In a move that would expand its presence in California’s affluent Orange County, BayCom Corp. in Walnut Creek, California, is acquiring Pacific Enterprise Bancorp in Irvine.
A 14-year-old, single-branch institution, the $ 647 million-asset Pacific Enterprise holds $ 424 million of deposits in Orange County, according to the Federal Deposit Insurance Corp. The $ 2.3 billion-asset BayCom, the holding company for United Business Bank , operates two branches with $ 118.4 million of deposits in Orange County.
The all-stock deal was announced late Monday and is valued at $ 53.1 million, or $ 17.78 per Pacific Enterprise share. It is expected to close in the first quarter of 2022.
According to Timothy Coffey, who covers BayCom for Janney Montgomery Scott, the purchase price is about 10 times Pacific Enterprise’s trailing 12-month earnings and 88% of tangible book value.
Read Also
- Murder of Honduran prosecutor Karen Almendares: Luis Almagro targeted organized crime and demanded justice May 28, 2022
- Mustache stick from Gianna Maradona to Alejandro Fantino after he claimed that someone took money from Diego’s account after his death: “How little memory is people?” Feb 8, 2021
- United States: Joe Biden marries his granddaughter at the White House and behind closed doors Nov 19, 2022
- Corona virus in Argentina: 28 deaths and 4,032 new infections confirmed during the past 24 hours Mar 21, 2021
- UAE provides over 10 million coronavirus vaccine doses Apr 23, 2021
- What solution is the United States considering to evacuate more Afghan refugees? Aug 22, 2021
- Jimmy Fallon forced to confirm he’s alive because of fake news on Twitter Nov 18, 2022
BayCom has completed nine whole-bank acquisitions since 2010. In its most recent deal, which closed in February 2020, BayCom paid $ 13.9 million in cash for the $ 131 million-asset Grand Mountain Bancshares in Granby, Colorado. It operates 34 branches in California, New Mexico, Colorado and Washington.
BayCom said the deal for Pacific Enterprise would be accretive to earnings in the first year of combined operations. It is projecting cost savings equal to 30% of Pacific Enterprise’s noninterest expense base, which totaled $ 8.4 million for the first six months of 2021 and $ 17.6 million in 2020.
Through June 30, BayCom’s net income was $ 11.5 million, while Pacific Enterprise reported earnings of $ 3.3 million, according to the FDIC. The combined company would have assets of $ 2.9 billion, deposits of $ 2.4 billion and loans of $ 2.2 billion.
“We are very excited to have the opportunity to expand our branch network in Orange County while setting the stage for taking advantage of additional partner opportunities available in the future,” George Guarini, BayCom’s president and CEO, said in a press release. “The transaction will expand both our presence in Southern California and the breadth of our resources in the area of SBA and other government guaranteed lending products.”
Both BayCom and Pacific Enterprise are active Small Business Administration 7 (a) lenders. Between Oct. 1, 2020, and June 30, the first nine months of the SBA’s 2021 fiscal year, BayCom reported $ 43.1 million in 7 (a) originations, versus $ 30.1 million for Pacific Enterprise. The combined institution would rank among the agency’s top 100 7 (a) lenders.
“We are blessed with a solid, experienced employee base that have expertise in low-risk, high-margin loan programs,” Pacific Enterprise President and CEO Brian Halle said in the press release. “Couple that with a much lower, diversified cost of funds and we are optimistic that the combined company’s profitability will improve.”
Pacific Enterprise shareholders would own about 22% of the combined company. Pacific Enterprise Chairman Dennis Guida is expected to join United Business Bank’s board of directors.
appId : ‘1203048096448894’,