California BanCorp and Southern California Bancorp enter merger agreement

Southern California Bancorp (BCAL), the holding company for Bank of Southern California, and California BanCorp (CALB), the holding company for California Bank of Commerce, jointly announced the execution of a definitive merger agreement, pursuant to which the companies will combine in an all-stock merger valued at approximately $233.6M, or $26.54 per share of California BanCorp. The transaction aims to create a premier California financial institution with approximately $4.6B in assets in a merger of equals that adds complementary business lines and diversified lending verticals to each client base. Under the terms of the definitive agreement, which has been unanimously approved by the boards of directors of Southern California Bancorp and California BanCorp, each outstanding share of California BanCorp common stock will be exchanged for the right to receive 1.590 shares of Southern California Bancorp common stock. As a result of the transaction, Southern California Bancorp shareholders will own approximately 57.1% of the outstanding shares of the combined company and California BanCorp shareholders will own approximately 42.9% of the outstanding shares of the combined company. The companies will evaluate rebranding with new names and logos for the combined company and bank at the close of the transaction. The combined company’s common stock will continue to trade on the Nasdaq. Corporate headquarters will be located in San Diego, Calif. The combined company’s Southern California footprint will include Bank of Southern California’s 13 branches that serve Los Angeles, Orange, San Diego, and Ventura counties, and the Inland Empire. The combined company’s Northern California footprint will include the California Bank of Commerce branch in Contra Costa County and its four loan production offices serving Alameda, Contra Costa, Sacramento, and Santa Clara counties. The combined company’s Board of Directors will consist of six directors from Southern California Bancorp and six from California BanCorp. A lead independent director will be appointed after closing. David Rainer, Chairman of Southern California Bancorp, will serve as Executive Chairman of the combined company, bank and boards. Steven Shelton, CEO of California BanCorp, will serve as CEO and director of the combined company and the combined bank. Richard Hernandez, President of Southern California Bancorp, will serve as President of the combined company and combined bank. Thomas Sa, CFO and COO of California BanCorp will serve as COO of the combined company and combined bank. Thomas Dolan, CFO and COO of Southern California Bancorp will serve as CFO of the combined company and Chief Strategy Officer of the combined bank. The transaction is expected to close in 3Q24, subject to satisfaction of customary closing conditions, including receipt of required regulatory approvals and approvals from Southern California Bancorp and California BanCorp shareholders.