Pacific Premier Bancorp, Inc. announced it has entered into a definitive agreement under which Pacific Premier will acquire Opus Bank in an all-stock transaction valued at approximately $1.0 billion, or $26.82 per share, based on a closing price for Pacific Premier’s common stock of $29.80 as of January 31, 2020. Pacific Premier expects the transaction to be 14% accretive to EPS in 2021 with a 1.8 year earnback period to tangible book value per share based on anticipated cost savings of approximately 25%.

Opus is headquartered in Irvine, California with $8.0 billion in total assets, $5.9 billion in gross loans and $6.5 billion in total deposits as of December 31, 2019. Opus operates 46 banking offices located throughout California, Washington, Oregon and Arizona. The transaction will increase Pacific Premier’s total assets to approximately $20 billion on a pro forma basis as of December 31, 2019.

Steven R. Gardner, Chairman, President and Chief Executive Officer of Pacific Premier, commented, “We are excited to announce this transformative merger that we believe will create one of the premier commercial banks in the Western United States. The combination with Opus provides us with a meaningful presence in attractive major metropolitan markets with operational scale, a complementary set of banking products and services, and improved revenue and business diversification. As a result of this transaction, we believe we will be well-positioned to generate profitable growth in the future and to benefit the combined institution’s shareholders.”

“We are pleased to be partnering with Pacific Premier and believe the combination creates one of the most attractive banks in the Western U.S.,” said Paul Taylor, President and Chief Executive Officer of Opus. “We look forward to the opportunities and benefits this combination will bring to our shareholders, in terms of prospects for future earnings growth, immediate dividend pick-up and diversification, as well as to clients, employees and the many communities we serve.”

Anticipated Benefits of the Transaction

• Financially attractive with double-digit EPS accretion in 2021 and tangible book value earnback period of 1.8 years
• Increased scale provides improved opportunities to enhance efficiencies and leverage investment in technology
• Greater revenue diversification with the addition of Opus’ strong fee income generating businesses
• Adds a large source of stable, low-cost deposits through escrow and trust business lines, collectively providing $2.0 billion in deposits with a blended cost of deposits of 0.10%
• Accelerated capital generation facilitating continued prudent capital management and creating additional opportunities to return capital to shareholders.

Transaction Details

Under the terms of the definitive agreement, which was approved by the Board of Directors of both companies, holders of Opus common stock (including holders of Opus Series A preferred stock whose shares will be treated on an as-converted basis) will have the right to receive 0.90 shares of Pacific Premier common stock for each share of Opus common stock they own.

Existing Pacific Premier shareholders will own approximately 63% of the outstanding shares of the combined company, and Opus shareholders are expected to own approximately 37%.

The transaction is expected to close in the second quarter of 2020, subject to satisfaction of customary closing conditions, including regulatory approvals and shareholder approval from Pacific Premier and Opus shareholders. Opus directors who own shares of Opus common stock, executive officers and certain shareholders have entered into agreements with Pacific Premier pursuant to which they have committed to vote their shares of Opus common stock in favor of the acquisition. For additional information about the proposed acquisition of Opus, shareholders are encouraged to carefully read the definitive agreement, which will be filed with the Securities and Exchange Commission (“SEC”).

D.A. Davidson & Co. acted as financial advisor to Pacific Premier in the transaction and delivered a fairness opinion to the Board of Directors of Pacific Premier. Holland & Knight LLP served as legal counsel to Pacific Premier. Piper Sandler & Co. acted as financial advisor to Opus and delivered a fairness opinion to the Board of Directors of Opus. Sullivan & Cromwell LLP served as legal counsel to Opus.