First California Bank, which has $2 billion in assets and 19 branches, reported $2.6 million net income in the first quarter, compared with $15.6 million for the same quarter a year ago. PacWest proposed a $212 all-stock bid, a $7.25 swap for each First California share, last Thursday. First California said Wednesday that it asked for more information, but that PacWest didn’t include a non-disclosure agreement and First California would only execute the deal if it had a non-exclusivity clause.
“The First California board did not believe that it was in the best interests of stockholders to grant exclusivity to PacWest in the absence of satisfactory clarification of the terms and value of its proposal and taking into account the other strategic alternatives that First California may pursue,” the company said in a statement.
First California could not be reached for comment.
PacWest, a $5.4 billion bank with 76 branches, said it sent the board a letter last Thursday and decided to release it after First California decided not to talk further.
The bank offered a 30 percent premium on First California closing price, which was at $5.61 on the Nasdaq on Tuesday. The price jumped to $6.71 Wednesday.
“We believe the combination of PacWest Bancorp and First California is highly compelling for the stockholders of both organizations,” PacWest CEO Matt Wagner said. “On a pro forma basis, the combined organization would have nearly $7.5 billion in assets, a strong franchise with locations throughout California and an enhanced platform to serve its customers.”
The offer was “unsolicited and highly conditional”; First California said it needed clarification regarding the value of the bid and would only do the deal if it could talk to potential buyers.
First California recently expanded into Santa Barbara and named Catharine Manset as senior vice president and regional manager. Manset, a Santa Barbara native, most recently served as the senior lending manager for Santa Barbara-based Community West Bank.
“We believe the Santa Barbara marketplace represents a highly attractive growth opportunity that would welcome a strong, client focused, community business bank,” First California President and CEO C.G. Kum said.