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Central Bancorp Shareholders approve merger with Hanmi Financial

On April 17, the stockholders of Central Bancorp, Inc., the Texas-based parent company of United Central Bank, reportedly gave their support to a consolidation with Hanmi Financial Corp., the California-based holding firm for Hanmi Bank. Financial authorities expect the deal to close sometime between July and December 2014.

Under the agreement terms, the total consideration payable to common shareholders of Central Bancorp for the merger is $50 million in cash. This figure, however, is subject to possible purchase-price adjustments. As of the end of 2013, Central Bancorp had 23 branches in five states outside of Texas: California, Illinois, Virginia, New Jersey and New York. The parent company also had $1.25 billion in deposits, around $1.42 billion in assets and $640 million in gross loans.

After accounting for one-time expenses for the merger, the involved parties anticipate the addition of Central Bancorp to the Hanmi Financial Corp. family to be accretive for the holding company's earnings in 2014, 2015 and beyond. The merger is also estimated to produce an internal rate of return of more than 20 percent for shareholders of Hanmi Financial, authorities said.

In several instances, consolidations in the financial industry have proven to be very lucrative, particularly for the businesses that are purchased. As part of this, employees and investors alike may benefit from the mergers since it often compels a company to restructure itself to run more efficiently.

However, mergers may bring up complex situations that the leaders have to seriously think about, such as relocating employees and appointing new leaders. Although a board of directors is capable of making these decisions, they may find it helpful to retain the counsel of a business and commercial attorney. Such attorneys may develop the criteria of an acquisition and due diligence, draft a purchase agreement, identify funding options and ensure an efficient and accurate ownership transition.

Source: RTT, "Central Bancorp Shareholders Ok Merger With Hanmi Financial", April 17, 2014

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