Southern California Bancorp (NASDAQ: BCAL), the holding company for
Bank of Southern California, N.A., and California BanCorp (NASDAQ:
CALB), the holding company for California Bank of Commerce, jointly
announce the execution of a definitive merger agreement, pursuant
to which the companies will combine in an all-stock merger valued
at approximately $233.6 million, or $26.54 per share of California
BanCorp, based on the closing price of Southern California Bancorp
on January 29, 2024.
Transaction Highlights
- Creates a premier California
financial institution with approximately $4.6 billion in assets by
combining two high performing franchises with footprints in the
state’s two best markets for mid-market business banking
- True merger of equals uniting top
talent of two institutions with shared vision, values, and
client-centric focus
- Enhanced scale allows further
investment in technology to better manage risk, increase efficiency
and enhance the client experience
- Adds complementary business lines
and diversified lending verticals to each client base
“This merger of equals brings together two
premier California business banks to create a franchise with a
footprint that covers the two most attractive markets in
California,” said David Rainer, Chairman and CEO of Southern
California Bancorp. “Our two companies share the same vision and
values with a customer-centric focus on providing outstanding
service to mid-market businesses. We believe this combination,
resulting in increased size and scale, will drive improved
profitability and increase shareholder value. It also offers
customers increased product offerings and lending limits, as well
as access to branches in both Northern and Southern California. The
merger will also provide employees of both companies with increased
career opportunities. I am very excited to work with Steven Shelton
and his impressive team to build what we believe will be the
premier business banking franchise in California.”
“The expanded scale and capabilities we will
have as a result of this merger will enhance our ability to
continue adding attractive full banking relationships with
commercial clients that provide operating deposit accounts and high
quality lending opportunities, as well as enabling us to move up
market and work with larger businesses,” said Steven Shelton, Chief
Executive Officer of California BanCorp. “This merger is bringing
together two highly compatible institutions with similar cultures,
a relationship-based approach and commercial banking expertise,
with strong deposit bases that will offer opportunities for growth
in various lending verticals. With our combined capabilities, we
believe that we will be well positioned to consistently generate
profitable growth and further enhance the value of our franchise in
the years to come.”
“We believe this merger will benefit all our
constituents, including shareholders, employees, and the clients
that we serve,” said Stephen Cortese, Chairman of California
BanCorp. “Over the past several years, we have made investments in
talent and technology that strengthened our franchise and led to
the strong growth we have seen in our client base, increased
efficiencies, and improved profitability. This merger will
accelerate the growth of our franchise and further improve our
ability to create long-term value for shareholders.”
Transaction Details
Under the terms of the definitive agreement,
which has been unanimously approved by the boards of directors of
Southern California Bancorp and California BanCorp, each
outstanding share of California BanCorp common stock will be
exchanged for the right to receive 1.590 shares of Southern
California Bancorp common stock. As a result of the transaction,
Southern California Bancorp shareholders will own approximately
57.1% of the outstanding shares of the combined company and
California BanCorp shareholders will own approximately 42.9% of the
outstanding shares of the combined company.
Name, Branding Headquarters and
Markets
The companies will evaluate rebranding with new
names and logos for the combined company and bank at the close of
the transaction. The combined company’s common stock will continue
to trade on the Nasdaq Capital Market.
Corporate headquarters will be located in San
Diego, Calif.
The combined company’s Southern California
footprint will include Bank of Southern California’s 13 branches
that serve Los Angeles, Orange, San Diego, and Ventura counties,
and the Inland Empire. The combined company’s Northern California
footprint will include the California Bank of Commerce branch in
Contra Costa County and its four loan production offices serving
Alameda, Contra Costa, Sacramento, and Santa Clara counties.
Governance and Leadership
The combined company’s Board of Directors will
consist of six directors from Southern California Bancorp,
inclusive of Mr. Rainer, and six directors from California BanCorp,
inclusive of Mr. Shelton. A lead independent director will be
appointed after closing.
David Rainer, Chairman of Southern California
Bancorp, will serve as Executive Chairman of the combined company,
bank and boards.
Steven Shelton, Chief Executive Officer of
California BanCorp, will serve as Chief Executive Officer and
director of the combined company and the combined bank.
Richard Hernandez, President of Southern
California Bancorp, will serve as President of the combined company
and combined bank.
