Drive down Wilshire Boulevard between Vermont and Western avenues, the heart of L.A.'s Koreatown, and you'll pass by more Korean American businesses than you can count.
And almost as many Korean American banks trying to lend to them.
The community is home to half a dozen such banks, a number that industry analysts have long said is too many, even for Los Angeles, home to the single largest ethnic Korean community outside of Asia.
Now the bankers agree, and they're fighting among themselves to snatch up their competitors.
On Monday, executives at BBCN Bancorp and Wilshire Bancorp, the nation's two largest Korean American banks, announced a merger of their institutions — one that a rival hopes to block.
The deal would create an outsized player in a market long dominated by a handful of lenders and mint one of the largest financial institutions in California.
A combined BBCN and Wilshire would have $12.3 billion in assets, enough to make it the sixth-largest independent bank headquartered in the state and the third-largest in Southern California.
The bank would have branches in nine states and in every metro area with a sizable Korean American population, including New York, Chicago, Atlanta and Seattle.
"This will solidify our position as the premier Korean American Bank," said Kevin Kim, BBCN's chairman and chief executive.
Many of L.A.'s Korean American banks were founded in the 1980s, a decade that saw a flood of Korean immigrants who often spoke little to no English or lacked traditional credit histories. The new lenders cropped up to serve them as they started restaurants, garment factories and other small businesses.
As L.A.'s Koreatown rebuilt and flourished after the 1992 riots, the Korean American banks thrived. But over the last few years they've sought growth by expanding into Korean immigrant communities in other parts of the country.
Now, as they seek to cut costs and boost profits by merging, no bank wants to be the third man out.
"They're so heavily concentrated, and there's only so much market to go around," said Tim Chrisman, a downtown L.A. bank consultant. "It's just crying out for some consolidation."
The push to consolidate is so strong that last month Hanmi Financial — which ranks third behind No. 1 BBCN and No. 2 Wilshire — caught wind of the impending merger and, in an attempt to block it, proposed a deal of its own.
Hanmi Chief Executive C.G. Kum told The Times last month that he had been approached over the summer by members of BBCN's board who were interested in a BBCN-Hanmi combination. But Kum said that BBCN's board as a whole had rebuffed his attempts to discuss a deal.
In a call with investors Monday morning, BBCN's Kim acknowledged that the decision to merge with Wilshire was not unanimous among BBCN's board members. That could set the stage for a campaign led by Hanmi and dissident board members to spike the deal.
Regulators and shareholders at both institutions need to approve the merger and Hanmi is already making noise that could derail it. In a statement released Monday, Hanmi Chairman Joseph Rho called the BBCN-Wilshire deal a disappointment and "inferior" to what Hanmi offered last month.
"BBCN and its advisors did not engage us in any discussions before entering into an inferior agreement with Wilshire," Rho said.
Although both deals are structured as stock swaps, they are difficult to compare because the buyers and sellers are different.
Hanmi's proposal calls for it to acquire BBCN for about $1.6 billion. BBCN is proposing to buy Wilshire for $1 billion, with its stockholders receiving 70% of a BBCN share for each Wilshire share.
Based on Monday's closing price, that would value Wilshire shares at $12.79, a 9% premium over Wilshire's share price before the deal was disclosed.
Wilshire and BBCN expect to save $42 million a year in costs. Much of that is likely to come from closing branches in Southern California, where the banks have dozens of combined locations — some on the same block.
Kim would stay on as CEO of the combined bank, while Wilshire Chairman Steven Koh would be chairman.
The dueling deals show how important a merger is to the long-term growth of the banks. A combined BBCN-Wilshire would be nearly three times the size of Hanmi, have operations in more areas and be able to offer a broader array of services, putting the smaller lender at a significant disadvantage.
Tim Coffey, an analyst at banking industry brokerage FIG Partners, said if Hanmi isn't successful in blocking the deal, he would expect the bank to seek out another merger partner.
"Assuming this BBCN-Wilshire deal closes, I would think [Hanmi would] start to talk to some of the smaller banks about whether they're interested in combining," he said.
There are a handful of potential acquisition targets, but none approaching the size of Hanmi.
The BBCN-Wilshire announcement comes on the heels of big bank deals outside Koreatown.
Last month, Toronto's Royal Bank of Canada finalized its $5-billion acquisition of downtown L.A.'s City National Bank, long the biggest local lender. And in August, Pasadena's OneWest Bank was acquired by New Jersey's CIT Group.
Those and other recent bank deals put local institutions under the wing of bigger, out-of-town owners, cutting down on the number of locally headquartered institutions. They've also left ethnic banks as some of the biggest financial institutions in town.
Los Angeles County is now home to the headquarters of just three banks with assets of more than $10 billion, two of them ethnic banks: Chinese-American lenders East West Bank and Cathay Bank.
The BBCN-Wilshire deal would make it three out of four.
Chrisman, the bank consultant, said those ethnic players would probably stay local because their niche focus makes them unlikely acquisition targets for bigger banks.
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