Highlights of the Announced Transaction:
– Provides RBB with a strong presence in the New York market
– Highly accretive to EPS with a short tangible book value dilution payback period
– Increased scale resulting in enhanced efficiencies
LOS ANGELES, April 23, 2018 /PRNewswire/ — RBB Bancorp (NASDAQ: RBB) and its subsidiaries, Royal Business Bank and RBB Asset Management Company (collectively referred to herein as “RBB“) and First American International Corp. (OTC: FAIT) and its subsidiary First American International Bank (collectively referred to herein as “First American“), today announced the signing of a definitive agreement in a cash and stock transaction valued at $116.8 million, or $52.32 per share.
“We are very pleased to announce this transaction with First American, which enables us to expand the RBB franchise to the New York market and serve its large community of Asian-Americans,” said Mr. Alan Thian, Chairman, President and CEO of RBB Bancorp. “First American is an excellent cultural fit with RBB, as we have complementary business models, strong residential mortgage loan production platforms, and a focus on the Chinese-American market. On a pro forma basis, the addition of First American will enable RBB to surpass $2.5 billion in total assets and provide additional scale that we believe will enhance our overall efficiencies and improve our level of profitability. We believe that the combined company will be well positioned to continue growing the RBB franchise and creating value for our shareholders in the years ahead.”
“We believe the combination of First American and RBB will create an impressive bi-coastal banking franchise and add to the RBB family the leading New York Chinese-American community bank,” said Mr. Raymond Yu, Chairman of First American. “Our current depositors and customers will benefit immediately from RBB’s additional loan products and service offerings. RBB’s focus on shareholder value, professional client service, employee development and community service and support aligns well with First American’s core principles. We will work together to ensure a smooth transition and we expect to continue expanding in NYC and other regions.”
Under the terms of the definitive agreement, upon consummation of the transaction, all of First American common shares will be exchanged for approximately 3.0 million shares of RBB common stock and $33.7 million in cash. Based on a closing price for RBB Bancorp’s common stock of $27.48 as of April 20, 2018, the aggregate transaction value is approximately $116.8 million.
Existing RBB shareholders will own approximately 84.6% of the outstanding shares of the combined company and First American shareholders will own approximately 15.4%.
RBB expects the transaction to be accretive to earnings per share in 2019 in the mid-teens. RBB also expects to incur tangible book value per share dilution of approximately 4.1% upon closing of the transaction, with a tangible book value dilution payback period of approximately 1.9 years. The earnings per share accretion estimates are based on estimated cost savings of approximately 30% of First American’s non-interest expense, with 25% of the cost savings phased in during 2018 and 100% phased in during 2019. The earnings per share accretion estimates do not include any assumption of revenue synergies.
Pursuant to the terms of the definitive agreement, upon closing of the transaction, First American will designate two individuals, one of whom is First American’s Chairman, Mr. Raymond Yu, to serve on the Board of Directors of RBB, which will be expanded to 15 members. Mr. Yu will be appointed Vice Chairman of the Board of Directors of RBB.
First American’s Board of Directors has unanimously approved this transaction that is expected to close during the second half of 2018. The transaction is subject to the approval of First American’s shareholders, as well as regulatory approval and other customary closing conditions.
FIG Partners LLC is serving as financial advisor to RBB and Loren P. Hansen, APC is acting as RBB’s legal counsel. Sandler O’Neill + Partners, L.P. is serving as financial advisor to First American and Arnold & Porter is acting as First American’s legal counsel.
Conference Call and Presentation
RBB will host a conference call and webcast on April 23, 2018 at 10:00 a.m. Pacific Time/1 p.m. Eastern Time to discuss the transaction. To listen to the conference call, please dial 1-833-659-7620 or 1-430-775-1348, passcode 7889999. A replay of the call will be made available at 1-855-859-2056 or 1-404-537-3406, passcode 7889999, approximately one hour after the conclusion of the call and will remain available through April 30, 2018. The conference call will also be simultaneously webcast over the Internet; please visit RBB’s website at www.royalbusinessbankusa.com. This webcast will be recorded and available for replay on RBB’s website approximately two hours after the conclusion of the conference call.
A slide presentation with additional information regarding the transaction can be accessed on the Presentations page on the RBB website.
About RBB Bancorp
RBB Bancorp is a $1.7 billion in assets bank holding company headquartered in Los Angeles, California. Its wholly-owned subsidiary, Royal Business Bank (the “Bank”), is a full service commercial bank which provides business banking services to the Chinese-American communities in Los Angeles County, Orange County, Ventura County and in Las Vegas, Nevada, including remote deposit, E-banking, mobile banking, commercial and investor real estate loans, business loans and lines of credit, commercial and industrial loans, SBA 7A and 504 loans, 1-4 single family residential loans, trade finance and a full range of depository accounts. The Bank has ten branches in Los Angeles County, located in downtown Los Angeles, San Gabriel, Torrance, Rowland Heights, Monterey Park, Silver Lake, Arcadia, Cerritos, Diamond Bar, and west Los Angeles, two branches in Ventura County, located in Oxnard and Westlake Village, and one branch in Las Vegas, Nevada. RBB’s administrative and lending center is located at 123 E. Valley Blvd., San Gabriel, California 91176, and its finance and operations center is located at 7025 Orangethorpe Avenue, Buena Park, California 90621. RBB’s website address is www.royalbusinessbankusa.com.