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BBCN Bancorp Gets Merger Proposal from Hanmi Financial

BBCN Bancorp, Inc.BBCN received a merger proposal from Hanmi Financial Corporation HAFC on Nov 20, 2015, which was acknowledged by the former on Nov 24, 2015. Per the proposal, Hanmi Financial offered to merge with BBCN Bancorp in an all-stock deal valued at about $1.6 billion.

The proposal was made public on Nov 23, 2015, subsequent to the unsuccessful efforts over the last several months by Hanmi Financial to engage privately with BBCN Bancorp regarding a possible business combination.

An all-stock proposal was offered to BBCN Bancorp at an implied purchase price of $19.98 per BBCN Bancorp share based on Hanmi Financial's Nov 20, 2015 closing price. The proposal represents a 15.3% premium to BBCN Bancorp's volume weighted average price from Oct 21, 2015 to Nov 20, 2015.

Under the terms of the proposal, stockholders of BBCN Bancorp would receive 0.7331 of a share of Hanmi Financial common stock for each share held. While BBCN Bancorp would own 65% of the combined company, the remaining stake will be held by Hanmi Financial.

The move is expected to result in the creation of the largest Korean-American banking franchise in the U.S. The combined firm will have around $12 billion in assets and about $10 billion in deposits.

Also, the complementary business model of both BBCN Bancorp and Hanmi Financial will cause reduction in integration risk and provide substantial synergy potential. Moreover, the merger is expected to result in annual pre-tax cost savings of roughly $50-$60 million, which represents 18%-22% of the two companies' combined cash non-interest expense base.

The deal is also expected to generate around $400-$500 million of stockholder value with substantial earnings per share accretion for both companies' stockholders.

Joseph Rho, Hanmi's Chairman of the board of directors said, "The combined organization would create growth opportunities in new markets and an expanded geographic footprint and customer base, including the broader Asian-American and mainstream communities. With a premier core deposit franchise, a low-cost deposit base and significant future earnings power, the combined company would have a strong balance sheet and outstanding asset quality."

Currently, BBCN Bancorp holds a Zacks Rank #2 (Buy). A couple of similar-ranked western banks are American River Bankshares AMRB and TriCo Bancshares TCBK . Both these stocks sport a Zacks Rank #1 (Strong Buy).

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TRICO BANCSHRS (TCBK): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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