WashingtonFirst Bankshares in Reston, Va., has agreed to buy direct mortgage lender 1st Portfolio Holding Corp. in Fairfax, Va.
The $1.4 billion-asset WashingtonFirst said in a press release Thursday that it will pay $7.7 million in stock to 1st Portfolio's accredited shareholders. WashingtonFirst will also issue shares of its common stock in exchange for up to $7 million in new capital, representing 1st Portfolio's tangible equity capital in excess of $2.5 million. At March 31, the amount of such excess capital was about $5.1 million.
The seller's non-accredited shareholders, who hold about 2% of the lender's common stock, will receive cash. The transaction is expected to close early in the third quarter.
WashingtonFirst said it expects the deal to initially be 2% to 3% dilutive to its tangible book value per share, with an earnback period of two years.
WashingtonFirst plans to run 1st Portfolio Wealth Advisors as a subsidiary, while 1st Portfolio Lending Corp. will be managed as a division of WashingtonFirst Bank. Michael Rebibo, 1st Portfolio's president and chief executive, will join WashingtonFirst as an executive in charge of those businesses.
"We have known Michael Rebibo for many years," Shaza Andersen, WashingtonFirst's chief executive, said in the release. Rebibo "is a former banker who shares our vision and understanding of what is required to be a successful community bank in the 21st century."
Sandler O'Neill and Troutman Sanders advised WashingtonFirst. Cooley LLP provided legal advice to 1st Portfolio.