• East West Bank to Acquire MetroBank In Texas, California


    Dominic and GeorgeBy Winston Chua

    East West Bank Chairman Dominic Ng today announced the Pasadena-based bank will acquire MetroBank, which operates branches in Texas and California.

    “This is a strategic merger that will significantly increase East West’s presence in Houston and allow entry into the Dallas market,” Ng said. “Additionally, the merger further strengthens East West’s branch network in California and expands our footprint to San Diego.”

    Under the terms of the agreement, East West will acquire the outstanding shares of MetroCorp for the lesser of $14.60 per share or 1.72 times the per share tangible equity. That is an aggregate purchase price of about $273 million.

    East West Bancorp is a publicly owned company with $23.3 billion in assets and is traded on the Nasdaq Global Market under the symbol “EWBC.” As of June 30, 2013, MetroCorp had consolidated assets of $1.6 billion.

    The post-merger combined assets total about $24.9 billion.

    By comparison, Los Angeles-based City National Corp., the parent company of City National Bank, has total assets of $27.4 billion.

    “This is a strategic merger that will significantly increase East West’s presence in Houston and allow entry into the Dallas market,” Ng said. “Additionally, the merger further strengthens East West’s branch network in California and expands our footprint to San Diego.”

    After this acquisition, slated to be completed in early 2014, East West will grow from having one branch in Texas to 13 branches, including nine in Houston and four in Dallas.This completed deal will also add six branches to East West’s California branch network, including one branch in San Diego.

    Ng emphasized that the acquisition will help East West become more influential specifically in the energy sector in Texas, a region that is fast becoming more relevant to U.S.-China business relations. The chairman reiterated the role of East West Bank as a financial bridge between East and West.

    “We are pleased to have reached an agreement to merge with East West,” said MetroCorp CEO George M. Lee, who will be joining East West as a Senior Advisor and Chairman of the newly formed Texas Strategic Markets Advisory Council. “As one of the top performing banks in the nation, East West has the balance sheet, scale and expertise to provide strong value for MetroCorp’s shareholders, customers and employees. Additionally, East West and MetroCorp share the same values and vision, making this combination a cultural fit as well.”

    The shareholders of MetroCorp will receive two-thirds of the merger consideration in shares of East West common stock and the remainder in cash. The exchange ratio for determining the number of shares of East West common stock deliverable to shareholders of MetroCorp will be based on the weighted average closing price of East West’s common stock over a 60 trading day measurement period ending five days prior to the closing.

    Ng lauded the accomplishments of East West, citing its reputation as a strong company, a sentiment echoed by both Forbes and Fortune magazines. As for further acquisitions, he added “Anywhere where bridges can be built, we can expand.”

     

     

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