RBB Bancorp in Los Angeles has agreed to buy First American International in Brooklyn, N.Y.
The $1.7 billion-asset RBB said in a press release Monday that it will pay $116.8 million in cash and stock for the parent of the $873 million-asset First American International Bank. The deal, which is expected to close in the second half of this year, prices First American at 186% of its tangible book value.
First American, which primarily serves Chinese-American communities in Brooklyn, Manhattan and Queens, has eight branches, $715 million in loans and $630 million in deposits. RBB said it plans to keep all of First American’s branches open.
The deal is RBB’s fifth acquisition since 2011 and its first since going public last year.
The transaction “enables us to expand the RBB franchise to the New York market and serve its large community of Asian-Americans,” Alan Thian, RBB’s chairman, president and CEO, said in the release.
“First American is an excellent cultural fit … as we have complementary business models, strong residential mortgage loan production platforms and a focus on the Chinese-American market,” Thian added. The deal will “provide additional scale that we believe will enhance our overall efficiencies and improve our level of profitability.”
RBB said it expects the transaction to be accretive to its 2019 earnings per share. It should take about two years to earn back the expected 4.1% dilution to RBB’s tangible book value.
RBB plans to cut about 30% of First American’s annual noninterest expense. RBB expects to incur $9 million of merger-related expenses.
Two members of First American’s board will become RBB directors. Raymond Yu, First American’s chairman, will become RBB’s vice chairman.
FIG Partners and Loren Hansen advised RBB. Sandler O’Neill and Arnold & Porter advised First American.