The Law Office of Lynnette Ariathurai A Professional Corporation

Regulators approve business merger for 2 California banks

When two large financial corporations attempt to merge, they require approval from various government regulators and agencies. Two California banks have recently been approved by regulators to move forward with their planned business merger. PacWest Bancorp will now be merging with CapitalSource Inc. These two banking firms received approval from the Federal Reserve board for the merger in late March.

Along with the Federal Reserve board, the California Department of Business Oversight, as well as Federal Deposit Insurance Corp., also granted approval for the merger to move ahead. The merger, which had been planned since July 2013, is set to be finalized in early April. PacWest has an estimated $6.5 billion in assets while CapitalSource has $8.7 billion worth of assets. PacWest is expected to have a total of $15.4 billion in assets once the merger is completed.

Twelve CapitalSource branch locations will be closed down, leaving nine of their total 21 branches intact. The remaining locations will be consolidated with PacWest. One Pacific Western branch location is also planned to be closed in mid-April. The remaining PacWest branches will be re-opened as Pacific Western Bank locations.

If a business merger is done correctly, it can result in a significant improvement in business and profits. However, it will be necessary for these two banking firms in California to ensure that the business plan for the merger incorporates a risk management plan. This should include ensuring adherence to all applicable rules and regulations, which will help to avoid any potential liabilities from lawsuits or regulatory fines.

Source:, "PacWest Bancorp Set to Merge with CapitalSource", Parimal Rohit, April 5, 2014

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