The combined entity will serve middle market businesses in the San Francisco Bay Area, while strengthening CABC’s South Bay presence.
CABC will own 79% stake in the company, while the remaining 21% will be owned by PPFC.
The combined bank will operate as California Bank of Commerce and is said to continue to create "superior, lasting banking relationships with the primary purpose of making our clients more successful".
CABC president and CEO Terry A. Peterson said: "We are excited about combining these two business banking franchises covering the San Francisco Bay Area.
"Both banks have developed strong commercial banking relationships with successful middle market businesses. Both banks have built robust banking platforms and production capabilities, established low cost deposit bases with significant focus on C&I lending."
Under the agreed terms, Pan Pacific Bank shareholders will receive $4.75 per share based on the last trading price of CABC common stock.
The merger is subject to customary conditions, including the approvals of bank regulatory agencies and the shareholders of both California Bank of Commerce and Pan Pacific Bank.
It is expected to be completed by the end of this year or early in the first quarter of 2016, upon receiving necessary approvals.
