PacWest Bancorp Announces $100 Million Investment By CapGen Financial
02 September 2008 - 3:00PM
PR Newswire (US)
-Investment to be made at $26 per share- SAN DIEGO, Sept. 2
/PRNewswire-FirstCall/ -- PacWest Bancorp (NASDAQ:PACW) today
announced that the private equity firm CapGen Financial has agreed
to acquire approximately $100 million of newly issued shares of
PacWest Bancorp common stock at a price of $26 per share,
representing a 21% premium to the last five trading-day average
closing price of PacWest common stock. CapGen will invest in
PacWest through an investment vehicle advised by CapGen Capital
Advisers LLC. In connection with the investment, the CapGen
investment vehicle will seek to register as a bank holding company
and, upon consummation of the investment, the CapGen investment
vehicle will own approximately 12% of PacWest common stock on a
fully-diluted basis as of June 30, 2008. On a pro forma basis for
the investment, PacWest's book value per share at June 30, 2008
would be $14.81, an increase of 13.5% from its actual book value
per share of $13.30. Additionally, the regulatory capital ratios
for PacWest Bancorp would have further exceeded well-capitalized
status at June 30, 2008 as follows: Actual and Pro Forma Regulatory
Capital Ratios Regulatory Requirements at June 30, 2008 Adequately
Well Pro Capitalized Capitalized Actual Forma Tier 1 leverage
capital ratio 4.00% 5.00% 9.77% 11.83% Tier 1 risk-based capital
ratio 4.00% 6.00% 10.89% 13.17% Total risk-based capital ratio
8.00% 10.00% 12.14% 14.43% The investment is subject to regulatory
approval by federal and state banking authorities and is expected
to close in the fourth quarter of 2008. John Rose, principal of
CapGen, will join PacWest Bancorp's board of directors upon
completion of the investment. In addition to a seat on PacWest's
board, CapGen will be granted pre-emptive rights in future equity
offerings to maintain its percentage ownership. Matt Wagner, CEO of
PacWest Bancorp, commented, "The additional capital from this
investment is expected to be used for general corporate purposes,
to fund debt retirement and, most importantly, to take advantage of
growth opportunities as they arise." Mr. Wagner continued, "Our
historically strong balance sheet and healthy capital ratios are a
source of comfort for our stockholders, customers and employees.
While we didn't need to raise capital, the significant premium paid
in recognition of the strength and value of our franchise and the
amount of capital offered put PacWest in an enviable position going
forward." Gene Ludwig, Managing Principal of CapGen and former U.S.
Comptroller of the Currency, stated, "We are pleased to invest in
PacWest Bancorp, one of the premier banking franchises in the
country. We have long admired PacWest and believe this investment
will deliver value over the long term to CapGen, PacWest, its
stockholders and employees by, among other things, enabling PacWest
to be better positioned to capitalize on future growth
opportunities. We look forward to partnering with them for years to
come." Upon regulatory approval of the proposed investment and
expiration of any waiting periods, the PacWest shares being issued
will be acquired by the CapGen investment vehicle in a private
placement transaction. PacWest has agreed that, following
consummation, it will file a shelf registration statement with the
Securities and Exchange Commission with respect to the shares being
issued to the CapGen investment vehicle. ABOUT PACWEST BANCORP
PacWest Bancorp is a bank holding company with $4.3 billion in
assets as of June 30, 2008, with one wholly-owned banking
subsidiary, Pacific Western Bank. Through 60 full-service community
banking branches, Pacific Western provides commercial banking
services, including real estate, construction and commercial loans,
to small and medium-sized businesses. Pacific Western's branches
are located in Los Angeles, Orange, Riverside, San Diego and San
Bernardino Counties. Through its subsidiary BFI Business Finance
and its divisions First Community Financial and Pacific Western SBA
Lending, Pacific Western also provides working capital financing to
growing companies located throughout the Southwest, primarily in
the states of Arizona, California and Texas. Additional information
regarding PacWest Bancorp is available on the Internet at
http://www.pacwestbancorp.com/. Information regarding Pacific
Western Bank is also available on the Internet at
http://www.pacificwesternbank.com/. ABOUT CAPGEN FINANCIAL CapGen
is a private equity firm that invests in financial services
businesses with a particular focus on community and regional
financial institutions, specialty finance and related services.
