The president and chief executive officer of Royal Asian Bank in Philadelphia is leading a group of investors that struck a deal to buy it.
Edward Shin formed Royal Asian Bancshares Inc. to buy the $117 million-asset bank from its parent company, Royal Bancshares of Pennsylvania Inc. in Narberth, Pa. The deal price was not disclosed.
Royal Bancshares of Pennsylvania is a two-bank holding company that also operates the $1.2 billion-asset Royal Bank America in Narberth.
In a press release announcing the deal Friday, Robert R. Tabas, the chairman and CEO of Royal Bancshares of Pennsylvania, said, “The sale of Royal Asian Bank allows us to channel our energies on continuing to reinvigorate the Royal Bank America brand.”
Though both of its bank units are well capitalized, the company has been under stress lately because of rising loan losses. It swung to an $11.8 million loss in the second quarter, from a $315,000 profit the year earlier.
Its Royal Bank America unit agreed to a cease-and-desist order with the Federal Deposit Insurance Corp. in July, which, among other things, requires the bank to increase its board supervision, reduce its concentration in commercial real estate loans and maintain elevated capital ratios.
Royal Asian Bank focuses on Korean-American communities in eastern Pennsylvania, northern New Jersey, and Flushing, N.Y. Its nonperforming loans rose to 5.39% at June 30, from 1.19% a year earlier.
Young Man Kim, a director of Royal Asian Bank, is to become chairman of the newly formed Royal Asian Bancshares. The investor group expects to close the deal by yearend.