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Business Combinations | 12 Months Ended
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Dec. 31, 2013
Business Combinations [Abstract] |
Business Combinations |
. | BUSINESS COMBINATIONS
Acquisition of Foster On August 13, 2013, the Company completed the acquisition of Foster, the holding company of Foster Bank. The Company acquired Foster in order to expand its market in Illinois and into Virginia. Foster's primary subsidiary, Foster Bank, operated eight branches in Illinois and one branch in Virginia. Under the terms of the acquisition agreement, Foster shareholders were able to elect to receive a cash price of $34.6703 per share or, for shareholders who qualified as accredited investors, 2.62771 shares of Company common stock for each share of Foster common stock. As of December 31, 2013, the Company issued 180,300 shares of Company common stock in exchange for 68,619 shares of Foster common stock, paid $1.9 million for 58,906 shares of Foster common stock and there were 4,475 shares of Foster common stock that had not been redeemed. At December 31, 2013, the accrued liability for the unredeemed Foster common shares was $276 thousand. The consideration paid, the assets acquired, and the liabilities assumed are summarized in the following table:
| (In thousands) |
Consideration paid: |
| BBCN common stock issued in exchange for Foster common stock | $ | 2,567 |
| Cash paid for the redemption of Foster common stock | 1,922 |
| Liability for unredeemed Foster common stock | 276 |
| Total consideration paid | $ | 4,765 |
Assets Acquired: |
| Cash and cash equivalents | $ | 42,883 |
| Investment securities available for sale | 4,844 |
| Loans, net | 255,297 |
| FRB and FHLB stock | 1,714 |
| OREO | 14,251 |
| Premises and equipment | 4,733 |
| Core deposit intangibles | 2,763 |
| Deferred tax assets, net | 21,211 |
| Other assets | 2,353 |
Liabilities Assumed: |
| Deposits | (321,596 | )
| Borrowings | (18,045 | )
| Subordinated debentures | (15,309 | )
| Other liabilities | (5,859 | )
Total identifiable net assets | $ | (10,760 | )
Excess of consideration paid over fair value of net assets acquired (goodwill) | $ | 15,525 |
The assets and liabilities of Foster were recorded on the consolidated balance sheet at estimated fair value on the acquisition date. The purchase price may change as additional information becomes available and when unredeemed Foster shares are redeemed. The fair values of the net deferred tax assets, loans, and certain liabilities assumed from Foster were provisional and adjustments to the provisional amounts may occur during the measurement period as the Company obtains additional information about the facts and circumstances that existed as of the acquisition date. The $15.5 million of goodwill recognized in the Foster acquisition represent the future economic benefit arising from the acquisition including the creation of a platform that can support future operations and strengthening the Company's existing presence in the Chicago metropolitan market and expansion into the Virginia market. Goodwill is not amortized for book purposes and is not deductible for tax purposes. Acquisition of PIB On February 15, 2013, the Company completed the acquisition of PIB, a Seattle based company, pursuant to an Agreement and Plan of Merger, dated October 22, 2012. The Company acquired PIB in order to increase the Company's presence in terms of branch offices and deposit market share in the Seattle market. PIB's primary subsidiary, Pacific International Bank, a Washington state-chartered bank, operated four bank branches in the Seattle metropolitan area. In connection with the acquisition, the consideration paid, the assets acquired, and the liabilities assumed are summarized in the following table:
| (In thousands) |
Consideration paid: |
| BBCN common stock issued | $ | 8,437 |
| Cash in lieu of fractional shares paid to PIB stockholders | 1 |
| Redemption of Preferred Stock | 7,475 |
| Total consideration paid | $ | 15,913 |
Assets Acquired: |
| Cash and cash equivalents | $ | 25,968 |
| Investment securities available for sale | 7,810 |
| Loans, net | 131,589 |
| FRB and FHLB stock | 1,829 |
| OREO | 3,418 |
| Deferred tax assets, net | 9,886 |
| Core deposit intangibles | 604 |
| Other assets | 2,514 |
Liabilities Assumed: |
| Deposits | (143,665 | )
| Borrowings | (14,698 | )
| Subordinated debentures | (4,108 | )
| Other liabilities | (5,116 | )
Total identifiable net assets | $ | 16,031 |
Bargain purchase gain | $ | 118 |
The bargain purchase gain from the PIB acquisition was recorded in other income in the Consolidated Statements of Income. Acquired Loans The Company estimated the fair value for most loans acquired by utilizing a methodology wherein loans with comparable characteristics were aggregated by type of collateral, remaining maturity and repricing terms. Cash flows for each pool were determined by estimating future credit losses and prepayment rates. Projected monthly cash flows were then discounted using a risk-adjusted market rate for similar loans to determine the fair value of each pool. To estimate the fair value of the remaining loans, management analyzed the value of the underlying collateral of the loans, assuming the fair values of the loans were derived from the eventual sale of the collateral. The value of the collateral was based on recently completed appraisals adjusted to the valuation date based on recognized industry indices. The Company discounted those values using market derived rates of return, with consideration given to the period of time and costs associated with the foreclosure and disposition of the collateral. There was no carryover of the allowance for loan losses associated with the loans the Company acquired as the loans were initially recorded at fair value. The following table presents loans acquired with deteriorated credit quality as of the date of acquisition:
