An internal investigation involving the longtime CEO of RBB Bancorp – and his leave of absence while the probe is being conducted – could create a challenge for the Los Angeles company when it comes to completing a recently announced acquisition.
The $4.2 billion-asset RBB disclosed last month that Alan Thian had stepped down while a special board committee looks into an undisclosed matter. RBB named David Morris, its chief financial officer, to step in as interim president and CEO.
Morris, during a recent Q&A with Stephens analyst Andrew Terrell, said the situation could “make it harder” for RBB to get approval for its pending purchase of Gateway Bank in Oakland, Calif.
“Regulators do not like sudden changes in management,” Morris said, noting that RBB had submitted its merger application about two weeks ago.
RBB agreed to pay $22.9 million in cash for the $172 million-asset Gateway.
Morris provided a few other updates, though he declined to discuss the specifics of the investigation, which should be completed “within the next few weeks.”
RBB also expects Catherine Thian, Alan Thian’s sister, to remain on its board. The Thian family has no outstanding loans from the bank, and Morris said he has no worries that RBB will lose any of their roughly $25 million of deposits.
Morris said the company’s regulators “are well aware of the investigation,” adding that RBB had a regular examination that began last November.
RBB is also in the process of interviewing a new chief lending officer to replace Tammy Song, who resigned last month. “This person will be well known in the community and experienced as a” chief lending officer or chief operating officer, Morris said.
“The management team of a bank is not just one person,” Morris noted during the Q&A. “It is the entire team. Most of the team has been with RBB since 2009 when I joined as a consultant.”