 2017, $1.3 million for 2018, and $954,000 for 2019.

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PACWEST BANCORP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Continued)

(Unaudited)

NOTE 4—GOODWILL AND OTHER INTANGIBLE ASSETS (Continued)

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

 
  Three Months Ended  
 
  March 31,
2014
  December 31,
2013
  March 31,
2013
 
 
  (In thousands)
 

Gross Amount of CDI and CRI:

                   

Balance, beginning of period

  $ 48,963   $ 48,963   $ 45,412  
               

Balance, end of period

    48,963     48,963     45,412  
               

Accumulated Amortization:

                   

Balance, beginning of period

    (31,715 )   (30,285 )   (30,689 )

Amortization

    (1,364 )   (1,430 )   (1,176 )
               

Balance, end of period

    (33,079 )   (31,715 )   (31,865 )
               

Net CDI and CRI, end of period

  $ 15,884   $ 17,248   $ 13,547  
               
               

NOTE 5—INVESTMENT SECURITIES

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

 
  March 31, 2014  
Security Type
  Amortized
Cost
  Gross
Unrealized
Gains
  Gross
Unrealized
Losses
  Carrying
Value
 
 
  (In thousands)
 

Residential mortgage-backed securities:

                         

Government agency and government-sponsored enterprise pass through securities

  $ 560,004   $ 16,204   $ (1,539 ) $ 574,669  

Government agency and government-sponsored enterprise collateralized mortgage obligations

    272,832     762     (3,957 )   269,637  

Covered private label collateralized mortgage obligations

    29,649     8,032     (87 )   37,594  

Municipal securities

    455,437     5,599     (13,103 )   447,933  

Corporate debt securities

    84,210     308     (307 )   84,211  

Government-sponsored enterprise debt securities

    36,180     74     (200 )   36,054  

Other securities

    27,393     37     (55 )   27,375  
                   

Total securities available-for-sale

  $ 1,465,705   $ 31,016   $ (19,248 ) $ 1,477,473  
                   
                   

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PACWEST BANCORP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Continued)

(Unaudited)

NOTE 5—INVESTMENT SECURITIES (Continued)


 
  December 31, 2013  
Security Type
  Amortized
Cost
  Gross
Unrealized
Gains
  Gross
Unrealized
Losses
  Carrying
Value
 
 
  (In thousands)
 

Residential mortgage-backed securities:

                         

Government agency and government-sponsored enterprise pass through securities

  $ 691,944   $ 18,012   $ (2,768 ) $ 707,188  

Government agency and government-sponsored enterprise collateralized mortgage obligations

    197,069     388     (4,584 )   192,873  

Covered private label collateralized mortgage obligations

    30,502     7,552     (150 )   37,904  

Municipal securities

    459,182     1,749     (24,273 )   436,658  

Corporate debt securities

    84,119     71     (1,483 )   82,707  

Government-sponsored enterprise debt securities

    10,046         (174 )   9,872  

Other securities

    27,654     2     (113 )   27,543  
                   

Total securities available-for-sale

  $ 1,500,516   $ 27,774   $ (33,545 ) $ 1,494,745  
                   
                   

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

        As of March 31, 2014, securities available-for-sale with a carrying value of $291.9 million were pledged as collateral for borrowings, public deposits and other purposes as required by various statutes and agreements.

        During the three months ended March 31, 2014, we sold $137.3 million in government-sponsored enterprise ("GSE") pass through securities for which we realized a gross gain of $4.8 million. We sold these securities to take advantage of favorable market conditions for premium coupon seasoned GSE pass through securities, and redeployed the proceeds into single-maturity investments that are expected to perform better under current market conditions. During the three months ended March 31, 2013, we sold $12.4 million in corporate debt securities for which we realized a $409,000 gross gain. These securities were sold as part of our investment portfolio risk management activities to reduce price volatility and duration.

