Santa Ana-based Banc of California Inc., the second largest bank headquartered in Orange County (NYSE: BANC), is purchasing Beverly Hills-based PacWest Bancorp (Nasdaq: PACW) in an all-stock transaction.
The combined holding company and bank will operate under the Banc of California name and brand following the closing of the transaction, which is expected later this year or early next year. The bank will be headquartered in Los Angeles.
Shares of Banc of California rose 11% to $14.62 and an $842 million market cap. Shares of PacWest fell 27% to $7.69 and a $925 million market cap.
Banc of California also announced today that it has entered into investment agreements with affiliates of funds managed by Warburg Pincus LLC and Centerbridge Partners L.P., which will invest an aggregate of $400 million for newly issued equity securities. The proceeds are to reposition the combined company’s balance sheet and generate material savings.
Following closing and the asset sales, the combined company is expected to have approximately $36.1 billion in assets, $25.3 billion in total loans, $30.5 billion in total deposits and more than 70 branches in California.
Banc of California Chief Executive and President Jared Wolff will assume the same roles at the combined company. John Eggemeyer, who currently serves as the independent Lead Director on the board of PacWest, will become the chairman of the board of the combined company.
“This transformational merger will create a robust, well-capitalized and highly liquid institution poised to deliver exceptional service to even more California businesses and communities,” Wolff said in a statement. “Out of the gate, the combined company will have the strength and market position to support the banking needs of small and medium-size businesses in California and to capitalize on the opportunities created for stronger financial institutions in the wake of the recent banking industry turmoil.”
For more information, see the July 31st issue of the Orange County Business Journal.