Enterprising Investor
12 years ago
PacWest Bancorp Announces the Completion of Its Acquisition of First California Financial Group (5/31/13)
-- Acquisition adds 6 branches after consolidation and approximately $1.7 billion in assets --
-- Two First California Financial Group Directors Join the PacWest Board of Directors –
-- First California Bank merged into Pacific Western Bank –
-- Integration and systems conversion scheduled for June 14, 2013 --
PacWest Bancorp (Nasdaq:PACW) ("PacWest") announced that today it completed its previously announced acquisition of First California Financial Group, Inc. (Nasdaq:FCAL) ("First California"). As part of the acquisition, First California Bank, a wholly-owned subsidiary of First California, merged with and into PacWest's wholly-owned banking subsidiary, Pacific Western Bank ("PWB").
The acquisition, which was first announced on November 6, 2012, was concluded following receipt of shareholder approval from both institutions and all required regulatory approvals. First California had $1.7 billion in assets as of March 31, 2013. As of March 31, 2013, on a pro forma consolidated basis with First California, PacWest would have had approximately $7.0 billion in assets.
In the merger with First California, each share of First California common stock was converted into the right to receive 0.2966 of a share of PacWest common stock. The exchange ratio was calculated based on the volume-weighted average share price of PacWest common stock for the 20 consecutive trading days ending on the second full trading day prior to the receipt of the last of the regulatory approvals required under the merger agreement. PacWest is issuing an aggregate of approximately 8.3 million shares of PacWest common stock to First California stockholders (which include PacWest common shares issuable in exchange for First California's Series A Preferred Stock). Approximately $231,000 in cash is being delivered to holders of outstanding and unexercised First California options. In addition, approximately one million shares of First California common stock currently owned by PacWest have been cancelled in the merger. Based on the closing price of PacWest's common stock on May 31, 2013 of $28.83 per share, the aggregate consideration to be paid to First California common stockholders and holders of options to acquire First California common stock, plus the cost of the First California shares of common stock cancelled in the merger, is approximately $243 million.
Effective May 31, 2013, Mr. Joseph Cohen and Antoinette Hubenette, M.D., former directors of First California, have joined PacWest Bancorp's board of directors.
The integration of First California Bank systems and the conversion of First California Bank's branches to PWB's operating platform are scheduled to be completed over the weekend of June 14, 2013. First California Bank has 15 branches, nine of which overlap with existing Pacific Western Bank branches. Seven of the First California Bank branches will be closed as part of the integration and system conversion on June 14, 2013 and two PWB branches will subsequently be closed in the consolidation on June 21, 2013.The resulting net effect of this branch conversion and closure activity is that PWB will add six branches to its branch system.
ABOUT PACWEST BANCORP
PacWest is a bank holding company with $5.3 billion in assets as of March 31, 2013, with one wholly-owned banking subsidiary, PWB. Through 68 full-service branches, excluding the 15 recently acquired branches of First California Bank which will be integrated on June 14, 2013, PWB provides commercial banking services, including real estate, construction, and commercial loans, to small and medium-sized businesses. PWB's branches are located throughout California in Los Angeles, Orange, Riverside, San Bernardino, Santa Barbara, San Diego, San Francisco, San Luis Obispo, San Mateo, and Ventura Counties. Through its subsidiaries, BFI Business Finance and Celtic Capital Corporation, and its divisions, First Community Financial and Pacific Western Equipment Finance, PWB also provides working capital financing and equipment leasing to growing companies located throughout the United States, with a focus on the Southwest, primarily in Arizona, California, Utah, and Texas. Additional information regarding PacWest is available on the Internet at www.pacwestbancorp.com. Information regarding PWB is also available on the Internet at www.pacificwesternbank.com.
CONTACT: Matthew P. Wagner
Chief Executive Officer
PacWest Bancorp
10250 Constellation Boulevard
Suite 1640
Los Angeles, CA 90067
Phone: 310-728-1020
Fax: 310-201-0498
Victor R. Santoro
Executive Vice President & CFO
PacWest Bancorp
10250 Constellation Boulevard
Suite 1640
Los Angeles, CA 90067
Phone: 310-728-1021
Fax: 310-201-0498
Enterprising Investor
12 years ago
PacWest Bancorp and First California Financial Group, Inc. Announce Receipt of All Regulatory Approvals and Timing for Closing of the Acquisition (5/14/13)
—Exchange Ratio Set at 0.2966 per Share of PacWest Common Stock for Each Share of First California Common Stock —
— Acquisition to Close at Close of Business on May 31, 2013 —
— Systems Conversion Expected to Occur on June 14, 2013 —
LOS ANGELES and WESTLAKE VILLAGE, Calif., May 14, 2013 (GLOBE NEWSWIRE) -- PacWest Bancorp (Nasdaq:PACW) and First California Financial Group, Inc. (Nasdaq:FCAL) today announced the receipt of all necessary regulatory approvals in connection with the previously announced pending merger of First California Financial Group, Inc. ("First California") with and into PacWest Bancorp ("PacWest"). The final regulatory approval was received on May 10, 2013.
