East West to Buy Standard Bank

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East West Bancorp Inc. said Wednesday it agreed to buy rival Standard Bank for about $204 million, creating a combined bank with $8.8 billion in assets and expanding its Chinese-American customer base.


Shareholders of Monterey Park-based Standard Bank will receive $204 million, about two times the book value of Standard Bank, subject to certain adjustments. Between 65 percent and 100 percent of the purchase price will be paid in East West stock.


The transaction, expected to close by the end of first quarter 2006, will add about 2 cents per share to San Marino-based East West’s 2006 earnings. The transaction has been approved by the boards of both banks, East West said in a statement.


East West said the deal will enhance its franchise in the ethnic Chinese-American retail and commercial markets. Standard Bank, which opened in 1982, has six branches in Los Angeles County. As of Sept. 30, the bank had total assets of approximately $914 million, total loans of nearly $528 million and total deposits of about $729 million.


John Lee, the co-founder, chairman and president of Standard Bank, will join East West as vice chairman. Lee has long ties to East West; he was its original general manager and helped found the bank over 30 years ago.


Shares of East West were up 1 percent to $37.03 in afternoon trading on Wednesday.

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