Southern California Bancorp, the holding company for Bank of Southern California, and Bank of Santa Clarita jointly announced the signing of a definitive merger agreement.
Southern California Bancorp is set to acquire Bank of Santa Clarita by merging it with and into Bank of Southern California.
Based on financial results as of Dec. 31, 2020, the combined company is expected to have pro-forma total assets of approximately $2 billion, deposits of $1.5 billion and net loans of $1.5 billion.
“On behalf of our board of directors, I am pleased to announce our merger into Bank of Southern California,” Frank Di Tomaso, chairman and CEO of Bank of Santa Clarita, said in a prepared statement. “We share with them a banking culture focused on providing high-touch, personalized service to small and middle-market businesses, with a deep commitment to the markets and communities we serve. We believe this strategic partnership, with a shared vision of providing relationship-based banking to the middle market, will benefit our shareholders, customers, employees and communities. We will continue to focus on maintaining and creating strong relationships and bringing value to the customers we serve.”
Di Tomaso is set to join the board of directors of Southern California Bancorp and Bank of Southern California, providing the bank with additional capabilities as an employee specializing in client relations and marketing, according to David Rainer, executive chairman of Southern California Bancorp and Bank of Southern California.
“The cultures, values and relationship-based banking models of these two banks are in close alignment and we are very pleased to have the Bank of Santa Clarita team and their customers join the Bank of Southern California family,” Nathan Rogge, president and CEO of Bank of Southern California, added in the statement. “We have recently added several experienced bankers in the northern area of our footprint, and this expansion will support those teams, as well as increase the bank’s lending limit.”
This acquisition is expected to provide Bank of Santa Clarita customers with greater branch access, covering Los Angeles, Ventura, Orange and San Diego counties, as well as the Coachella Valley.
Due, in part, to the merger, Bank of Southern California is expected to offer greater lending capacity and additional services, such as greater access to subject matter experts, to both of the banks’ customers.
The acquisition of Bank of Santa Clarita marks an important first step in Southern California Bancorp’s strategy to grow its commercial banking model and expand the bank’s footprint north of Los Angeles to the Santa Clarita Valley area, Rainer added.
Pursuant to the merger agreement, Bank of Santa Clarita shareholders are expected to receive 1.00 share of Southern California Bancorp common stock in exchange for each share of Bank of Santa Clarita.
The 100% stock transaction is valued at approximately $56.2 million in aggregate, based on a per-share value of Southern California Bancorp’s stock of $14.15, while the value of the merger consideration is set to fluctuate based on Southern California Bancorp’s stock price.
Existing shareholders of Southern California Bancorp are expected to own approximately 78% of the outstanding shares of the combined company and Bank of Santa Clarita shareholders are expected to own approximately 22%.
The transaction is subject to shareholder and regulatory approvals and satisfaction of customary closing conditions, and is expected to close in the third quarter of 2021.