East West Bancorp, Inc.
Metrocorp Bancshares Inc.
) signed a definite agreement, which authorizes the former to
acquire the latter by first-quarter 2014. The consolidated value,
including cash and stock, of the deal is $273 million.
EAST WEST BC (EWBC): Free Stock Analysis
METROCORP BANCS (MCBI): Free Stock Analysis
PROSPERITY BCSH (PB): Free Stock Analysis
SOUTHSIDE BANCS (SBSI): Free Stock Analysis
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As per the terms, East West Bancorp will acquire approximately
$18.7 million outstanding shares of Metrocorp. Once the
acquisition is completed, shareholders of the acquired company
will receive two thirds of their existing stock holdings as East
West Bancorp's shares and the remainder in cash.
However, the number of stocks that the shareholders are entitled
to receive for two thirds of their holdings depend on the average
closing price of East West Bancorp's stock over the 60 trading
days ending 5 days before the deal's closure.
Metrocorp currently has 18 branches spread across Houston,
Dallas, Los Angeles, San Francisco and San Diego. It has assets
worth $1.6 billion, total loans of $1.2 billion and total
deposits of $1.3 billion, all of which will come under East West
Bancorp's domain following the completion of the merger.
The deal is expected to benefit East West Bancorp, as it will
strengthen its existing foothold and enable it to venture into
new markets. Capitalizing on Metrocorp's wide retail and
commercial customer base, East West Bancorp intends to provide
enhanced services to customers through better product offerings
and a larger branch network.
The latest deal is the first acquisition by East West Bancorp in
the last six years. Earlier in Aug 2007, the company acquired
Desert Community Bank for $148.2 million.
While East West Bancorp carries a Zacks Rank #2 (Buy), Metrocorp
has a Zacks Rank #3 (Hold). Better-performing banks include
Prosperity Bancshares Inc.
Southside Bancshares Inc.
). Both these stocks carry a Zacks Rank #1 (Strong Buy).