The nation’s two largest Korean American banks, both with headquarters in Los Angeles, plan to merge in a deal that will create an ethnic banking powerhouse – and that stymies an effort by another local bank to stop the deal.
In a deal announced early Monday, BBCN Bancorp said it will acquire smaller rival Wilshire Bancorp for $1 billion in an all-stock deal. Both banks, with headquarters just blocks from each other on Wilshire Boulevard in Koreatown, specialize in lending to businesses owned by Korean immigrants.
Combined, the two banks would have branches in nine states and $12.3 billion in assets, according to an investor presentation on the deal, making it by far the country’s largest Korean American bank.
“The combination of BBCN and Wilshire will create an unrivaled organization with the only national platform providing full banking services in all of the major geographic markets in the United States with sizable Korean-American communities,” said Steven S. Koh, Wilshire’s chairman, in a statement.
The merged BBCN-Wilshire would be run by current BBCN Chief Executive Kevin Kim. Koh would be chairman of the new bank’s board.
The deal is subject to regulatory approval and is not expected to close until mid-2016.
Another local Korean American lender, third-ranked Hanmi Financial, had recently heard a BBCN-Wilshire deal was in the works and tried to stop the merger by making an offer of its own to acquire BBCN, a much larger bank.
Last month, Hanmi Chief Executive C.G. Kum said he had been approached over the summer by members of BBCN’s board who were interested in a BBCN-Hanmi combination. But Kum told The Times that BBCN’s board as a whole had rebuffed his attempts to discuss a deal.
“There’s a segment of BBCN’s board that believes Hanmi and its management team is better suited to run a combined organization — obviously the group that was interested in exploring a combination with us was not in the majority,” he said last month.