Cathay General Bancorp, the parent of Cathay Bank, has agreed to acquire SinoPac Bancorp, the US arm of Bank SinoPac, in a $340m deal.
The two parties have inked a stock purchase agreement, under which the purchase price will be subject to an adjustment based on the net gain from the sale of certain real estate owned by SinoPac Bancorp’s subsidiary Far East National Bank (FENB).
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At least 90% of the purchase amount can be paid in cash and the rest can be paid in Cathay common stock.
Of the purchase price, $100m will be held back and released based on the timing of the subsequent merger of FENB and Cathay Bank, while 10% will be held back and released over three years.
The deal is anticipated to close during the first half of 2017, subject to regulatory approvals.
Cathay chairman of the board, CEO and president Dunson Cheng said: "We are very excited about this transaction and the additional scale it adds to our franchise in Los Angeles, our home market, as well as Orange County, San Francisco, and Silicon Valley and the opportunity to deploy a portion of our capital to generate strong returns.
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By GlobalData"Cathay Bank and Far East National Bank share similar attributes and business values, and we look forward to servicing customers of Far East National Bank and hope they will enjoy the additional products and services that Cathay Bank has to offer."
SinoPac Bancorp, through FENB, operates a total of five branches in Los Angeles including one in Orange County, two in San Francisco, and one in Silicon Valley. SinoPac Bancorp managed total assets of $1.3bn, total loans of $956m, and total deposits of $964m as of 31 March 2016.
Cathay Bank comprises 33 branches in California, 12 branches in New York State, three in the Chicago, Illinois area, three in Washington State, two in Texas, one in Maryland, one in Massachusetts, one in Nevada, one in New Jersey, one in Hong Kong, and a representative office in Shanghai and in Taipei.
