First California Financial Group Inc. is being acquired by PacWest Bancorp in a deal valued at $231 million. The deal would make the combined financial institutions the eighth largest publicly-held bank headquartered in California.
The acquisition comes six months after the Los Angeles parent of Pacific Western Bank made its first attempt to buy the parent of First California Bank, headquartered in Westlake Village. At the time, First California executives said the offer was rejected because PacWest failed to provide satisfactory answers about the terms of the deal.
PacWest will now pay $8 a share for First California, payable in PacWest stock.
First California Bank is a 15-branch institution serving southern California from San Luis Obispo to San Diego counties. The institution has $2 billion in total assets. PacWest has 66 branches serving San Francisco to San Bernardino counties. The bank has total assets of $5.5 billion.
Both banks have branches in Glendale and Camarillo, which could result in consolidation after the deal closes, expected in the first quarter of next year. The combined company will have assets of more than $7.5 million and 81branches.
Merging First California into PacWest will increase shareholder value, said First California Chief Executive C. G. Kum.
“The combined bank will continue to offer the same dedication and high quality service both institutions are known for, while providing customers with an even greater array of products and higher lending limits,” said Kum, in a prepared statement.
PacWest showed interest in First California as early as late 2011 when the First California stock price was less than $4 per share. Large institutional investors became critical of the bank’s financial performance and encouraged the bank’s board to look at strategic alternatives, including a sale.
In August, First California announced it was hiring financial and legal advisors to analyze and assess the bank’s business plan and look into a possible merger or business combination.
First California shares have steadily improved since then, closing at $7.60 on Wednesday before the deal was announced. Shares gained 3 cents Thursday to close at $7.63 on the Nasdaq.
Shares of PacWest gained 15 cents, or less than a percent, to close Thursday at $23.22 on the Nasdaq.