Pursuant to the terms of the merger agreement, PacWest will acquire First California for $8.00 per First California common share. The exchange ratio is calculated based on the volume-weighted average share price of PacWest common stock for the 20 consecutive trading days ending on the second full trading day prior to the receipt of the last of the regulatory approvals required under the merger agreement.
As a result, each share of First California common stock shall be converted into the right to receive 0.2966 of a share of PacWest common stock. PacWest will issue an aggregate of approximately 8.4 million shares of PacWest common stock to First California stockholders (which includes PacWest common shares issuable in exchange for First California's Series A Preferred Stock). Approximately $537,000 in cash will be delivered to holders of outstanding and unexercised First California options. In addition, approximately one million shares of First California common stock currently owned by PacWest will be cancelled in the merger. Based on the closing price of PacWest's common stock on May 13, 2013 of $27.61 per share, the aggregate consideration to be paid to First California common stockholders and holders of options to acquire First California common stock plus the cost of the First California shares of common stock cancelled in the merger is approximately $237.1 million.
Stockholders of PacWest and First California overwhelmingly approved the merger on March 20, 2013.
PacWest and First California expect to complete the merger on May 31, 2013. Completion of the merger remains subject to satisfaction of customary closing conditions set forth in the merger agreement. The integration of First California's systems and the conversion of First California's branches to PacWest's operating platform are scheduled to be completed over the weekend of June 14, 2013.
As of March 31, 2013, on a pro forma consolidated basis with First California, PacWest would have had approximately $7.0 billion in assets with 82 branches throughout California.
ABOUT PACWEST BANCORP
PacWest Bancorp ("PacWest") is a bank holding company with $5.3 billion in assets as of March 31, 2013, with one wholly-owned banking subsidiary, Pacific Western Bank ("Pacific Western"). Through 67 full-service community banking branches, Pacific Western provides commercial banking services, including real estate, construction and commercial loans, to small and medium-sized businesses. Pacific Western's branches are located throughout California in Los Angeles, Orange, Riverside, San Bernardino, Santa Barbara, San Diego, San Francisco, San Luis Obispo, San Mateo and Ventura Counties. Through its subsidiaries, BFI Business Finance and Celtic Capital Corporation, and its divisions, First Community Financial and Pacific Western Equipment Finance, Pacific Western also provides working capital financing and equipment leasing to growing companies located throughout the United States, with a focus on the Southwestern U.S., primarily in Arizona, California, Utah and Texas. Additional information regarding PacWest Bancorp is available on the Internet at www.pacwestbancorp.com. Information regarding Pacific Western Bank is also available on the Internet at www.pacificwesternbank.com.
ABOUT FIRST CALIFORNIA FINANCIAL GROUP, INC.
First California Financial Group, Inc. is the holding company of First California Bank. Founded in 1979 and with nearly $2 billion in assets, First California serves the comprehensive financial needs of small- and middle-sized businesses and high net worth individuals throughout Southern California. Led by an experienced team of bankers, First California is committed to providing the best client service available in its markets, offering a full line of quality commercial banking products through 15 full-service branch offices in Los Angeles, Orange, Riverside, San Bernardino, San Diego, San Luis Obispo and Ventura counties. The holding company's website can be accessed at www.fcalgroup.com. For additional information on First California Bank's products and services, visit www.fcbank.com.
