Hope Bancorp in Los Angeles has agreed to buy the commercial banking unit of SMBC MANUBANK.
The $18.5 billion-asset Hope said in a press release that it will enter into a collaboration and partnership agreement with Sumitomo Mitsui Banking Corp. to provide commercial and consumer banking services to SMBC’s Japanese midsize business and retail customers.
The deal is expected to close in the second half of this year. The price of the all-cash transaction wasn’t disclosed.
The acquisition adds eight branches, $2.5 billion in loans and $2.7 billion in deposits. About a fifth of the deposits are noninterest-bearing.
Hope said it plans to combine SMBC MANUBANK’s Japanese banking division with its Korean subsidiary group.
“We are very excited to announce this accretive transaction, which strengthens our product offering, deepens our talent and expertise, and enhances our ability to serve the diverse multicultural communities that define modern America, with a particular focus on Korean and Japanese clients,” Kevin Kim, Hope’s chairman, president and CEO, said in the release.
“The addition of the Japanese banking division … positions us to drive strategic growth in cross-border middle market banking across the continental United States and Hawaii,” Kim added.
The deal is expected to be more than 20% accretive to Hope’s 2027 earnings per share in 2027. It should take about two years to earn back an expected 4.5% dilution to Hope’s tangible book value. Hope expects to incur $30 million of after-tax merger-related expenses.
Keefe Bruyette and Woods and Skadden, Arps, Slate, Meagher & Flom advised Hope. RBC Capital Markets and Davis Polk & Wardwell advised the seller.