Los Angeles-based BBCN Bancorp, Inc. (NASDAQ: BBCN) and
Chicago-based Foster Bankshares, Inc. today jointly announced the
signing of a definitive agreement under which Foster Bankshares
will merge with and into BBCN. The transaction positions BBCN as
the leading Korean-American bank in Chicago and provides an entry
to the Korean-American community in the greater Washington D.C.
metropolitan area.
As of December 31, 2012, Foster Bankshares had total assets of
$412.6 million, total loans of $326.9 million and total deposits of
$357.4 million. Foster Bank, a wholly owned subsidiary of Foster
Bankshares, was founded in 1989 as one of the first Korean-American
banks in the Chicago area. Foster Bank is a state-chartered bank,
operating eight branches in the Chicago metropolitan area and one
branch in Annandale, Virginia. The transaction is expected to close
during the second half of 2013, subject to regulatory approvals and
satisfaction of other customary closing conditions.
“This partnership underscores BBCN’s strategic objective to be
the dominant Korean-American bank in the markets in which we
operate,” said Kevin S. Kim, Chairman and Chief Executive Officer
of BBCN Bancorp. “The combination adds the rich heritage of one of
Chicago’s first Korean-American banks to BBCN. As the logistical
hub to commerce, finance and trade in the Midwest, the Chicago
market represents a large and solid base from which we see longer
term opportunities to grow our franchise. In addition, we are
excited to be expanding our banking footprint into the D.C.
metropolitan area, a region that represents one of the fastest
growing populations of Korean-Americans in the country.”
“We are very pleased to be joining the BBCN family,” said Paul
Byungtag Kim, President and Chief Executive Officer of Foster
Bankshares. “We believe this is an excellent opportunity for our
shareholders, customers and employees to realize enhanced value by
being a part of an organization with considerably deeper resources,
operational scale and a steady stream of core earnings. We look
forward to continuing our legacy of excellent customer service and
fostering the healthy growth of our communities.”
Under the terms of the merger agreement, the transaction is
valued at approximately $4.6 million, valuing each outstanding
share of Foster common stock at $34.67. Foster shareholders will
have a choice between electing to receive the cash value per share
or, for shareholders who qualify as accredited investors, 2.62771x
shares of BBCN common stock for each share of Foster Bankshares or
a combination thereof, with no limitations on the consideration
mix. The consideration for the transaction is subject to reduction
in certain events. Foster has no outstanding options or
warrants.
On a pro forma combined basis including BBCN’s recent
acquisition of Pacific International Bancorp and the proposed
acquisition Foster Bankshares, BBCN would have total assets of $6.2
billion, total loans outstanding of $4.8 billion and total deposits
of $4.9 billion as of December 31, 2012. Upon completion of the
transaction, BBCN will increase its presence in Chicago from two
branches, including a new BBCN branch to be opened during the
current second quarter, to 10 branches. In addition, the
transaction will provide BBCN with a first entry point to the D.C.
metropolitan market with a branch in Annandale and a self-service
ATM in Centreville, Virginia.
BBCN was advised by the investment banking firm of Keefe,
Bruyette & Woods, a Stifel Company, and the law firm of Arnold
& Porter LLP. Foster Bankshares was advised by the investment
banking firm of FIG Partners LLC and the law firm of Barack
Ferrazzano Kirschbaum & Nagelberg LLP.
About BBCN Bancorp, Inc.
BBCN Bancorp, Inc. is the parent company of BBCN Bank, the
largest Korean-American bank in the nation with $5.6 billion in
assets as of December 31, 2012. The acquisition of Seattle-based
Pacific International Bancorp, Inc. on February 15, 2013 increased
the company’s total assets to $5.8 billion. Headquartered in Los
Angeles and serving a diverse mix of customers mirroring its
communities, BBCN operates 44 branches in California, New York, New
Jersey, Washington and Illinois, along with five loan production
offices in Seattle, Denver, Dallas, Atlanta and Northern
California. BBCN specializes in core business banking products for
small- and medium-sized companies, with an emphasis in commercial
real estate and business lending, SBA lending and international
trade financing. BBCN Bank is a California-chartered bank and its
deposits are insured by the FDIC to the extent provided by law.
BBCN is an Equal Opportunity Lender.
About Foster Bankshares,
Inc.
Foster Bankshares, Inc. is the holding company of Foster Bank,
the only Korean-American Bank headquartered in the Midwest.
Established in Chicago in February 1989, Foster Bank serves the
banking needs of Korean-American and other ethnic communities
through eight branches in the Chicago metropolitan area and one
branch in Northern Virginia. Foster Bank employs 120 full-time
equivalent employees and its deposits are insured by the FDIC to
the extent provided by law. Foster Bank is an Equal Opportunity
Lender.
Forward-Looking Statements
This press release contains statements regarding the proposed
transaction between BBCN Bancorp and Foster Bankshares, future
financial and operating results, benefits and synergies of the
proposed transaction and other statements about the future
expectations, beliefs, goals, plans or prospects of the management
of each of BBCN Bancorp and Foster Bankshares. These statements are
based on current expectations, estimates, forecasts and projections
and management assumptions about the future performance of each of
BBCN Bancorp and Foster Bankshares and the combined company, as
well as the businesses and markets in which they operate. These
statements constitute forward-looking statements within the meaning
of the U.S. Private Securities Litigation Reform Act of 1995. Words
such as “expects,” “believes,” “estimates,” “anticipates,”
“targets,” “goals,” “projects,” “intends,” “plans, “seeks,” and
variations of such words and similar expressions are intended to
identify such forward-looking statements, which are not statements
of historical fact. These forward-looking statements are not
guarantees of future performance and involve risks, uncertainties
and assumptions that are difficult to assess. Actual outcomes and
results may differ materially from what is expressed or forecasted
in such forward-looking statements. The closing of the proposed
transaction is subject to regulatory approval and other customary
closing conditions. There is no assurance that such conditions will
be met or that the proposed transaction will be consummated within
the expected time frame, or at all. If the transaction is
consummated, factors that may cause actual outcomes to differ from
what is expressed or forecasted in these forward-looking statements
include, among things: difficulties and delays in integrating BBCN
Bancorp and Foster Bankshares and achieving anticipated synergies,
cost savings and other benefits from the transaction; higher than
anticipated transaction costs; deposit attrition, operating costs,
customer loss and business disruption following the merger,
including difficulties in maintaining relationships with employees,
may be greater than expected; required governmental approvals of
the merger may not be obtained on its proposed terms and schedule,
or without regulatory constraints that may limit growth;
competitive pressures among depository and other financial
institutions may increase significantly and have an effect on
revenues; the strength of the United States economy in general, and
of the local economies in which the combined company will operate,
may be different than expected, which could result in, among other
things, a deterioration in credit quality or a reduced demand for
credit and have a negative effect on the combined company’s loan
portfolio and allowance for loan losses; changes in the U.S. legal
and regulatory framework; and adverse conditions in the stock
market, the public debt market and other capital markets (including
changes in interest rate conditions) which would negatively affect
the combined company’s business and operating results.
For a more complete list and description of such risks and
uncertainties, refer to BBCN Bancorp’s Form 10-K for the year ended
December 31, 2012, as well as other filings made by BBCN Bancorp
with the SEC. Except as required under the U.S. federal securities
laws and the rules and regulations of the SEC, BBCN Bancorp and
Foster Bankshares disclaim any intention or obligation to update
any forward-looking statements after the distribution of this press
release, whether as a result of new information, future events,
developments, changes in assumptions or otherwise.
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