Banc of California in Irvine has agreed to sell its wholly owned investment adviser subsidiary, The Palisades Group.
The bank will sell the division to Palisades Holdings I LLC, an entity owned by members of The Palisades Group management team that includes its chief executive, Stephen Kirch, and its chief investment officer, Jack Macdowell.
Palisades is an independent credit manager overseeing portfolios of performing, reperforming and nonperforming residential mortgage loans.
"We have valued our strategic relationship with Banc of California and thank them for their role in the success of Palisades. We are excited by the future growth opportunities which lie ahead of us," Kirch said in a news release Wednesday.
Banc of California Chairman and CEO Steven Sugarman said in the news release that the unit's sale aligns with the $8.2 billion-asset company's aim "to focus on commercial banking activities and to grow incremental spread and recurring fee-based revenues."
"This transaction will enhance the overall efficiency of our organization….and sharpen management's focus on the tremendous opportunities we are seeing in our commercial banking division," Sugarman said.
According to the agreement, the bank will receive a mix of cash, a two-year promissory note and an earn-out tied to the asset management firm's success following the deal. The sale is expected to close this quarter. Banc of California said it would be accretive to its 2016 earnings.
