Combined bank emerges as the third-largest
bank headquartered in California and one of the nation’s premier
relationship-focused business banks
Banc of California, Inc. (“Banc of California”) (NYSE: BANC)
today announced the completion of its transformational merger with
PacWest Bancorp (“PacWest”) (Nasdaq: PACW), pursuant to which
PacWest has merged into Banc of California, and as of December 1,
2023, Banc of California, N.A. will have merged into Pacific
Western Bank (the “combined bank”). The combined bank will operate
under the Banc of California name and brand. Concurrent with the
completion of the merger, Banc of California also completed its
$400 million equity raise from affiliates of funds managed by
Warburg Pincus LLC and certain investment vehicles sponsored,
managed or advised by Centerbridge Partners, L.P. and its
affiliates.
“Today begins a new chapter for Banc of California,” said Jared
Wolff, CEO and President of Banc of California. “By combining the
best of two well-respected banks, we have created one of the
nation’s premier, relationship-focused business banks. We look
forward to sharing our expanded capabilities with clients and all
the communities we serve. California has experienced a void of
business banks that we intend to fill, and we look forward to
helping our clients grow and delivering for our clients,
communities and shareholders.”
In connection with the merger, Banc of California, N.A. and
Pacific Western Bank have sold approximately $1.9 billion in assets
as part of the previously disclosed balance sheet repositioning
strategy, which strategy includes additional asset sales expected
to be completed through the end of the first quarter of 2024. As of
the merger closing date, Pacific Western Bank has sold
approximately $1.5 billion of its securities portfolio, which
included agency commercial mortgage-backed securities, agency
collateralized mortgage obligations (“CMO”), treasury bonds,
municipal bonds and corporate bonds. As of the merger closing date,
Banc of California, N.A. has sold approximately $447.4 million of
its securities portfolio, which included agency mortgage-backed
securities, CMOs and municipal bonds. In addition, the previously
announced forward sale of Banc of California’s $1.8 billion
single-family residential mortgage portfolio (“SFR Portfolio”) is
expected to close on or about December 1, 2023. The proceeds from
the securities sales and the SFR Portfolio sale, as well as
proceeds from additional balance sheet repositioning sales to come,
are expected to be utilized primarily for the repayment of the
combined bank’s wholesale borrowings and higher cost funding.
The combined bank is headquartered in Los Angeles and operates
more than 70 branches in California, as well as branches in North
Carolina and Colorado. The combined bank has more than 2,200 team
members focused on serving small- to medium-sized businesses
through tailored solutions and industry-leading treasury management
services. The full-service business bank offers solutions in all
areas of commercial and real estate lending, including banking
services for healthcare and education. The combined bank provides
additional expertise in specialty national business lines,
including venture banking, HOA services, small business lending,
warehouse lending, and entertainment and media, along with payment
processing solutions through its subsidiary, Deepstack
Technologies.
About Banc of California,
Inc.
Banc of California, Inc. (NYSE: BANC) is a bank holding company
headquartered in Los Angeles with one wholly-owned banking
subsidiary, Banc of California (the “bank”). Banc of California is
one of the nation’s premier relationship-based business banks
focused on providing banking and treasury management services to
small-, middle-market, and venture-backed businesses. Banc of
California offers a broad range of loan and deposit products and
services through more than 70 full-service branches throughout
California and in Denver, Colorado, and Durham, North Carolina, as
well as full-stack payment processing solutions through its
subsidiary, Deepstack Technologies. The bank is committed to its
local communities by supporting organizations that provide
financial literacy and job training, small business support,
affordable housing, and more. For more information, please visit us
at www.bancofcal.com.
