Talley Industries Agrees to Buy East-West Federal Bank
East-West Federal Bank, a San Marino thrift that was the nation’s first federally chartered Chinese-American savings institution, said Thursday that it will be acquired by Talley Industries of Phoenix.
The agreement in principle calls for Talley, a diversified manufacturing firm, to pay $27.3 million, or $17 a share, for the 11-branch thrift.
East-West, founded in 1972, is the second local Chinese-American lending institution to be acquired recently. Last September, Security Pacific Bank acquired California Pacific National Bank, a small Los Angeles bank serving the city’s Chinese business community.
“This acquisition will provide Talley with market entry into the growing financial services industry,” William H. Mallender, Talley’s chairman, told a group of analysts in New York. Mallender said East-West, all of whose offices are in Southern California, is “strategically located” in a high-growth area.
East-West, a public company with 550 shareholders, specializes in residential real estate lending. It primarily serves the Chinese-American community, offering bilingual services at its branches in Chinatown on Broadway as well as in San Marino, Silver Lake, Eagle Rock, South Pasadena, Alhambra, Monterey Park, Montebello, Artesia-Cerritos, Rolling Hills and Lincoln Heights.
Kellogg Chan, a founder of East-West and its chairman, president and chief executive, said in a telephone interview:
“We had no intention of selling. However, we were approached by Talley through (investment banker) Bear Stearns. They offered us a very attractive price and commitment to continue in what we started out to do--serve the Chinese-American community.”
Chan said the current staff and management will remain.
He said the acquisition by Talley will help East-West’s customers, who have operated largely within the Chinese-American community, move into the “mainstream.”
The thrift had a profit of $1.06 million in the first quarter ended March 31, and its 1986 earnings were a record $3.3 million. Its assets totaled $308.3 million at the end of March. The figures do not include results of the recently acquired Lincoln Heights branch.
Talley had 1986 earnings of $13.85 million on revenue of $345.58 million.
The deal is subject to regulatory and stockholder approval from both companies.
