—Transaction Will Create a $19.8
Billion Asset Commercial Bank—
—Square 1 Stockholders Will
Receive at Closing PacWest Common Stock Based on a Fixed Exchange
Ratio of 0.5997—
—Based on the PacWest
Pre-Announcement Closing Common Stock Price, Total Consideration
for Each Square 1 Share Would be $27.49—
—Transaction Valued at
Approximately $849 Million—
PacWest Bancorp (Nasdaq:PACW) ("PacWest") and Square 1 Financial,
Inc. (Nasdaq:SQBK) ("Square 1") today announced the signing of a
definitive agreement and plan of merger (the "Agreement") whereby
PacWest will acquire Square 1 in a transaction valued at
approximately $849 million. The Square 1 lending operations will
continue to do business under the name Square 1 as a division of
Pacific Western Bank.
Square 1 Financial, Inc., headquartered in Durham, North
Carolina, is the parent of Square 1 Bank, a North Carolina
commercial bank with approximately $3.1 billion in assets at
December 31, 2014, one banking office in Durham, and twelve loan
production offices throughout the United States. In connection with
the transaction, Square 1 Bank will be merged into Pacific Western
Bank, the Los Angeles-based, wholly-owned subsidiary of PacWest
Bancorp. PacWest had $16.2 billion in assets at December 31, 2014
and 80 branches located primarily in southern and central
California. The combined company will remain headquartered in Los
Angeles and will have senior executives from each of the
organizations in key positions. Upon completion of the transaction,
one former Square 1 director will be appointed to the PacWest
board.
The transaction, currently expected to close in the fourth
quarter of 2015, is subject to customary conditions, including the
approval of bank regulatory authorities and the Square 1
stockholders. Certain stockholders of Square 1 have agreed to vote
in favor of the transaction.
As of December 31, 2014, on a pro forma consolidated basis, the
combined company would have had approximately $19.8 billion in
assets with 80 branches throughout California and one in North
Carolina. The combined institution would be the 6th largest
publicly owned bank headquartered in California.
Under the terms of the Agreement, Square 1 stockholders will
receive 0.5997 shares of PacWest common stock for each share of
Square 1 common stock. The total value of the per share merger
consideration, based on the closing price of PacWest common stock
on February 27, 2015, of $45.84 is $27.49.
The transaction is intended to qualify as a tax-free
reorganization for U.S. federal income tax purposes and Square 1
stockholders are not expected to recognize gain or loss to the
extent of the stock consideration received.
Matt Wagner, CEO of PacWest Bancorp, commented, "We are very
excited to align ourselves with the Square 1 team. Thanks to the
talented professionals and founders that built this successful
institution, we are confident this transaction with Square 1
represents an excellent opportunity to grow core deposits, expand
our nationwide lending platform, and increase our presence in the
dynamic technology and life-sciences markets."
"Joining PacWest will be a terrific opportunity for our clients,
employees, and stockholders," said Doug Bowers, CEO of Square
1. "Square 1 offers PacWest a complementary line of business
and significant core deposit growth. As part of PacWest, we
will maintain our steadfast commitment to the entrepreneurial and
venture communities, will be able to offer clients a wider array of
products and will be well-positioned to continue to serve them
through all stages of their growth."
In connection with the announcement of the transaction, an
investor presentation will be filed with the SEC and is available
on the websites of both PacWest Bancorp and Square 1. On the
PacWest Bancorp website, the presentation can be found under the
link for "Presentations". On the Square 1 website, the
presentation can be found under the link for "Events &
Presentations".
Sandler O'Neill acted as financial advisor to Square 1 in the
transaction and delivered a fairness opinion to the Board of
Directors of Square 1. Wachtell, Lipton, Rosen & Katz served as
legal counsel to Square 1. Jefferies LLC acted as financial
advisor to PacWest. Sullivan & Cromwell LLP served as
legal counsel to PacWest.
ABOUT PACWEST BANCORP
PacWest Bancorp ("PacWest") is a bank holding company with over
$16 billion in assets as of December 31, 2014, with one
wholly-owned banking subsidiary, Pacific Western Bank ("Pacific
Western"). Through 80 full-service branches located throughout the
state of California, Pacific Western provides commercial banking
services, including real estate, construction, and commercial
loans, to small and medium-sized businesses. Through its
CapitalSource division it delivers a full spectrum of financing
solutions nationwide across numerous industries and property types.
Pacific Western Bank has key lending offices located in Chevy
Chase, Maryland, Southern California, including Los Angeles, St.
Louis, Missouri, Denver, Colorado, Chicago, Illinois, New York, New
York, and Midvale, Utah. Pacific Western Bank also maintains a
number of smaller lending offices throughout the country. For more
information about PacWest Bancorp, visit www.pacwestbancorp.com, or
to learn more about Pacific Western Bank, visit
www.pacificwesternbank.com.
ABOUT SQUARE 1 FINANCIAL, INC.
