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PacWest Bancorp and First California Financial Group Agree to Merger

 

Nov 7 - PacWest Bancorp (Nasdaq:PACW) and First California Financial Group Inc. (Nasdaq:FCAL) have announced the signing of a definitive agreement and plan of merger whereby PacWest will acquire First California for $8 per First California common share, or approximately $231 million in aggregate consideration, payable in PacWest common stock.

First California, headquartered in Westlake Village, Calif., is the parent of First California Bank and had approximately $2 billion in assets and 15 branches across Los Angeles, Orange, Riverside, San Bernardino, San Diego, San Luis Obispo and Ventura Counties at Sept. 30, 2012. In connection with the acquisition, First California Bank will be merged into Pacific Western Bank, the Los Angeles-based wholly owned subsidiary of PacWest Bancorp.

Directors of PacWest and of First California unanimously approved the transaction. Two independent directors from the board of directors of First California will join PacWest's board of directors upon completion of the acquisition.

The transaction, currently expected to close late in the first quarter of 2013, is subject to customary conditions, including the approval of bank regulatory authorities and the stockholders of both companies. Stockholders of First California, including all current directors and certain other stockholders, owning or controlling approximately 22 percent in the aggregate of the currently outstanding shares of First California, have agreed to vote in favor of the transaction.

As of Sept. 30, 2012, on a pro forma consolidated basis with First California, PacWest would have had approximately $7.5 billion in assets with 81 branches throughout California. The combined institution would be the eighth largest publicly owned bank headquartered in California, and the 12th largest commercial bank headquartered in California (out of more than 240 financial institutions).

Pursuant to the terms of the definitive agreement, First California shareholders will receive PacWest common stock for their shares of First California common stock in a tax-free transaction. First California in-the-money option holders will receive cash, net of applicable taxes withheld, for the value of their unexercised stock options.

The number of shares of PacWest common stock deliverable for each share of First California common stock will be determined based on an average price of PacWest common stock over a measuring period prior to the receipt of regulatory approval, and will fluctuate if such average price is between $20 and $27 and will be fixed if such average price is below $20 or above $27. Based on PacWest's closing stock price of $22.27 on Nov. 5, 2012, First California stockholders would have received 0.3592 of a share of PacWest common stock for each share of First California common stock, which would provide First California stockholders with aggregate ownership, on a pro forma basis, of approximately 22.4 percent of the common stock of the combined company.

The holders of 100 percent of the outstanding shares of First California series A preferred stock have agreed to convert their shares into common stock, per the terms of the series of preferred stock, and have the resulting common stock exchanged in the transaction. PacWest and First California expect to redeem First California's outstanding Series C preferred stock for cash in accordance with its terms immediately prior to the closing of the transaction.

Matt Wagner, CEO of PacWest Bancorp and chairman and CEO of Pacific Western Bank, commented, "We are very pleased to have reached this agreement with First California. The merger of these two organizations will create a valuable franchise for the stockholders of both companies, and meaningfully enhance the presence of the combined organization throughout California."

C. G. Kum, First California's president and CEO, said, "First California is proud of what it has built since its inception in 1979. As a result of this transaction, two premier organizations will come together to create one of the leading commercial banks headquartered in Los Angeles, with more than $7.5 billion in assets. 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. We also believe this transaction provides opportunity for future shareholder value."

Keefe, Bruyette & Woods, Inc. acted as financial adviser to First California in the transaction and delivered a fairness opinion to the board of directors of First California. Skadden, Arps, Slate, Meagher & Flom, LLP served as legal counsel to First California. Castle Creek Financial acted as financial adviser to PacWest, and Sandler O'Neill + Partners, L.P. delivered a fairness opinion to the board of PacWest. Wachtell, Lipton, Rosen & Katz served as legal counsel to PacWest.

About PacWest Bancorp
PacWest Bancorp is a bank holding company with $5.5 billion in assets as of Sept. 30, 2012, with one wholly owned banking subsidiary, Pacific Western Bank. Through 66 full-service community banking branches, Pacific Western provides commercial banking services, including real estate, construction and commercial loans, to small and medium-sized businesses. Pacific Western's branches are located throughout California in Los Angeles, Orange, Riverside, San Bernardino, Santa Barbara, San Diego, San Francisco, San Luis Obispo, San Mateo and Ventura Counties. Through its subsidiaries, BFI Business Finance and Celtic Capital Corporation, and its divisions, First Community Financial and Pacific Western Equipment Finance, Pacific Western also provides working capital financing and equipment leasing to growing companies located throughout the United States, with a focus on the Southwestern United States, primarily in Arizona, California, Utah and Texas. Additional information regarding PacWest Bancorp is available on the Internet at www.pacwestbancorp.com. Information regarding Pacific Western Bank is also available on the Internet at www.pacificwesternbank.com.

About First California Financial Group Inc.
First California Financial Group Inc. is the holding company of First California Bank. Founded in 1979 and with nearly $2 billion in assets, First California serves the comprehensive financial needs of small- and middle-sized businesses and high net worth individuals throughout Southern California. Led by an experienced team of bankers, First California is committed to providing the best client service available in its markets, offering a full line of quality commercial banking products through 15 full-service branch offices in Los Angeles, Orange, Riverside, San Bernardino, San Diego, San Luis Obispo and Ventura counties. The holding company's website can be accessed at www.fcalgroup.com. For additional information on First California Bank's products and services, visit www.fcbank.com.



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