First Foundation (FFWM) to Acquire TGR Financial for $295M
With an aim to further solidify its banking and trust services in Florida, First Foundation Inc. FFWM recently announced the execution of a deal, under which TGR Financial, Inc. will merge into First Foundation. The all-stock deal, expected to close in the second half of this year, however, awaits regulatory approvals, consents of both companies’ shareholders, and is subject to customary conditions.
Scott F. Kavanaugh, CEO of First Foundation, said, “This acquisition highlights our desire to continue growing our business in markets with attractive demographic and economic trends and we are excited to have a regional presence spanning from coast to coast."
Transaction Details
Based on First Foundation’s common stock‘s closing price as of Mar 28, the transaction is valued at $295 million. Per the terms of the deal, shareholders of TGR Financial will get 0.6068 share of First Foundation's common stock for each share of TGR Financial’s common stock. Thus, following the closure, TGR Financial shareholders will own roughly 20.2% of outstanding shares of First Foundation’s common stock.
As of Mar 31, 2021, TGR Financial operated seven branch offices in Southwest Florida, with total assets of $2.3 billion. After the conclusion of the deal, First Florida Integrity Bank, the bank subsidiary of TGR Financial, will be merged with and into First Foundation Bank. Further, First Foundation’s assets will increase to more than $9.4 billion on a pro forma basis.
Following the transaction’s completion, Gary L. Tice will join First Foundation’s board of directors.
Conclusion
Over the years, First Foundation has grown strategically through acquisitions. In 2017, the company’s acquisitions of Premier Business Bank and Community 1st Bank boosted its financials substantially. Some of the other buyouts that expanded the company's footprints, include two branches in Seal Beach and Laguna Hills from Pacific Western Bank in 2016, Pacific Rim Bank in 2015, and Desert Commercial Bank in 2012.
Over the past six months, shares of First Foundation have rallied 32.5%, underperforming the industrys gain of 35.8%.
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Other Finance Stocks Making Similar Moves
M&T Bank Corporation MTB and People’s United Financial Inc. PBCT announced another such merger deal in 2021. The all-stock deal worth $7.6 billion is likely to close in the fourth quarter of 2021, subject to necessary approvals.
Huntington Bancshares Incorporated HBAN and TCF Financial Corporation also announced a merger deal in December 2020. It is expected to close in the ongoing quarter and is subject to regulatory consents.
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