Acquisitions

3 Months Ended

Mar. 31, 2020

Business Combinations [Abstract]

Acquisitions

Acquisitions

Pending Acquisition of Opus

On January 31, 2020, the Corporation, the Bank and Opus Bank (“Opus”) entered into a definitive agreement to acquire Opus in an all-stock transaction valued at approximately $1.0 billion, or $26.82 per share, based on a closing price for the Corporation’s common stock of $29.80 as of January 31, 2020. Based on the $18.84 closing price for the Corporation’s common stock as of March 31, 2020, the value of the transaction is approximately $653.3 million, or $16.96 per share. The transaction will increase the Company’s total assets to approximately $20 billion on a pro forma basis as of December 31, 2019.

Opus is a California-chartered state bank headquartered in Irvine, California. As of March 31, 2020, Opus has $8.4 billion in total assets, $6.0 billion in gross loans and $6.7 billion in total deposits. Opus operates 46 banking offices located throughout California, Washington, Oregon and Arizona.

The consideration payable to Opus shareholders upon consummation of the acquisition will consist of whole shares of the Corporation’s common stock and cash in lieu of fractional shares of the Corporation’s common stock. Upon consummation of the transaction, (i) each share of Opus common stock, no par value per share, issued and outstanding immediately prior to the effective time of the acquisition will be canceled and exchanged for the right to receive 0.9000 shares of the Corporation’s common stock, and (ii) each share of Opus Series A non-cumulative, non-voting preferred stock issued and outstanding immediately prior to the effective time of the acquisition will be converted into and canceled in exchange for the right to receive that number of shares of the Corporation’s common stock equal to the product of (X) the number of shares of Opus common stock into which such share of Opus preferred stock is convertible in connection with, and as a result of, the acquisition, and (Y) 0.9000, in each case, plus cash in lieu of fractional shares of the Corporation’s common stock. Existing Corporation shareholders will own approximately 63% of the outstanding shares of the combined company, and Opus shareholders are expected to own approximately 37%. We expect to issue approximately 34.7 million shares of our common stock in the Opus acquisition.

The transaction is targeting a June 1, 2020 effective closing date, subject to the satisfaction of customary closing conditions. For additional information about the proposed acquisition of Opus, see the Corporation’s Current Report on Form 8-K filed with the SEC on February 6, 2020, which includes as an exhibit the definitive agreement.