Banc of California in Irvine is acquiring Popular Community Bank's 20 Southern California offices, part of a deal in which Popular Inc., Puerto Rico's largest bank, is shedding 41 mainland U.S. branches.
The companies said Wednesday that Banc of California would pay $5.4 million for the local franchise, more than doubling its current network of 18 branches.
The deal includes $1.1 billion in deposits and $1.1 billion in loans from eastern and southern Los Angeles County and northern Orange County. Layoffs are expected to be minimal because the branch networks don't overlap, said Banc of California Chief Executive Steven Sugarman.
Banc of California is one of several large community banks that are rapidly expanding in the Southland with a focus on small businesses, but with a twist -- the deal will make it a presence in areas with large Latino communities where Popular operated.
The Irvine bank announced in July that it had hired former Los Angeles Mayor Antonio Villaraigosa as an advisor, in part because of his influence in the Latino community.
"We think the dreams of entrepreneurs are the same in these neighborhoods," Sugarman said in an interview. "A person trying to finance his second restaurant in Downey is not much different than [Banc of California client] Tender Greens expanding to a second restaurant in West L.A."
Investors gave the deal a thumbs-up, bidding up Popular's stock by 6.5% and Banc of California's by 1.5% in midday trading.
Popular said Wednesday it would retain 49 mainland branches in south Florida and New York but shed its networks in central Florida and Illinois as well as Southern California.
Slammed by foreclosures and severe recession in Puerto Rico, the bank has been shrinking to cut costs and shore up its reserves against losses. It has yet to repay $935 million in bailout funds it received in 2008 from the U.S. government's Troubled Asset Relief Program.