In the midst of an ongoing merger, Banc of California last week announced it was committing $4.1 billion to a three-year community benefits plan, in conjunction with reinvestment coalition Rise Economy.
The Santa Ana-based bank said the plan aims to make a “meaningful and positive impact” in communities served by its existing operations as well as those by downtown-based Pacific Western Bank, with which it is merging. The plan will initiate once the merger between the two banks is completed.
Banc of California worked with Rise Economy, formerly called the California Reinvestment Coalition, to identify target areas for its outreach and investments.
“Banc of California and Pacific Western Bank both have strong, long-standing records of serving our communities and we look forward to building upon that foundation as a combined organization to expand our services, investments and products in communities that need it most,” John Sotoodeh, COO of Banc of California, said in a statement. “Our work with Rise Economy is a model of collaboration, with us working together to incorporate many of their critical recommendations into our Community Benefits Plan to make a positive impact in underserved communities. It also showcases the positive benefits our merger will have for our communities in the years to come.”
Banc of California shares opened at $12 the day of the Rise Economy announcement, fell to $11.27 in the days following, and closed at $12.06 on Thursday.
Meanwhile, PacWest Bancorp – the parent to Pacific Western – shares opened at $7.67 on the day of the announcemen and closed at $7.59 on Thursday.
The bank plans to lend $1.45 billion to small businesses, largely through U.S. Department of Agriculture loan programs and the State Small Business Credit Initiative. Some of that will also be spent on promoting the loans through ethnic minority media outlets.
It will also target $2.3 billion in loans for long-term affordable housing development, as well as another $300 million to invest in low-income housing, homelessness prevention, small-business investment companies and community-development financial institutions led by women and minority owners.
Additionally, the bank pledged to participate in and support community land trusts, dedicating $20 million toward investments in affordable housing preservation by those trusts.
It will also ramp up due diligence in real estate lending to more closely track housing-code violations, evictions and other areas.
Another $250,000 will be donated to support climate-resiliency programs in low-income and minority communities. In addition, $500,000 will be spent on outreach, investment and support to Native American communities.
“We appreciate Banc of California’s commitment to helping the communities they serve and the constructive way in which they listened to the experience and concerns of Rise Economy members working hard every day to build wealth in their communities, Paulina Gonzalez-Brito, chief executive of Rise Economy, said in a statement. “The bank is taking a meaningful step forward in meeting the banking needs of low-income communities and communities of color in our state.”
The combination of Banc of California and Pacific Western Bank will result in an institution with more than $36 billion in combined assets and more than 70 branches in California, Colorado and North Carolina.