FORWARD-LOOKING STATEMENTS
This press release contains certain forward-looking information about PacWest Bancorp, First California Financial Group, and the combined company after the close of the transaction that is intended to be covered by the safe harbor for "forward-looking statements" provided by the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact are forward-looking statements. Such statements involve inherent risks and uncertainties, many of which are difficult to predict and are generally beyond the control of PacWest, First California and the combined company. Forward-looking statements speak only as of the date they are made and we assume no duty to update such statements. We caution readers that a number of important factors could cause actual results to differ materially from those expressed in, or implied or projected by, such forward-looking statements. Risks and uncertainties for each institution and the combined institution include, but are not limited to: lower than expected revenues; credit quality deterioration or a reduction in real estate values could cause an increase in the allowance for credit losses and a reduction in net earnings; increased competitive pressure among depository institutions; the ability to complete the proposed acquisition, or any future acquisition, successfully integrate such acquired entities, or achieve expected beneficial synergies and/or operating efficiencies, in each case within expected time-frames or at all; settlements with the FDIC related to loss-sharing arrangements; the possibility that personnel changes will not proceed as planned; the cost of additional capital is more than expected; a change in the interest rate environment reduces net interest margins; asset/liability re-pricing risks and liquidity risks; pending legal matters may take longer or cost more to resolve or may be resolved adversely; general economic conditions, either nationally or in the market areas in which the entities operate or anticipate doing business, are less favorable than expected; and environmental conditions, including natural disasters, may disrupt business, impede operations, or negatively impact the values of collateral securing loans.
CONTACT: PacWest Bancorp
10250 Constellation Blvd., Suite 1640
Los Angeles, CA 90067
Matthew P. Wagner
Chief Executive Officer
(310) 728-1020
Victor R. Santoro
Executive Vice President and CFO
(310) 728-1021
First California Financial Group, Inc.
3027 Townsgate Road, Suite 300
Westlake Village, CA 91361
C. G. Kum
President and Chief Executive Officer
(805) 322-9308
Romolo C. Santarosa
Sr. Executive Vice President and COO/CFO
(805) 322-9333
Enterprising Investor
12 years ago
FCAL and PSBK Terminate Merger Agreement (1/30/13)
WESTLAKE VILLAGE, CA and RIVERSIDE, CA--(Marketwire - Jan 30, 2013) - First California Financial Group, Inc. (NASDAQ: FCAL), its wholly owned subsidiary, First California Bank (FCB) and Premier Service Bank (OTCBB: PSBK) announced today that they have jointly agreed to terminate that certain Agreement and Plan of Merger dated February 27, 2012, as amended, among the parties, effective January 30, 2013. Under the terms of the Merger Agreement the transaction was to be accomplished by December 31, 2012. As the parties were unable to accomplish the transaction by that date, the parties have mutually determined that it is in the best interest of both companies to terminate the Merger Agreement. The termination agreement entered into between the parties includes mutual general releases of all claims.
About Premier Service Bank
Premier Service Bank is a California state-chartered bank with two offices, its headquarters office in Riverside and a full-service banking office in Corona. The Bank provides commercial banking services, including a wide variety of checking accounts, investment services with competitive deposit rates, on-line banking products, and real estate, construction, commercial and consumer loans, to small and medium-sized businesses, professionals and individuals. Additional information about Premier Service Bank is available at its website at www.premierservicebank.com.
About First California
First California Financial Group, Inc. (NASDAQ: FCAL) is the holding company of First California Bank. Founded in 1979 and with nearly $2 billion in assets, First California serves the comprehensive financial needs of small- and middle-sized businesses and high net worth individuals throughout Southern California. Led by an experienced team of bankers, First California is committed to providing the best client service available in its markets, offering a full line of quality commercial banking products through 15 full-service branch offices in Los Angeles, Orange, Riverside, San Bernardino, San Diego, San Luis Obispo and Ventura counties. The holding company's website can be accessed at www.fcalgroup.com. For additional information on First California Bank's products and services, visit www.fcbank.com.
http://www.marketwire.com/press-release/first-california-financial-group-and-premier-service-bank-terminate-merger-agreement-nasdaq-fcal-1751533.htm
Enterprising Investor
12 years ago
PACW and FCAL Agree to Merger (11/06/12)
-- PacWest to Pay $8.00 per Share for FCAL Common Stock or Approximately $231 Million in Aggregate to FCAL Stockholders
-- Acquisition of First California to Add Nearly $2.0 Billion in Assets to PacWest
-- Two Valuable Franchises Combine to Create the Eighth Largest Publicly-Owned Bank Headquartered in California
LOS ANGELES, CA and WESTLAKE VILLAGE, CA--(Marketwire - Nov 6, 2012) - PacWest Bancorp (NASDAQ: PACW) and First California Financial Group, Inc. (NASDAQ: FCAL) today announced the signing of a definitive agreement and plan of merger whereby PacWest will acquire First California for $8.00 per First California common share, or approximately $231 million in aggregate consideration, payable in PacWest common stock.
First California, headquartered in Westlake Village, California, is the parent of First California Bank and had approximately $2.0 billion in assets and 15 branches across Los Angeles, Orange, Riverside, San Bernardino, San Diego, San Luis Obispo and Ventura Counties at September 30, 2012. In connection with the acquisition, First California Bank will be merged into Pacific Western Bank, the Los Angeles-based wholly-owned subsidiary of PacWest Bancorp.
