First Foundation, a financial services company with two wholly-owned operating subsidiaries, First Foundation Advisors and First Foundation Bank, and PBB Bancorp this week announced the signing of a definitive merger agreement under which First Foundation will acquire PBB Bancorp. The transaction, which has been unanimously approved by each company’s board of directors, is expected to close in the second quarter of 2018 and is subject to customary closing conditions, including obtaining approval by PBB Bancorp’s shareholders and bank regulatory authorities.
PBB Bancorp is the parent company of Premier Business Bank and its community bank divisions, Premier Bank of Palos Verdes and First Mountain Bank. It is a California state-chartered bank with $587 million in total assets as of September 30, 2017 and six branch offices and a SBA loan center located in Southern California. Upon the closing of the transaction, Premier Business Bank will be merged with and into First Foundation Bank.
“We are pleased to announce this strategic acquisition,” said Scott F. Kavanaugh, CEO of First Foundation. “Premier Business Bank has built a reputation as a strong banking partner for business owners and real estate investors, which makes it a great fit for First Foundation. Our combined firm will be well-positioned for growth in Southern California. We look forward to welcoming the employees, clients, and shareholders of Premier Business Bank to the First Foundation family.”
Pursuant to the merger agreement, PBB Bancorp shareholders will receive 1.05 shares of First Foundation common stock in exchange for each share of PBB Bancorp. The 100 per cent stock transaction is valued at approximately $106 million in aggregate, based on a closing price for First Foundation’s common stock of $19.04 as of December 18, 2017, and the value per share for a PBB Bancorp shareholder is $19.99. The value of the merger consideration will fluctuate based on First Foundation’s common stock price.
On a pro forma consolidated basis with Premier Business Bank, First Foundation Bank would have had approximately $4.7 billion in total assets as of September 30, 2017. The transaction is expected to be immediately accretive to First Foundation’s EPS (excluding approximately $5.1 million of one-time expenses). At closing, the transaction is expected to be approximately 3.6 per cent dilutive to First Foundation’s tangible book value per share with an estimated tangible book value earn-back period of 3.8 years. The transaction will not require any supplemental financing.
“In entering into this agreement, Premier Business Bank believes that it has found a strong partner in First Foundation,” said John Polen, president and CEO of Premier Business Bank. “Its platform of business and personal banking, as well as private wealth management solutions, present greater opportunities for our clients going forward.”
The merger with PBB Bancorp will become the fifth acquisition for First Foundation, which acquired Community 1st Bank in the Greater Sacramento area on Nov. 10, 2017, two branches in Seal Beach and Laguna Hills from Pacific Western Bank on Dec. 12, 2016; Pacific Rim Bank in Honolulu on June 16, 2015; and Desert Commercial Bank in Palm Desert on Aug. 15, 2012.