Two Los Angeles banks are one step closer to merging after announcing Thursday they have received all approvals from government regulators.
CU Bancorp, the parent company of California United Bank in Encino, said the Federal Deposit Insurance Corp. and the California Department of Business Oversight has approved its purchase of downtown L.A.’s 1st Enterprise Bank
Both banks are publicly traded. Holders of 1st Enterprise stock will receive about 1.3 shares of CU Bancorp stock for each of their current shares, valuing the transaction at roughly $104 million.
Following the transaction, California United Bank will have a dozen branches and assets of $2.2 billion.
“These regulatory approvals are an important step in completing the combination of California United Bank and 1st Enterprise Bank and the creation of an unparalleled commercial bank serving the Southern California business community,” said California United Chief Executive David Rainer in a statement.
Shareholders from the two banks must now approve the deal. Meetings are expected to be announced soon.
The deal, expected to close by the end of the year, is the latest in a string of bank mergers and acquisitions that have followed the end of the recession. Analysts and executives have said it is difficult for small lenders to be profitable while meeting stricter bank regulations enacted after the financial crisis.
Shares of CU Bancorp closed down 19 cents, or about 1 percent, to $18.66 on the Nasdaq. Shares of 1st Enterprise, which trade over the county, closed down 10 cents, less than half a percent, to $25.05.
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