Good morning, ladies and gentlemen, and thank you for waiting. We'd like to welcome everyone to Bradesco's BAC Florida Bank Share Purchase Agreement conference call. This call is being broadcasted simultaneously through the Internet on the website banco.bradesco/ir-en. In that address, you can also find the presentation available for download. We inform that all participants will only be able to listen to the conference call during the company's presentation. After the presentation, there will be a question and answer session when further instructions will be given. Should any participant need assistance during this call, please press star zero to reach the operator. Before proceeding, let me mention that forward-looking statements are based on the beliefs and assumptions of Banco Bradesco's management and on information currently available to the company.
They involve risks, uncertainties, and assumptions because they relate to future events and therefore depend on circumstances that may or may not occur in the future. Investors should understand that general economic conditions, industry conditions, and other operating factors could also affect the future results of Banco Bradesco and could cause results to differ materially from those expressed in such forward-looking statements. Now, I'll turn the conference over to Mr. Carlos Wagner Firetti , market relations director.
Good morning, everyone. Welcome to our conference call for discussing the acquisition of BAC Florida Bank. We have with us today our CFO, André Cano , and the executive director and IRO, Leandro De Miranda Araujo. For starting the call, I turn the floor to Leandro.
Hello. Good morning, everybody. We are very happy to make this announcement today related to the acquisition of BAC Florida. We consider this acquisition pretty much strategic for us. It enhances our goal of strengthening our wealth management operation, especially in the segment of high-net-worth individuals and private banking. It also brings us other assets such as being able to raise funding in the U.S. to provide mortgage credit personal loans to our clients, which has been, for a while, a very strong demand from our clients to have these kinds of services in the U.S. We believe that in this sense, we are going to have a much better condition to serve our clients through the operation in the U.S. Moving now to the details of the deal. Pretty much make the acquisition for $500 million, which implies a price-to-tangible book value of 2.5 times.
The closing of the transaction is subject to the approval of both authorities in the U.S. and Brazil. This is something that we expect to happen from six to eight months from now. Of course, again, we are not able to precise any sort of date due to transactions of this matter. BAC has $2.2 billion in total assets and a book value of $206 million. It had a net income of $39 million in 2018 and a return on equity of 15.3%, what is pretty much good when you compare the U.S. industry. We're going to turn a little bit to our strategy there. In slide three, you can see that we provide an overview of BAC Florida. The bank is headquartered in Coral Gables. It has more than 25 years of banking experience in the U.S.
The main business lines are real estate and mortgage financing, private banking, and wealth management. We also have activities of corporate banking, a very interesting one of digital banking. It has its own broker-dealer. That is also something that we want to connect to the ones that we have here in Brazil, and it's used for operations and private banking in high-income individuals that I have told before. It has a very solid capital base and its wealth management. In this sense, we want to keep the whole team there just running the operation the way they have done so far. We are very pleased with the performance that they have achieved, and we do believe that it can be enhanced even more, connected to our culture and the way we see the business.
Jumping to slide four, we see that the real estate financing of BAC is pretty much the leading provider of mortgage loans in Florida. Brazilian residents, they pretty much represent something around 20% of this portfolio. Then you have around 10% coming from North Americans. All the rest you have Latin America and China. It's pretty much focused on non-resident market for private banking and wealth management, and related to corporate institutional banking, the bank is pretty much focused on cash management investment services. Finally, BAC, as I have mentioned previously, has a digital bank that acts nationwide. It comprises 49 states, and it's called MyeBanc . We believe that this MyeBanc platform is something that is really going to be a plus for the Brazilian clients, since it has all the information and features that they need the most.
This is a product that may be expanded. Our strategy there is to, first of all, keep BAC current operation, and then expanding the base with our clients and clients alike the way they have today. As it provides a wide range of financial services to U.S., we believe that our clients are going to benefit from that. In the presentation, we just would like to highlight one more our objectives here in the transaction, that is to expand our client base in Brazil, because we're going to increase the array of services that we are providing there that has been a long request from our clients here. Also, fees from BAC's client base and increase our share of wallet in the U.S. market related to Brazilian clients.
It also attracts a more cost-effective funding cost for us to make our operations in the U.S., our cost of funds shall benefit from that related to international loans that we provide to our clients. Of course, we understand it can help us in terms of loyalty increase and NPS on Bradesco's clients, of course to get the adequate financial return to the capital invested there. We do like to get this opportunity to once more confirm our commitment to create long-term value to our shareholders, employees, and society as a whole. We are pretty much confident that the financial industry, the strength, the strategy, and wealth management will benefit all the clients in the region. Thank you very much for your attention, and we remain available here for the Q&A.
Ladies and gentlemen, we will now initiate the questions and answer section. If you'd like to ask a question, please dial star one. If at any point your question has been answered, you may remove your question from the queue by pressing star two. Our first question comes from Mr. Carlos Gomez-Lopez of HSBC. Mr. Carlos, you may proceed.
Hello, good morning. Thank you for taking my question. Perhaps the main question is the philosophy of the transaction. I mean, this seems to be away from your Brazilian business. Yes, you're going to develop a bank in Florida, should we see this as a first step to make you a more international bank, to go to Central America? Do you intend to use it more as a platform to expand the bank operation for your own Brazilian clients? Thank you.
