More regional-bank consolidation is likely in the wake of Banc of California Inc.’s agreement to combine with PacWest Bancorp, Southern Bancorp Chief Executive Officer Darrin Williams said.
(Bloomberg) — More regional-bank consolidation is likely in the wake of Banc of California Inc.’s agreement to combine with PacWest Bancorp, Southern Bancorp Chief Executive Officer Darrin Williams said.
“I wish I could say that you’ve seen the end of it,” Williams said Friday in an interview set to air on Bloomberg Television. “I believe you’ll probably see more.”
Banc of California, based in Santa Ana, is purchasing larger rival PacWest, the firms announced Tuesday. Before the deal came together, interest expenses at PacWest had soared as the Beverly Hills-based lender borrowed from the Federal Reserve in an effort to stay afloat. The firms will carry the Banc of California name, and its CEO, Jared Wolff, will lead the combined company. The deal is expected to be completed late this year or in early 2024.
“That made sense probably for them,” Williams said. “Hopefully that’ll be better for folks in California, merging two good institutions together to make one stronger institution.”
The banking industry has seen tremendous consolidation over the past few years, and Williams said he worries that mergers may limit access to capital for some people, especially those living in rural or underserved communities. His bank is based in Arkadelphia, Arkansas.
“We’re troubled when we see the consolidation, particularly if it means that people have to move further and further away from a bank and not have access to capital, credit,” he said.
–With assistance from David Westin.
More stories like this are available on bloomberg.com
©2023 Bloomberg L.P.