Leader of RBB in Los Angeles resigns after probe finds misconduct

RBB Bancorp in Los Angeles said its longtime chairman and CEO, Alan Thian, resigned after an internal investigation determined he had violated unspecified company policies and procedures.

Thian had been on leave since February, when the investigation began.

Longtime Chief Financial Officer David Morris has helmed RBB, holding company for the 13-year-old Royal Business Bank, as interim CEO since Thian first went on leave. In the wake of Thian’s resignation, which was disclosed Monday, Chairman James Kao said RBB’s board was “committed to providing [Morris] and his team with the resources they need to continue excelling.”

Kao made no mention of a permanent successor to Thian, who had served as CEO since the company’s founding in 2008.

Morris did not respond to calls seeking comment by deadline.

Analyst Timothy Coffey, who covers RBB for Janney Montgomery Scott, wrote in a research note that the company still faces significant headwinds.

“Thian was important to RBB, as several senior executives had prior professional relationships with him,” Coffey wrote, adding it is “unclear” whether his resignation would impact RBB’s pending acquisition of Oakland-based Gateway Bank.

RBB announced plans to acquire the one-branch, $175 million-asset Gateway for $22.9 million in cash on Dec. 28. The deal is expected to close in the second quarter. It would mark RBB’s entry into the San Francisco Bay area. Glen Terry, Gateway’s president and CEO, did not immediately respond to a request for comment Wednesday.

According to RBB’s most recent proxy statement with the Securities and Exchange Commission, Thian and his sister Catherine, who continues to serve as a director on RBB’s board, together own 9.75% of the company.

RBB may consider seeking a merger partner itself, “given the magnitude of recent changes to the executive team,” Coffey wrote in his research note. “We believe the stock could be worth $27 per share on a takeout and have increased the M&A weighting in our valuation model to 15% from 10%.”

Chief Lending Officer Tammy Song left RBB in February. Song has since joined $61 billion-asset East West Bancorp as a commercial lending officer.

RBB shares were trading at $23.22 Wednesday afternoon, up about 1%.

Thian’s resignation came just three days after Robert Sarver stepped down as executive chairman of the $56 billion-asset Western Alliance Bancorp, amid an ongoing investigation by the National Basketball Association into allegations of misconduct inside the Phoenix Suns, which Sarver owns.