Former Affinity Bank Branches Open for Business as Pacific Western Bank.

SAN DIEGO, Aug. 31 /PRNewswire-FirstCall/ -- PacWest Bancorp today announced its wholly-owned subsidiary Pacific Western Bank has opened the 10 former Affinity Bank branches as Pacific Western Bank branches.

On August 28, 2009, Pacific Western Bank ("Pacific Western"), the wholly-owned banking subsidiary of PacWest Bancorp, purchased substantially all the assets and assumed substantially all the liabilities of Affinity Bank ("Affinity") from the Federal Deposit Insurance Corporation ("FDIC"), as Receiver of Affinity. Pacific Western paid no cash or other consideration. As part of this transaction, Pacific Western and the FDIC entered into a loss sharing agreement covering future losses incurred on loans, foreclosed loan collateral, and certain investment securities. Under the terms of the loss sharing agreement, the FDIC will absorb 80 percent of losses and share in 80 percent of loss recoveries on the first $234 million of losses, and absorb 95 percent of losses and share in 95 percent of loss recoveries on losses exceeding $234 million.

Based upon a preliminary closing with the FDIC as of August 28, 2009, Pacific Western (a) acquired an estimated $818 million in loans, $46 million in foreclosed assets, $185 million in investment securities and $166 million in cash and other assets and (b) assumed an estimated $870 million in deposits, $288 million in borrowings, and $3 million in other liabilities. All of these amounts are at Affinity's book value and do not reflect fair value. In addition, the FDIC will wire to Pacific Western cash totaling approximately $79 million. The foregoing estimates are subject to adjustment based on final settlement with the FDIC.

Pacific Western will account for the Affinity acquisition under the purchase method of accounting in accordance with Statement of Financial Accounting Standards No. 141 (revised 2007), Business Combinations ("FAS 141R"). Under FAS141R, the assets acquired and liabilities assumed will be recorded at their estimated fair values as of the August 28, 2009 acquisition date. Based upon currently estimated fair values of the assets acquired and liabilities assumed, Pacific Western expects to record a net after-tax gain of approximately $45 million. Such estimated gain represents the amount by which the estimated fair value of the assets acquired exceeds the estimated fair value of the liabilities assumed. The fair value estimates and resultant net gain are preliminary and subject not only to the final fair value estimates but also to adjustment for up to one year after the acquisition closing date based on information that becomes available regarding the closing date fair values.

On a pro forma basis for the transaction using the preliminary settlement amounts, Pacific Western would have had approximately $5.7 billion in assets and $4.2 billion in deposits at June 30, 2009, through 66 branches across Southern California and 3 branches in Northern California, including the former Affinity Bank branches.

Former customers of Affinity Bank and Pacific Western Bank customers should continue to use their existing branches until Pacific Western can fully integrate the systems of Affinity Bank with the Pacific Western Bank network. After this transition period, former Affinity Bank customers will gain access to Pacific Western's 59 existing locations throughout Los Angeles, Orange, Riverside, San Bernardino and San Diego Counties.

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