Combined bank to have total loans of 25.3 bln
Warburg Pincus, Centerbridge buy new shares
PacWest shares soar 34, Banc of California up 9

July 25 Reuters Banc of California and PacWest Bancorp will merge in an allstock deal to create a bank with 36 billion in assets, the companies said on Tuesday, coming together just months after the regional banking sector was mired in crisis.

To help fund the combination, the lenders have also agreed to sell 400 million of new shares to private equity firms Warburg Pincus and Centerbridge Partners.

The combined bank will have 25.3 billion in total loans and more than 70 branches in California. It will be based in Los Angeles and led by Banc of California CEO Jared Wolff.

PacWest was among the lenders that were rocked by the collapse of three regional banks earlier this year, prompting the worst industry turmoil since the 2008 financial crisis.

Both the banks are in the same geographies, are focused on commercial assets and so this could be seen as a marriage of convenience, Timothy Coffey, an analyst at Janney Montgomery Scott, said before the deal was announced.

Shares of PacWest surged 34 after the market close, while Banc of California jumped 9.

PacWest stockholders will receive 0.6569 Banc of California shares for each PacWest share they currently own. Meanwhile, the two private equity firms will be issued new Banc of California stock worth 400 million at a price of 12.30 per share.

Treasury Secretary Janet Yellen said…