Cathay General Bancorp in Los Angeles has agreed to buy Asia Bancshares in New York.
The $11.6 billion-asset Cathay will pay $126 million in cash and stock for the $497 million-asset parent of Asia Bank in a transaction that should close in the second quarter. The transaction is expected to be 2% to 3% accretive to Cathay's annual earnings, excluding one-time merger charges.
Asia Bank also has $419 million in loans, $418 million in deposits, three branches in New York and a branch in Rockville, Md. Cathay already has nine branches and $1.8 billion in loans in New York.
"Asia Bank serves the same targeted customer base as Cathay and shares our same focus on serving our customer's lending and deposit needs," Dunson Cheng, Cathay's chairman, president and chief executive, said in a press release Wednesday. "We believe that we will be able to provide additional products to Asia Bank's customer base."
Jentai Tsai, Asia Bancshares' chairman and chief executive, will remain with Cathay as chairman of an advisory board for the company's eastern region.
Kafafian Group delivered a fairness opinion to Asia Bancshares' board, while Lamb & Barnosky served as legal counsel. Wachtell, Lipton, Rosen & Katz served as Cathay's legal counsel.