East West Bancorp Inc., Pasadena-based parent company of East West Bank, and MetroCorp Bancshares Inc., the Houston-based parent of MetroBank, N.A. and Metro United Bank, plan to merge, the companies announced today.
MetroCorp will be merged into East West, which will pay about $273 million for the outstanding shares of MetroCorp.
MetroCorp operates 18 branches under its two subsidiary banks --
MetroBank, which has a dozen branches in Houston and Dallas, and Metro United
Bank, which operates six branches in Los Angeles, San Francisco and San Diego.
East West has branches in Diamond Bar, Walnut, City of Industry, and Rowland Heights.
As of June 30, MetroCorp reported total assets of $1.6 billion, total loans of $1.2 billion and total deposits of $1.3 billion.
"This is a strategic merger that will significantly increase East West's presence in Houston and allow entry into the Dallas market. Additionally, the merger further strengthens East West's branch network in California and expands our footprint to San Diego," said Dominic Ng, chairman and CEO of East West.
Following the completion of the merger, George M. Lee, co-chairman, president and CEO of MetroCorp, will join East West as a senior adviser and chairman of its newly formed Texas Strategic Markets Advisory Council.
"As one of the top performing banks in the nation, East West has the balance sheet, scale and expertise to provide strong value for MetroCorp's shareholders, customers and employees," Lee said. "Additionally, East West and MetroCorp share the same values and vision, making this combination a cultural fit as well."
The shareholders of MetroCorp will receive two-thirds of the merger consideration in shares of East West common stock and the remainder in cash.
The merger has been unanimously approved by the East West and MetroCorp Boards of Directors. It is expected to be completed during the first quarter of 2014 subject to customary closing conditions, including approval by MetroCorp shareholders and regulatory approvals.
Post-merger, East West will grow from having one branch in Texas to 13, including nine in Houston and four in Dallas. The merger will also add six branches to East West's California branch network, including one branch in San Diego.