First PacTrust Bancorp (BANC) has landed another deal and a co-chief executive.
The Irvine, Calif., company has agreed to pay roughly $50 million for the Private Bank of California (PBCA) in Century City, Calif., as it seeks to bulk up in Southern California.
First PacTrust also announced that one of its board members, Steven Sugarman, has been named co-CEO.
Sugarman, who has served on First PacTrust's board since November 2010, would focus on corporate initiatives and nondepository operations. Greg Mitchell, the current CEO of First PacTrust, would share the chief executive's job with Sugarman and focus on banking operations. Mitchell remains CEO and president of PacTrust Bank.
The $650 million-asset Private Bank would be merged into First PacTrust's Beach Business Bank, and the combined entity would be called Private Bank of California.
The Private Bank has two branches and a loan production office in the Los Angeles area and one branch in Irvine. First PacTrust would have about $2.2 billion of assets and 22 branches throughout Los Angeles, Orange, San Diego and Riverside counties once the deal is completed. It also would have 23 loan production offices in California, Arizona, Oregon and Washington.
"The acquisition of The Private Bank of California represents a significant milestone in our stated strategy of becoming Southern California's bank of choice for small-to-midsized businesses, entrepreneurs and high net worth individuals throughout Southern California," Mitchell said in a news release. "We are bringing together two highly complementary organizations that will enable First PacTrust to expand its Southern California footprint in attractive markets such as Los Angeles, Hollywood, Century City and Irvine."
First PacTrust expects to maintain a Tier 1 capital ratio of at least 13% following the deal, which is expected to close in the second quarter. The transaction is expected to be immediately accretive to First PacTrust's earnings, excluding onetime merger costs, and accretive to tangible book value within two years of closing.
The Private Bank's directors and officers, representing 35% of the outstanding shares of the company, have agreed to vote for the deal. David Misch, CEO of Private Bank, would become First PacTrust's chief risk officer.
Besides Misch, several others from Private Bank — including Richard Pachulski, a director and founding shareholder, Richard Smith, president, and Nick Zappia, executive vice president — have agreed to continue working with First PacTrust following the deal's closing. Pachulski would serve as chairman of a new advisory board.
FIG Partners is acting as financial advisor to First PacTrust, and Wachtell, Lipton, Rosen & Katz is serving as legal counsel for this transaction. Milestone Advisors is acting as financial adviser to Private Bank and King, Holmes, Paterno & Berliner is serving as its legal counsel.
Separately, First PacTrust named John Grosvenor as its general counsel and Jeff Seabold to the board of PacTrust Bank. Grosvenor was previously First PacTrust's outside corporate counsel. Seabold has been on the board for First PacTrust since February 2011 and had previously served as a director for the bank.