8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): October 15, 2021

BANC OF CALIFORNIA, INC.

(Exact name of registrant as specified in its charter)

Maryland	001-35522	04-3639825
(State or other jurisdiction<br>of incorporation)	(Commission File Number)	(IRS Employer<br>Identification No.)
3 MacArthur Place, Santa Ana, California	92707
---	---
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (855) 361-2262

N/A

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2.):

☐    Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐    Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐    Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐    Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.01 per share	BANC	New York Stock Exchange
Depositary Shares each representing a 1/40th Interest in a share of 7.00% Non-Cumulative Perpetual Preferred Stock, Series E	BANC PRE	New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company   ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

Item 2.01. Completion of Acquisition or Disposition of Assets

On October 18, 2021, pursuant to the Agreement and Plan of Merger (the “Merger Agreement”), dated as of March 22, 2021, between Banc of California, Inc., a Maryland corporation (the “Company”), and Pacific Mercantile Bancorp, a California corporation (“PMB”), PMB was merged with and into the Company (the “Merger”), with the Company continuing as the surviving corporation. Pursuant to the Articles of Merger filed by the Company with the State Department of Assessments and Taxation of the State of Maryland, the Merger became effective at 8:59 p.m., Pacific time, on October 18, 2021 (the “Effective Time”). Promptly after the Merger, Pacific Mercantile Bank, a California state-chartered bank and a wholly owned subsidiary of PMB, merged with and into Banc of California, National Association, a national banking association and wholly owned subsidiary of the Company (“BoC Bank”), with BoC Bank as the surviving bank (the “Bank Merger”, and collectively, with the Merger, the “Mergers”).

Pursuant to the terms and conditions of the Merger Agreement, each outstanding share of PMB common stock, no par value per share, and PMB non-voting common stock, no par value per share (collectively, “PMB Common Stock”), excluding certain specified shares, was converted into the right to receive 0.50 (the “Exchange Ratio”) of a share of Company common stock, par value $0.01 per share (“BANC Common Stock” and such consideration, the “Merger Consideration”).

In addition, as a result of the Merger, at the effective time of the Merger (i) each outstanding option to acquire PMB Common Stock, whether vested or unvested, was cancelled and converted into the right to receive a cash payment based on the product of (x) the total number of shares of PMB Common Stock subject to such option and (y) the excess of (A) the product of (a) $18.62 (the per share value of the merger consideration based on an average BANC Common Stock price for a 20 day trading period prior to the closing of the Merger) and (b) the Exchange Ratio (the “Cashout Price”) over (B) the exercise price per PMB share of such option (less applicable taxes required to be withheld with respect to such payment), (ii) each outstanding PMB restricted stock award became fully vested and converted into the right to receive the Cashout Price (less applicable taxes required to be withheld with respect to such vesting), and (iii) each outstanding PMB restricted stock unit became fully vested and converted into the right to receive the Cashout Price (less applicable taxes required to be withheld with respect to such vesting).

As a result of the Merger, the Company will deliver approximately 11,856,718 shares of BANC Common Stock to the former holders of PMB Common Stock. Former holders of PMB Common Stock as a group have the right to receive shares of BANC Common Stock in the Merger constituting approximately 19% of the outstanding shares of BANC Common Stock immediately after the Merger. As a result, holders of BANC Common Stock immediately prior to the Merger, as a group, own approximately 81% of the outstanding shares of the BANC Common Stock immediately after the Merger.

The foregoing description of the Merger and the Merger Agreement does not purport to be complete and is qualified in its entirety by reference to the Merger Agreement, which was filed as Exhibit 2.1 to the Company’s Current Report on Form 8-K filed on March 23, 2021, which is incorporated herein by reference.

Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

Pursuant to the terms of the Merger Agreement, on October 18, 2021, the Board increased its size by two to twelve total directors and filled the new vacancies created by this increase by appointing Denis Kalscheur and Shannon Eusey, each directors of PMB, to serve on the board of directors of the Company and BoC Bank (together, the “Board”), in each case until their initial terms as directors of the Company will expire at the Company’s 2022 Annual Meeting of Stockholders. Mr. Kalscheur will also be appointed to the Joint Audit Committee and the Joint Asset Liability Company. Ms. Eusey will be appointed to the Joint Enterprise Risk Committee and the Joint Compensation, Nominating and Corporate Governance Committee. On October 15, 2021, Barbara Fallon-Walsh notified the Company that she will retire effective as of October 18, 2021 from her position as a member of the Board of the Company and of BoC Bank, including as a member of the Joint Compensation, Nominating and Corporate Governance Committee and the Joint Asset Liability Committee.

In addition, on October 18, 2021, the Company appointed Vania Schlogel to fill the vacancy created by the resignation of Ms. Fallon-Walsh to serve on the Board of the Company and BoC Bank until her initial term as a director of the Company will expire at the Company’s 2022 Annual Meeting of Stockholders. Ms. Schlogel will also be appointed to the Joint Audit Committee and the Joint Asset Liability Committee. After giving effect to the foregoing, each Board consists of twelve members.

Mr. Kalscheur has served on the on the board of directors for PMB and Pacific Mercantile Bank, a wholly owned subsidiary of PMB, since February 2015, including as Chairman of the board and Chair of the audit committee. Since April 2021, Mr. Kalscheur has served as a member of the board of directors of ORIX Corporation USA following service as an advisory director. From January 2017 to November 2018, Mr. Kalscheur served as a member of the board of directors for Avolon Holdings Limited, the third largest

commercial jet aircraft leasing company in the world. From January 2016 to January 2017, Mr. Kalscheur served as Vice Chairman of Aviation Capital Group (“ACG”), a global commercial jet aircraft leasing firm and wholly owned subsidiary of Pacific Life, a leading U.S. headquartered life insurance enterprise, and a member of ACG's Board of Directors. From January 2013 to December 2015, Mr. Kalscheur served as ACG’s CEO and as a member of its board of directors. From 2010 through 2012, Mr. Kalscheur served as SVP and Treasurer of Pacific Life.

Ms. Eusey is the Chief Executive Officer and President of Beacon Pointe Advisors, which she co-founded in 2002. Beacon Pointe Advisors is one of the largest Registered Investment Advisors specializing in full service financial planning, research driven investments that partners with institutions, retirement-sponsored plans and private clients. Ms. Eusey serves or has served on numerous boards including the Charles Schwab Advisor Council, the TD Ameritrade Advisory Council, CNBC’s Advisory Council, as well as Scratchworks, a financial technology accelerator that connects innovative tech companies with investment and wealth management luminaries to advance the digital transformation of the financial services industry.

Ms. Schlogel is Managing Partner and Founder of Atwater Capital, a media and entertainment sector-focused investment firm with offices in Los Angeles, California and Seoul, South Korea. Prior to founding Atwater, Ms. Schlogel served as a senior executive at several leading companies, including as Chief Investment Officer of Roc Nation and was a member of KKR's private equity team, where she specialized in the media sector and launched the growth equity division. Ms. Schlogel began her career in the Leveraged Finance and Capital Markets groups at Goldman Sachs in London and Los Angeles. Ms. Schlogel serves as a director on a number of boards, including as the Chairperson of Epidemic Sound, a provider of royalty-free music, and LEONINE Studios, Germany's leading content production and distribution company.

Compensatory arrangements for Mr. Kalscheur, Ms. Eusey and Ms. Schlogel will be consistent with the Company’s previously disclosed standard arrangements for non-employee directors. Such arrangements are described in the Company’s proxy statement for its 2021 annual meeting filed on March 31, 2021, which descriptions are incorporated herein by reference.

Mr. Kalscheur, Ms. Eusey and Ms. Schlogel have no direct or indirect material interest in any transaction required to be disclosed pursuant to Item 404(a) of Regulation S-K and have no arrangement or understanding with any other person pursuant to which they were selected as a director.

