First California nixes acquisition on eve of PacWest deal
Westlake Village-based First California Financial Group has called off a deal to acquire Premier Service Bank, a small Riverside-based lender it was slated to buy last year.
The dashed deal may be a sign that a contentious $231 million acquisition of First California by Los Angeles-based PacWest Bancorp is moving forward.
Executives from First California and PacWest did not return calls seeking comment for this story.
In a statement, First California said the Premier Service Bank deal was terminated because the terms of the agreement called for the transaction to close by Dec. 31, 2012. As that didn’t happen, First California and Premier Service mutually agreed to sever the agreement, they said.
The acquisition would have been the latest for First California, a Ventura County-based bank that has significantly increased its footprint in recent years by buying rival banks, many in regulator-assisted purchases.
But the tables were turned on First California last year, when PacWest, an equally aggressive acquirer, made an unsolicited offer for the Westlake Village-based lender. After rebuffing PacWest’s first offer, which set off an outcry from several major investors, First California said in November that it had agreed to be purchased by PacWest for $231 million, or $8 per share. The offer represents an 18.5 percent premium over First
California’s pre-merger share price and a 10.3 percent premium over PacWest’s initial May 2012 offer of $7.25 per share.
The all-cash deal slated to close in the first quarter of this year. When it does, PacWest will close nine branches — seven of First California’s and two Pacific Western locations — the Los Angeles bank said in Feb. 6 investor presentation documents. PacWest estimated it could saved $31.5 million by consolidating locations and adding First California’s $1.6 billion in deposit accounts and $1.2 million in loans to its books.
PacWest has not said where the consolidation will occur or how many jobs will be affected, but in the Tri-Counties, the areas of overlap appear to be in Camarillo, Ventura and San Luis Obispo.
First California’s Westlake Village campus on Townsgate Road would also be shuttered as the bank is merged into PacWest’s Los Angeles headquarters, presumably resulting in layoffs at the administrative level as well.
PacWest first made its tri-county debut with the 2009 acquisition of Ventura-based Affinity Bank when that company was taken over by federal banking regulators. It acquired Solvang-based Los Padres Bank in another failed-bank takeover in 2010.
PacWest posted a fourth-quarter 2012 profit of $19.9 million, or 54 cents per share, compared to $16.1 million a year earlier. For the full year, the bank earned $56.8 million, or $1.54 per diluted share, compared to $50.7 million, or $1.37 per diluted share, in 2011. PacWest pinned its increased profitability in part on the three acquisitions it closed last year, including of San Luis Obispo-based American Perspective Bank for $58.1 million.
“In 2012, we made great strides,” PacWest CEO Matt Wagner said in a statement. “We completed the acquisitions of Pacific Western Equipment Finance, Celtic Capital Corporation and American Perspective Bank. These three acquisitions contributed $3.7 million to fourth-quarter net earnings and $9.7 million to calendar 2012 net earnings. We increased our quarterly dividend to 25 cents per share, resulting in a current dividend yield of 3.9 percent.”
Wagner said PacWest’s “priority in 2013 will be the completion of the First California merger and integration of its operations.”