A South Korean blank-check company could emerge as a consolidator in the struggling Korean-American banking market.

North Asia Investment Corp., a $50 million special-purpose acquisition company led by a group of South Korean investors, announced Tuesday that it has agreed to acquire Pacific City Financial Corp., a Los Angeles company that caters to Korean-Americans.

The $50 million in cash would nearly double Pacific City's equity and put it in a position of strength in the nation's $15.5 billion Korean-American banking market.

"There is speculation that we are going to see significant consolidation in the Korean banking niche," said Aaron James Deer, a managing director at Sandler O'Neill & Partners LP. "So to the extent that you have an investor group loading up a bank with capital that is not solely for the reason of backfilling, I'd imagine it will be looking to use the bank as a mechanism to do deals for failures or otherwise."

The $534 million-asset Pacific City appears to have fared better than most of the other 14 Korean-American banks, many of which have been hit hard by the economic downturn.

It had total nonperforming loans of $10 million as of Sept. 30, up one-third from a year earlier, making up 2.02% of total loans. Among Korean-American banks, Pacific City had the second-smallest percentage of nonperforming assets.

The company has some blemishes, however. It lost $12 million in the first nine months of the year, compared with earnings of $1.7 million a year earlier.

Pacific City also missed its November dividend payment on $16 million it received from the Treasury Department's Troubled Asset Relief Program.

Still, Pacific City was able to catch the eye of North Asia Investment, which organized in December 2007 in the Cayman Islands and took two years to find an acquisition target. The blank-check company said Tuesday it had reviewed 200 transactions before striking the deal with Pacific City.

"Pac City will allow our shareholders to participate in the expected recovery of the Southern California economy as well as the dynamic Korean-American banking sector," Thomas C. Kang, North Asia Investment's chief executive, said in a press release.

Analysts said Pacific City's stability and the lack of an urgent need for additional capital are factors favoring the transaction.

"That bodes well for this deal," said Brett Rabatin, an analyst with Sterne, Agee & Leach Inc. "If they don't need the money, they are not under any tight deadline. But if you have time to spare, that helps, because it is taking so long for the regulators to approve anything right now."

North Asia Investment is a foreign-owned company, however, which could provide an additional hurdle for the deal.

Though regulators appear to be more willing to work with foreign investors following the failure of UCBH Holdings Inc.'s $13 billion-asset United Commercial Bank in November, analysts said regulators will be tough on a deal involving a foreign-owned bank.

"They are still going to face some pretty tough scrutiny," Rabatin said.

The Treasury could also weigh in because of the company's deferment on its Tarp dividend, particularly if North Asia Investment's intentions include resuming the dividend payment or repaying Tarp. "I would imagine the Treasury is going to have something to say," said Joe Gladue, an analyst at B. Riley & Co.

Special-purpose acquisition companies are entities that raise money with the intention of acquiring control of a targeted company. The organizers typically have two years to find a company or face dissolution as shareholders pull their investments.

North Asia Investment said in Securities and Exchange Commission filings that it was looking for acquisition targets in China and South Korea, but was not limiting itself by geography. North Asia Investment had a Jan. 29 deadline for striking a deal and a deadline of July 29 to complete the acquisition. The company also could ask its shareholders for another year to complete a deal.

Blank-check companies have struggled to complete deals for banks. In recent years shareholders killed deals because bank valuations were too high. And now that bank prices have fallen, regulatory delays have caused deals to crumble when companies ran up against self-imposed deadlines.

One company that suffered such a fate is SP Acquisition Holdings Corp., a New York blank-check outfit. It abandoned its bid to acquire the $4 billion-asset Frontier Financial Corp. in Everett, Wash., when regulators failed to approve the deal before SP's Oct. 10 deadline.

Still, a few blank-check companies have recently managed to complete deals. One of the first was Community Bankers Acquisition Corp.'s takeover of two Virginia banks in 2008.

Sometimes the self-imposed deadlines have worked out for institutions, as in the case of Western Liberty Bancorp, formerly known as Global Consumer Acquisition Corp. Western's first deal crumbled after Colonial Bank in Montgomery, Ala., failed. Western had agreed to buy Colonial's Nevada branch network.

Then the SPAC ran up against its Nov. 27 deadline, but instead of dissolving, Western received shareholder approval to eliminate the deadline.

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