California Republic Bancorp Announces Completion of $400 Million Prime Auto Loan Securitization Transaction

IRVINE, Calif.--()--California Republic Bancorp (“CRB” or “Company”) (OTCBB: CRPB), a bank holding company for California Republic Bank (“Bank”), announced the Bank had successfully completed a prime automobile loan securitization transaction in which $400 million in notes were sold in an underwritten public offering registered with the Securities and Exchange Commission. All of the Class A notes received “AAA” credit ratings from two separate nationally recognized statistical rating organizations, Standard & Poor’s and DBRS.

The securitization structure included six note classes issued by the securitization trust created by the Bank as follows:

             
Class   Amount   Coupon   Credit Rating (sf) (1)
A-1   $ 65,000,000   0.67 %   A-1+ /R-1(high)
A-2 $ 102,000,000 1.34 % AAA / AAA
A-3 $ 96,000,000 1.56 % AAA / AAA
A-4 $ 97,200,000 1.83 % AAA / AAA
B $ 27,000,000 2.52 % A / A
C $ 12,800,000 3.51 % BBB / BBB
$ 400,000,000
 
(1) Credit Ratings from Standard & Poor's and DBRS, respectively
 

The Bank will continue to service the underlying receivables on behalf of the trust. For servicing the portfolio, the Bank will receive an annual servicing fee of 1.0%. The Bank also announced that it sold all remaining residual interest in the securitized receivables through a cash sale of the underlying ownership certificates of the securitization trust through a private placement transaction under Rule 144A to qualified institutional buyers.

“We are pleased to have completed our thirteenth securitization transaction bringing our total issuance to $4.1 billion of auto-backed securities to date,” stated Jon Wilcox, Chief Executive Officer of California Republic Bancorp.

John DeCero, President of California Republic Bancorp commented, “We experienced stronger investor demand for both the notes issued and our residual interest sold. Several of our note classes were oversubscribed, which allowed us to significantly tighten credit spreads from initial price discussions and lower the overall coupons on all note classes as compared to our first quarter transaction. Weighted average credit spread for this transaction tightened 39 basis points from our first quarter transaction, including 100 basis points tightening on the BBB note class. We had 21 total investors participate in the transaction, including two new investors to our platform. The overall valuation of the residual interest sold also significantly improved from our first quarter transaction."

This announcement of the sale of the notes included in the securitization and the ownership certificates of the securitization trust appears as a matter of record only. Credit Suisse and J.P. Morgan acted as joint bookrunners, and Citigroup acted as co-manager for the issuance of notes. Credit Suisse was the sole placement agent for the certificates. Sidley Austin LLP acted as issuer’s counsel.

About California Republic Bancorp:

California Republic Bancorp is the holding company for California Republic Bank. California Republic Bank is a full-service commercial bank providing loans, deposit and cash management services to individuals, businesses, investors, and family offices. The Bank offers its clients direct access to decision makers, unparalleled responsiveness, seasoned Relationship Managers and state-of-the-art technology. The Bank has five branch offices serving Southern California, located in Newport Beach, Beverly Hills, Irvine, Westlake Village and San Diego. The Bank also operates CRB Auto, a division of the bank, which is a relationship based, indirect auto lender, which purchases auto contracts from both franchised and select independent automobile dealerships throughout 14 States—Arizona, California, Colorado, Idaho, Illinois, Iowa, Kansas, Missouri, Nevada, Oklahoma, Oregon, Texas, Utah, and Washington.

For more information, contact Jon Wilcox, CEO, or John DeCero, President at 949-270-9719. You can also visit the Company’s website at www.crbnk.com.

California Republic Bancorp’s Board of Directors includes:

Inside Directors: Jon Wilcox, CEO and John DeCero, President.

Outside Directors: Robert Barth, Chairman of the Board of California Republic Bank and CEO of Black Equities Group Ltd.; John Bendheim, President of Bendheim Enterprises, Inc.; Marc Brutten, Entrepreneur and CEO of Westcore Holdings; Bob Din, CEO of Din Cloud; John Hagestad, Managing Partner of SARES-REGIS Group; Warren S. Orlando, retired; and J. Scott Watt, President and CEO of the Watt Group of Companies.

Forward-looking Statements

Certain matters discussed in this press release constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, and are subject to the safe harbors created by the act. These forward-looking statements refer to California Republic’s current expectations regarding future operating results, and growth in loans, deposits, and assets. These forward-looking statements are subject to certain risks and uncertainties that could cause the actual results, performance or achievements to differ materially from those expressed, suggested or implied by the forward-looking statements. These risks and uncertainties include, but are not limited to (1) the ability to obtain regulatory approvals and meet other closing conditions to the merger on the expected terms and schedule; (2) delay in closing the merger; (3) difficulties and delays in integrating the Mechanics and CRB businesses or fully realizing cost savings and other benefits associated with the merger; (4) business disruption following the proposed merger transaction; changes in asset quality and credit risk; (5) the inability to sustain revenue and earnings growth after the merger; (6) Mechanics’ and CRB’s businesses experiencing disruptions due to transaction-related uncertainty or other factors making it more difficult to maintain relationships with employees, customers, other business partners or governmental entities associated with the merger; (7) economic and capital market conditions; (8) the impact, extent and timing of technological changes, capital management activities, and other actions of regulatory agencies (9) the impact of changes in interest rates, a decline in economic conditions and increased competition by financial service providers on California Republic’s results of operations; (10) California Republic’s ability to continue its internal growth rate; (11) California Republic’s ability to build net interest spread; (12) California Republic’s ability to access the public securitization market for automobile loans; (13) the credit spread or cost of funds for auto-backed securities; (14) the quality of California Republic’s earning assets; (15) changes in the level of non-performing assets and charge-offs; (16) the effect of changes in laws and regulations with which California Republic must comply; (17) changes in estimates of future reserve requirements based upon the periodic review thereof under relevant regulatory authorities and accounting requirements; (18) acts of war or terrorism or natural disasters; (19) the timely development of new banking products and services; (20) the success of products and services, such as the indirect auto loan business; (21) technological changes; (22) cyber-security threats, including loss of system functionality or theft or loss of data; (23) the ability to increase market share and control expenses; and (24) California Republic’s success at managing the risks involved in the foregoing items.

California Republic does not undertake, and specifically disclaims any obligation to update any forward-looking statements to reflect occurrences or unanticipated events or circumstances after the date of such statements except as required by law.

Contacts

California Republic Bancorp
John DeCero, President
949-270-9797

Contacts

California Republic Bancorp
John DeCero, President
949-270-9797