Directors of PacWest and of First California unanimously approved the transaction. Two independent directors from the board of directors of First California will join PacWest's board of directors upon completion of the acquisition.
The transaction, currently expected to close late in the first quarter of 2013, is subject to customary conditions, including the approval of bank regulatory authorities and the stockholders of both companies. Stockholders of First California, including all current directors and certain other stockholders, owning or controlling approximately 22% in the aggregate of the currently outstanding shares of First California, have agreed to vote in favor of the transaction.
As of September 30, 2012, on a pro forma consolidated basis with First California, PacWest would have had approximately $7.5 billion in assets with 81 branches throughout California. The combined institution would be the eighth largest publicly-owned bank headquartered in California, and the 12th largest commercial bank headquartered in California (out of more than 240 financial institutions).
Pursuant to the terms of the definitive agreement, First California shareholders will receive PacWest common stock for their shares of First California common stock in a tax-free transaction. First California in-the-money option holders will receive cash, net of applicable taxes withheld, for the value of their unexercised stock options.
The number of shares of PacWest common stock deliverable for each share of First California common stock will be determined based on an average price of PacWest common stock over a measuring period prior to the receipt of regulatory approval, and will fluctuate if such average price is between $20.00 and $27.00 and will be fixed if such average price is below $20.00 or above $27.00. Based on PacWest's closing stock price of $22.27 on Monday, November 5, 2012, First California stockholders would have received 0.3592 of a share of PacWest common stock for each share of First California common stock, which would provide First California stockholders with aggregate ownership, on a pro forma basis, of approximately 22.4% of the common stock of the combined company.
The holders of 100% of the outstanding shares of First California Series A preferred stock have agreed to convert their shares into common stock, per the terms of the series of preferred stock, and have the resulting common stock exchanged in the transaction. PacWest and First California expect to redeem First California's outstanding Series C preferred stock for cash in accordance with its terms immediately prior to the closing of the transaction.
Matt Wagner, Chief Executive Officer of PacWest Bancorp and Chairman and CEO of Pacific Western Bank, commented, "We are very pleased to have reached this agreement with First California. The merger of these two organizations will create a valuable franchise for the stockholders of both companies, and meaningfully enhance the presence of the combined organization throughout California."
C. G. Kum, First California's President and Chief Executive Officer, said, "First California is proud of what it has built since its inception in 1979. As a result of this transaction, two premier organizations will come together to create one of the leading commercial banks headquartered in Los Angeles, with more than $7.5 billion in assets. The combined bank will continue to offer the same dedication and high quality service both institutions are known for, while providing customers with an even greater array of products and higher lending limits. We also believe this transaction provides opportunity for future shareholder value."
Keefe, Bruyette & Woods, Inc. acted as financial advisor to First California in the transaction and delivered a fairness opinion to the Board of Directors of First California. Skadden, Arps, Slate, Meagher & Flom, LLP served as legal counsel to First California. Castle Creek Financial acted as financial advisor to PacWest, and Sandler O'Neill + Partners, L.P. delivered a fairness opinion to the Board of PacWest. Wachtell, Lipton, Rosen & Katz served as legal counsel to PacWest.
ABOUT PACWEST BANCORP
PacWest Bancorp ("PacWest") is a bank holding company with $5.5 billion in assets as of September 30, 2012, with one wholly-owned banking subsidiary, Pacific Western Bank ("Pacific Western"). Through 66 full-service community banking branches, Pacific Western provides commercial banking services, including real estate, construction and commercial loans, to small and medium-sized businesses. Pacific Western's branches are located throughout California in Los Angeles, Orange, Riverside, San Bernardino, Santa Barbara, San Diego, San Francisco, San Luis Obispo, San Mateo and Ventura Counties. Through its subsidiaries, BFI Business Finance and Celtic Capital Corporation, and its divisions, First Community Financial and Pacific Western Equipment Finance, Pacific Western also provides working capital financing and equipment leasing to growing companies located throughout the United States, with a focus on the Southwestern U.S., primarily in Arizona, California, Utah and Texas. Additional information regarding PacWest Bancorp is available on the Internet at www.pacwestbancorp.com. Information regarding Pacific Western Bank is also available on the Internet at www.pacificwesternbank.com.
ABOUT FIRST CALIFORNIA FINANCIAL GROUP, INC.
