Business Combinations

6 Months Ended

Jun. 30, 2013

Business Combinations [Abstract]

Business Combinations

Note 2—Business Combinations

        On December 1, 2012, the Company completed its acquisition of Pacific Capital Bancorp (PCBC), a bank holding company headquartered in Santa Barbara, California, for $1.5 billion in cash.

        The assets acquired and liabilities assumed from PCBC were recorded at their estimated fair values on the acquisition date. These fair value estimates are considered provisional, as additional analysis will be performed on certain assets and liabilities in which fair values were primarily determined through the use of inputs that were not observable from market-based information. During the first six months of 2013, management reviewed and, where necessary, adjusted the acquisition date fair values for circumstances that existed as of the acquisition date. Management may further adjust the provisional fair values for a period of up to one year from the date of acquisition. The assets and liabilities that continue to be provisional include loans, intangible assets, OREO, and the residual effects the adjustments would have on goodwill.

        The following table presents the net assets acquired from PCBC and the estimated purchase accounting adjustments as of the acquisition date. During the first six months of 2013, measurement period adjustments were applied to the acquisition date fair values, which increased goodwill by $17 million.

(Dollars in millions)	December 1, 2012
Purchase price	$	1,516
Net assets acquired		859
Purchase accounting adjustments:
Securities available for sale		8
Loans held for investment		141
Intangible assets		18
Other assets		128
Deposits		(12	)
Other short-term borrowings		(36	)
Long-term debt		(14	)
Other liabilities		11
Total purchase accounting adjustments		244
Fair value of net assets acquired		1,103
Goodwill	$	413

        For further information related to the PCBC acquisition, see Note 2 to the consolidated financial statements in the Company's 2012 Form 10-K. For further information related to goodwill, see Note 5 to the consolidated financial statements in the Company's 2012 Form 10-K.

• Acquisition of PB Capital

        During the second quarter of 2013, the Company acquired PB Capital Corporation's (PB Capital) institutional commercial real estate (CRE) lending division for $3.7 billion in cash. The acquisition will expand the Company's CRE presence in the U.S., and provide geographic and asset class diversification. Excluding the effects of purchase accounting adjustments, the Company acquired approximately $3.5 billion in loans. The assets acquired were recorded at acquisition date fair values of $3.4 billion, resulting in goodwill as of the acquisition date of $227 million, which was allocated to the Company's Corporate Banking reportable business segment. These fair value estimates are considered provisional and are subject to change for up to one year after the closing date of the acquisition as additional information relative to closing date fair values becomes available.