| Foster |  | PIB
| (In thousands)
Contractually required principal and interest at acquisition | $ | 150,430 |  |  | $ | 54,462 |
Contractual cash flows not expected to be collected (nonaccretable discount) | 37,447 |  |  | 9,687 |
Expected cash flows at acquisition | 112,983 |  |  | 44,775 |
Interest component of expected cash flows (accretable discount) | 14,928 |  |  | 4,945 |
Fair value of acquired impaired loans | $ | 98,055 |  |  | $ | 39,830 |
The outstanding principal balances and the related carrying amounts of the acquired loans included in the statement of financial condition are $279.7 million and $235.1 million, respectively for Foster and $126.0 million and $107.6 million, respectively for PIB, as of December 31, 2013. Pro Forma Information The operating results of Foster and PIB from the dates of acquisitions through December 31, 2013 are included in the Condensed Consolidated Statement of Income for 2013 and are not material to the total consolidated operating results for the year ended December 31, 2013. The following unaudited combined pro forma information presents the operating results for the year ended December 31, 2013 and 2012, as if the Foster and PIB acquisitions had occurred on January 1, 2012:
| 2013 |  | 2012
| (In thousands, except share data)
Net Interest income | $ | 264,040 |  |  | $ | 264,669 |
Net income | $ | 84,304 |  |  | $ | 74,949 |
Pro forma earnings per share: |  |  |
Basic | $ | 1.07 |  |  | $ | 0.88 |
Diluted | $ | 1.06 |  |  | $ | 0.88 |
The above pro forma results are presented for illustrative purposes and are not intended to represent or be indicative of the actual results of operations of the merged companies that would have been achieved had the acquisition occurred at January 1, 2012, nor are they intended to represent or be indicative of future results of operations. The pro forma results do not include expected operating cost savings as a result of the acquisitions. These pro forma results require significant estimates and judgments particularly as it relates to valuation and accretion of income associated with acquired loans. Acquisition-Related Expenses The Company incurred acquisition-related expenses associated with the Foster and PIB acquisitions which were reflected on the Company's income statement. During the year ended December 31, 2013, the Company incurred $4.0 million and $1.1 million in expenses related to the Foster and PIB acquisitions, respectively. These expenses are comprised primarily of salaries and benefits, occupancy expenses, professional services, and other noninterest expense

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- Definition The entire disclosure for a business combination (or series of individually immaterial business combinations) completed during the period, including background, timing, and recognized assets and liabilities. The disclosure may include leverage buyout transactions (as applicable). + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 30 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=7488404&loc=d3e6996-128479 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 30 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=7488404&loc=d3e7000-128479 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 20 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6910749&loc=d3e4922-128472 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 20 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6910749&loc=d3e4926-128472 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 20 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=6910749&loc=d3e4934-128472 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=25497992&loc=d3e1383-128463 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=25497992&loc=d3e1392-128463 Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=25497992&loc=d3e1486-128463 Reference 9: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 30 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=7488404&loc=d3e6927-128479 Reference 10: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 5 -URI http://asc.fasb.org/extlink&oid=25497992&loc=d3e1497-128463 Reference 11: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=25497992&loc=d3e1490-128463 Reference 12: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 30 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=7488404&loc=d3e7008-128479 Reference 13: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 20 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6910749&loc=d3e4845-128472 Reference 14: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 6 -URI http://asc.fasb.org/extlink&oid=25497992&loc=d3e1500-128463 Reference 15: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 7 -URI http://asc.fasb.org/extlink&oid=25497992&loc=d3e1524-128463 + Details
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