Fresno-based Security First Bank is merging with Los Angeles-based SunPac Financial.
SunPac will provide capital for Security First Bank to expand its physical presence and lending in Fresno. SunPac Financial will continue to be headquartered in Los Angeles, and the Fresno Security First Bank office at Palm and Nees avenues will continue to operate as normal.
The agreement has been approved by boards of both companies and will be finalized after shareholder and regulatory approval, which is expected to happen by the end of the second quarter. Security First Bank shareholders will receive $10.50 per share.
SunPac was formed in July 2014 as an investment vehicle to explore developing a commercial and private bank serving Southern California.
“We are so pleased to join forces with Security First Bank, which will serve as our initial platform providing the necessary infrastructure to expand banking activities in Fresno and into the Los Angeles market,” said V. Charles “Charlie” Jackson, CEO of SunPac Financial. “Our plan is to allocate capital to expand Security First’s presence, lending activities and commitment to the Fresno market. In addition, we plan to establish a commercial and private banking presence in the Los Angeles market.”
Security First Bank was founded in 2007 by local investors. President and CFO Steve C. Jones said the bank focuses on commercial lending. On Wednesday, he said it is too early to tell whether some personnel would be moved to other departments as a result of the merger.
Last month, Security First announced its total deposits as of Dec. 31 were $84 million, a $1 million increase from the previous year. Total assets grew during the same period, from $99 million to $104 million. Net income also increased to more than $2 million, compared to $393,000 the year before. A share in the company climbed from 22 cents at the end of 2013 to $1.13 at the end of 2014.
News of the merger raised Security First’s stock significantly on Wednesday. At the end of Tuesday, a Security First share was valued at $5.25. By close of trading Wednesday, the share price was $10.09 (ticker symbol: SFRK).
“This merger will bring together exceptional talent, technology and the potential of growth through expanded and new business relationships and additional capital,” said Security First CEO Robert Hemsath. “The value-added capital and products will truly benefit our business community.”