Pacific Bank of San Francisco has agreed to buy Los Angeles' Sterling West Bancorp for about $11.4 million in stock, it announced last week.
Pacific Bank offered about $6.88 per share for Sterling, or roughly 1.75 times its book value. If approved by Sterling shareholders, the deal would close in the second or third quarter.
"We are confident that this acquisition will serve both banks' existing clients well and will strengthen Pacific's presence in Southern California and the state," said Michael Tun Zan, Pacific's chairman, president, and chief executive officer.
With about $79 million of capital-for a capital-to-assets ratio of about 13%-Pacific Bank has been on the lookout for acquisitions, Mr. Tun Zan said. He added that Sterling is a good fit because both companies' customers are small-business owners and high-net-worth individuals.
If approved, the acquisition would boost $594 million-asset Pacific Bank's assets above $700 million and increase its number of branches from nine to 14. Sterling's branches will be converted into Pacific branches when the deal is completed.