Hanmi Financial in Deal for California Center Bank
Hanmi Financial Corp. said Wednesday it agreed to buy California Center Bank for about $103 million in cash, a deal that would make the combined Los Angeles-based institution one of the larger local lenders to Asian-owned businesses.
“I think we have to be larger to compete in this ethnic market,” said Chung Hoon Youk, Hanmi’s president and chief executive.
He said the combined company would be the area’s largest lender to Korean-owned businesses.
Formed in 1982, Los Angeles-based Hanmi Financial, with $1.07 billion in assets and $959 million in deposits as of March 31, has 11 branches in Los Angeles, Orange and San Diego counties. With 300 employees, it specializes in commercial and small-business lending.
Los Angeles-based California Center Bank, formed in 1986, has $480 million in assets and $421 million in deposits, and a total of six offices in Los Angeles and Orange counties. The company has 200 employees and specializes in international trade financing for business customers.
The combined company would operate under the name Hanmi Bank.
Seon Hong Kim, CEO of California Center Bank, said the banks’ “similar operating philosophies” make the two “a good match.”
He said the deal would allow California Center Bank to expand its product offerings.
Hanmi’s Youk said it hasn’t been determined what role Kim would take in the merged entity. Youk would remain CEO. Kim could not be reached for comment.
Hanmi Financial said the takeover price would be 2.3 times California Center Bank’s shareholder equity at the end of the month before the deal’s closing. Based on shareholder equity as of March 31, California Center Bank shareholders would get about $17 a share, Hanmi said.
That price is a 46% premium over California Center Bank’s $11.66 closing stock price Tuesday.
California Center Bank’s shares surged $3.39, or 29%, to $15.05 on the OTC Bulletin Board after Wednesday’s announcement.
Hanmi Financial’s shares rose 80 cents to close at $17.50 on Nasdaq.
The deal is expected to close in the last quarter of this year.
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Surprise Bid
Hanmi Financial’s takeover offer for California Center Bank caught investors by surprise and drove the target’s shares sharply higher Wednesday.
Weekly closes and latest for Callifornia Center Bank on the OTC Bulletin Board
Wednesday: $15.05, up $3.39
Source: Bloomberg News
