Yahoo Finance RBB Bancorp (RBB) Enters San Francisco Bay,To buy Gateway Bank
RBB Bancorp RBB has entered a definitive agreement to buy Gateway Bank in a cash transaction valued at $22.9 million in a bid to penetrate the strategic San Francisco Bay Area.
Gateway Bank has a focus on the Asian American communities in the San Francisco Bay Area. Ithas another branch in Oakland’s Chinatown neighborhood, providing consumer and business banking, and loan products and services. Hence the buyout will expand RBB Bancorp’s physical presence in six of nine target markets of Gateway Bank and provide a profitable base to extend the advancement the latter has made in the Bay Area. It is also in line with RBB Bancorp’s aim to establish its relationship-based banking model in the region for the community.
As of Sep 30, 2021, Gateway Bank had total assets of $172.4 million, total gross loans of $123.1 million, total deposits of $147.5 millionand total tangible equity of $15.5 million. Hence, the acquisition is likely to enhance RBB Bancorp’s balance sheet.
The transaction is subject to certain terms and norms, including customary holdbacks if specific contingencies are not met, and other possible adjustments as per the definitive agreement. It is expected to close in second-quarter 2022 and is subject to regulatory approvals as well as other customary closing terms.
Importantly, the transaction is expected to result in notable financial benefits. The company anticipates the buyout to be accretive to 2022 earnings per share in the mid-single-digit range. This is based on estimated cost savings of 60% of Gateway Bank’s non-interest expenses, which will be phasedin during 2022. The accretion does not include any revenue synergy projections.
RBB Bancorp expects to witness dilution in tangible book value per share of 1.8% upon the closing of the deal, with a tangible book value dilution payback period of 1.8 years.
In the past year, shares of RBB Bancorp have gained 66.7% compared with the industry’s growth of 51%.
One Year Price Performance
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Currently, RBB Bancorp carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Inorganic Growth Efforts by Other Firms
Several companies from the finance sector are making consolidation efforts to counter the low-interest-rate environment and heightened costs of investments in technology.
FirstCash Holdings, Inc. FCFS completed the previously announced acquisition of American First Finance, a technology-driven, virtual lease-to-own and retail finance provider for underserved, non-prime customers. The cash-and-stock transaction, valued at $916 million (based on FCFS’s closing stock price on Dec 3, 2021), was announced this October.
FirstCash has a proven performance history in retail-based operations, primarily for cash-and-credit constrained consumers. Via the acquisition, FCFS will become a pioneer in the complementary and burgeoning point-of-sale and buy-now-pay-later payment space.
Walker & Dunlop, Inc. WD successfully closed a $696-million deal to acquire tax credit syndicators and affordable housing developers, Alliant Capital, Ltd. and its affiliates, Alliant Strategic Investments and ADC Communities.
Apart from steering Walker & Dunlop deeper into the affordable housing domain, Alliant’s competencies, assets and personnel will boost WD’s goals of furthering debt financing, property brokerage and assets under management, as underlined in its Drive to ’25 strategic plan.
In early December, United Bankshares, Inc. UBSI announced the completion of its merger deal with Community Bankers Trust Corporation.
The buyout brought together two high-performing banking companies. It also bolsters United Bankshares’ position as one of the largest and best-performing regional banking companies in the Mid-Atlantic and Southeast. The combined entity will now operate across 250 locations in opportunistic markets in the United States.
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