Thomas Sa, President, Chief Financial Officer
and Chief Operating Officer of California BanCorp will serve as
Chief Operating Officer of the combined company and combined
bank.
Thomas Dolan, Chief Financial Officer and Chief
Operating Officer of Southern California Bancorp will serve as
Chief Financial Officer of the combined company and Chief Strategy
Officer of the combined bank.
Timing and Approvals
The transaction is expected to close in the
third quarter of 2024, subject to satisfaction of customary closing
conditions, including receipt of required regulatory approvals and
approvals from Southern California Bancorp and California BanCorp
shareholders.
Members of the board of directors of each of
Southern California Bancorp and California BanCorp have entered
into agreements pursuant to which they have committed to vote their
shares of common stock in favor of the merger of California BanCorp
with and into Southern California Bancorp.
For additional information about the proposed
merger of California BanCorp with and into Southern California
Bancorp, shareholders are encouraged to carefully read the
definitive agreement that will be filed with the Securities and
Exchange Commission (“SEC”).
Advisors
MJC Partners acted as financial advisor to
Southern California Bancorp and delivered a fairness opinion to
their Board of Directors. Stuart Moore Staub acted as legal counsel
to Southern California Bancorp. Keefe, Bruyette and Woods, A Stifel
Company acted as financial advisor to California BanCorp and
delivered a fairness opinion to their Board of Directors. Sheppard,
Mullin, Richter & Hampton LLP served as legal counsel to
California BanCorp.
Investor Presentation
Details
A presentation regarding the merger announcement
has been filed with the SEC and can be accessed at
www.banksocal.com through the “investor relations” link.
ABOUT SOUTHERN CALIFORNIA BANCORP AND
BANK OF SOUTHERN CALIFORNIA, N.A.
Southern California Bancorp (NASDAQ: BCAL) is a
registered bank holding company headquartered in San Diego,
California. Bank of Southern California, N.A., a national banking
association chartered under the laws of the United States (the
“Bank”) and regulated by the Office of Comptroller of the Currency,
is a wholly owned subsidiary of Southern California Bancorp.
Established in 2001 and headquartered in San Diego, California, the
Bank offers a range of financial products and services to
individuals, professionals, and small- to medium-sized businesses
through its 13 branch offices serving Orange, Los Angeles,
Riverside, San Diego, and Ventura counties, as well as the Inland
Empire. The Bank's solutions-driven, relationship-based approach to
banking provides accessibility to decision makers and enhances
value through strong partnerships with its clients. Additional
information is available at www.banksocal.com.
ABOUT CALIFORNIA BANCORP AND CALIFORNIA
BANK OF COMMERCE
California BanCorp, the parent company for
California Bank of Commerce, offers a broad range of commercial
banking services to closely held businesses and professionals
located throughout Northern California. The Company’s common stock
trades on the Nasdaq Global Select marketplace under the symbol
CALB. For more information on California BanCorp, please visit our
website at www.californiabankofcommerce.com.
FORWARD-LOOKING STATEMENTS
This communication may contain certain
forward-looking statements, including but not limited to certain
plans, expectations, projections and statements about the benefits
of the proposed merger (the “Merger”) of Southern California
Bancorp (“SCB”) and California BanCorp (“CBC”), the timing of
completion of the Merger, and other statements that are not
historical facts. Such statements are subject to numerous
assumptions, risks, and uncertainties. All statements other than
statements of historical fact, including statements about beliefs
and expectations, are forward-looking statements. Forward-looking
statements may be identified by words such as “expect,”
“anticipate,” “believe,” “intend,” “estimate,” “plan,” “target,”
“goal,” or similar expressions, or future or conditional verbs such
as “will,” “may,” “might,” “should,” “would,” “could,” or similar
variations. The forward-looking statements are intended to be
subject to the safe harbor provided by the Private Securities
Litigation Reform Act of 1995.
