Business Context and Reporting Period
This Form 8-K, dated July 27, 2010, reports on First PacTrust Bancorp, Inc. (the "Company"), a Maryland corporation. The filing details the entry into material definitive agreements for a private placement of equity securities. The Company's principal executive offices are located in Chula Vista, California.
Key Financial Metrics and Transaction Details
The filing does not provide historical revenue, profit, cash flow, or margin data. The primary financial event is a proposed private placement with the following terms:
- Gross Proceeds: $60.0 million.
- Securities Issued: 4,529,075 shares of Voting Common Stock and 925,470 shares of Non-Voting Common Stock.
- Price Per Share: $11.00.
- Use of Proceeds: General corporate purposes, capital support for subsidiary Pacific Trust Bank, and approximately $19.3 million to redeem preferred stock issued under the TARP Capital Purchase Program.
- Estimated Severance Cost: Approximately $1.6 million (pre-tax) if TARP stock is redeemed, payable to executive officers.
Material Changes and Agreements
The Company entered into Subscription Agreements with selected institutional and accredited investors. Key contractual terms include:
- Liquidated Damages: $3.0 million payable to subscribers if the Company fails to close by December 31, 2010. Subscribers forfeit 2.5% of their purchase price if they breach.
- Warrants: TCW Shared Opportunity Fund V, L.P. receives warrants for 240,000 shares. COR Advisors LLC receives warrants for 1,560,000 shares. Both are exercisable at $11.00 per share over a five-year term.
- Preemptive Rights: Certain subscribers are granted preemptive rights to maintain their percentage ownership in future offerings for three years post-closing.
- Management Changes: Gregory Mitchell is expected to be named CEO or President. Hans Ganz will remain on the Board and as CEO of Pacific Trust Bank. Steven Sugarman is expected to join the Board.
Guidance, Outlook, and Risks
The transaction is expected to close in the fourth quarter of 2010, subject to regulatory approvals and stockholder approval under NASDAQ Rule 5635. The Company intends to file a registration statement for the resale of securities within 30 business days of closing.
Risks and Contingencies:
- Failure to obtain required regulatory or stockholder approvals.
- Inability to complete the sale within the expected timeframe.
- Deterioration in the economy or loan portfolio affecting the intended use of capital.
- Resale restrictions on unregistered securities.
Investor Verification Checklist
- Verify the receipt of regulatory approvals required for the closing of the Private Placement.
- Confirm stockholder approval for the issuance of Common Stock under NASDAQ Rule 5635.
- Monitor the filing of the proxy statement for details on security holdings and transaction specifics.
- Review the updated "Risk Factors" filed as Exhibit 99.3.
- Track the execution of the TARP preferred stock redemption and the associated $1.6 million severance payment.