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PACWEST BANCORP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Continued)

(Unaudited)

NOTE 5—INVESTMENT SECURITIES (Continued)

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

 
  March 31, 2014  
 
  Less Than 12 Months   12 months or Longer   Total  
Security Type
  Carrying
Value
  Gross
Unrealized
Losses
  Carrying
Value
  Gross
Unrealized
Losses
  Carrying
Value
  Gross
Unrealized
Losses
 
 
  (In thousands)
 

Residential mortgage-backed securities:

                                     

Government agency and government-sponsored enterprise pass through securities

  $ 119,687   $ (1,381 ) $ 673   $ (158 ) $ 120,360   $ (1,539 )

Government agency and government-sponsored enterprise collateralized mortgage obligations

    218,387     (3,957 )           218,387     (3,957 )

Covered private label collateralized mortgage obligations

    89     (1 )   1,047     (86 )   1,136     (87 )

Municipal securities

    175,910     (5,984 )   98,152     (7,119 )   274,062     (13,103 )

Corporate debt securities

    37,294     (307 )           37,294     (307 )

Government-sponsored enterprise debt securities

    25,936     (200 )           25,936     (200 )

Other securities

    16,550     (55 )           16,550     (55 )
                           

Total

  $ 593,853   $ (11,885 ) $ 99,872   $ (7,363 ) $ 693,725   $ (19,248 )
                           
                           

 

 
  December 31, 2013  
 
  Less Than 12 Months   12 months or Longer   Total  
Security Type
  Carrying
Value
  Gross
Unrealized
Losses
  Carrying
Value
  Gross
Unrealized
Losses
  Carrying
Value
  Gross
Unrealized
Losses
 
 
  (In thousands)
 

Residential mortgage-backed securities:

                                     

Government agency and government-sponsored enterprise pass through securities

  $ 148,662   $ (2,767 ) $ 32   $ (1 ) $ 148,694   $ (2,768 )

Government agency and government-sponsored enterprise collateralized mortgage obligations

    179,938     (4,486 )   4,383     (98 )   184,321     (4,584 )

Covered private label collateralized mortgage obligations

    1,640     (60 )   617     (90 )   2,257     (150 )

Municipal securities

    337,208     (24,273 )           337,208     (24,273 )

Corporate debt securities

    72,636     (1,483 )           72,636     (1,483 )

Government-sponsored enterprise debt securities

    9,872     (174 )           9,872     (174 )

Other securities

    23,969     (113 )           23,969     (113 )
                           

Total

  $ 773,925   $ (33,356 ) $ 5,032   $ (189 ) $ 778,957   $ (33,545 )
                           
                           

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PACWEST BANCORP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Continued)

(Unaudited)

NOTE 5—INVESTMENT SECURITIES (Continued)

        We reviewed the securities that were in a continuous loss position less than 12 months and longer than 12 months at March 31, 2014, and concluded that their 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 that the securities were temporarily impaired and we did not recognize such impairment in the condensed consolidated statements of earnings. Additionally, we have no plans to sell these securities and believe that it is more likely than not we would not be required to sell these securities before recovery of their amortized cost.

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

 
  March 31, 2014  
Maturity
  Amortized
Cost
  Carrying
Value
 
 
  (In thousands)
 

Due in one year or less

  $ 3,585   $ 3,587  

Due after one year through five years

    24,390     24,614  

Due after five years through ten years

    266,745     265,949  

Due after ten years

    1,170,985     1,183,323  
           

Total securities available-for-sale

  $ 1,465,705   $ 1,477,473  
           
           

        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.

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

 
  Three Months Ended  
Securities Interest by Type:
  March 31,
2014
  December 31,
2013
  March 31,
2013
 
 
  (In thousands)
 

Taxable interest

  $ 6,920   $ 6,564   $ 5,563  

Nontaxable interest

    3,328     3,333     2,425  

Dividend income

    575     525     228  
               

Total interest income on investment securities

  $ 10,823   $ 10,422   $ 8,216  
               
               

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PACWEST BANCORP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Continued)

(Unaudited)

NOTE 5—INVESTMENT SECURITIES (Continued)

        At March 31, 2014, the Company had a $25.0 million investment in Federal Home Loan Bank of San Francisco ("FHLB") stock carried at cost. During the first quarter of 2014, FHLB stock decreased $2.9 million due to redemptions by the FHLB. We evaluated the carrying value of our FHLB stock investment at March 31, 2014, and determined that it was not impaired. Our evaluation considered the long-term nature of the investment, the current financial and liquidity position of the FHLB, repurchase activity of excess stock by the FHLB at its carrying value, the return on the investment, and our intent and ability to hold this investment for a period of time sufficient to recover our recorded investment.

