September 24, 2013
East West Bank, a Chinese-American bank that has about 100 branches in the state of California, has announced plans to purchase MetroCorp Bancshares, another Chinese-American banking corporation that has a strong presence in the state of Texas. The acquisition of MetroBank will also allow East West Bank to operate its first branch in the city of San Diego.
In addition to its strong California presence, East West Bank operates a small number of branches in the states of Georgia, Washington, and New York. Before the merger, East West Bank had assets valued at more than $20 billion. The acquisition of MetroCorp Bancshares, which uses the name MetroBank in Texas and Metro United Bank in California, will add a little over $1.5 billion in assets.
The chief executive of East West Bank indicated that the merger of the two banks represented a good fit for East West's future growth plans because of its connections in the energy sector and its ties to business interests in China. He also indicated that it will be several months before any final decisions are made on layoffs or restructuring that may result from the consolidation of the two banks. While both banks have strong ties to China and Chinese-American communities, MetroBank also has a branch that serves primarily Latino customers, a group that could represent a growth opportunity for the newly merged entity in the future.
Businesses that are considering expanding their market share by merging with another business may need professional help to ensure that the process proceeds smoothly. Attorneys working in the area of business and commercial law may be able to help corporations to structure an agreement that will protect their interests and provide a solid foundation for future growth.
Source: Los Angeles Times, "East West acquires bank with 12 branches in Texas, 6 in California", E. Scott Reckard, September 18, 2013