Southern California Bancorp (NasdaqCM:BCAL) entered into an agreement to acquire California BanCorp (NasdaqGS:CALB) for $230 million on January 30, 2024. At the effective time of the merger, each outstanding share of California BanCorp (?CBC?) common stock, excluding certain specified shares, will be converted into the right to receive 1.590 shares of Southern California Bancorp (?SCB?) common stock. The agreement also provides, among other things, David I. Rainer, the current Chief Executive Officer and Chairman of Southern California, will serve as Executive Chairman of the surviving corporation, surviving bank, and of their boards of directors, Steven E. Shelton, the current Chief Executive Officer of California BanCorp, will serve as the Chief Executive Officer, as well as a member of the board of directors, of the surviving corporation and surviving bank, Thomas A. Sa, the current President, Chief Financial Officer and Chief Operating Officer of California BanCorp, shall serve as the Chief Operating Officer of the surviving corporation and of the surviving bank, Richard Hernandez, the current President of Southern California, shall serve as the President of the surviving corporation and of the surviving bank, and Thomas G. Dolan, the current Chief Financial Officer of Southern California, shall serve as the Chief Financial Officer of the surviving corporation and Chief Strategy Officer of the surviving bank. In the agreement, SCB and CBC have agreed that the boards of directors of SCB and SCB Bank after the merger will consist of twelve members, with six each from the current SCB and CBC (and their subsidiary banks?) boards of directors, with a needed amendment to SCB?s bylaws made to provide for the increased board size. SCB and CBC also have agreed to evaluate rebranding the names of the surviving corporation and surviving bank. The agreement contains certain termination rights for both SCB and CBC, including if (i) the merger is not consummated by January 30, 2025, (ii) the required regulatory approvals are not obtained, (iii) the approval of SCB?s shareholders or CBC?s shareholders is not obtained, or (iv) there has been a breach by the other party that is not cured such that the applicable closing conditions are not satisfied. The agreement provides certain additional termination rights for each company related to competing acquisition proposals for both SCB and CBC and further provides that a termination fee of $9.3 million will be payable by either SCB or CBC, as applicable, in the event of a termination of the agreement under certain circumstances. The companies will evaluate rebranding with new names and logos for the combined company and bank at the close of the transaction. The combined company?s common stock will continue to trade on the Nasdaq Capital Market. Corporate headquarters will be located in San Diego, Calif.

The respective boards of directors of each of SCB and CBC have unanimously approved the merger. The transaction is subject to approval of the merger by shareholders of Southern California Bancorp and California BanCorp, receipt of required regulatory and other approvals, effectiveness of the registration statement for the SCB common stock to be issued as consideration in the merger, the shares of SCB Common Stock to be issued to the CBC shareholders as the merger consideration shall have been approved for listing on Nasdaq. and satisfaction of customary closing conditions. The transaction is expected to be completed in the third quarter of 2024.

MJC Partners acted as financial advisor to Southern California Bancorp and delivered a fairness opinion to their Board of Directors. Kenneth E. Moore of Stuart Moore Staub acted as legal counsel to Southern California Bancorp. Jeffrey Wishner, Joseph Gulash and Ashwin Kakani of Keefe, Bruyette and Woods, A Stifel Company acted as financial advisor to California BanCorp and delivered a fairness opinion to their Board of Directors. Joshua A. Dean of Sheppard, Mullin, Richter & Hampton LLP acted as legal counsel to California BanCorp. Katten Muchin Rosenman acted as legal counsel to Southern California.