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Pacific Premier to Acquire Plaza Bancorp in All-Stock Deal


Pacific Premier Bancorp, Inc. PPBI has entered into an agreement to acquire Plaza Bancorp in an all-stock deal. The transaction is expected to close in fourth-quarter 2017 or early first-quarter 2018, subject to customary closing conditions.

The deal has been valued at about $226.3 million or $7.29 per share, on the basis of Pacific Premier’s closing price of $36.45 as of Aug 8, 2017.

Pacific Premier expects the deal to be immediately accretive to its earnings per share as well as tangible book value per share. Also, it will raise the company’s total assets to about $7.7 billion on a pro forma basis.

The California-based community bank, Plaza Bancorp, had about $1.3 billion in total assets, $1.1 billion in gross loans and $1.1 billion in total deposits as of Jun 30, 2017.

Pacific Premier’s estimates of earnings per share accretion are based on estimated costs savings of nearly 35% of Plaza’s non-interest expenses, with 75% of the cost savings phased-in during 2018 and 100% phased-in during 2019. The earnings per share accretion estimates do not include any assumption of revenue synergies.

Terms of the Transaction

Per the agreement, shareholders of Plaza will receive 0.200 shares of Pacific Premier for each share of Plaza.

The current Pacific Premier shareholders will own 86.9% of the outstanding shares of the combined company and Plaza shareholders will own the rest.

Upon execution of the transaction, Carpenter Fund Manager GP, LLC, manager of funds currently owning about 86% of the outstanding shares of Plaza, will appoint one person to the Boards of Directors of the company and Pacific Premier Bank as long as such funds own at least 9.9% of Pacific Premier’s outstanding shares.

Shares of Pacific Premier have gained 3.1% year to date against 5.9% decline of the industry.

Currently, Pacific Premier carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the finance space are Washington Federal, Inc. WAFD, Carolina Financial Corporation CARO and The Bank of New York Mellon Corporation BK.

Washington Federal’s Zacks Consensus Estimate witnessed an upward revision of nearly 1% for current-year earnings, over the past 30 days. Also, its shares have gained 32.2%, over the last one year. The company has a Zacks Rank #2 (Buy).

Carolina Financial witnessed an upward earnings estimate revision of 4.5% for the current year, over the last 30 days. Its share price has increased 64.9% in the last one year. The company currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

BNY Mellon carries a Zacks Rank #2. For the current year, its Zacks Consensus Estimate was revised 1.1% upward in the last 30 days. The company’s share price has increased 35% in the last one year.

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