Banc of California, PacWest in Advanced Talks to Combine
Deal would marry regional lenders beset by fears about the soundness of the sector earlier in the year
Banc of California is in advanced talks to buy PacWest Bancorp, in a move by the lenders to further shore themselves up following a regional-banking crisis earlier this year.
A deal could be announced as soon as today, when both banks are scheduled to report results, assuming there isn’t a last-minute snag, people familiar with the matter said.
PacWest has been at the center of recent fears about the regional-banking system since the failure of three lenders this spring, with the Beverly Hills, Calif., bank beset by deposit outflows and a sinking stock price. Shares of Banc of California dropped significantly too.
Still, both banks have come through the recent turmoil in relatively good health and both stocks have rebounded somewhat. PacWest has sold assets to shore up its balance sheet, while Banc of California remained profitable in the first quarter.
Centerbridge and Warburg Pincus plan to contribute equity to help fund the deal, the people said. The private-equity firms, each with a history of investing in financial companies, will provide the only external source of funding for the acquisition.
Updates to follow as news develops.