NOTE 6—LOANS AND LEASES

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

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

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PACWEST BANCORP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Continued)

(Unaudited)

NOTE 6—LOANS AND LEASES (Continued)

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

 
  March 31, 2014   December 31, 2013  
 
  Non-PCI
Loans
and Leases
  PCI
Loans
  Total   Non-PCI
Loans
and Leases
  PCI
Loans
  Total  
 
  (In thousands)
 

Non-covered loans and leases

  $ 3,745,849   $ 16,871   $ 3,762,720   $ 3,844,591   $ 20,326   $ 3,864,917  

Covered loans

    82,720     315,645     398,365     85,948     362,470     448,418  
                           

Total gross loans and leases

    3,828,569     332,516     4,161,085     3,930,539     382,796     4,313,335  

Unearned income

    (18 )       (18 )   (983 )       (983 )
                           

Total loans and leases, net of unearned income

    3,828,551     332,516     4,161,067     3,929,556     382,796     4,312,352  
                           

Allowance for loan and lease losses:

                                     

Non-covered loans and leases

    (59,980 )   (270 )   (60,250 )   (60,241 )       (60,241 )

Covered loans

        (20,930 )   (20,930 )       (21,793 )   (21,793 )
                           

Total allowance for loan and lease losses

    (59,980 )   (21,200 )   (81,180 )   (60,241 )   (21,793 )   (82,034 )
                           

Total net loans and leases

  $ 3,768,571   $ 311,316   $ 4,079,887   $ 3,869,315   $ 361,003   $ 4,230,318  
                           
                           

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PACWEST BANCORP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Continued)

(Unaudited)

NOTE 6—LOANS AND LEASES (Continued)

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

 
  March 31, 2014   December 31, 2013  
 
  Non-PCI
Loans
and Leases
  PCI
Loans
  Total   Non-PCI
Loans
and Leases
  PCI
Loans
  Total  
 
  (In thousands)
 

Non-Covered Loans and Leases

                                     

Real estate mortgage

  $ 2,257,853   $ 15,306   $ 2,273,159   $ 2,359,125   $ 18,900   $ 2,378,025  

Real estate construction

    231,351     1,531     232,882     200,332     1,391     201,723  

Commercial

    942,687         942,687     963,152         963,152  

Leases

    249,736         249,736     269,769         269,769  

Consumer

    64,222     34     64,256     52,213     35     52,248  
                           

Total gross non-covered loans and leases

  $ 3,745,849   $ 16,871   $ 3,762,720   $ 3,844,591   $ 20,326   $ 3,864,917  
                           
                           

Covered Loans

                                     

Real estate mortgage

  $ 62,719   $ 306,226   $ 368,945   $ 65,739   $ 352,234   $ 417,973  

Real estate construction

    8,722     8,315     17,037     8,758     9,036     17,794  

Commercial

    8,719     873     9,592     8,855     974     9,829  

Consumer

    2,560     231     2,791     2,596     226     2,822  
                           

Total gross covered loans

  $ 82,720   $ 315,645   $ 398,365   $ 85,948   $ 362,470   $ 448,418  
                           
                           

Total Loans and Leases

                                     

Real estate mortgage

  $ 2,320,572   $ 321,532   $ 2,642,104   $ 2,424,864   $ 371,134   $ 2,795,998  

Real estate construction

    240,073     9,846     249,919     209,090     10,427     219,517  

Commercial

    951,406     873     952,279     972,007     974     972,981  

Leases

    249,736         249,736     269,769         269,769  

Consumer

    66,782     265     67,047     54,809     261     55,070  
                           

Total gross loans and leases

  $ 3,828,569   $ 332,516   $ 4,161,085   $ 3,930,539   $ 382,796   $ 4,313,335  
                           
                           

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PACWEST BANCORP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Continued)

(Unaudited)

NOTE 6—LOANS AND LEASES (Continued)

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

 
  Three Months Ended March 31, 2014  
 
  Real
Estate
Mortgage
  Real
Estate
Construction
  Commercial   Leases   Consumer   Total
Non-PCI
  Total
PCI
  Total  
 
  (In thousands)
 

Allowance for Loan and Lease Losses:

                                                 

Balance, beginning of period

  $ 26,078   $ 4,298   $ 23,694   $ 3,227   $ 2,944   $ 60,241   $ 21,793   $ 82,034  

Charge-offs

    (94 )       (1,069 )   (372 )   (15 )   (1,550 )       (1,550 )

Recoveries

    261     24     377         27     689     51     740  

Provision (negative provision)

    (1,893 )   (219 )   1,332     551     829     600     (644 )   (44 )
                                   

