Beverly Hills-based PacWest Bancorp and downtown’s CU Bancorp announced Thursday they will merge, with PacWest acquiring CU for $705 million in cash and stock considerations.

The companies will have a combined $25 billion in assets and operate a total of 87 bank branches. The transaction has been approved by both companies’ board of directors and is expected to close sometime in the fourth quarter of 2017.

PacWest’s acquisition price works out to $39.45 a share, which represented a slight discount from the $39.50 CU stock closed at on Wednesday. CU’s shares dropped almost 2 percent Thursday to close at $38.75. PacWest’s stock jumped 2.2 percent Thursday to close at $52.88 after the merger was announced.

PacWest Bancorp Chief Executive Matt Wagner said in a statement that his outfit had been eyeing the CU operation and that the companies’ were a good strategic match.

“We have long admired the Southern California franchise the CU Bancorp team has built over the years,” Wagner said. “We are confident the partnership announced today will create value for both PacWest and CU Bancorp shareholders.”

Keefe Bruyette & Woods acted as financial advisor to CU Bancorp with Manatt Phelps & Philips serving as legal counsel. Sandler O’Neill and Partners was financial advisor to PacWest with Sullivan & Cromwell providing legal counsel on the deal.

Deals & Dealmakers reporter Henry Meier can be reached at [email protected]. Follow him on Twitter @henry_meier.