WashingtonFirst Bankshares, Inc. to Acquire 1st Portfolio Holding Corporation

WashingtonFirst Bankshares, Inc.

and 1st Portfolio Holding Corporation announced today that they have entered into a definitive agreement for WashingtonFirst to acquire 1st Portfolio in a stock transaction expected to close early in the third quarter of 2015. The combination will significantly expand WashingtonFirst's mortgage lending business as well as add an additional line of business - wealth management - to WashingtonFirst's array of financial services. "We are excited to welcome 1st Portfolio's shareholders, customers and employees to WashingtonFirst," said Shaza Andersen, founder and Chief Executive Officer of WashingtonFirst. "We have known Michael Rebibo, 1st Portfolio's President and Chief Executive Officer, for many years. Michael is a former banker who shares our vision and understanding of what is required to be a successful community bank in the 21st century. 1st Portfolio's mortgage lending and wealth advisory businesses serve their clients throughout the Washington DC metropolitan area, which overlays perfectly with our customer base. The knowledge and experience of 1st Portfolio's personnel, together with our cultural similarities, make this combination very attractive for us." "By joining the WashingtonFirst team, we have strategically broadened our wealth management and mortgage lending offering to include comprehensive banking services," said Rebibo. "Banking is a logical complement to our core services and we are thrilled to align ourselves with a leader in the metro DC area. As members of the WashingtonFirst family, we are excited to bring the conveniences of private banking to our high net worth clientele, while enhancing the lending options for our mortgage customers." Under the terms of the merger agreement, accredited shareholders of 1st Portfolio will receive $7.7 million in WFBI common stock valued at $16.00 per share. Ten percent of the merger consideration will be held in escrow for one year to secure 1st Portfolio's indemnification obligations under the merger agreement. In addition, WFBI will issue shares of its common stock, valued at $16.00 per share, in exchange for up to $7.0 million in new capital, representing 1st Portfolio's tangible equity capital in excess of $2.5 million. As of March 31, 2015, the amount of such excess capital was approximately $5.1 million. Non-accredited shareholders of 1st Portfolio, who hold approximately 2% of 1st Portfolio's common stock, will receive cash consideration in lieu of shares of WFBI common stock. "We project that this acquisition will be immediately accretive to earnings per share and will initially be 2% to 3% dilutive to WFBI's tangible book value per share. However, the accretion to earnings per share will lead to a recovery of the tangible book value share dilution within approximately two years," said Matthew Johnson, Chief Financial Officer of WashingtonFirst. After the merger, 1st Portfolio Wealth Advisors will be a subsidiary of WashingtonFirst, 1st Portfolio Lending Corporation will be a division of WashingtonFirst Bank, and Michael Rebibo will join WashingtonFirst as an executive in charge of those two lines of businesses. In this transaction, Sandler O'Neill + Partners, LP served as financial advisor to WashingtonFirst and Troutman Sanders LLP served as legal counsel. Cooley LLP served as legal counsel to 1st Portfolio. 1st Portfolio shareholders will receive separate instructions for exchanging their 1st Portfolio shares for shares of WashingtonFirst. WashingtonFirst has successfully executed three previous acquisitions: First Liberty National Bank in 2006, Alliance Bankshares Corporation in 2012, and Millennium Bank, N.A. in 2014.