Cautionary Statements Regarding
Forward-Looking Information
This press release contains certain forward-looking statements
within the meaning of the federal securities laws. Forward-looking
statements may be identified by the use of words such as
“estimate,” “plan,” “project,” “forecast,” “intend,” “expect,”
“anticipate,” “believe,” “seek,” “strategy,” “future,”
“opportunity,” “may,” “could,” “target,” “should,” “will,” “would,”
“will be,” “will continue,” “will likely result,” or similar
expressions that predict or indicate future events or trends or
that are not statements of historical matters, although not all
forward-looking statements contain such identifying words. These
forward-looking statements include, but are not limited to,
statements regarding the transaction between Banc of California and
PacWest and the investment by affiliates of funds managed by
Warburg Pincus LLC and certain investment vehicles sponsored,
managed or advised by Centerbridge Partners, L.P. and its
affiliates, including statements as to the expected effects of the
transaction. These statements are based on various assumptions,
whether or not identified in this press release, and on the current
expectations of Banc of California’s management and are not
predictions of actual performance, and, as a result, are subject to
risks and uncertainties. These forward-looking statements are
provided for illustrative purposes only and are not intended to
serve as and must not be relied on by any investor as, a guarantee,
an assurance, a prediction or a definitive statement of fact or
probability. Actual events and circumstances are difficult or
impossible to predict, may differ from assumptions and many are
beyond the control of Banc of California. These forward-looking
statements are subject to a number of risks and uncertainties,
including, but not limited to: (i) the effect of the transaction on
Banc of California’s business relationships, operating results and
business generally; (ii) potential difficulties in retaining Banc
of California customers and employees as a result of the
transaction; (iii) Banc of California’s estimates of its financial
performance; (iv) changes in general economic conditions; (v)
changes in the interest rate environment, including the recent
increases in the Board of Governors of the Federal Reserve System
benchmark rate and duration at which such increased interest rate
levels are maintained, which could adversely affect Banc of
California’s revenue and expenses, the value of assets and
obligations, and the availability and cost of capital and
liquidity; (vi) the impacts of continuing inflation; (vii) the
credit risks of lending activities, which may be affected by
deterioration in real estate markets and the financial condition of
borrowers, and the operational risk of lending activities,
including the effectiveness of Banc of California’s underwriting
practices and the risk of fraud; (viii) fluctuations in the demand
for loans; (ix) the ability to develop and maintain a strong core
deposit base or other low cost funding sources necessary to fund
Banc of California’s activities particularly in a rising or high
interest rate environment; (x) the rapid withdrawal of a
significant amount of deposits over a short period of time; (xi)
results of examinations by regulatory authorities of Banc of
California and the possibility that any such regulatory authority
may, among other things, limit Banc of California’s business
activities, restrict Banc of California’s ability to invest in
certain assets, refrain from issuing an approval or non-objection
to certain capital or other actions, increase Banc of California’s
allowance for credit losses, result in write-downs of asset values,
restrict Banc of California’s ability or that of Banc of
California’s bank subsidiary to pay dividends, or impose fines,
penalties or sanctions; (xii) the impact of bank failures or other
adverse developments at other banks on general investor sentiment
regarding the stability and liquidity of banks; (xiii) changes in
the markets in which Banc of California competes, including with
respect to the competitive landscape, technology evolution or
regulatory changes; (xiv) changes in consumer spending, borrowing
and saving habits; (xv) slowdowns in securities trading or shifting
demand for security trading products; (xvi) the impact of natural
disasters or health epidemics; (xvii) legislative or regulatory
changes; (xviii) impact of operating in a highly competitive
industry; (xix) reliance on third party service providers; (xx)
competition in retaining key employees; (xxi) risks related to data
security and privacy, including the impact of any data security
breaches, cyberattacks, employee or other internal misconduct,
malware, phishing or ransomware, physical security breaches,
natural disasters, or similar disruptions; (xxii) changes to
accounting principles and guidelines; (xxiii) litigation that may
be instituted against Banc of California or its directors and
officers, including the effects of any outcomes related thereto;
(xxiv) volatility in the trading price of Banc of California’s
securities; and (xxv) the ability to implement business plans,
forecasts, and other expectations after the completion of the
transaction, and identify and realize additional opportunities. The
foregoing list of factors is not exhaustive. You should carefully
consider the foregoing factors and the other risks and
uncertainties described in the “Risk Factors” section of Banc of
California’s Annual Report on Form 10-K for the year ended December
31, 2022, and other documents filed by Banc of California from time
to time with the SEC. These filings do and will identify and
address other important risks and uncertainties that could cause
actual events and results to differ materially from those contained
in the forward-looking statements. If any of these risks
materialize or our assumptions prove incorrect, actual events and
results could differ materially from those contained in the
forward-looking statements. There may be additional risks that Banc
of California does not presently know or that Banc of California
currently believes are immaterial that could also cause actual
events and results to differ from those contained in the
forward-looking statements. In addition, forward-looking statements
reflect Banc of California’s expectations, plans or forecasts of
future events and views as of the date of this press release. Banc
of California anticipates that subsequent events and developments
will cause Banc of California’s assessments to change. While Banc
of California may elect to update these forward-looking statements
at some point in the future, Banc of California specifically
disclaims any obligation to do so, unless required by applicable
law. These forward-looking statements should not be relied upon as
representing Banc of California’s assessments as of any date
subsequent to the date of this press release. Accordingly, undue
reliance should not be placed upon the forward-looking statements.
Forward-looking statements speak only as of the date they are made.
Banc of California does not give any assurance that Banc of
California will achieve the results or other matters set forth in
the forward-looking statements.
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version on businesswire.com: https://www.businesswire.com/news/home/20231130750099/en/
Investor Relations Inquiries:
Banc of California, Inc. (855) 361-2262 Jared Wolff, (949)
385-8700 Joe Kauder, (310) 844-5224 William Black, (919)
597-7466
Media Contacts:
Debora Vrana, Banc of California (213) 999-4141
Debora.Vrana@bancofcal.com
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