First Business Bank (OTCBB: FBBN) and 1st Pacific Bancorp
(NASDAQ: FPBN) today announced that they have signed a definitive
merger agreement under which 1st Pacific Bank of California, 1st
Pacific Bancorp�s banking subsidiary, will merge with First
Business Bank.
Under the terms of the agreement, each outstanding share of 1st
Pacific Bancorp will receive $1.40 per share in cash and a
percentage of the recoveries of certain charged-off loans and a
lawsuit. The initial cash payment to 1st Pacific Bancorp
shareholders represents a transaction value of approximately $7.0
million. Shareholders of First Business Bank will become the
shareholders of 1st Pacific Bancorp.
The banking subsidiary will operate a total of 11 branch offices
and will retain the name 1st Pacific Bank of California. First
Business Bank�s three full-service offices in Del Mar Heights,
Carlsbad and Ramona will be rebranded. Corporate headquarters
functions will be consolidated at 1st Pacific Bank�s corporate
headquarters in University Towne Center. 1st Pacific Bank�s eight
offices in La Jolla, Solana Beach, University Towne Center, Mission
Valley, Tri-Cities, Inland North County, El Cajon and Downtown San
Diego will also continue to operate.
Nathan L. Rogge, President and Chief Executive Officer of First
Business Bank, will continue in that capacity for the combined
company. In addition, the six directors of First Business Bank will
become the directors of 1st Pacific Bancorp and the merged bank.
When the transaction is completed, two members of 1st Pacific
Bank�s Board of Directors are also expected to continue on as part
of the board.
The transaction is subject to shareholder and regulatory
approvals and is expected to close in the fourth quarter of this
year.
�This transaction meets the needs of both companies,� said
Rogge. �We have wanted to expand into additional markets in the
region, and the bank�s increased asset size and combined resources
will allow us to operate more efficiently and profitably while
delivering more products and services to a larger customer
base.�
Ronald Carlson, 1st Pacific�s Chairman, President and Chief
Executive Officer, added, �First Business Bank is one of the
highest capitalized banks in the San Diego market and the financial
strength of the combined company will be of great value to our
customers.�
As of June 30, First Business Bank had a total risk-based
capital ratio of 23.75% and a leverage ratio of 16.85%. A 10% total
risk-based capital ratio is required for a bank to be considered
�well-capitalized.� Rogge noted that First Business Bank�s
principal shareholder, Ernest Auerbach, has committed to infuse
substantial additional capital into the bank to facilitate the
transaction and to enhance the regulatory capital ratios of the
combined bank.
Rogge said the combined company will continue to emphasize a
strategy of providing commercial banking services to small and
medium-sized businesses and professionals that can best be served
by a local bank offering a portfolio of loan and deposit products
tailored to meet their specialized needs.
�Both companies have experienced managements and talented staffs
with deep local market knowledge in the San Diego business banking
community,� said Rogge. �With a strong capital base, safe and sound
banking practices, and dedicated local ownership and management, we
expect the combination to be a formidable competitor in this region
for many years to come.�
First Business Bank was advised by Keefe, Bruyette & Woods,
Inc. and Horgan, Rosen, Beckham & Coren, L.L.P. 1st Pacific
Bancorp was advised by Sandler O�Neill + Partners, L.P. and Luce,
Forward, Hamilton & Scripps LLP.
First Business Bank is exclusively focused on serving the
special needs of professionals and small and medium-sized
enterprises. Established in 2001, First Business Bank is dedicated
to providing business professionals with simple, fast and effective
solutions. Experienced bankers deliver highly tailored financial
solutions while providing customers with educational and networking
opportunities. For more information, contact First Business Bank at
(858) 847-4780, 12265 El Camino Real, Suite 100, San Diego, CA
92130, or visit the company�s website at www.fbbank.com.
1st Pacific Bank of California is a San Diego community business
bank. The bank offers a full complement of business products and
services to meet the financial needs of professional firms, small
to mid-sized businesses, their owners and the employees who work
there. For additional information about 1st Pacific Bank, visit the
company's website at www.1stpacbank.com.
Forward-Looking Statements
This release may contain forward-looking statements, which are
included in accordance with the �safe harbor� provisions of the
Private Securities Litigation Reform Act of 1995 and, accordingly,
the cautionary statements contained in 1st Pacific Bancorp�s Annual
Report on Form 10-K for the year ended Dec. 31, 2008 (See Item I --
Business, and Item 7 -- Management�s Discussion and Analysis of
Consolidated Financial Condition and Results of Operations), and
other filings with the Securities and Exchange Commission or the
Board of Governors of the Federal Reserve System are incorporated
herein by reference. These factors include, but are not limited to:
the effect of interest rate and currency exchange fluctuations;
competition in the financial services market for both deposits and
loans; the ability to efficiently incorporate acquisitions into
current operations; the ability of the two institutions to increase
their customer bases; the effect of regulatory and legislative
action; and regional and general economic conditions. Actual
results and performance in future periods may be materially
different from any future results or performance suggested by the
forward-looking statements in this release. Such forward-looking
statements speak only as of the date of this release. First
Business Bank and 1st Pacific Bancorp expressly disclaim any
obligation to update or revise any forward-looking statements found
herein to reflect any changes in their expectations of results or
any change in events.
Participants in a
Solicitation
This release does not constitute an offer to sell securities or
a solicitation of an offer to buy and does not constitute
solicitation material in respect of the proposed acquisition of 1st
Pacific Bancorp by First Business Bank. In connection with the
proposed transaction, First Business Bank and 1st Pacific Bancorp
will prepare a Proxy Statement/Prospectus containing all relevant
disclosures which either will be filed with the SEC or, pursuant to
an exemption, will be filed with the California Department of
Corporations. SHAREHOLDERS OF 1ST PACIFIC BANCORP
AND FIRST BUSINESS BANK ARE URGED TO READ THE PROXY
STATEMENT/PROSPECTUS BECAUSE IT WILL CONTAIN IMPORTANT INFORMATION
ABOUT 1ST PACIFIC BANCORP AND FIRST BUSINESS BANK AND
THE PROPOSED TRANSACTION. The Proxy Statement/Prospectus will
be mailed to shareholders in advance of special meetings of
shareholders that will be held to consider the proposed
transaction.
First Business Bank, 1st Pacific Bancorp, and their directors,
executive officers and other members of their management and
employees, may be deemed to be participants in the solicitation of
proxies in respect of the proposed acquisition. Information about
the directors and executive officers of First Business Bank and 1st
Pacific Bancorp and their stock ownership of their respective
institution will be included in the Proxy Statement/Prospectus,
when it becomes available.
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