First California Financial Group, Inc. is the holding company of First California Bank. Founded in 1979 and with nearly $2 billion in assets, First California serves the comprehensive financial needs of small- and middle-sized businesses and high net worth individuals throughout Southern California. Led by an experienced team of bankers, First California is committed to providing the best client service available in its markets, offering a full line of quality commercial banking products through 15 full-service branch offices in Los Angeles, Orange, Riverside, San Bernardino, San Diego, San Luis Obispo and Ventura counties. The holding company's website can be accessed at www.fcalgroup.com. For additional information on First California Bank's products and services, visit www.fcbank.com.
FORWARD-LOOKING STATEMENTS
This press release contains certain forward-looking information about PacWest Bancorp, First California Financial Group, and the combined company after the close of the transaction that is intended to be covered by the safe harbor for "forward-looking statements" provided by the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact are forward-looking statements. Such statements involve inherent risks and uncertainties, many of which are difficult to predict and are generally beyond the control of PacWest, First California and the combined company. Forward-looking statements speak only as of the date they are made and we assume no duty to update such statements. We caution readers that a number of important factors could cause actual results to differ materially from those expressed in, or implied or projected by, such forward-looking statements. Risks and uncertainties for each institution and the combined institution include, but are not limited to: lower than expected revenues; credit quality deterioration or a reduction in real estate values could cause an increase in the allowance for credit losses and a reduction in net earnings; increased competitive pressure among depository institutions; the ability to complete the proposed acquisition, including obtaining regulatory approvals and approval by the stockholders of PacWest and First California, or any future acquisition, successfully integrate such acquired entities, or achieve expected beneficial synergies and/or operating efficiencies, in each case within expected time-frames or at all; regulatory approvals may not be received on expected timeframes or at all; settlements with the FDIC related to loss-sharing arrangements; the possibility that personnel changes will not proceed as planned; the cost of additional capital is more than expected; a change in the interest rate environment reduces net interest margins; asset/liability re-pricing risks and liquidity risks; pending legal matters may take longer or cost more to resolve or may be resolved adversely; general economic conditions, either nationally or in the market areas in which the entities operate or anticipate doing business, are less favorable than expected; and environmental conditions, including natural disasters, may disrupt business, impede operations, or negatively impact the values of collateral securing loans.
ADDITIONAL INFORMATION ABOUT THE PROPOSED TRANSACTION AND WHERE TO FIND IT
Investors and security holders are urged to carefully review and consider each of PacWest Bancorp's and First California Financial Group's public filings with the SEC, including but not limited to their Annual Reports on Form 10-K, their proxy statements, and their Quarterly Reports on Form 10-Q. The documents filed by PacWest with the SEC may be obtained free of charge at PacWest's website at www.pacwestbancorp.com or at the SEC's website at www.sec.gov. These documents may also be obtained free of charge from PacWest by requesting them in writing to PacWest Bancorp, c/o Pacific Western Bank, 275 North Brea Boulevard, Brea, CA 92821; Attention: Investor Relations, or by telephone at (714) 671-6800.
The documents filed by First California with the SEC may be obtained free of charge at First California's website at www.fcalgroup.com or at the SEC's website at www.sec.gov. These documents may also be obtained free of charge from First California by requesting them in writing to First California Financial Group Inc., 3027 Townsgate Road, Suite 300, Westlake Village, California 91361, Attention: Investor Relations, or by telephone at Phone: (805) 322-9655.
This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval. PacWest Bancorp and First California intend to file a registration statement including a joint proxy statement/prospectus and other documents regarding the proposed acquisition with the SEC. Before making any voting or investment decision, investors and security holders of either First California or PacWest Bancorp are urged to carefully read the entire registration statement and joint proxy statement/prospectus, when they become available, as well as any amendments or supplements to these documents, because they will contain important information about the proposed acquisition. A definitive joint proxy statement/prospectus will be sent to the stockholders of each institution seeking any required stockholder approvals. Investors and security holders will be able to obtain the registration statement and the joint proxy statement/prospectus free of charge from PacWest or First California by writing to the addresses provided for each company set forth in the paragraphs above.
PacWest, its directors, executive officers and certain other persons may be soliciting proxies from PacWest Bancorp stockholders in favor of the approval of the acquisition. Information about the directors and executive officers of PacWest and their ownership of PacWest common stock is set forth in the proxy statement for PacWest's 2012 annual meeting of stockholders, as previously filed with the SEC. Stockholders may obtain additional information regarding the interests of such participants by reading the registration statement and the joint proxy statement/prospectus when they become available.
