BBCN Bancorp may have decided that buying Wilshire Bancorp was its best option to cement its status as the nation's biggest Korean-American bank — but the verdict was not unanimous.

The deal, announced Monday, was expected given rumors that the Los Angeles companies were in talks and given industry observers' long-held belief that consolidation among Asian-American banks would increase.

The lead-up to the deal was far from typical — Hanmi Financial made a public overture last month in hopes of merging with BBCN — and there may be more twists in coming months. Hanmi refused to back off; it said in a brief press release Monday that it would "continue to evaluate" the BBCN-Wilshire deal, along with its own unsolicited bid.

Joseph Rho, Hanmi's chairman, said in the release that his company found it "surprising" that BBCN pursued a deal that would be harmful to BBCN shareholders. "What is even more disappointing is that BBCN and its advisers did not engage us in any discussions before entering into an inferior agreement with Wilshire," he added.

A Hanmi spokeswoman said that C.G. Kum, the $4.2 billion-asset company's president and chief executive, was unavailable for further comment.

A $40 million breakup fee associated with the BBCN-Wilshire deal makes it unlikely that either company will bow out, Matthew Clark, an analyst at Piper Jaffray, wrote in a note to clients.

Still, Hanmi could try to make a direct appeal to BBCN's shareholders to reject the merger agreement with Wilshire.

Such efforts, while unusual, costly and often unsuccessful, have happened before. For instance, in 2001 SunTrust Banks in Atlanta tried to persuade Wachovia shareholders to vote against a merger agreement with First Union. Wachovia's shareholders sided with First Union, which went on to buy the North Carolina bank and take its name.

BBCN's inability to secure unanimous support from its 13-member board for the Wilshire deal could give Hanmi some hope that it could sway shareholders.

Kevin Kim, the $7.6 billion-asset BBCN's chairman and chief executive, said during a conference call Monday that some of the company's directors backed a deal with Hanmi.

"I don't think it is really surprising" that the board would be divided, Kim said, given that both deals are "very compelling."

Kim was asked during the conference call to discuss whether buying Hanmi would have yielded more value and opportunity to cut costs. Hanmi had claimed in its offer that BBCN would have been able to cut $50 million to $60 million in expenses; BBCN plans to reduce costs tied to the Wilshire deal by $42 million.

Kim dismissed Hanmi's figures, noting that they were not based on collaborative due diligence. "The basic foundation of any negotiation process, including merger scenarios, has to be mutual trust," he said.

"Given all of the progress that had been made, we believe it would not have been in the best interest of our shareholders to walk away from a viable, compelling deal that was very close to completion, especially for an unsolicited nonbinding proposal that" included higher execution risk, Kim added.

BBCN will pay $1 billion, or $13 a share, in stock for the $4.7 billion-asset Wilshire. The deal, which is being characterized as a merger of equals, values Wilshire at 220% of its tangible book value. BBCN said it should take about five years to earn back any dilution to its own tangible book value.

The acquisition would also propel BBCN over the $10 billion-asset threshold when additional regulatory requirements, including caps on interchange fees and mandatory stress testing, kick in, increasing the importance of reducing costs and finding ways to boost revenue over the long term.

BBCN would have fared better by buying Hanmi, which would have given BBCN excess liquidity while reducing its reliance on commercial real estate loans, Clark wrote in his note. "We believe a merger with [Hanmi] would have been a better combination," he added.

Three-fourths of BBCN's loan portfolio, post-Wilshire, would consist of commercial real estate credits, according to an investor presentation tied to the deal. Management said during Monday's call that they would work to lower that number, adding that each bank focused on different types of industries, which reduces overall risk.

Hanmi, however, should have opportunities to expand even if it lets this deal go.

"Fortunately, Hanmi has the flexibility to grow both organically and [with] smaller bank M&A," Clark told his clients.

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