First Advantage going private

Board says cost savings will be 'dramatic'

The board of directors for First Advantage Bancorp has voted to leave the Nasdaq and take the $360 million bank holding company private. Officials say the move will “dramatically” cuts their administrative costs and let them focus on their plans.

The delisting is expected to be completed May 10. After that, First Advantage — which had 564 shareholders of record at the end of 2012 — will use the SecondMarket for the trading of its stock.

“The public stock markets are not ideal for smaller institutions with lower trading volumes. This allows us to maintain all the characteristics of a community bank and give investors the ability to buy and sell shares,” said First Advantage Bank CEO Earl Bradley. “Every administrative efficiency we gain and every expense we reduce ultimately increases value for our shareholders. As a private company we will be in an even better position to execute on our strategic plan and strengthen our presence in Middle Tennessee.”

Shares of First Advantage (Ticker: FABK), which has traded publicly since 2007, were down more than 11 percent in Monday afternoon trading. The company now has a market value of about $50 million. The company has in the past three years averaged a profit of $2 million on revenues of $15.3 million. Noninterest expenses have averaged $12.1 million during that period.

The board’s decision comes after the company has launched five stock buyback plans since December of 2008. The company’s employee stock ownership plan is its largest investor with a 9.2 percent stake while M3 Funds, a Utah-based fund manager specializing in the financial sector, owns 8.2 percent.

First Advantage Bank last year expanded into Davidson County by opening a commercial lending office on West End Avenue and is planning to open an office on Highway 96 in Franklin later this spring. In its core Montgomery County market, it runs five banking centers and ranks third in deposit market share.