After East West Bancorp acquired $10.4 billion in assets and $9.2 billion in liabilities form their San Francisco-based competitor, United Commercial Bank, shares of East West shot upward. The deal, that analysts said would improve earnings and expand market share, was arranged by the Federal Deposit Insurance Corp—which will share any losses on the $7.7 billion worth of loans acquired.
East West Bancorp shares rose $4.30, or 50 percent, to $12.95 in midday trading. Shares have traded between $3.24 and $16.64 in the past year.
The acquisition emerged through pressure from government regulators for United Commercial Bank to improve capital by as much as $600 million. UCB became the first commercial bank to receive federal TARP money to fail, receiving $298.7 million from the government.
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