California business banking to benefit from Banc of California, PacWest Bancorp merger
Banc of California, Inc. and PacWest Bancorp have entered into a definitive agreement to merge in an all-stock deal. Both boards unanimously approved the agreement, which will see PacWest Bancorp merge into Banc of California, with the resulting combined company operating under the Banc of California name and brand.
PacWest Bancorp stockholders will receive 0.6569 shares of Banc of California common stock for each PacWest Bancorp common stock. The merger will forge a premier business banking franchise in California with increased scale and expanded product offerings, allowing it to capitalize on market opportunities.
Additionally, Banc of California revealed its investment agreements with affiliates of Warburg Pincus LLC and Centerbridge Partners, L.P. and its affiliates, who will invest $400 million in newly issued equity securities simultaneously with the merger’s closing. The proceeds are set to reposition the combined company’s balance sheet and generate substantial savings. The restructuring is anticipated to raise the net interest margin by over 170 basis points.
The post-merger and asset sales combined company is projected to hold around $36.1 billion in assets, $25.3 billion in total loans, $30.5 billion in total deposits and more than 70 branches in California. The board of the combined company will comprise 12 directors, including eight from the existing Banc of California board, three from the existing PacWest board and one from the Warburg Investors.
Jared Wolff, current President and CEO of Banc of California, will retain his positions in the combined company. John Eggemeyer, PacWest Bancorp’s independent Lead Director, will become Chairman of the board following the merger.
Wolff commented, “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.”
The merger is expected to conclude in late 2023 or early 2024, subject to regulatory and shareholder approvals and the concurrent equity capital raise.