Opus Bank is to acquire PENSCO Trust Company, (PENSCO) a wholly-owned subsidiary of PENSCO Services.
PENSCO is a custodian of self-directed IRA and alternative investments headquartered in San Francisco, California, and has nearly USD11 billion of custodial assets from over 45,000 clients and investments in over 40,000 unique asset types, comprised of private equity, real estate, notes, cash, and other non-exchange traded assets. Under the terms of the agreement, PENSCO shareholders and members will receive aggregate consideration comprised of 1,698,529 shares of Opus Bank common stock and USD47.25 million in cash, subject to certain adjustments set forth in the definitive agreement. The transaction is expected to close early in the second quarter of 2016, subject to certain regulatory approvals or non-objections and approvals by PENSCO’s shareholders and members, after which PENSCO will operate as a subsidiary of Opus. PENSCO shareholders and members have entered into voting agreements which provide for the requisite approvals when special meetings are held to vote on the transaction. Kelly Rodriques, President and Chief Executive Officer of PENSCO, will continue in the role of President and Chief Executive Officer of PENSCO, and will join Opus as Executive Vice President-Wealth Services.
Stephen H Gordon (pictured), Chairman, Chief Executive Officer and President of Opus, says: “I am excited to announce that PENSCO and its talented team will be joining Opus. We see tremendous benefit and opportunity between our companies, clients, and employees and I’m pleased we are announcing this important strategic transaction.” Gordon added, “Having banked PENSCO since early 2014, the Opus team has a strong understanding of PENSCO’s business and sector and views this synergistic transaction as part of the continued evolution, diversification, and sophistication of Opus. In addition to placing Opus squarely in the forefront of the alternative asset wealth services business, thereby adding a substantial new source of recurring non-interest income-based revenue and contributing approximately USD1.0 billion of near-zero cost deposits on to Opus’ balance sheet, we believe that several other revenue opportunities will be realized between PENSCO and Opus in the future.”
“We look forward to working with the PENSCO team and their clients, of which over 17,000 are domiciled within Opus’ West Coast footprint, in order to help them achieve their financial goals.”
Kelly Rodriques, President of PENSCO, says: “We are thrilled to join Opus Bank and are excited about the opportunities that the combined companies will create for our clients. This marriage of our growing and entrepreneurial firms is characterized by our shared institutional expertise and sharp focus on fintech innovation that will shape the future of financial services firms.” Rodriques concluded, “Investor interest in alternative assets continues to grow rapidly, and both Opus and PENSCO are at the forefront of interacting with multiple touch points in this space. Both companies share the vision of servicing clients’ alternative asset investing needs. The two firms already have similar clients – entrepreneurs, business owners, individual investors, private equity firms, and investments banks – and also have a common expertise in handling real estate, private equity and technology related assets. Together, our shared expertise enables an even greater focus on creating and delivering industry-leading technology platforms that simplify and expand the way investors and business owners create and manage their wealth."
PENSCO will continue to operate and serve its clients as a subsidiary of Opus, providing Opus with strong, recurring non-interest income based on assets under custody. PENSCO has over USD1.0 billion in near-zero cost cash balances deposited at FDIC insured depository institutions, which will be brought on to Opus’ balance sheet over a short transition period and contribute further growth and spread income to Opus. In addition, the teams at PENSCO and Opus will work to develop and realize future additional potential revenue opportunities through Opus’ Merchant Bank, Commercial Bank, Retail Bank, and Opus Financial Partners, Opus’ broker-dealer subsidiary.