Balance, end of period

  $ 24,352   $ 4,103   $ 24,334   $ 3,406   $ 3,785   $ 59,980   $ 21,200   $ 81,180  
                                   
                                   

Amount of the allowance applicable to loans and leases:

                                                 

Individually evaluated for impairment

  $ 2,690   $ 251   $ 5,337   $   $ 387   $ 8,665              
                                       
                                       

Collectively evaluated for impairment

  $ 21,662   $ 3,852   $ 18,997   $ 3,406   $ 3,398   $ 51,315              
                                       
                                       

Acquired with deteriorated credit quality

                                      $ 21,200        
                                                 
                                                 

Loans and Leases:

                                                 

Ending balance

  $ 2,320,572   $ 240,073   $ 951,406   $ 249,736   $ 66,782   $ 3,828,569   $ 332,516   $ 4,161,085  
                                   
                                   

The ending balance of the loan and lease portfolio is composed of loans and leases:

                                                 

Individually evaluated for impairment

  $ 58,532   $ 12,926   $ 17,572   $ 220   $ 3,972   $ 93,222              
                                       
                                       

Collectively evaluated for impairment

  $ 2,262,040   $ 227,147   $ 933,834   $ 249,516   $ 62,810   $ 3,735,347              
                                       
                                       

Acquired with deteriorated credit quality

                                      $ 332,516        
                                                 
                                                 

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PACWEST BANCORP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Continued)

(Unaudited)

NOTE 6—LOANS AND LEASES (Continued)


 
  Three Months Ended March 31, 2013  
 
  Real
Estate
Mortgage
  Real
Estate
Construction
  Commercial   Leases   Consumer   Total
Non-PCI
  Total
PCI
  Total  
 
  (In thousands)
 

Allowance for Loan and Lease Losses:

                                                 

Balance, beginning of period

  $ 38,700   $ 3,221   $ 20,759   $ 1,493   $ 1,726   $ 65,899   $ 26,069   $ 91,968  

Charge-offs

    (322 )       (708 )   (114 )   (9 )   (1,153 )       (1,153 )

Recoveries

    177     323     407         23     930     97     1,027  

Provision (negative provision)

    (1,290 )   (244 )   693     627     (246 )   (460 )   3,137     2,677  
                                   

Balance, end of period

  $ 37,265   $ 3,300   $ 21,151   $ 2,006   $ 1,494   $ 65,216   $ 29,303   $ 94,519  
                                   
                                   

Amount of the allowance applicable to loans and leases:

                                                 

Individually evaluated for impairment

  $ 7,805   $ 122   $ 4,467   $   $ 273   $ 12,667              
                                       
                                       

Collectively evaluated for impairment

  $ 29,460   $ 3,178   $ 16,684   $ 2,006   $ 1,221   $ 52,549              
                                       
                                       

Acquired with deteriorated credit quality

                                      $ 29,303        
                                                 
                                                 

Loans and Leases:

                                                 

Ending balance

  $ 1,818,285   $ 126,707   $ 814,292   $ 204,766   $ 19,148   $ 2,983,198   $ 487,489   $ 3,470,687  
                                   
                                   

The ending balance of the loan and lease portfolio is composed of loans and leases:

                                                 

Individually evaluated for impairment

  $ 95,712   $ 13,688   $ 13,355   $ 244   $ 629   $ 123,628              
                                       
                                       

Collectively evaluated for impairment

  $ 1,722,573   $ 113,019   $ 800,937   $ 204,522   $ 18,519   $ 2,859,570              
                                       
                                       

Acquired with deteriorated credit quality

                                      $ 487,489        
                                                 
                                                 

        The following table presents the composition of Non-PCI loans and leases by portfolio segment as of the dates indicated:

 
  March 31, 2014   December 31, 2013  
 
  Amount   % of
Total
  Amount   % of
Total
 
 
  (Dollars in thousands)
 

Real estate mortgage

  $ 2,320,572     60 % $ 2,424,864     62 %

Real estate construction

    240,073     6     209,090     5  

Commercial

    951,406     25     972,007     25  

Leases

    249,736     7     269,769     7  

Consumer

    66,782     2     54,809     1  
                   

Total gross Non-PCI loans and leases

    3,828,569     100 %   3,930,539     100 %
                       
                       

Less:

                         

Unearned income

    (18 )         (983 )      

Allowance for loan and lease losses

    (59,980 )         (60,241 )      
                       

