First Business Bank announces merger with 1st Pacific
First Business Bank and 1st Pacific Bancorp on July 16 announced that they have signed a definitive merger agreement under which 1st Pacific Bank of California, 1st Pacific Bancorp’s banking subsidiary, will merge with First Business Bank.
Under the terms of the agreement, each outstanding share of 1st Pacific Bancorp will receive $1.40 per share in cash and a percentage of the recoveries of certain charged-off loans and a lawsuit. The initial cash payment to 1st Pacific Bancorp shareholders represents a transaction value of approximately $7.0 million, according to a news release from First Business Bank, which has three branches, one at 1315 Main St.
Shareholders of First Business Bank will become the shareholders of 1st Pacific Bancorp.
The banking subsidiary will operate 11 branch offices and will retain the name 1st Pacific Bank of California. First Business Bank’s three full-service offices in Ramona, Del Mar Heights and Carlsbad will be renamed 1st Pacific Bank of California when the transaction is complete.
The transaction is subject to shareholder and regulatory approvals and is expected to close in the fourth quarter of this year.
“This transaction meets the needs of both companies,” said Nathan L. Rogge, president and chief executive officer (CEO) of First Business Bank. “We have wanted to expand into additional markets in the region, and the bank’s increased asset size and combined resources will allow us to operate more efficiently and profitably while delivering more products and services to a larger customer base.”
Corporate headquarters functions will be consolidated at 1st Pacific Bank’s corporate headquarters in University Towne Center. 1st Pacific Bank’s eight offices in La Jolla, Solana Beach, University Towne Center, Mission Valley, Tri-Cities, Inland North County, El Cajon and Downtown San Diego will continue to operate.
Rogge will continue as president and chief executive officer (CEO) for the combined company. In addition, the six directors of First Business Bank will become the directors of 1st Pacific Bancorp and the merged bank. When the transaction is completed, two members of 1st Pacific Bank’s Board of Directors are expected to continue on as part of the board.
Ronald Carlson, 1st Pacific’s chairman, president and CEO added, “First Business Bank is one of the highest capitalized banks in the San Diego market and the financial strength of the combined company will be of great value to our customers.”
As of June 30, First Business Bank had a total risk-based capital ratio of 23.75 percent and a leverage ratio of 16.85 percent. A 10 percent total risk-based capital ratio is required for a bank to be considered “well-capitalized.” Rogge noted that First Business Bank’s principal shareholder, Ernest Auerbach, has committed to infuse substantial additional capital into the bank to facilitate the transaction and to enhance the regulatory capital ratios of the combined bank.
Rogge said the combined company will continue to emphasize a strategy of providing commercial banking services to small and medium-sized businesses and professionals that can best be served by a local bank offering a portfolio of loan and deposit products tailored to meet their specialized needs.
“Both companies have experienced managements and talented staffs with deep local market knowledge in the San Diego business banking community,” said Rogge. “With a strong capital base, safe and sound banking practices, and dedicated local ownership and management, we expect the combination to be a formidable competitor in this region for many years to come.”
First Business Bank was advised by Keefe, Bruyette & Woods, Inc. and Horgan, Rosen, Beckham & Coren L.L.P. 1st Pacific Bancorp was advised by Sandler O’Neill + Partners, L.P. and Luce, Forward, Hamilton & Scripps LLP.
First Business Bank is exclusively focused on serving the special needs of professionals and small and medium-sized enterprises. Established in 2001, First Business Bank officials say it is dedicated to providing business professionals with simple, fast and effective solutions. Experienced bankers deliver tailored financial solutions and provide customers with educational and networking opportunities.
For more information, contact First Business Bank at 858-847-4780, 12265 El Camino Real, Suite 100, San Diego, CA 92130, or visit the company’s Web site at www.fbbank.com.
1st Pacific Bank of California is a San Diego community business bank. The bank offers a full complement of business products and services to meet the financial needs of professional firms, small to mid-sized businesses, their owners and the employees who work there. For more information about 1st Pacific Bank, visit the company’s Web site at www.1stpacbank.com.