Banks Complete ‘Merger of Equals’

SAN DIEGO – There’s a new name, new logo and some new branding coming for Southern California BanCorp, the holding company for the Bank of Southern California, after a merge with California BanCorp (California Bank of Commerce).

On July 31, Southern California Bancorp (Nasdaq: BCAL) officially merged with Northern California-based California BanCorp (Nasdaq: CALB) to become a single premier business bank.

But while the name of the San Diego-based bank has changed, the focus on providing a personal touch remains the same.

“What’s made us successful is really our commitment to the communities that we serve,” said David Rainer, executive chairman of the new combined company, boards and bank, California Bank of Commerce, N.A.

“We’re an old-fashioned bank,” Rainer said. “Most of our business comes from client referrals. You won’t see us on TV ads. You won’t see billboards on the freeway. We’ll do some targeted advertising in the San Diego Business Journal but outside of that, we live off of referrals from our reputation.”

The two high-performing commercial banks are now one California financial institution with about $4.26 billion in assets. The new entity will be based in San Diego, take the name California BanCorp for the holding company and California Bank of Commerce, N.A. for the bank. Its Nasdaq ticker symbol will remain BCAL.

Merger Expands ‘Scale and Capabilities’

“We’re home grown… it’s really important to come in (to the conversation) as a San Diego bank,” said Scott Yates, a native of La Jolla who was SVP and regional manager for Bank of Southern California and holds the same title for California Bank of Commerce.

“I think in San Diego, especially, business owners like working with and partnering with people that know San Diego. We know the markets, we know the history all of it, so it really resonates well.”

The merger aims to expand scale and capabilities, enhancing the ability to attract commercial clients and work with larger businesses, and the combined entity will have a significant presence in both Southern and Northern California, including branches and loan production offices.

Rainer called the merger one of “equals,” explaining that the “merger of equals brings two very similarly sized banks that share a common commercial banking culture together to form one company, which will benefit both through greater efficiencies, synergies and the expansion of the combined franchise footprint.”

Rainer said that the merged company and bank will feature shared executive management and a 12-member board of directors “drawn equally from each legacy company.”

The enhanced scale allows further investment in technology to better manage risk, increase efficiency and enhance the client experience.

The plan for the transaction was announced Jan. 30, with the companies combining in an all-stock merger valued at approximately $233.6 million, or $26.54 per share of California BanCorp, based on the closing price of Southern California Bancorp on Jan. 29.

Rainer, who was chairman and CEO of Southern California BanCorp, said the two banks have a shared vision, shared values and the same client-centric focus on providing outstanding service to mid-market businesses.

The banks are highly compatible institutions with similar cultures, a relationship-based approach and commercial banking expertise, with strong deposit bases that will offer opportunities for growth in various lending verticals.

“We believe this combination, resulting in increased size and scale, will drive improved profitability and increase shareholder value,” Rainer said. “It also offers customers increased product offerings and lending limits, as well as access to branches in both Northern and Southern California.”

Looking Back, Looking Ahead

The combined company’s Southern California footprint will include Bank of Southern California’s 13 branches that serve Los Angeles, Orange, San Diego and Ventura counties, as well as the Inland Empire.

The combined company’s Northern California footprint will include the California Bank of Commerce branch in Contra Costa County and its four loan production offices serving Alameda, Contra Costa, Sacramento and Santa Clara counties.

The merger received overwhelming support from shareholders, indicating strong confidence in the transaction.

In mid-July, shareholders of Southern California Bancorp also approved a change of the company’s name from Southern California Bancorp to California BanCorp and the bank’s name from Bank of Southern California to California Bank of Commerce, N.A., better reflecting its expanded footprint.

They also approved an amendment to Southern California Bancorp’s bylaws to change the allowable range of members of the board of directors to seven to 13, from its previous range of six to 11.

Each outstanding share of California BanCorp common stock was exchanged for the right to receive 1.590 shares of Southern California Bancorp common stock. Legacy Southern California Bancorp shareholders now own approximately 57.1% of the outstanding shares of the combined company and California BanCorp shareholders now own approximately 42.9% of the outstanding shares of the combined company.

U.S. Commercial Banking

A cornerstone of business and finance in the United States, commercial banks primarily serve businesses rather than individual customers, providing services that include accepting deposits, providing business loans and offering treasury management solutions.

The number of commercial banks insured with the Federal Deposit Insurance Corporation has decreased steadily over the last decade: as of 2022, there were 4,136, about 100 fewer than in the previous year.

Last year marked the first year since 2000 when the number of such banks increased, according to Statista. At the end of 2023, there were 4,470 FDIC-insured commercial banks in the country, up from 4,136 a year earlier.

California is the fifth largest economy in the world, with a nominal GDP of nearly $3.9 trillion (2023) and a growth rate of 6.1% since the year prior, according to the U.S. Bureau of Economic Analysis. Southern California is the world’s 14th largest economy.n

California Bancorp and California Bank of Commerce, N.A.
FOUNDED: 2024 (Southern California Bancorp founded 2001; California Bancorp originally founded 2007)
EXECUTIVE CHAIRMAN: Dave Rainer
HEADQUARTERS: San Diego
BUSINESS: Commercial Bank
ASSETS: $4.2 billion
STOCK: BCAL (Nasdaq)
EMPLOYEES: 350
WEBSITE: californiabankofcommerce.com
CONTACT: 818-637-7065
SOCIAL IMPACT: Provides banking services, financial support and volunteers for many nonprofit causes, including Youth Business Alliance, the Volunteer Income Tax Assistance program and the Walk to End Alzheimer’s.
NOTABLE: Bank of Southern California, founded in 2001, and California Bank of Commerce, founded in 2007, officially merged in 2024.