Shareholders in First California Financial Group voted overwhelmingly in favor of merging the bank into rival PacWest Bancorp at a March 20 meeting.
Investors in the Westlake Village bank cast 23.4 million votes in favor of the $233 million deal, with 212,252 shares voting against the proposal and 5,865 abstaining. The deal still requires regulatory approval.
Shareholder approval had been expected, since a merger between the two Southern California banks was pushed through by several large investors in First California, notably the Pohlad Group banking family.
After First California executives rejected an initial buyout offer of $5.10 per share from PacWest in late 2011, the Pohlads and other major investors pressured First California’s leadership to reconsider an offer. In May 2012, PacWest raised its offer to $7.25, a deal First California ultimately accepted.
The merger is expected to close within coming months and will likely result in numerous bank consolidations and layoffs since the two banks share a similar footprint. The areas that appear to have the most overlap between the branch networks includes Camarillo, Ventura and San Luis Obispo.
First California’s operations would be rebranded to Pacific Western Bank and its operations managed out of PacWest’s Los Angeles headquarters. PacWest has said it expects to save about $31.5 million by consolidating branches and adding First California’s approximately $1.6 billion in deposits and $1.2 billion in loans to its books. The deal is expected to add 12 percent to PacWest’s earnings in the first full year after the merger.
The deal involves a stock swap in which the holders of First California shares will get fractional shares in PacWest at a price of $8 per share, though the target price could go up slightly if PacWest’s shares trade above $27 in the days leading up to final regulatory approval.
Under the current deal, First California gets to appoint two members to PacWest’s board of directors. First California’s executives could also receive golden parachutes if the deal is consummated and they’re terminated.
First California CEO and President C.G. Kum would receive a $4.8 million package and Chief Financial Officer Ron Santarosa would receive $2.3 million.
First California shares closed down 1.7 percent to $8.35 on March 21.[wikichart align=”center” ticker=”FCAL” showannotations=”true” livequote=”true” startdate=”21-09-2012″ enddate=”21-03-2013″ width=”390″ height=”245″]