Square 1 is a financial services company focused primarily on
serving entrepreneurs and their investors. Square 1
(Nasdaq:SQBK) is headquartered in Durham, North
Carolina with twelve loan production offices located in key
innovation hubs across the United States. Through Square 1
Bank, which was formed by experienced venture bankers, commercial
bankers and entrepreneurs, Square 1 offers a full range of banking
and financial products focused on the entrepreneurial community and
their venture capital and private equity investors. Since
inception, Square 1 has operated as a highly-focused venture bank
and has provided a broad range of financial services to
entrepreneurs, growing entrepreneurial companies and the venture
capital and private equity communities. Square 1 provides banking
services to its clients, including venture, commercial and
international banking services, asset-based lending programs, and
SBA and USDA commercial and real estate loan programs.
Square 1 also provides investment advisory and asset
management services to its clients through Square 1 Asset
Management, a subsidiary of Square 1 Bank. More information
can be found at www.square1financial.com.
FORWARD-LOOKING STATEMENTS
This communication contains certain forward-looking information
about PacWest, Square 1, and the combined company after the close
of the transaction 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
PacWest, Square 1 and the combined company. Forward-looking
statements speak only as of the date they are made and we assume no
duty to update such statements. We caution readers that a number of
important factors could cause actual results to differ materially
from those expressed in, or implied or projected by, such
forward-looking statements. In addition to factors previously
disclosed in reports filed by PacWest and Square 1 with the SEC,
risks and uncertainties for each institution and the combined
institution include, but are not limited to: lower than expected
revenues; credit quality deterioration or a reduction in real
estate values could cause an increase in the allowance for credit
losses and a reduction in net earnings; increased competitive
pressure among depository institutions; the ability to complete the
proposed transaction, including obtaining regulatory approvals and
approval by the stockholders of Square 1, or any future
transaction, successfully integrate such acquired entities, or
achieve expected beneficial synergies and/or operating
efficiencies, in each case within expected time-frames or at all;
regulatory approvals may not be received on expected timeframes or
at all; the possibility that personnel changes will not proceed as
planned; the possibility that the cost of additional capital may be
more than expected; the possibility that a change in the interest
rate environment may reduce net interest margins; asset/liability
re-pricing risks and liquidity risks; pending legal matters may
take longer or cost more to resolve or may be resolved adversely;
general economic conditions, either nationally or in the market
areas in which the entities operate or anticipate doing business,
are less favorable than expected; and environmental conditions,
including natural disasters, may disrupt business, impede
operations, or negatively impact the values of collateral securing
loans.
ADDITIONAL INFORMATION ABOUT THE PROPOSED TRANSACTION
AND WHERE TO FIND IT
Investors and security holders are urged to carefully review and
consider each of PacWest Bancorp's and Square 1's public filings
with the SEC, including but not limited to their Annual Reports on
Form 10-K, their proxy statements, their Current Reports on Form
8-K and their Quarterly Reports on Form 10-Q. The documents
filed by PacWest with the SEC may be obtained free of charge at
PacWest's website at www.pacwestbancorp.com or at the SEC's website
at www.sec.gov. These documents may also be obtained free of charge
from PacWest by requesting them in writing to PacWest Bancorp, c/o
Pacific Western Bank, 130 S. State College Blvd., Brea, CA 92821,
Attention: Investor Relations, telephone (714) 671-6800, or via
e-mail to investor-relations@pacwestbancorp.com.
The documents filed by Square 1 with the SEC may be obtained
free of charge at Square 1's website at www.square1bank.com or at
the SEC's website at www.sec.gov. These documents may also be
obtained free of charge from Square 1 by requesting them in writing
to Square 1 Financial, c/o Square 1 Bank, 406 Blackwell Street,
Suite 240, Durham, NC 27701; Attention: Investor Relations, or by
telephone at Phone: (866) 355-0468.
PacWest intends to file a registration statement with the SEC
which will include a proxy statement of Square 1 and a prospectus
of PacWest, and each party will file other documents regarding the
proposed transaction with the SEC. Before making any voting
or investment decision, investors and security holders of Square 1
are urged to carefully read the entire registration statement and
proxy statement/prospectus, when they become available, as well as
any amendments or supplements to these documents, because they will
contain important information about the proposed transaction. A
definitive proxy statement/prospectus will be sent to the
stockholders of Square 1 seeking any required stockholder
approvals. Investors and security holders will be able to obtain
the registration statement and the proxy statement/prospectus free
of charge from the SEC's website or from PacWest or Square 1 by
writing to the addresses provided for each company set forth in the
paragraphs above.
PacWest, Square 1, their directors, executive officers and
certain other persons may be deemed to be participants in the
solicitation of proxies from Square 1 stockholders in favor of the
approval of the transaction. Information about the directors
and executive officers of PacWest and their ownership of PacWest
common stock is set forth in the proxy statement for PacWest's 2014
annual meeting of stockholders, as previously filed with the
SEC. Information about the directors and executive officers of
Square 1 and their ownership of Square 1 common stock is set forth
in the proxy statement for Square 1's 2014 annual meeting of
stockholders, as previously filed with the SEC. Stockholders
may obtain additional information regarding the interests of such
participants by reading the registration statement and the proxy
statement/prospectus when they become available.
CONTACT: PacWest Bancorp
Matthew P. Wagner
President and Chief Executive Officer
(310) 728-1020
Square 1 Financial, Inc.
Douglas H. Bowers
President and Chief Executive Officer
(919) 627-6339
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