Carlos, thank you very much for your question. First of all, this is going to be a tool for our network, I'm sorry, our wealth management division to retain and to expand our base of clients. It has been a long time request from our clients to get access to U.S. financing, especially mortgage in the state of Florida. They also used to ask for credit cards, to have checking accounts there. We believe it's going to be an important movement in terms of strengthening our wealth management and our Brazilian clients base. We also are going to benefit from the clients base that we have there, Brazilians, U.S., and Central America. We do not believe it as might implying to a huge strategy for Latin America. We do not want to play retail in Latin America as a whole, neither Latin America nor in the U.S.
We just intend to provide more tools on a strategic base to get more access. Much more cost-effective funding and provide access to our clients to listen and have a stronger wealth management platform.
Okay, thank you. Can I just follow up, are you going to maintain the brand or could you change it to Bradesco USA?
No, we'll keep the brand. They have been in the market for 45 years. They have very good recognition among their clients. We have a very good coincidence that BAC might also imply Bradesco America or something like that. That's how our president has been mentioning our internal conversation. We like the name, and the clients recognize it, and we shall keep it for the time being.
Thank you. If I can abuse you again, can you tell us if it was the result of a bilateral negotiation with the group or a competitive process with other banks?
No, indeed, we did the other way around. We needed to expand our activities in the U.S. in order to provide all the services and products that we wanted to our client base. We actively identified three banks that could be good platforms for that. BAC Florida was for us, the one that really provided the ideal platform because it was pretty much complete, well-run, and with a very good team. We actively searched for them with our advisors, Bradesco BBI advised us in this matter. We talked to the shareholders, so the controllers of the bank, and we engaged into discussions since they not only liked our financial offer, but especially our culture, the way we tended to manage the banks, because we also aimed at keeping all the staff there and the senior management. It was a very smooth operation for them as well.
It was a concern of them since the very beginning. It was, I would say, a perfect match.
Thank you very much.
Our next question is coming from Mr. Yuri Fernandes of J.P. Morgan. Mr. Yuri, you may proceed.
Thank you, gentlemen. I have two questions, actually. The first one is regarding the bank in Florida. If you plan to expand the operations in the U.S. and open more branches in Florida, something like this, or this is going to be, as you said, more a hub for high-income individuals from other countries and provide these services to Brazil. My second question is regarding the value you paid. It says no asset. I understand it's a strategic move. When you look to recent acquisitions in Florida, I recall BCI, when they had two acquisitions there, TotalBank and City National Bank of Florida, and I think they paid 1.4, 1.5, and 1.7 for those assets. What implied that you are paying, I would say, a premium to what they paid. Can you also explain what would explain this premium if these assets better, like the profitability?
What do you think can justify this premium versus recent acquisitions in Florida? Thank you.
Thank you for your question, Yuri. First of all, we do not intend to expand our activities there in Florida regarding to retail or to commercial bank as a whole. This is much more a wealth management strategy in order to enhance our position and to provide all the products and services that our client base ask us to do so. That's the first point. It's not expected us to extend more and more the activities that we have there to different kind of ones. The second thing regarding to price, we have made a very deep research there and analyzed most of the transactions of this kind in the U.S. Preceding transactions, they have price-to-earnings ratio of 19.6 times. This one was 17.2 times. Basically, it was a little bit below the average price.
We were prepared to pay much more because we believe that this is the only bank that has a perfect match with our aims. They are very well-run. We like the team. We do not need to make additions or to make corrections in the way they manage the business. The personnel there is enough to back the activities that we want. We believe it's a unique opportunity for us. It's strategic. It is below the average price, and we were expecting to pay even more because of the importance of this business to our wealth management platform.
No, super clear. Thank you, and congratulations for the acquisition.
Thank you.
I would like to remind you that to ask a question, you just have to dial star 1, and to remove, dial star 2. Our next question comes from Mr. Nicolas Riva of Bank of America. Mr. Nicolas, you may proceed.
Thank you very much for taking my question. Just one. In terms of funding, you're paying $500 million for this, you also have a bond coming due in September of BRL 150 million. Anything you can share in terms of funding for this acquisition?
Nicolas, one thing doesn't mix with the other. I think the amount we are paying relatively is small. We can do without any problems. Regarding the maturities of the bonds, any issues depends on market conditions and the attractiveness of the rates. To be honest, raising money outside Brazil hasn't been, at this point, the most attractive option. We have been much more focused on funding ourselves in Brazil.
Thanks.
Excuse me, ladies and gentlemen. There are no further questions, I would like to invite the speakers for the closing remarks.
Once more, thank you very much for making the time to listen and talk to us. We are very enthusiastic with this acquisition. We think it's strategic and it's going to enhance our third arm as our CEO has said in several occasions, that we have a very strong wholesale arm, a very strong retail arm, and now we are enhancing our wealth management platform. It's pretty much aligned to what we have mentioned several times in the last month, and we remain positive with the way we are going through. Thank you once more. Have a great week.
That just conclude the Banco Bradesco conference call for today. Thank you very much for your participation.