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California Bank of Commerce and Pan Pacific Bank to Merge

September 21, 2015, 07:45 AM

California Bank of Commerce (CABC) and Pan Pacific Bank (PPFC) jointly announced the execution of an Agreement and Plan of Reorganization whereby Pan Pacific Bank will merge into California Bank of Commerce in a transaction valued at approximately $24.3 million. The strategic partnership will result in a business bank with over $620 million in total assets dedicated to serving middle market businesses in the San Francisco Bay area.

Shareholders of Pan Pacific Bank will receive merger consideration in the form of a combination of approximately one third cash and two thirds CABC common stock, with a per share value of $4.75 to Pan Pacific Bank shareholders based on the last trading price of CABC common stock.

The merger represents a strategic, cultural, and financial fit between two San Francisco Bay Area business banks and bolsters CABC’s South Bay presence. California Bank of Commerce, headquartered in Lafayette, California, is a state chartered commercial bank with approximately $473 million in assets as of June 30, 2015, and with offices in San Jose, California and Oakland, California. Pan Pacific Bank, headquartered in Fremont, California, is a state chartered commercial bank with approximately $147 million in assets as of June 30, 2015, and also has one branch located in San Jose, California. The combined bank will operate as California Bank of Commerce and will continue to create superior, lasting banking relationships with the primary purpose of making our clients more successful.

“We are excited about combining these two business banking franchises covering the San Francisco Bay Area,” said Terry A. Peterson, President and CEO of California Bank of Commerce. “Both banks have developed strong commercial banking relationships with successful middle-market businesses. Both banks have built robust banking platforms and production capabilities, established low cost deposit bases with significant focus on C&I lending.”

“We are excited to join forces with California Bank of Commerce and believe we are building a powerful business bank dedicated to serving the demanding needs of growing and successful businesses here in the San Francisco Bay Area,” said Wayne Doiguchi, Chairman and CEO of Pan Pacific Bank. “The combination of the two banks is a great cultural and business strategy fit as we share the same passion for serving business clients with sophisticated treasury management products and services, lending programs customized to fit each client’s needs, and local business-making decisions designed for quick and thoughtful responses.”

The boards of directors of both banks approved the transaction, which is subject to customary conditions, including the approvals of bank regulatory agencies and the shareholders of both California Bank of Commerce and Pan Pacific Bank. Upon completion of the transaction, the California Bank of Commerce Board of Directors will consist of 12 members, eleven representatives from California Bank of Commerce and Wayne Doiguchi, current Chairman and CEO of Pan Pacific Bank. Subsequent to the merger the Board of Directors of CABC will add another director from the South Bay area. Stephen Cortese will continue as Board Chairman for California Bank of Commerce, and Terry A. Peterson will continue as President and CEO of California Bank of Commerce.

The transaction, currently expected to close by year-end 2015 or early in the first quarter of 2016, will result in the existing shareholders of California Bank of Commerce expected to own 79% of the outstanding shares of the combined bank and Pan Pacific shareholders expected to own 21%.

Hovde Group acted as financial advisor to California Bank of Commerce and delivered a fairness opinion to its Board of Directors. Stinson Leonard Street LLP served as legal counsel for California Bank of Commerce. Keefe, Bruyette & Woods, Inc. acted as financial advisor to Pan Pacific Bank and delivered a fairness opinion to its Board of Directors. Manatt Phelps & Phillips LLP served as legal counsel for Pan Pacific Bank.





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