SOURCE: First California Financial Group

First California Financial Group

February 28, 2012 16:20 ET

First California Announces Branch Realignment Initiative

Company Signs Definitive Merger Agreement With Premier Service Bank

WESTLAKE VILLAGE, CA--(Marketwire - Feb 28, 2012) - First California Financial Group, Inc. (NASDAQ: FCAL), the holding company of First California Bank, today announced plans to realign branch offices within its banking regions, which includes the closing and consolidation of four branches located in Brea, Temecula, Thousand Oaks and Woodland Hills.

The closing of the branches, which is scheduled for mid-year 2012, will result in pre-tax cost savings of approximately $1.4 million in 2012 and $2.7 million annually, thereafter. This initiative is expected to improve EPS by $0.03 for 2012 and $0.06 for 2013. One-time charges related to the branch consolidation are not expected to be material.

The planned closings and consolidations are a result of an evaluation, which measured near-term growth potential in the current economic environment, as well as the Bank's ability to continue to service clients' needs at nearby First California Bank locations.

"Through our merger and acquisition activity in recent years, we have gained branch banking locations," said C. G. Kum, president and chief executive officer of First California Financial Group. "This growth created the need to conduct an evaluation of our banks' coverage area across our regional footprint. The resulting branch realignment plan will help ensure that we are efficient and productive. We do not expect our loan or deposit totals to be materially impacted, as we intend to transfer relationship managers from the closed offices to other locations."

The Company anticipates the branch realignment initiative, excluding the effect of the pending Premier Service Bank merger, to result in an efficiency ratio in the low 60's by the fourth quarter of 2012.

First California also announced today that it entered into a definitive agreement with Premier Service Bank (PSBK), in which Premier Service Bank will merge into First California Bank. The transaction is expected to close during the third quarter of 2012, subject to regulatory and shareholder approvals and other customary closing conditions.

Under the terms of the merger agreement, Premier Service Bank's shareholders will receive, subject to certain adjustments, consideration of $2.0 million in the form of FCAL common stock. Currently, this would equal 477,269 common shares and result in an exchange ratio of 0.3784 FCAL shares for each share of PSBK common stock outstanding. The purchase price is approximately 30 percent of PSBK's book value and the transaction is expected to be accretive to earnings per share immediately in 2012. For the full year of 2013, this transaction will generate additional EPS of at least $0.05.

"We believe these initiatives underscore our commitment to increasing shareholder value, and we look forward to providing updates throughout the year," Kum concluded.

About First California
First California Financial Group, Inc. (NASDAQ: FCAL) is the holding company of First California Bank. Founded in 1979 and with nearly $2 billion in assets, First California serves the comprehensive financial needs of small- and middle-sized businesses and high net worth individuals throughout Southern California. Led by an experienced team of bankers, First California is committed to providing the best client service available in its markets, offering a full line of quality commercial banking products through 19 full-service branch offices in Los Angeles, Orange, Riverside, San Bernardino, San Diego, San Luis Obispo and Ventura counties. The holding company's website can be accessed at www.fcalgroup.com. For additional information on First California Bank's products and services, visit www.fcbank.com.

Forward-Looking Information
This press release contains certain forward-looking information about First California that is intended to be covered by the safe harbor for "forward-looking statements" provided by the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact are forward-looking statements, and include statements related to the Company's ability to realize cost savings and efficiencies through branch consolidations, the Company's ability to enhance efficiencies and manage costs and the expected continued progress in consolidating operations and the benefits of those activities, the monitoring of and management of risks in First California's loan portfolio, the adequacy of sources of liquidity to support First California's operations and strategic plans, the monitoring of and response to changing market conditions, and the status of the economy in the Southern California communities served by First California. Such statements involve inherent risks and uncertainties, many of which are difficult to predict and are generally beyond the control of First California. First California cautions readers that a number of important factors could cause actual results to differ materially from those expressed in, or implied or projected by, such forward-looking statements. Risks and uncertainties include, but are not limited to, revenues are lower than expected, credit quality deterioration which could cause an increase in the provision for credit losses, First California's ability to complete future acquisitions, successfully integrate such acquired entities, or achieve expected beneficial synergies and/or operating efficiencies within expected time-frames or at all, changes in consumer spending, borrowing and savings habits, technological changes, the cost of additional capital is more than expected, a change in the interest rate environment reduces interest margins, asset/liability repricing risks and liquidity risks, general economic conditions, particularly those affecting real estate values, either nationally or in the market areas in which First California does or anticipates doing business are less favorable than expected, a slowdown in construction activity, recent volatility in the credit or equity markets and its effect on the general economy, loan delinquency rates, the ability of First California to retain customers, changes in the bank regulatory environment, demographic changes, demand for the products or services of First California as well as their ability to attract and retain qualified people, competition with other banks and financial institutions, First California's level of small business lending, and other factors. If any of these risks or uncertainties materializes or if any of the assumptions underlying such forward-looking statements proves to be incorrect, First California's results could differ materially from those expressed in, or implied or projected by such forward-looking statements. First California assumes no obligation to update such forward-looking statements. For a more complete discussion of risks and uncertainties, investors and security holders are urged to read the section titled "Risk Factors" in First California's Annual Report on Form 10-K and any other reports filed by it with the Securities and Exchange Commission ("SEC"). The documents filed by First California with the SEC may be obtained at the SEC's website at www.sec.gov. These documents may also be obtained free of charge from First California by directing a request to: First California Financial Group, Inc., 3027 Townsgate Road, Suite 300, Westlake Village, CA 91361. Attention: Investor Relations. Telephone (805) 322-9655.

FIRST CALIFORNIA FINANCIAL GROUP
SUMMARY OF SIGNIFICANT TERMS
OF THE
MERGER WITH PREMIER SERVICE BANK
Parties of the Merger Agreement First California Financial Group, Inc.
First California Bank
3027 Townsgate Road
Westlake Village, California 91361

Premier Service Bank
3637 Arlington Avenue, Suite B
Riverside, California 92506
Consideration to be paid by FCAL for all shares of PSBK Common Stock
$2 million, currently 477,269 shares of FCAL Common Stock
Accretive to Earnings Transaction will be immediately accretive to earnings in 2012 and expected to increase EPS by at least $0.05 in 2013.
Purchase Price Represents approximately 30 percent of PSBK's book value; significant discount to book provides downside protection to asset quality; minimal goodwill creation
Earn-Back Period Tangible book value earn-back period of less than 2 years
Attractiveness of PSBK - Strong core deposit franchise with 37 percent noninterest bearing deposits;
- Acquiring $103 million loan portfolio with yield of 6.21 percent in most recent quarter;
- Enhances FCAL franchise, specifically in Riverside-San Bernardino-Ontario MSA with 2 new branches - excellent in-fill locations to existing footprint;
- Cost synergies and revenue enhancements will increase performance of combined bank;
- Transaction leverages existing FCAL balance sheet and capital position;
- Transaction return in excess of internal minimum requirement of 15 percent.

Contact Information

  • For further Information:

    At the Company:
    Ron Santarosa
    805-322-9333

    At PondelWilkinson:
    Robert Jaffe
    310-279-5969

    Corporate Headquarters Address:
    3027 Townsgate Road, Suite 300
    Westlake Village, CA 91361