First California, its directors, executive officers and certain other persons may be soliciting proxies from First California Financial Group stockholders in favor of the approval of the acquisition. Information about the directors and executive officers of First California and their ownership of First California common stock is set forth in the proxy statement for First California's 2012 annual meeting of stockholders, as previously filed with the SEC. Stockholders may obtain additional information regarding the interests of such participants by reading the registration statement and the joint proxy statement/prospectus when they become available.
Contact Information
PacWest Bancorp
10250 Constellation Blvd., Suite 1640
Los Angeles, CA 90067
Contacts:
Matthew P. Wagner
Chief Executive Officer
(310) 728-1020
Victor R. Santoro
Executive Vice President and CFO
(310) 728-1021
First California Financial Group, Inc.
3027 Townsgate Road, Suite 300
Westlake Village, CA 91361
Contacts:
C. G. Kum
President and Chief Executive Officer
(805) 322-9308
Romolo C. Santarosa
Sr. Executive Vice President and COO/CFO
(805) 322-9333
http://www.marketwire.com/press-release/pacwest-bancorp-and-first-california-financial-group-inc-agree-to-merger-nasdaq-pacw-1722489.htm
Enterprising Investor
12 years ago
FCAL Reports 38 Percent Increase in Earnings for 2012 Third Quarter (10/25/12)
Company to Host Conference Call Today at 11 a.m. Pacific Time
WESTLAKE VILLAGE, CA--(Marketwire - Oct 25, 2012) - First California Financial Group, Inc. (NASDAQ: FCAL), the holding company of First California Bank, today reported net income of $3.5 million for the quarter ended September 30, 2012, compared with $2.5 million for the same quarter a year ago. Net income available to common shareholders was $3.2 million, or $0.11 per diluted share, compared with $900,000, or $0.03 per diluted share, for the prior year third quarter. Preferred dividends were $312,500 for the third quarter of 2012 and $1,616,000, which included a deemed and final dividend on the series B preferred shares, for the third quarter of 2011. At September 30, 2012, tangible book value per common share increased to $4.71 from $4.19 at December 31, 2011.
"Earnings for the 2012 third quarter grew significantly over the same period last year and return on average tangible common equity improved to 10.25 percent from 4.25 percent," said C. G. Kum, president and chief executive officer of First California Financial Group. "Moreover, we were able to grow net interest income and fee income, as well as our loan portfolio and deposits. Our solid financial performance continues to demonstrate the successful strategies we implemented to enhance profitability, despite economic headwinds and the added expense and challenges related to ongoing shareholder matters."
2012 Third Quarter Financial Highlights
•Net interest income rose 9 percent from same period last year;
•Service charges, fees and other income increased 9 percent from the year ago period;
•Efficiency ratio, inclusive of $0.9 million for shareholder matter expenses, was 68 percent;
•Strong asset quality with annualized year-to-date net charge-offs of 0.12 percent of average loans;
•Non-covered loans, before the allowance, increased 14 percent over the 2011 year-end;
•Total deposits increased 12 percent while non-interest checking deposits jumped 40 percent from year-end 2011;
•Tangible book value per common share increased to $4.71, or 12 percent, since the end of 2011;
•Third quarter return on average tangible common equity was 10.25 percent.
Financial Results
For the 2012 third quarter, net interest income before the provision for loan losses increased 9 percent to $17.0 million from $15.6 million for the 2011 third quarter. The increase reflects a 13 percent increase in average earning assets and a 3 percent decrease in net interest margin. Interest income (discount accretion) on covered loans for the 2012 third quarter was $4.5 million. 2011 third quarter interest income (discount accretion) on covered loans was $3.8 million. Net interest margin, on a taxable equivalent basis, declined to 3.91 percent from 4.05 percent for the 2011 third quarter.
Service charges, fees and other income increased to $2.3 million from $2.1 million for the 2011 third quarter, primarily reflecting continued growth in business volumes and fees generated from the EPS division. Revenues from the EPS division increased to $1.2 million for the 2012 third quarter from $800,000 for the same quarter last year.
Third quarter 2012 non-interest income included a $510,000 net gain on the sale of securities, offset by a $449,000 impairment loss on securities, a $99,000 loss on non-hedged derivatives and $135,000 decrease in FDIC shared-loss asset. For the 2011 third quarter, non-interest income included a $209,000 net gain on the sale of securities.