Factors that could cause or contribute to
results differing from those in or implied in the forward-looking
statements include but are not limited to the occurrence of any
event, change or other circumstances that could give rise to the
right of SCB or CBC to terminate their agreement with respect to
the Merger; the outcome of any legal proceedings that may be
instituted against SCB or CBC; delays in completing the Merger; the
failure to obtain necessary regulatory approvals (and the risk that
such approvals impose conditions that could adversely affect the
combined company or the expected benefits of the Merger); the
failure to obtain shareholder approvals or to satisfy any of the
other conditions to the Merger on a timely basis or at all; the
ability to complete the Merger and integration of SCB and CBC
successfully; costs being greater than anticipated; cost savings
being less than anticipated; changes in economic conditions; the
risk that the Merger disrupts the business of SCB, CBC or both;
difficulties in retaining senior management, employees or
customers; the impact of bank failures or other adverse
developments at other banks on general investor sentiment regarding
the stability and liquidity of banks; and other factors that may
affect the future results of SCB and CBC. Additional factors that
could cause results to differ materially from those described above
can be found in SCB’s amended Registration Statement on
Form 10 filed on April 24, 2023, which is on file with
the Securities and Exchange Commission (the “SEC”) and is available
in the “Investor Relations” section of SCB’s website,
www.banksocal.com, in CBC’s Annual Report on
Form 10-K for the year ended December 31, 2022 which
is on file with the SEC and is available in the “Investor
Relations” section of CBC’s website,
www.californiabankofcommerce.com, and in other documents that SCB
and CBC file with the SEC. Investors may obtain free copies of
these documents and other documents filed with the SEC on its
website at www.sec.gov.
All forward-looking statements speak only as of
the date they are made and are based on information available at
that time. Neither SCB nor CBC assumes any obligation to update
forward-looking statements to reflect circumstances or events that
occur after the date the forward-looking statements were made or to
reflect the occurrence of unanticipated events except as required
by federal securities laws. As forward-looking statements involve
significant risks and uncertainties, caution should be exercised
against placing undue reliance on such statements.
ADDITIONAL INFORMATION AND WHERE TO FIND
IT
In connection with the Merger, SCB will file
with the SEC a Registration Statement on Form S-4 that
will include a joint proxy statement of SCB and CBC and a
prospectus of SCB, as well as other relevant documents concerning
the proposed transaction. Certain matters in respect of the Merger
will be submitted to SCB’s and CBC’s shareholders for their
consideration. This communication does not constitute an offer to
sell or the solicitation of an offer to buy any securities or a
solicitation of any vote or approval, nor shall there be any sale
of securities, in any jurisdiction in which such offer,
solicitation or sale would be unlawful prior to registration or
qualification under the securities laws of any such
jurisdiction.
INVESTORS AND SHAREHOLDERS ARE URGED TO READ THE
REGISTRATION STATEMENT AND THE JOINT PROXY STATEMENT/PROSPECTUS
REGARDING THE MERGER WHEN THEY BECOME AVAILABLE AND ANY OTHER
RELEVANT DOCUMENTS FILED WITH THE SEC IN CONNECTION WITH THE MERGER
BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION.
Investors will be able to obtain a free copy of
the definitive joint proxy statement/prospectus, as well as other
filings containing information about SCB and CBC, without charge,
at the SEC’s website, www.sec.gov. Copies of the joint proxy
statement/prospectus and the filings with the SEC that will be
incorporated by reference in the joint proxy statement/prospectus
can also be obtained, without charge, in the “Investor Relations”
section of SCB’s website at www.banksocal.com (for SCB’s
filings) and in the “Investor Relations” section of CBC’s website,
www.californiabankofcommerce.com (for CBC’s filings).
PARTICIPANTS IN THE
SOLICITATION
SCB, CBC and certain of their respective
directors and executive officers may be deemed to be participants
in the solicitation of proxies from the shareholders of SCB and CBC
in connection with the Merger. Information regarding SCB’s
directors and executive officers and their ownership of SCB common
stock is available in SCB’s definitive proxy statement for its 2023
annual meeting of shareholders filed with the SEC on June 13, 2023
and other documents filed by SCB with the SEC. Information
regarding CBC’s directors and executive officers and their
ownership of CBC common stock is available in CBC’s definitive
proxy statement for its 2023 annual meeting of shareholders filed
with the SEC on April 20, 2023 and other documents filed by CBC
with the SEC. Other information regarding the participants in the
proxy solicitation and their ownership of common stock will be
contained in the joint proxy statement/prospectus relating to the
Merger. Free copies of these documents may be obtained as described
in the preceding paragraph.
INVESTOR RELATIONS CONTACTKevin
Mc CabeBank of Southern
Californiakmccabe@banksocal.com818.637.7065
Thomas A. SaCalifornia BanCorptsa@bankcbc.com510.457.3775
California BanCorp (NASDAQ:BCAL)
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California BanCorp (NASDAQ:BCAL)
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