First PacTrust Bancorp Inc. on Wednesday said that it will acquire the South Bay’s Beach Business Bank in a cash-and-stock deal valued at roughly $37.4 million.
First PacTrust will pay Beach Business’s shareholders the equivalent of $9.07 a share, a 53 percent premium to the stock’s Tuesday closing price. The Chula Vista parent of Pacific Trust Bank, which operates 11 branches in San Diego and Riverside counties, sees the deal as way to get a toehold in Los Angeles and Orange counties. Beach Business is based in Manhattan Beach and has branches in Long Beach, Torrance and Costa Mesa.
“The acquisition of Beach Business Bank represents a significant milestone in our stated strategy of becoming Southern California’s bank of choice for growing families, small- to mid-sized businesses and high net worth individuals in the communities we serve,” said Chief Executive Greg Mitchell said in a statement.
Pending regulatory approval, the bank expects the deal to close in the first quarter of next year. Depending on First PacTrust's stock price prior to closing, Beach Business shareholders will receive cash and either shares or warrants of First PacTrust. First PacTrust also intends to acquire Beach Business's remaining TARP preferred securities from the U.S. Treasury as part of the acquisition.
Beach Business shares closed up $2.67, or 45 percent, to $8.60 on the Over-the-Counter Bulletin Board. First PacTrust shares closed down 22 cents, or 2 percent, to $11.87 on the Nasdaq.