Total net Non-PCI loans and leases

  $ 3,768,571         $ 3,869,315        
                       
                       

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PACWEST BANCORP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Continued)

(Unaudited)

NOTE 6—LOANS AND LEASES (Continued)

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

 
  March 31, 2014   December 31, 2013  
 
  Nonclassified   Classified   Total   Nonclassified   Classified   Total  
 
  (In thousands)
 

Real estate mortgage:

                                     

Hospitality

  $ 159,966   $ 10,907   $ 170,873   $ 168,216   $ 12,337   $ 180,553  

SBA 504

    37,143     5,175     42,318     39,869     5,297     45,166  

Other

    2,043,877     63,504     2,107,381     2,134,866     64,279     2,199,145  
                           

Total real estate mortgage

    2,240,986     79,586     2,320,572     2,342,951     81,913     2,424,864  
                           

Real estate construction:

                                     

Residential

    59,795     747     60,542     58,131     750     58,881  

Commercial

    173,294     6,237     179,531     143,918     6,291     150,209  
                           

Total real estate construction

    233,089     6,984     240,073     202,049     7,041     209,090  
                           

Commercial:

                                     

Collateralized

    535,547     44,437     579,984     568,348     18,838     587,186  

Unsecured

    141,532     1,977     143,509     151,896     1,856     153,752  

Asset-based

    196,802     3,772     200,574     195,569     6,859     202,428  

SBA 7(a)

    21,729     5,610     27,339     22,880     5,761     28,641  
                           

Total commercial

    895,610     55,796     951,406     938,693     33,314     972,007  
                           

Leases

    245,936     3,800     249,736     269,137     632     269,769  

Consumer

    62,431     4,351     66,782     50,398     4,411     54,809  
                           

Total Non-PCI loans and leases

  $ 3,678,052   $ 150,517   $ 3,828,569   $ 3,803,228   $ 127,311   $ 3,930,539  
                           
                           

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

21


Table of Contents


PACWEST BANCORP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Continued)

(Unaudited)

NOTE 6—LOANS AND LEASES (Continued)

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

 
  March 31, 2014  
 
  30 - 59 Days
Past Due
  60 - 89 Days
Past Due
  Greater
Than
90 Days
Past Due
  Total
Past Due
  Current   Total  
 
  (In thousands)
 

Real estate mortgage:

                                     

Hospitality

  $   $   $   $   $ 170,873   $ 170,873  

SBA 504

    393     1,092         1,485     40,833     42,318  

Other

    5,065     379     12,941     18,385     2,088,996     2,107,381  
                           

Total real estate mortgage

    5,458     1,471     12,941     19,870     2,300,702     2,320,572  
                           

Real estate construction:

                                     

Residential

                    60,542     60,542  

Commercial

            2,013     2,013     177,518     179,531  
                           

Total real estate construction

            2,013     2,013     238,060     240,073  
                           

Commercial:

                                     

Collateralized

    140     382     365     887     579,097     579,984  

Unsecured

        1     64     65     143,444     143,509  

Asset-based

                    200,574     200,574  

SBA 7(a)

    1,471     21     407     1,899     25,440     27,339  
                           

Total commercial

    1,611     404     836     2,851     948,555     951,406  
                           

Leases

    4,075     220         4,295     245,441     249,736  

Consumer

    280     32     3,180     3,492     63,290     66,782  
                           

Total Non-PCI loans and leases

  $ 11,424   $ 2,127   $ 18,970   $ 32,521   $ 3,796,048   $ 3,828,569  
                           
                           

22


Table of Contents


PACWEST BANCORP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Continued)

(Unaudited)

NOTE 6—LOANS AND LEASES (Continued)


 
  December 31, 2013  
 
  30 - 59 Days
Past Due
  60 - 89 Days
Past Due
  Greater
Than
90 Days
Past Due
  Total
Past Due
  Current   Total  
 
  (In thousands)
 

Real estate mortgage:

                                     

Hospitality

  $   $   $   $   $ 180,553   $ 180,553  

SBA 504

    2,564             2,564     42,602     45,166  

Other

    12,466     560     2,406     15,432     2,183,713     2,199,145  
                           

Total real estate mortgage

    15,030     560     2,406     17,996     2,406,868     2,424,864  
                           

Real estate construction:

                                     

Residential

                    58,881     58,881  

Commercial

            2,013     2,013     148,196     150,209