The acquisition of a Downtown Los Angeles bank by a Century City bank finally received the green light by the Federal Reserve board last week, meaning the reported merger of the PacWest Bancorp and CapitalSource Inc. will make the new venture the fourth largest local financial institution in the County.
According to PacWest, the Federal Reserve System’s Board of Governors announced it gave the bank regulatory approval to go forward with the merger and acquisition of CapitalSource.
The merger also received regulatory approvals from the California Dept. of Business Oversight and Federal Deposit Insurance Corp. (FDIC), according to reports.
With the Federal Reserve System’s regulatory approval last week, both banks moved to complete the merger by the end of business on April 7.
As a result of the merger, 12 of CapitalSource’s 21 branches will be shut down. The other nine will consolidate with PacWest, it was announced. Also, PacWest stated one of its overlapping Pacific Western branches would close April 11.
The remaining branches will re-open April 14 as Pacific Western Bank.
PacWest also announced all CapitalSource Bank systems will be integrated and converted to Pacific Western Bank’s operating platform between April 11 and April 14.
News reports indicate the merger means PacWest’s total assets would increase to $15.4 billion. Within Los Angeles County, only City National Bank, East West Bank, and One West Bank reportedly have more total assets.
The commercial banks announced plans to merge in July 2013. According to PacWest, the transaction was valued at about $2.3 billion when merger plans were announced last summer.
At the time of the July 2013 announcement, CapitalSource reported about $8.7 billion in assets. In December 2013, PacWest reported about $6.5 billion in total assets.
PacWest had operated 73 Pacific Western Bank branches across 10 counties within California prior to announcing its intentions to acquire CapitalSource and its CapitalSource Bank branches.
In a released statement, PacWest stated both institutions combined would rank as the sixth largest publicly owned bank and eighth largest commercial bank headquartered in California.
Other companies involved in the transaction included JP Morgan Securities (CapitalSource financial advisor), Wachtell, Lipton, Rosen & Katz (CapitalSource legal counsel), Jefferies LLC, Castle Creek Financial and Goldman Sachs & Co. (PacWest financial advisor), and Sullivan & Cromwell (PacWest legal counsel).
On Wall Street, PacWest (PACW) is traded on NASDAQ; CapitalSource was a New York Stock Exchange (NYSE) company.
PacWest is located at 10250 Constellation Boulevard, Suite 1640, in Century City.
