PacWest Bancorp (PACW) in Los Angeles will take a $12 million after-tax charge in the fourth quarter because of stock awards connected to its pending acquisition of CapitalSource (CSE).

The $6.6 billion-asset PacWest vested restricted stock awards for certain executive officers and paid them a portion of incentive compensation set for distribution next year, according to a regulatory filing. The company would have otherwise had to make $21 million in change-in-control payments tied to its CapitalSource deal.

"The $12 million of restricted stock expense and the $21 million of tax and compensation expense were included in the original $80 million in after-tax deal costs management estimated in connection with the CapitalSource merger," Aaron Andrew Deer, an analyst at Sandler O'Neill, wrote in a Tuesday note to clients. "So by taking these strategic tax planning actions, the company significantly reduces its merger costs."

The accelerated vesting and payments were limited to executives whose potential tax reimbursements and compensation expense deductions could have been affected by the merger, PacWest's filing said. PacWest executives who received payments include Chief Executive Matthew Wagner, Chief Financial Officer Victor Santoro, General Counsel Jared Wolff, director Daniel Platt and two unnamed officials.

PacWest agreed in July to pay $2.3 billion in cash and stock for the $8.8 billion-asset CapitalSource in Los Angeles. Sandler O'Neill's Deer expects the deal to be at least 15% accretive to the company's longer-term earnings.

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