First PacTrust to acquire Beach Business Bank of Manhattan Beach

First PacTrust Bancorp, the parent of Chula Vista's Pacific Trust Bank, has agreed to acquire Beach Business Bank, a Manhattan Beach community bank with a specialty sideline of lending to physicians across the country.

The deal, expected to close early next year, continues an expansion into Los Angeles and Orange counties for First PacTrust, which raised $28 million in fresh capital this summer by selling stock.

First PacTrust also is acquiring Gateway Business Bank, a three-branch bank based in Cerritos that operates home-lending offices across California, Oregon and Arizona through its Mission Hills Mortgage Bankers arm.

In a joint statement Wednesday morning, First PacTrust and Beach Business Bank said their boards had OK'd the deal, which also requires approval by Beach shareholders and regulators.

Assuming that goes as planned, Beach shareholders are to receive combinations of cash and stock or cash and stock warrants with a total value of $37.2 million, the statement said.

The deal adds up to $9.07 for each share of Beach Business Bank stock. The closely held shares had traded in the $16 range in late 2006 and early 2007, before the financial crisis struck.

They had been changing hands at about $6 in recent over-the-counter trading and shot up to $8.60 after the deal was announced, a 45% gain.

Besides its Manhattan Beach headquarters, Beach has full-service branches in Long Beach and Costa Mesa and a lending office in Torrance.

It is to continue operating under its own name, with its chief executive, Robert M. Franko, becoming president of First PacTrust Bancorp. Franko said the merger would "result in a stronger bank with the capital strength and scale to continue to expand into new markets."