Rabobank's potential divestment of some of its U.S operations could be a Golden State opportunity for U.S. regional banks or Canadian banks looking to grow, according to one investment banker.

The Dutch cooperative lending company is reportedly mulling a sale of California-based Rabobank NA's retail and wealth management business lines, according to a Nov. 12 article from Reuters. The news outlet reported a potential deal could be valued at more than $1 billion. The sale could be a sizable gain for any bank looking to grow or gain a foothold in California, which boasts a large, healthy and diversified economy, said Jeffrey Brand, managing director and head of bank M&A at the investment bank Silver Lane.

"There aren't a lot of buyers who can afford a large transaction and want to be on the West Coast," he said, "but it only takes one. I don't think there would be a lot of difficulty finding the right partner for a West Coast franchise."

Rabobank NA had $359.9 million in total managed assets held in fiduciary accounts as of Sept. 30 and recorded $3.3 million in total noninterest income from fiduciary activities over the last 12 months. The bank also provides commercial financing and had about $13.5 billion in total assets as of Sept. 30, according to S&P Global Market Intelligence data. A spokesperson for Rabobank NA's parent company said the bank does not comment on divestments or speculation in an email.

Brand said Rabobank NA's scarcity value and the lack of similar opportunities on the West Coast could appeal to banks in the U.S. with more than $50 billion in assets or a Canadian bank that may be less interested in smaller targets. He added that there are banks in California that could do a merger-of-equals, but that transaction might be harder to integrate.

One Canadian bank made a similar play in 2015. Royal Bank of Canada agreed to acquire Los Angeles-based City National Corp. for an announced deal value of $5.4 billion. City National had $35.58 billion in assets at announcement.

Foreign banks looking to exit their U.S. operations have either used deals or initial public offerings to divest or monetize their stakes. Brand said these banks may choose to divest them because of a change in strategic focus or a need to free up capital. It is unclear what Rabobank would do with its commercial financing operations following a sale.

In 2017, Banco de Sabadell SA decided to sell its Miami-based unit Sabadell United Bank NA, which had $5.79 billion in assets at announcement, to IBERIABANK Corp. for $1.03 billion. The deal valued the bank at 195.7% of tangible common equity and 21.2x earnings, on an aggregate basis, according to S&P Global Market Intelligence data.

Brand has experience with international banks and their U.S.-based units. He led the Keefe, Bruyette & Woods team that advised National Australia Bank Ltd. on its acquisition of Great Western Bancorp Inc., which was announced in 2007. National Australia took Great Western Bank public in 2014. Brand said the new CEO at the parent company decided to exit the U.S. because it fell outside of the bank's core footprint, but that the franchise was a "great investment" during that time.

Brand also advised Citizens Financial Group Inc. unit Citizens Bank NA, which had been owned by Royal Bank of Scotland Group PLC, on its November acquisition of wealth management firm Clarfeld Financial Advisors LLC. Citizens went public in 2014 in the largest bank IPO ever. A stock offering made sense given that Citizens' size led to a small pool of logical buyers and allowed RBS to monetize its stake and raise capital.

Deals with price tags of more than $1 billion have encountered investor skepticism and disapproval, and that may make potential acquirers apprehensive. Brand said that good management teams take a long-term perspective and evaluate transactions on their strategic or financial sense. But there is always a risk those reasons will not resonate with investors.

"You do have to think about the investor reaction," he said. "If your stock is going to get crushed in the transaction, you definitely have to take that into consideration."