Mr. Kalscheur, Ms. Eusey and Ms. Schlogel are expected to enter into the same form of indemnification agreement with the Company as the Company’s other directors and certain of the Company’s officers, which agreement supplements the indemnification provisions of the Company’s charter by contractually obligating the Company to indemnify, and to advance expenses to, such persons to the fullest extent permitted by applicable law.

Item 8.01. Other Events.

On October 18, 2021 the Company issued a press release announcing the completion of the Merger. A copy of the press release is filed as Exhibit 99.1 hereto and is incorporated herein by reference.

Item 9.01. Financial Statements and Exhibits

(a) Financial Statements of Businesses Acquired.

The Company intends to file the financial statements of the business acquired under cover of Form 8-K/A no later than 71 calendar days after the date this Report is required to be filed.

(b) Pro Forma Financial Information.

The Company intends to file pro forma financial information under cover of Form 8-K/A no later than 71 calendar days after the date this Report is required to be filed.

(d) Exhibits

Exhibit Number	Description
2.1*	Agreement and Plan of Merger, dated March 22, 2021, between Banc of California and PMB (filed as Exhibit 2.1 to the Company’s Current Report on Form-8-K filed on March 23, 2021 and incorporated herein by reference).
99.1	Press Release, dated October 18, 2021.
104	Cover Page Interactive Data File (embedded within the Inline XBRL document)

*Schedules and exhibits omitted pursuant to Item 601(a)(5) of Regulation S-K. Banc of California agrees to furnish a copy of any omitted schedule or exhibit to the

SEC upon request.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

BANC OF CALIFORNIA, INC.

Date:    October 19, 2021

/s/ Ido Dotan
Ido Dotan
Executive Vice President, General Counsel and<br>Corporate Secretary

Document

Banc of California Announces the Completion of its Acquisition of Pacific Mercantile Bancorp

•Acquisition creates a business banking franchise in Southern California with over $9 billion in assets

•Three new independent directors appointed to the Board of Directors

SANTA ANA, Calif., (October 18, 2021) — Banc of California, Inc. (NYSE: BANC) (the “Company” or “Banc of California”), the holding company of Banc of California, N.A. (the “Bank”), announced today the completion of its acquisition of Pacific Mercantile Bancorp (NASDAQ: PMBC) (“Pacific Mercantile”) effective as of October 18, 2021. Following the acquisition, Banc of California will have over $9 billion in total assets. The Company announces third quarter earnings on October 21, 2021.

Jared Wolff, President & CEO of Banc of California, stated, “The Pacific Mercantile acquisition significantly enhances the growth of our business banking franchise in Southern California with the addition of approximately $980 million in gross loans, $1.3 billion in total deposits and $1.5 billion in total assets as of September 30, 2021. Moreover, we are excited to welcome Pacific Mercantile’s clients and team of highly experienced bankers into our Banc of California family.”

Mr. Wolff added, “We are very proud of the commitment and hard work of the team members of Banc of California and Pacific Mercantile who have already made significant progress in planning and integrating the two organizations and will complete the Pacific Mercantile system conversion this quarter. We expect the smooth transition of Pacific Mercantile clients to our platform and integration of our teams will enable us to deliver quickly on the compelling economic benefits of the transaction and enhance the value of our franchise.”

Under the terms of the Agreement and Plan of Merger, each Pacific Mercantile common share, other than excluded shares, was converted into the right to receive 0.50 of a share of Company common stock. The Company is issuing an aggregate of approximately 11.9 million shares of Company common stock and paying approximately $3.2 million in cash to equity award holders. The value of the total deal consideration is approximately $226 million.

In connection with the completion of the merger, two Pacific Mercantile directors, Denis P. Kalscheur and Shannon F. Eusey, have joined the Board of Directors of the Company and the Bank (the “Board”). In addition, the Company today announced the appointment of Vania Schlogel to the Board, effective October 18, 2021. Mr. Kalscheur was most recently the Chairman of the Board of Pacific Mercantile, Ms. Eusey is the Co-Founder, Chief Executive Officer and President of Beacon Pointe Advisors, and Ms. Schlogel is the Founder and Managing Partner of Atwater Capital. Barbara Fallon-Walsh, a well-respected and valued Board member, retired from both Boards effective at the closing of the merger.