Operating expenses for the 2012 third quarter were $13.0 million, compared with $12.1 million for the 2011 third quarter. Operating expenses exclude intangible amortization, integration/conversion expenses and foreclosed property gains, losses and expenses. The increase reflects higher professional services expenses, which included approximately $0.9 million of costs related to shareholder matters, and higher deposit insurance assessments due to the 40 percent increase in non-interest checking deposits. The efficiency ratio was 68.37 percent for the 2012 third quarter, compared with 68.22 percent for the same period last year.
Core earnings, which represent income before taxes and exclude credit charges and non-recurring items such as gain on acquisitions, integration/conversion expense and securities transactions, were $5.5 million for the third quarter of 2012, compared with $5.0 million for the same period a year ago, an increase of 10 percent.
Non-covered loans, before the allowance for loan losses, grew 14 percent to $1.1 billion at September 30, 2012 from $936.1 million at December 31, 2011. Commercial mortgage loans led the increase, up $60 million or 15 percent from the end of the year. Aided by purchases earlier in the year, home mortgage loans increased 44 percent, while multifamily mortgage loans increased 15 percent through originations and purchases.
At September 30, 2012, covered loans decreased to $106.1 million from $135.4 million at December 31, 2011. The Bank's covered non-performing assets declined by $18.7 million, or 55 percent, during the same period.
Non-interest checking deposits increased 40 percent from year-end 2011, primarily from growth in EPS deposits, and now represent 42 percent of total deposits. The cost of all deposits, aided by the change in the mix of deposits, fell 37 percent to 32 basis points for the 2012 third quarter from 51 basis points for the same period last year. Core deposits now comprise 83 percent of all deposits.
Kum added, "The banking industry continues to be impacted by a low interest rate environment. Despite this, we have proactively managed our cost of liabilities and our margin has held up better than most of our peers as evidenced by the slight decline in our net interest margin of only 14 basis points over the last 12 months."
Asset Quality
At September 30, 2012, non-covered non-performing assets (the sum of non-covered loans past due 90 days and accruing, nonaccrual loans and foreclosed properties) improved to 1.54 percent of total assets, compared with 1.89 percent at December 31, 2011. At September 30, 2012, nonaccrual loans increased $1.5 million from year-end 2011 while foreclosure properties declined $5.1 million for the same period.
The allowance for loan losses was $18.2 million, or 1.71 percent of non-covered loans, at September 30, 2012, compared with $17.7 million, or 1.90 percent of non-covered loans, at December 31, 2011. Net loan charge-offs for the 2012 third quarter were $605,000, down from $2.1 million for the 2011 third quarter. The provision for non-covered loan losses was $500,000 for the 2012 third quarter compared with $1.6 million for the 2011 third quarter.
Capital resources
Shareholders' equity rose to $236.6 million at September 30, 2012 from $223.1 million at December 31, 2011. The Company's book value per common share increased to $7.21 at September 30, 2012 from $6.75 at December 31, 2011. Tangible book value per common share rose to $4.71 at September 30, 2012 from $4.19 at December 31, 2011.
At September 30, 2012, First California's preliminary Tier 1 leverage capital ratio was 10.00 percent versus 10.33 percent at the 2011 calendar year end, and the total risk-based capital ratio decreased to 17.18 percent from 17.32 percent at December 31, 2011. The Company's ratio of tangible common equity to tangible assets was 7.18 percent at September 30, 2012, up from 7.05 percent at the end of 2011. Total assets were $1.99 billion at September 30, 2012, compared with $1.81 billion at December 31, 2011.
Kum concluded, "We remain focused on improving our performance, while keeping an eye on expenses and providing the highest quality service to our loyal customers. More than ever, we appreciate the hard work and dedication of our employees who help make First California the business bank of choice in our markets."
Use of Non-GAAP Financial Measures
This news release includes "non-GAAP financial measures" within the meaning of the Securities and Exchange Commission rules. Tangible common equity as a percentage of tangible assets is a non-GAAP financial measure. Tangible common equity to tangible assets represents tangible common equity, calculated as total shareholders' equity less preferred stock and related dividend and accretion of preferred stock discount, goodwill and intangible assets, net, divided by tangible assets which are total assets less goodwill and other intangible assets, net. Management believes that this measure is useful when comparing banks with preferred stock, due to CPP or SBLF funding, to banks without preferred stock on their balance sheet and for evaluating a company's capital levels. Core earnings represent income before taxes and exclude credit charges and other items such as gain on acquisitions, integration/conversion expense and securities transactions and are intended to represent recurring operating earnings. Operating expenses exclude amortization of intangible assets and loss on and expense of foreclosed property and other items such as integration/conversion expenses related to acquisitions and are intended to represent normalized, recurring expenses. This information is being provided in response to market participant interest in these financial metrics. This information is not intended to be considered in isolation or as a substitute for the relevant measures calculated in accordance with U.S. GAAP. The reconciliation of this non-GAAP financial measure to a GAAP financial measure is provided as an attachment to the financial tables.
