RBB Bancorp to acquire Chicago-based Pacific Global Bank for £26m

Pacific Global Bank has £180m in total assets, £136m in total loans and total deposits of £196m as of this June

RBB Bancorp (RBB) has agreed to acquire PGB Holdings and its subsidiary Pacific Global Bank for a value of $32.5m (£26m).

Headquartered in Chicago, Illinois, Pacific Global Bank primarily serves the Chinese-American communities in Chicago through its three branches in the neighbourhoods of Chinatown and Bridgeport, offering consumer and business banking and loan products and services.

Pacific Global Bank has total assets worth $223.3m (£180.6m), total gross loans of $168.8m (£136.5m) and total deposits of $196.7m (£159.1m) as of 30 June 2019.

The bank owns two of its three branches with an estimated market value of about $2m (£1.62m) in excess of book value.

The deal is expected to be closed early next year

The deal is expected to be closed in the first quarter of next year, subject to obtaining regulatory approvals and customary closing conditions.

Under the terms of the acquisition agreement, RBB will pay PGB shareholders about $32.5m (£26m) in cash. The bank expects the transaction to be accretive to earnings per share next year in high single digit range. It also expects to incur tangible book value per share dilution of about 3.9% after the deal is closed, with a with a tangible book value dilution payback period of about 3.3 years.

The earnings per share accretion estimates are based on estimated cost savings of about 30% of PGB’s non-interest expense, with the cost savings phased in during next year.

RBB Bancorp chairman, president and CEO Alan Thian said: “We are very pleased to announce this transaction with Pacific Global Bank, which enables us to expand the RBB franchise to the attractive Chicago market and serve its large community of Asian-Americans.

“Pacific Global 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.”

Thain continued saying: “We are excited to be entering the Chicago market and intend to open two new branches in metro Chicago next year. We believe that this transaction will position us well for continued growth of the RBB franchise and the creation of value for our shareholders in the years ahead.”

PGB founder and CEO Betty Chow said: “We are very excited to be joining the RBB family. RBB’s focus on high engagement client service, disciplined underwriting standards, strong asset quality and commitment to employee development aligns well with Pacific Global’s culture and provides me great confidence for the future of the combined organization.”

RBB Bancorp is a community-based bank headquartered in Los Angeles, California. The bank has total assets of $2.8bn (£2.27bn). Its subsidiary Royal Business Bank serves the Chinese-American communities in Los Angeles County, Orange County and Ventura County in California, in Las Vegas, Nevada, and in Brooklyn, Queens, and Manhattan in New York City.

The bank offers 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, automobile lending, trade finance, a full range of depository account products and wealth management services to its customers.