LOS ANGELES, July 8, 2016 /PRNewswire/ -- Cathay General
Bancorp ("Cathay", NASDAQ: CATY) and Bank SinoPac Co. Ltd. ("Bank
SinoPac") today announced that they have signed a Stock Purchase
Agreement for Cathay to acquire SinoPac Bancorp, the U.S.
subsidiary of Bank SinoPac, for $340
million subject to certain adjustments.
SinoPac Bancorp, through its subsidiary Far East National Bank
("FENB"), operates five branches in Los
Angeles, one in Orange
County, two in San
Francisco, and one in Silicon Valley. As of March 31, 2016, SinoPac Bancorp reported, on a
consolidated basis, total assets of $1.3
billion, total loans of $956
million, and total deposits of $964
million.
"We are very excited about this transaction and the additional
scale it adds to our franchise in Los
Angeles, our home market, as well as Orange County, San
Francisco, and Silicon Valley and the opportunity to deploy
a portion of our capital to generate strong returns," stated Mr.
Dunson K. Cheng, Chairman of the
Board, Chief Executive Officer, and President of Cathay. "Cathay
Bank and Far East National Bank share similar attributes and
business values, and we look forward to servicing customers of Far
East National Bank and hope they will enjoy the additional products
and services that Cathay Bank has to offer."
"SinoPac and Cathay General Bancorp have worked closely together
and in good faith to complete this transaction. We are pleased with
the effort both sides have put into this process. We believe this
transaction is mutually beneficial for both groups and we look
forward to working with Cathay to provide valuable services to our
customers in the future," stated Mr. Michael Chang, President of Bank SinoPac.
Under the terms of the Stock Purchase Agreement the purchase
price will be subject to an adjustment based on the net gain from
the sale of certain real estate owned by FENB. The aggregate
consideration mix paid to Bank SinoPac will be at least 90% cash,
with Cathay having the option to pay up to 10% in Cathay common
stock. $100 million of the
purchase price will be held back and released based on the timing
of the subsequent merger of FENB and Cathay Bank and 10% of the
purchase price will be held back and released over a period of
three years.
The exchange ratio for determining the number of shares of
Cathay common stock deliverable to Bank SinoPac will float based on
the volume weighted average closing price of Cathay's common stock
for the 20 full trading days ending on the third business day
immediately preceding the closing date.
The transaction is expected to be completed during the first
half of 2017. The transaction is subject to regulatory approvals
and other customary closing conditions.
The transaction is not expected to result in the creation of any
additional goodwill and is expected to be approximately 4-5%
accretive to Cathay's GAAP earnings per share, excluding any
one-time transaction costs and restructuring charges.
RBC Capital Markets served as financial advisor and Wachtell,
Lipton, Rosen & Katz served as legal counsel to Cathay. Morgan
Stanley served as financial advisor and Lee and Li Attorneys-at-Law
and Davis Polk & Wardwell, LLP
served as legal counsel to Bank SinoPac.
An investor presentation related to this transaction is
available at Cathay's website, www.cathaygeneralbancorp.com.
Cathay General Bancorp will host a conference call this morning to
discuss the transaction. The call will begin at 8:00 a.m., Pacific Time. Analysts and investors
may dial in and participate in the question-and-answer session. To
access the call, please dial 1-855-761-3186 and enter Conference ID
46677247. A listen-only live Webcast of the call will be available
at www.cathaygeneralbancorp.com and a recorded version is scheduled
to be available for replay for 12 months after the call.
ABOUT CATHAY GENERAL BANCORP
Cathay General Bancorp is the holding company for Cathay Bank, a
California state-chartered bank.
Founded in 1962, Cathay Bank offers a wide range of financial
services. Cathay Bank currently operates 33 branches in
California, 12 branches in
New York State, three in the
Chicago, Illinois area, three in
Washington State, two in
Texas, one in Maryland, one in Massachusetts, one in Nevada, one in New
Jersey, one in Hong Kong,
and a representative office in Shanghai and in Taipei. Cathay Bank's website is found at
www.cathaybank.com. Cathay General Bancorp's website is found at
www.cathaygeneralbancorp.com.
ABOUT BANK SINOPAC CO. LTD.
Bank SinoPac (a member of SinoPac Holdings) is a Taiwan-based bank holding company founded in
1992. It has total assets of $50
billion and serves more than 2.5 million customers
throughout Asia and North America from over 200 service
locations. Bank SinoPac acquired Far East National Bank in
1997, and subsequently formed SinoPac Bancorp, a U.S. bank holding
company. Founded in 1974, Far East National Bank (FENB) was the
first federally chartered bank in the
United States founded by the Asian-American. Headquartered
in Los Angeles, FENB has over 170
employees and total assets exceeding $1.3
billion. FENB offers both corporate and individual banking
services through its 9 branches located in Los Angeles, Orange
County, Silicon Valley, and San
Francisco, along with an overseas representative office in
Beijing. FENB offers a wide
spectrum of financial services, including commercial real estate
lending, corporate banking, investments, treasury and foreign
exchange, and other consumer businesses.
FORWARD-LOOKING STATEMENTS AND OTHER NOTICES
This press release contains certain forward-looking information
about Cathay, SinoPac Bancorp and FENB, and the combined companies
after the closing of the acquisition of SinoPac Bancorp and the
merger of Cathay Bank and FENB that is intended to be covered by
the safe harbor for "forward-looking statements" provided by the
Private Securities Litigation Reform Act of 1995. All statements
other than statements of historical fact are forward-looking
statements. In some cases, you can identify forward-looking
statements by words such as "may," "hope," "will," "should,"
"expect," "plan," "anticipate," "intend," "believe," "estimate,"
"predict," "potential," "continue," "could," "future" or the
negative of those terms or other words of similar meaning. You
should carefully read forward-looking statements, including
statements that contain these words, because they discuss the
future expectations or state other "forward-looking" information
about Cathay, SinoPac Bancorp and FENB and the combined companies.
Such statements involve inherent risks and uncertainties, many of
which are difficult to predict and are generally beyond the control
of Cathay, Bank SinoPac, SinoPac Bancorp and FENB, and the combined
companies. Forward-looking statements speak only as of the date
this press release is made and we assume no duty to update such
statements. In addition to factors previously disclosed in reports
filed by Cathay with the SEC, risks and uncertainties for each
company and the combined companies include, but are not limited to:
the possibility that any of the anticipated benefits of the
proposed acquisition will not be realized or will not be realized
within the expected time period; the failure to satisfy conditions
to completion of the proposed acquisition or merger of Cathay Bank
and FENB, including receipt of required regulatory approvals; the
failure of the proposed acquisition or merger of Cathay Bank and
FENB to be completed for any other reason; the inability to
complete the proposed acquisition or merger of Cathay Bank and FENB
in a timely manner; the risk that integration of SinoPac Bancorp's
and FENB's operations with those of Cathay and Cathay Bank will be
materially delayed or will be more costly or difficult than
expected; diversion of management's attention from ongoing business
operations and opportunities; the challenges of integrating and
retaining key employees; the effect of the announcement of the
proposed acquisition on Cathay's, SinoPac Bancorp's or FENB's, or
the combined companies', respective customer relationships and
operating results; the possibility that the proposed acquisition
may be more expensive to complete than anticipated, including as a
result of unexpected factors or events; and general competitive,
economic, political and market conditions and fluctuations.
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SOURCE Cathay General Bancorp