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BayCom Corp, Pacific Enterprise Bancorp Agree to Merge

September 08, 2021, 07:20 AM
Filed Under: Mergers & Acquisitions

BayCom Corp, the holding company for United Business Bank, and Pacific Enterprise Bancorp, the holding company for Pacific Enterprise Bank, announced jointly the signing of an Agreement and Plan of Merger under which BayCom has agreed to acquire PEB in an all-stock transaction valued at approximately $53.1 million or $17.78 per share, based on the BayCom common stock price closing price of $17.28 per share on Sept. 3. The transaction will expand BayCom’s presence in Southern California.

Under the terms of the merger agreement, PEB will be merged with and into BayCom. The agreement also calls for the merger of Pacific Enterprise Bank with and into United Business Bank.

At June 30, PEB had approximately $646.9 million in assets, $568.7 million in loans, $424.1 million in deposits and $61.0 million in shareholder's equity. Pacific Enterprise Bank generates commercial and consumer loans and receives deposits from customers, who are predominately small and middle-market businesses and individuals located primarily in Orange County through its one branch located in Irvine, CA. Upon completion of the transaction, the combined company will have approximately $2.9 billion in total assets, $2.1 billion in total loans and $2.4 billion in total deposits. UBB will have 17 locations in California, two in Washington, five in New Mexico and 11 in Colorado.

The Merger Agreement was approved by the boards of directors of BayCom and PEB. The transaction is expected to close in the first quarter of 2022, and is subject to customary closing conditions, including regulatory approval, and approvals by the shareholders of both BayCom and PEB. BayCom anticipates this transaction will be accretive to earnings (before merger costs) and tangible book value in the first year of combined operations.

Upon closing of the transaction, Pacific Enterprise Bank’s Chairman of the Board, Dennis Guida, will join the United Business Bank Board of Directors. The directors and executive officers of PEB and BayCom have entered into agreements pursuant to which they have committed to vote their respective shares, which represent approximately 14.5 percent and 7.8 percent of PEB’s and BayCom’s issued and outstanding common stock, respectively, in favor of the transaction.

Brian Halle, President and CEO of PEB, said, “We are excited about the merger and believe the combined company will be able to better service both new and existing clients. We are blessed with a solid, experienced employee base that have expertise in low risk, high margin loan programs. Couple that with a much lower, diversified cost of funds and we are optimistic that the combined company’s profitability will improve.”

George Guarini, President and CEO of BayCom, said, “Let me start by addressing the Pacific Enterprise Bank staff. At the end of the day, our business is only as good as our people and we are looking forward to having the Pacific Enterprise Bank team join the United Business Bank family. 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. We look forward to serving Pacific Enterprise Bank clients and welcoming the shareholders of PEB.”

“From a strategic perspective, we think Pacific Enterprise Bank is a great fit. 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. We look forward to the prospect of establishing new relationships, enhancing our position in the market and building on an already strong foundation,” Guarini said.

BayCom and United Business Bank were assisted by Dave Muchnikoff of Silver, Freedman, Taff & Tiernan LLP for legal services and Greg Gersack of Janney Montgomery Scott LLC served as financial advisor. PEB and Pacific Enterprise Bank were assisted by Joshua A. Dean of Sheppard Mullin Richter & Hampton LLP for legal services and Dan Pake of Hovde Group, LLC served as financial advisor.

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