First PacTrust Bancorp in Chula Vista, Calif., on Wednesday agreed to buy Beach Business Bank for $37.4 million.
At $9.07 a share, Beach Business Bank's comes at a 53% premium to the Manhattan Beach, Calif., seller's closing price on Tuesday. The acquisition further expands FirstPacTrust's footprint into Southern California and will add $304 million in assets. The $882 million-asset buyer also intends to pay off Beach Business Bank's remaining $4.5 million owed under the Troubled Asset Relief Program.
Robert Franko, the president and chief executive of Beach Business Bank, will become First PacTrust's president, while Gregory Mitchell will remain its chief executive. First PacTrust and unit Pacific Trust Bank are also expanding their boards, adding a total of four directors from Beach Business.
First PacTrust said it expects to close the deal in the first quarter of 2012.
First PacTrust, which raised $25 million in capital this summer, also has a pending deal for Gateway Business Bank. Once both deals are completed, First PacTrust expects to reach $1.3 billion in assets, 18 branches in California and 23 loan production offices across four states.