First PacTrust Bancorp, Inc. (Nasdaq: BANC) (“First PacTrust”), the holding company for PacTrust Bank, and Manhattan Beach, Calif.-based Beach Business Bank (OTCBB: BBBC) (“Beach”) today jointly announced they have completed their merger, under which Beach shareholders are entitled to receive cash and warrants to acquire First PacTrust common stock with a total value of approximately $39 million.
The banks also announced that at the completion of the merger, Robert M. Franko, president and CEO of Beach prior to the merger, became president of First PacTrust, and Robb Evans, a director of Beach prior to the merger, joined the board of directors of First PacTrust, expanding the board to eight members. In addition, at the completion of the merger, Beach directors Fred Jensen, Jim Gray and Dan Mathis joined the board of directors of PacTrust Bank.
“The transaction is in keeping with our growth strategy of acquiring healthy, complementary banks that add to our services, strengthen our management team and expand our geographic footprint into attractive contiguous markets like Manhattan Beach, Long Beach and Costa Mesa,” said Gregory Mitchell, president and CEO of First PacTrust. “The acquisition of Beach Business Bank provides us with a great team of skilled community bankers and enhances our presence in the commercial banking and SBA markets. Based upon data as of March 31, 2012, the combined company will hold $1.3 billion in total assets and operate through 18 banking offices spanning an area from Santa Monica to the Mexican border.”
Under the terms of the merger agreement, Beach shareholders are entitled to receive approximately $9.21 per share in cash, plus one warrant to acquire 0.33 shares of First PacTrust common stock at an exercise price of $14.00 per share exercisable for one year following the completion of the merger for each Beach share they hold. Mitchell said the transaction is expected to be accretive to First PacTrust’s earnings in the first year after closing, excluding one-time merger costs, and accretive to tangible book value within two years of closing.