Peninsula Bank Ends Merger With Western

Western Bancorp’s ambitious expansion plans suffered a setback Friday when the Newport Beach-based company said Peninsula Bank of San Diego called off a merger agreement.

Western’s fading stock price killed the $113.8-million stock deal, the company indicated. The plan, announced July 24, called for Western to exchange $45.75 in stock for each share of Peninsula.

Western’s stock, which traded at $43.13 a share when the acquisition was announced, has fallen 27%. The shares closed Friday at $31.50, up 50 cents. The company announced the terminated merger after the markets closed.

Peninsula Bank shares, which traded at $46 immediately before the merger announcement, most recently traded on Oct. 20 at $34.

Western has been one of the more aggressive suitors in the ongoing wave of bank consolidations in California. The company, created in 1996 out of the merger of Monarch Bancorp and Western Bank, had acquired or announced plans to purchase six banking firms, including Peninsula.

On Monday, Western completed its acquisition of Bank of Los Angeles for about $72 million in stock, expanding its presence in the Los Angeles area. It previously acquired Santa Monica Bank and Southern California Bank, and earlier this month announced plans to buy PNB Financial Group, Newport Beach-based parent of Pacific National Bank.

The Peninsula Bank acquisition would have added $428 million in assets and 10 branches in San Diego County to Western Bancorp’s holdings. Western has about $2.3 billion in assets.