Durham’s Square 1 Bank, which focuses on the venture capital industry, is being sold to California-based PacWest Bancorp in an all-stock deal worth $849 million.

The banks announced the deal early Monday. It is expected to close later this year.

Square 1, which has some $3 billion in assets, just went public a year ago. The financial firm is North Carolina born, having launched in Durham in 2005. It has offices in Austin, the San Francisco Bay Area, Boston, Chicago, Denver, Los Angeles, New York, San Diego, Seattle, and Washington, DC.

  • WTW Insider exclusive: A graphical view of the merger.

PacWest Bancorp (Nasdaq: PACW) is paying for the deal with stock.

Square 1 (Nasdaq: SQBK) will operate as a division of PacWest and retain its name.

Combined, the deal will create $19.8 billion in assets.

Square 1 shareholders will receive 0.6 shares from PacWest , or $27.49 per share, based on Friday’s closing price of $45.83, in exchange for each of their Square 1 holdings.

The price is slightly lower than Square 1’s share value. Square 1 shares closed at $27.68 on Friday.

The deal will create a $19.8 billion asset commercial bank.

“Little” Change for Square 1

In a statement, Square 1 Bank CEO Doug Bowers said the deal will change Square 1 “little” beyond new ownership.

“While ownership of Square 1 will change, little else about our company will. The same brand and culture, the creative solutions and exemplary service you have come to expect will continue. The same team you’ve always known will be here, ready to serve your needs. And our commitment to our mission – supporting entrepreneurs, their investors and the VC community – is as strong as ever,” he wrote in an email.

“With the access to additional capital this transaction brings, Square 1 will be a bigger bank with more capability – one that is better able to serve you as your company grows. This step presents the perfect opportunity to take our company to the next level for our clients, team and shareholders.

“The transaction will close later this year, but honestly, you shouldn’t notice a thing. You have a business to build, and we will be there every step of the way to help you succeed.”

PacWest Reaction

Matt Wagner, CEO of Los Angeles-based PacWest, said the deal expands that bank’s presence in technology and life science.

“We are very excited to align ourselves with the Square 1 team. Thanks to the talented professionals and founders that built this successful institution, we are confident this transaction with Square 1 represents an excellent opportunity to grow core deposits, expand our nationwide lending platform, and increase our presence in the dynamic technology and life-sciences markets,” he said in the announcement.

Bowers added that Square 1 offers PacWest “a complimentary line of bsuiness.”

“Joining PacWest will be a terrific opportunity for our clients, employees, and stockholders,” he said. “Square 1 offers PacWest a complementary line of business and significant core deposit growth. As part of PacWest, we will maintain our steadfast commitment to the entrepreneurial and venture communities, will be able to offer clients a wider array of products and will be well-positioned to continue to serve them through all stages of their growth.”