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PacWest Bancorp Completes Merger With Square 1 Financial

October 07, 2015, 08:03 AM

PacWest Bancorp announced the completion of its merger with Square 1 Financial, Inc., effective on October 6, 2015. In conjunction with this merger, Square 1 Bank, a wholly-owned subsidiary of Square 1, is being merged with and into PacWest’s banking subsidiary, Pacific Western Bank.

Matt Wagner, CEO of PacWest and Pacific Western Bank, stated, “We believe the Square 1 Merger creates a stronger bank with a substantially improved core deposit base with excellent future growth prospects and better positioning for rising interest rates. Square 1’s expertise in the venture capital banking space, especially with technology and life sciences companies and their investors, is a complementary fit with our existing national lending platform.”       

Upon completion of the Bank Merger, Square 1 Bank will operate as a division of Pacific Western Bank.  The Square 1 Bank Division will continue its nationwide focus on venture-backed companies and venture capital firms, and will continue to offer a full spectrum of deposit, treasury management, and lending products.  Pacific Western Bank, with a network of 80 branches throughout California, will continue to serve small and medium-sized businesses with financing solutions, cash management and deposit services. The CapitalSource Division will continue to provide cash flow, asset-based, equipment and real estate loans and treasury management services to middle market clients on a nationwide basis.

Douglas H. Bowers, former President and CEO of Square 1, will be President of the Square 1 Bank Division upon completion of the merger.  Bowers commented, “We are eager to accelerate Square 1’s long-standing commitment to the venture and entrepreneurial communities. Now, as part of a larger organization with a broader range of products and resources, we’re better able to serve our clients through all stages of growth and expansion.”

Under the terms of the Agreement and Plan of Merger, each share of Square 1 common stock was converted into the right to receive 0.5997 of a share of PacWest common stock and each outstanding Square 1 equity award was settled in cash. PacWest is issuing an aggregate of approximately 18.1 million shares of PacWest common stock to Square 1 stockholders and a total of $17.8 million to Square 1 equity award holders in satisfaction of all outstanding equity awards.   Based on the closing price of PacWest's common stock on October 6, 2015 of $43.97 per share, the aggregate consideration payable to Square 1 common stockholders and holders of equity awards is approximately $815 million.

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