Banc of California has today completed its merger with PacWest Bancorp, with both firms shedding billions of dollars’ worth of agency commercial mortgage-backed securities, agency collateralised mortgage obligations (CMOs), treasury bonds, municipal bonds and corporate bonds.
Pacific Western Bank has sold approximately US$1.5 billion of its securities portfolio, which included agency commercial mortgage-backed securities, agency CMOs, treasury bonds, municipal bonds and corporate bonds. Banc of California has sold approximately US$447.4 million of its securities portfolio, which included agency mortgage-backed securities, CMOs and municipal bonds.
The previously announced forward sale of Banc of California’s $1.8 billion single-family residential mortgage portfolio is expected to close on or about 1 December 2023.
The cash from these sales, alongside proceeds from additional balance sheet repositioning sales to come, are expected to be used primarily for the repayment of the combined bank’s wholesale borrowings and higher cost funding.
Banc of California president, Jared Wolff, said, “By combining the best of two well-respected banks, we have created one of the nation’s premier, relationship-focused business banks. We look forward to sharing our expanded capabilities with clients and all the communities we serve. California has experienced a void of business banks that we intend to fill, and we look forward to helping our clients grow and delivering for our clients, communities and shareholders.”
The new entity becomes the third-largest bank headquartered in California and will operate under the Banc of California name and brand.
As well as the merger, Banc of California also completed its $400 million equity raise from affiliates of funds managed by Warburg Pincus.
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