Conference Call and Webcast
First California will hold a conference call today, October 25, 2012 at 11 a.m. Pacific (2 p.m. Eastern) to discuss the Company's 2012 third quarter financial performance. Investment professionals are invited to participate in the live call by dialing 877-317-6789 (domestic), 866-605-3852 (Canada) or 412-317-6789 (international) and requesting the First California conference call. Other interested parties are invited to listen to the live call through a live, listen-only audio Internet broadcast at www.fcalgroup.com. Listeners are encouraged to visit the Web site at least 15 minutes prior to the start of the call to register, download and install any necessary audio software. For those who are not available to listen to the live broadcast, the call will be archived on the same Web site for one year. A telephonic replay of the call will be available one hour after the end of the conference through November 9, 2012 by dialing 877-344-7529 (domestic) or 412-317-0088 (international) and entering replay passcode 10019615.
About First California
First California Financial Group, Inc. (NASDAQ: FCAL) is the holding company of First California Bank. Founded in 1979 and with nearly $2 billion in assets, First California serves the comprehensive financial needs of small- and middle-sized businesses and high net worth individuals throughout Southern California. Led by an experienced team of bankers, First California is committed to providing the best client service available in its markets, offering a full line of quality commercial banking products through 15 full-service branch offices in Los Angeles, Orange, Riverside, San Bernardino, San Diego, San Luis Obispo and Ventura counties. The holding company's website can be accessed at www.fcalgroup.com. For additional information on First California Bank's products and services, visit www.fcbank.com.
http://www.marketwire.com/press-release/first-california-reports-38-percent-increase-in-earnings-for-2012-third-quarter-nasdaq-fcal-1717766.htm
Enterprising Investor
12 years ago
What exactly does Bloomberg detail?
San Luis Trust Bank FSB merged with financial assistance into First California Bank
Who exactly provides financial assistance to a bank when it fails? The FDIC.
San Luis Trust Bank, FSB, San Luis Obispo, California, was closed today by the Office of Thrift Supervision, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with First California Bank, Westlake Village, California, to assume all of the deposits of San Luis Trust Bank, FSB.
The sole branch of San Luis Trust Bank, FSB will reopen on Tuesday as a branch of First California Bank. Depositors of San Luis Trust Bank, FSB will automatically become depositors of First California Bank. Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship in order to retain their deposit insurance coverage up to applicable limits. Customers of San Luis Trust Bank, FSB should continue to use their existing branch until they receive notice from First California Bank that it has completed systems changes to allow other First California Bank branches to process their accounts as well.
This evening and over the weekend, depositors of San Luis Trust Bank, FSB can access their money by writing checks or using ATM or debit cards. Checks drawn on the bank will continue to be processed. Loan customers should continue to make their payments as usual.
As of December 31, 2010, San Luis Trust Bank, FSB had approximately $332.6 million in total assets and $272.2 million in total deposits. In addition to assuming all of the deposits of the failed bank, First California Bank agreed to purchase essentially all of the assets.
The FDIC and First California Bank entered into a loss-share transaction on $241.7 million of San Luis Trust Bank, FSB's assets. First California Bank will share in the losses on the asset pools covered under the loss-share agreement. The loss-share transaction is projected to maximize returns on the assets covered by keeping them in the private sector. The transaction also is expected to minimize disruptions for loan customers. For more information on loss share, please visit: www.fdic.gov/bank/individual/failed/lossshare/index.html.
Customers who have questions about today's transaction can call the FDIC toll-free at 1-877-755-6665. The phone number will be operational this evening until 9:00 p.m., Pacific Standard Time (PST); on Saturday from 9:00 a.m. to 6:00 p.m., PST; on Sunday from noon to 6:00 p.m., PST; and thereafter from 8:00 a.m. to 8:00 p.m., PST. Interested parties also can visit the FDIC's Web site at http://www.fdic.gov/bank/individual/failed/sanluistrust.html.
The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $96.1 million. Compared to other alternatives, First California Bank's acquisition was the least costly resolution for the FDIC's DIF. San Luis Trust Bank, FSB is the twenty-second FDIC-insured institution to fail in the nation this year, and the third in California. The last FDIC-insured institution closed in the state was Charter Oak Bank, Napa, earlier today.
http://www.fdic.gov/news/news/press/2011/pr11041.html
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