Cathay General Bancorp in Los Angeles has agreed to buy SinoPac Bancorp from Bank SinoPac in Taiwan.

The $13.3 billion-asset Cathay said in a press release Friday that it will pay $340 million in cash and stock for SinoPac Bancorp. The transaction, which is expected to close during the first half of next year, values the seller at 126% of its tangible book value.

The purchase price will be subject to an additional payout based on the net gain from the sale of two properties owned by SinoPac Bancorp's Far East National Bank. Also, $100 million of the purchase price will be held back and released based on the timing of the subsequent merger of Far East National and Cathay Bank; 10% of the price will be held back and released over a three-year period.

Cathay said it plans to cut Far East National's annual noninterest expense by 60%. The company also expects to incur $10 million in merger-related costs.

The $1.3 billion-asset Far East National has nine branches, including five in Los Angeles. It has $956 million in loans and $964 million in deposits. The bank, formed in the 1970s, was bought by Bank SinoPac in 1997.

"We are very excited about this transaction and the additional scale it adds to our franchise in Los Angeles … as well as Orange County, San Francisco and Silicon Valley," Dunson Cheng, Cathay's chairman, president and chief executive, said in the release.

The transaction is expected to be 4% to 5% accretive to Cathay's earnings per share, excluding one-time transaction costs and restructuring charges.

RBC Capital Markets and Wachtell, Lipton, Rosen & Katz advised Cathay. Morgan Stanley; Lee & Li Attorneys-at-Law; and Davis Polk & Wardwell advised Bank SinoPac.

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