PacWest Bancorp (NASDAQ: PACW) experienced a significant upswing in pre-market trading, with its shares surging by 31.27% to reach $10.10 as of the latest update.

The stock had faced a downturn during the regular trading session, losing -27.04% and closing at $7.69.

However, thanks to a transformative agreement, the company managed to offset the losses incurred during the regular session.

Which Agreement Has PACW Entered Into?

PacWest Bancorp (PACW) made a significant announcement, revealing their plans for an all-stock merger with Banc of California, marking a major turning point for both companies.

The agreement, which has been unanimously approved by the boards of directors from both entities, will see PacWest merging into Banc of California, while Banc of California, N.A. will merge into Pacific Western Bank.

Upon the successful completion of the merger, the newly combined company will operate under the Banc of California name and brand, heralding a new era of collaboration and growth.

Shareholders of PacWest will be entitled to receive 0.6569 shares of Banc of California common stock for each share they currently hold, solidifying the alignment of interests between both sets of stakeholders.

The strategic implications of this merger are immense. By combining their strengths, the new entity is poised to become the premier California business banking franchise.

This consolidation of resources will enable the company to capitalize on market opportunities more effectively and provide an expanded range of products and services to its customers.

Beyond financial benefits, the merger is expected to create a more robust and well-capitalized institution, armed with ample liquidity to serve the banking needs of small and medium-sized businesses across California.

The potential for profitable and sustainable growth is enhanced, setting the stage for exceptional service to local communities.

The new company will be positioned to invest significantly in its technology platform, thereby elevating the client experience and streamlining internal efficiencies.

This commitment to innovation will also attract top-tier talent and foster new business development efforts, amplifying the company’s competitive edge in the dynamic California market.

To bolster its financial position further, the merged entity plans to execute a targeted balance sheet repositioning at the closing of the transaction.

With committed capital of $400 million from Investors, the company will achieve robust capital levels and enjoy a strong liquidity profile, enabling them to seize opportunities as they arise.

How PACW Will Be Transforming?

The merger between PacWest (PACW) and Banc of California promises to be transformational.

By joining forces, they are creating a powerhouse institution with the resources, scale, and vision to shape the future of California’s banking landscape.

Investors, customers, and communities alike are poised to benefit from this strategic alignment, driving growth and prosperity for years to come.