PacWest Bancorp and Square 1 Financial announced the signing of a definitive agreement and plan of merger whereby PacWest will acquire Square 1 in a transaction valued at approximately $849 million. The Square 1 lending operations will continue to do business under the name Square 1 as a division of Pacific Western Bank.

Square 1 Financial is the parent of Square 1 Bank, a North Carolina commercial bank with approximately $3.1 billion in assets at December 31, 2014, one banking office in Durham, and twelve loan production offices throughout the U.S. In connection with the transaction, Square 1 Bank will be merged into Pacific Western Bank, the Los Angeles-based, wholly-owned subsidiary of PacWest Bancorp. PacWest had $16.2 billion in assets at December 31, 2014 and 80 branches located primarily in southern and central California.

The combined company will remain headquartered in Los Angeles and will have senior executives from each of the organizations in key positions. Upon completion of the transaction, one former Square 1 director will be appointed to the PacWest board.

Matt Wagner, CEO of PacWest Bancorp, commented, “We are very excited to align ourselves with the Square 1 team. Thanks to the talented professionals and founders that built this successful institution, we are confident this transaction with Square 1 represents an excellent opportunity to grow core deposits, expand our nationwide lending platform, and increase our presence in the dynamic technology and life-sciences markets.”

“Joining PacWest will be a terrific opportunity for our clients, employees, and stockholders,” said Doug Bowers, CEO of Square 1. “Square 1 offers PacWest a complementary line of business and significant core deposit growth. As part of PacWest, we will maintain our steadfast commitment to the entrepreneurial and venture communities, will be able to offer clients a wider array of products and will be well-positioned to continue to serve them through all stages of their growth.”

The transaction is expected to close in the fourth quarter of 2015. As of December 31, 2014, on a pro forma consolidated basis, the combined company would have had approximately $19.8 billion in assets with 80 branches throughout California and one in North Carolina. The combined institution would be the 6th largest publicly owned bank headquartered in California.