SOURCE: First Foundation Inc.

First Foundation Inc.

June 29, 2011 20:00 ET

First Foundation Bank Announces Agreement to Acquire Desert Commercial Bank

IRVINE, CA--(Marketwire - Jun 29, 2011) - First Foundation Bank ("FFB"), announced today that it, and its parent holding company, First Foundation Inc. ("First Foundation" or "FFI") have entered into a definitive agreement and plan of merger to acquire Desert Commercial Bank (DCB) (OTCBB: DCBC), for an acquisition price of approximately $16 million consisting of FFI common stock for DCB's outstanding stock and cash for DCB stock options. Desert Commercial Bank has offices in Palm Desert and El Centro, California and at March 31, 2011 had total assets of approximately $153 million.

The definitive agreement provides for Desert Commercial Bank to merge with and into FFB, with FFB as the continuing bank, and for DCB shareholders to receive FFI common stock for their shares of DCB common stock and for the DCB option holders to receive cash, net of applicable taxes, for the value of their unexercised stock options. The number of FFI shares to be received by DCB shareholders and the cash to be paid to the DCB option holders in the merger may be adjusted based on DCB's financial performance after March 31, 2011, and prior to the closing of the merger. DCB shareholders and option holders could also receive up to $4.05 million of additional consideration, consisting of additional FFI shares to the DCB shareholders and additional cash to the DCB option holders, based upon the performance, over the succeeding two years, of certain loans within DCB's portfolio.

Completion of the merger is subject to customary closing conditions, including the approval of FFI and DCB shareholders and the receipt of bank regulatory and other governmental approvals. Subject to successful completion of these steps, it is anticipated the merger will close towards the end of 2011.

Scott F. Kavanaugh, Chairman and CEO of First Foundation Bank, said, "This strategic transaction provides FFB an excellent opportunity to continue to expand its market presence within the greater California market. We are particularly excited to strengthen our investment in the Coachella and Imperial Valleys and look forward to continuing DCB's commitment to the communities it serves." Kavanaugh added, "Financially, we expect that DCB's core deposits will help us grow our net interest margin and, since this is essentially an all stock transaction, we believe this combination will increase our tangible book value."

Tony J. Swartz, President and CEO of Desert Commercial Bank, commented, "We are excited about this combination, First Foundation has a tremendous trust and wealth management platform that will allow us to offer a greater array of financial services to our client base."

The combined company will have 5 full service offices throughout Southern California. At March 31, 2011, FFB had total assets of $456 million, $393 million in total loans and $317 million in total deposits and FFI's wealth management group had $1.7 billion in assets under management. At March 31, 2011, DCB had $153 million of total assets, $110 million in total loans and $137 million in total deposits.

Stradling, Yocca, Carlson & Rauth acted as outside legal counsel to First Foundation and First Foundation Bank. Professional Banking Services acted as financial advisor to Desert Commercial Bank and provided a fairness opinion to the Board of Directors of Desert Commercial Bank in conjunction with this transaction. Luce, Forward, Hamilton & Scripps acted as outside legal counsel to Desert Commercial Bank.

About First Foundation

First Foundation is a financial institution with over twenty years of experience that provides integrated investment management, wealth planning, consulting, trust and banking services. The company is headquartered in Irvine with offices in Irvine, La Quinta, Pasadena and San Diego, California. First Foundation Bank is a wholly-owned subsidiary of First Foundation Inc. For more information, please visit our website at

About Desert Commercial Bank

Established in June 2005, Desert Commercial Bank is a community bank supported by hundreds of local investors in the Coachella and Imperial Valleys. The goal of DCB's Founders was to build a locally owned and managed institution that reflected the broad interests and people of the communities it serves. FFB intends to continue and enhance that tradition. Headquartered in Palm Desert, DCB has offices in Palm Desert and El Centro. For more information, please visit our website at

Forward Looking Information

This press release includes certain forward-looking statements about First Foundation, First Foundation Bank and Desert Commercial Bank and the proposed transaction. All statements in this press release, other than statements of historical fact, are forward-looking statements. In particular, statements regarding our expectations about our future financial performance or the realization of expected benefits of the merger contained in the this press release are subject to a number of risks and uncertainties, and future financial results could differ materially due to such risk factors, which are difficult to predict and are beyond our control and the control of Desert Commercial. Such risks and uncertainties include, but are not limited to: the risk that we will not succeed in obtaining the regulatory or shareholder approvals needed for the DCB acquisition; the possibility that cost savings expected to be realized in the DCB acquisition may not be realized within expected time frames or at all; the possibility that integrating DCB's banking business into FFB's banking business could cost more, take longer or be less successful than expected; continued unfavorable economic conditions generally and, more particularly, in Southern California, including high unemployment, could result in loan losses that would adversely affect operating results; the monetary policies of the Federal Reserve, which affect interest rates, as well as competitive pressures among depository institutions, could cause our net interest margins to decline, thereby adversely affecting our banking revenues; and legislative or regulatory requirements or changes, including regulations that are in the process of being adopted under the Dodd-Frank Wall Street Reform and Consumer Protection Act, could increase the costs of doing business.

If any of these risks or uncertainties materializes or any of the assumptions underlying the forward-looking statements prove to have been incorrect, our financial performance and that of Desert Commercial could differ materially from the financial performance expressed in or implied or projected by, the forward-looking statements. Accordingly, you should not place undue reliance on forward-looking statements contained in this press release and we undertake no obligation to update those statements, except as may be required by applicable law.

Additional information

This press release is not a solicitation of a proxy from any shareholder of First Foundation or Desert Commercial Bank. In connection with the proposed transaction between First Foundation and Desert Commercial Bank, First Foundation and Desert Commercial Bank will be preparing a joint proxy statement that also will constitute a First Foundation offering circular. That joint proxy statement/offering circular will be sent to the respective shareholders of First Foundation and Desert Commercial Bank, who are urged to carefully read the joint proxy statement/offering circular and any other relevant documents when they become available, because they will contain important information about First Foundation, Desert Commercial Bank and the proposed transaction. It will be possible to obtain copies of the joint proxy statement/offering circular and other documents relating to the proposed transaction (when they become available), free of charge, from First Foundation, upon written request to First Foundation Inc., Von Karman Ave., Suite 750, Irvine, CA 92612; Attention: Mr. John Michel, or by calling Mr. Michel at (949) 202-4100, or from Desert Commercial Bank upon written request addressed to Desert Commercial Bank at 44801 Village Ct # 101, Palm Desert, CA 92260; Attention Mr. Tony Swartz or by calling Mr. Swartz at (760) 340-7595.

Contact Information

  • Contact:
    Ms. Nika Jones
    Marketing Coordinator
    First Foundation Inc.
    Telephone: (949) 476-0300
    Facsimile: (949) 622-3771
    Email Contact