Enterprise to acquire First Choice

St. Louis, Mo.-based Enterprise Financial Services Corp will acquire First Choice Bancorp, Cerritos, Calif., in an all-stock deal worth $397.7 million.

FCBP had approximately $2.5 billion in total assets, $2.0 billion in loans and $1.9 billion in deposits as of March 31. First Choice Bank has eight full-service branches and two LPOs in Los Angeles, Orange and San Diego Counties

“I am thrilled to announce the transaction and our continued expansion into the California market,” said Jim Lally, president and CEO of the $10.2 billion EFSC. “The acquisition of First Choice strengthens our commercial banking foundation in the largest economy in the country. I have tremendous respect for the associates of First Choice and the company they have built since its founding in 2005. They have successfully created a commercially-focused community bank with a demonstrated ability to generate organic growth.”

After the deal closes in the third quarter, FCBP founder and chair Peter Hui will join the Enterprise board

The transaction is expected to be approximately 8 percent accretive to Enterprise’s 2022 earnings per share (excluding the impact of one-time transaction expenses) after giving effect to estimated fully phased-in transaction synergies. Estimated tangible book value per share dilution to EFSC is expected to be earned back in less than three years under the crossover method including CECL “Day Two” accounting treatment. The acquisition is expected to generate an internal rate of return of approximately 21 percent for Enterprise.

Enterprise previously announced its acquisition of San Diego-based Seacoast Commerce Banc Holding last summer.

Boenning & Scattergood, Inc. served as financial advisor to EFSC and Holland & Knight LLP served as legal counsel. Keefe, Bruyette & Woods, A Stifel Company, served as financial advisor to FCBP and Duane Morris LLP served as legal counsel.