CapGen typically takes control positions in the institutions it
invests in, and CapGen applies its skill and insight in ways that
enhance both the success of the companies and the returns for its
investors. The New York-based firm was founded in 2007 by former
Comptroller Ludwig, along with Robert Goldstein and John Rose, both
highly regarded former bank executives and investors. CapGen's
other professionals are also highly regarded former bank executives
and investment professionals. The firm stresses using its financial
and human resources to add material value to the institutions in
which it invests in order to improve results for all of the
institution's stakeholders, including its shareholders, employees
and communities in which it operates. Additional information
regarding CapGen Financial is available on the Internet at
http://www.capgen.com/. FORWARD-LOOKING STATEMENTS This press
release contains certain forward-looking information about PacWest
that is intended to be covered by the safe harbor for
"forward-looking statements" provided by the Private Securities
Litigation Reform Act of 1995. All statements other than statements
of historical fact are forward-looking statements. Such statements
involve inherent risks and uncertainties, many of which are
difficult to predict and are generally beyond the control of the
Company. We caution readers that a number of important factors
could cause actual results to differ materially from those
expressed in, implied or projected by, such forward-looking
statements. Risks and uncertainties include, but are not limited
to: planned investments, acquisitions and related cost savings
cannot be realized or realized within the expected time frame;
lower than expected revenues; credit quality deterioration which
could cause an increase in the allowance for credit losses and a
reduction in net earnings; increased competitive pressure among
depository institutions; the Company's ability to complete
announced investments, acquisitions, to successfully integrate
acquired entities, or to achieve expected synergies and operating
efficiencies within expected time-frames or at all; the integration
of acquired businesses costs more, takes longer or is less
successful than expected; the possibility that personnel changes
will not proceed as planned; the cost of additional capital is more
than expected; a change in the interest rate environment reduces
interest margins; asset/liability repricing risks and liquidity
risks; pending legal matters may take longer or cost more to
resolve or may be resolved adversely to the Company; general
economic conditions, either nationally or in the market areas in
which the Company does or anticipates doing business, are less
favorable than expected; environmental conditions, including
natural disasters, may disrupt our business, impede our operations,
negatively impact the values of collateral securing the Company's
loans or impair the ability of our borrowers to support their debt
obligations; the economic and regulatory effects of the continuing
war on terrorism and other events of war, including the war in
Iraq; legislative or regulatory requirements or changes adversely
affecting the Company's business; changes in the securities
markets; regulatory approvals for any acquisitions cannot be
obtained on the terms expected or on the anticipated schedule; and,
other risks that are described in PacWest's public filings with the
U.S. Securities and Exchange Commission (the "SEC"). If any of
these risks or uncertainties materializes or if any of the
assumptions underlying such forward-looking statements proves to be
incorrect, PacWest's results could differ materially from those
expressed in, implied or projected by such forward-looking
statements. PacWest assumes no obligation to update such
forward-looking statements. For a more complete discussion of risks
and uncertainties, investors and security holders are urged to read
PacWest Bancorp's annual report on Form 10-K, quarterly reports on
Form 10-Q and other reports filed by PacWest with the SEC. The
documents filed by PacWest with the SEC may be obtained at PacWest
Bancorp's website at http://www.pacwestbancorp.com/ or at the SEC's
website at http://www.sec.gov/. These documents may also be
obtained free of charge from PacWest by directing a request to:
PacWest Bancorp c/o Pacific Western Bank, 275 North Brea Boulevard,
Brea, CA 92821. Attention: Investor Relations. Telephone
714-671-6800. DATASOURCE: PacWest Bancorp CONTACT: Matthew P.
Wagner, Chief Executive Officer of PacWest Bancorp,
+1-310-728-1020, fax, +1-310-201-0498; or John Sullivan, Managing
Director of CapGen Financial, +1-212-542-6868, fax,
+1-212-542-6879, for PacWest Bancorp Web site:
http://www.pacwestbancorp.com/ http://www.pacificwesternbank.com/
http://www.capgen.com/
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