First PacTrust Bancorp to buy Beach Business Bank - BusinessWeek
CHULA VISTA, Calif.
First PacTrust Bancorp, the holding company for Pacific Trust Bank, said Wednesday that it reached a deal to acquire Beach Business Bank in a deal worth about $37.4 million.
The news sent Beach Business Bank's shares soaring $2.69, or 45 percent, to $8.62 in over-the-counter trading.
First PacTrust said it will pay $9.07 per share for the company, which represents a 53 percent premium over the Manhattan Beach, Calif.-based bank's Tuesday closing stock price of $5.93. The boards of both companies have unanimously approved the deal, which is expected to close in the first quarter of 2012.
First PacTrust said the acquisition will allow it to expand into new California markets such as Manhattan Beach, Long Beach, Costa Mesa and Torrance.
Greg Mitchell will remain chief executive of First PacTrust, while Robert Franko, the current president and chief executive of Beach Business Bank, will become president of First PacTrust Bancorp.
In addition, Robb Evans, a director at Beach Business Bank, will join First PacTrust Bancorp's board, expanding it to seven members. James Gray, Daniel Mathis and Fred Jensen, also members of Beach Business Bank's board, will join Pacific Trust Bank's board, expanding it to nine members.
Once that deal and First PacTrust's previously announced acquisition of Gateway Business Bank closes, the company expects to have about $1.3 billion in total assets with 18 branches in Southern California and 23 loan production offices in California, Arizona, Oregon and Washington, First PacTrust said.
The acquisition is expected to boost First PacTrust's earnings in the first year, excluding one-time acquisition costs, and increase its tangible book value within two years, the company said.
First PacTrust said it also plans to repay Beach Business Bank's remaining Troubled Asset Relief Program loans in full.
The deal, which is subject to customary closing conditions, must still be approved by regulators and the shareholders of Beach Business Bank.
In afternoon trading, First PacTrust shares fell 38 cents, or 3.1 percent, to $11.71.
01 Sep, 2011
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