These appointments, along with Ms. Fallon-Walsh’s retirement, expand the Board to 12 directors, 11 of whom are independent.

“I’m pleased to welcome Denis, Shannon and Vania as new independent directors to the Board,” said Mr. Wolff. “Each of them brings important experience and enhances the diversity of skills and viewpoints on our Board. Their respective financial and risk management expertise, deep understanding of strategy and people, and strong roots in the Southern California business community will be invaluable as we continue to drive growth and execute on our strategic initiatives.”

Ms. Fallon-Walsh is retiring following her relocation to the East Coast after having served on the Board for three years.

“We are sad to see Fallon retire and would like to thank her for her many contributions and service to the Board,” said Board Chair Bob Sznewajs. “Her leadership and guidance were instrumental in guiding the Company through its transformation.”

About Banc of California, Inc.

Banc of California, Inc. (NYSE: BANC) is a bank holding company with one wholly-owned banking subsidiary, Banc of California, N.A. (the Bank), and had $8.0 billion in assets as of June 30, 2021, and over $9.0 billion in assets following the completion of its acquisition of Pacific Mercantile. The Bank has 39 offices including 33 full-service branches located throughout Southern California. Through our dedicated professionals, we provide customized and innovative banking and lending solutions to businesses, entrepreneurs and individuals throughout California. We help to improve the communities where we live and work, by supporting organizations that provide financial literacy and job training, small business support and affordable housing. With a commitment to service and to building enduring relationships, we provide a higher standard of banking. We look forward to helping you achieve your goals. For more information, please visit us at www.bancofcal.com.

Forward-Looking Statements

This press release includes forward-looking statements within the meaning of the “Safe-Harbor” provisions of the Private Securities Litigation Reform Act of 1995. These statements are necessarily subject to risk and uncertainty and actual results could differ materially from those anticipated due to various factors, including those set forth from time to time in the documents filed or furnished by Banc of California, Inc. with the Securities and Exchange Commission (SEC). Words such as “anticipates,” “believes,” “estimates,” “expects,” “forecasts,” “intends,” “plans,” “projects,” “could,” “may,” “should,” “will” or other similar words and expressions are intended to identify these forward-looking statements. In addition to those, statements about the potential effects of the Pacific Mercantile Bancorp acquisition on the business, financial results and condition of Banc of California, Inc. and its subsidiaries may constitute forward-looking statements and are subject to the risk that the actual effects may differ, possibly materially, from what is reflected in those forward-looking statements due to factors and future developments that are uncertain, unpredictable and in many cases beyond the control of Banc of California, Inc., including (i) the risk that the benefits from the transaction may not be fully realized or may take longer to realize than expected, including as a result of changes in general economic and market conditions, interest and exchange rates, monetary policy, laws and regulations and their enforcement, and the degree of competition in the geographic and business areas in which Banc of California Inc. and Pacific Mercantile Bancorp operate; (ii) risk that the COVID-19 pandemic, including uncertainty and volatility in financial, commodities and other markets, and disruptions to banking and other financial activity, could harm Banc of California, Inc.’s business, financial position and results of operations, and could adversely affect the anticipated benefits of the acquisition; (iii) the ability to promptly and effectively integrate the businesses of Banc of California Inc. and Pacific Mercantile Bancorp; (iv) the reaction to the transaction of the companies’ customers, employees and counterparties; (v) diversion of management time on integration-related issues; (vi) lower than expected revenues, credit quality deterioration or a reduction in real estate values or a reduction in net earnings; and (vii) other risks that are described in Banc of California Inc.’s public filings with the SEC. You should not place undue reliance on forward-looking statements and Banc of California, Inc. undertakes no obligation to update any such statements to reflect circumstances or events that occur after the date on which the forward-looking statement is made.

Media/Investor Relations Inquiries:
Banc of California, Inc.
(855) 361-2262
Jared Wolff, (949) 385-8700
Lynn Hopkins, (949) 265-6599

Source: Banc of California, Inc.