Recent Acquisitions

3 Months Ended

Mar. 31, 2014

Recent Acquisitions

Recent Acquisitions

Note 3.   Recent Acquisitions

On October 1, 2013, the Company acquired BankAsiana for approximately $32.5 million, which consideration was paid to BankAsiana shareholders and option holders in cash in the amount of $14.25 per common share. BankAsiana was a New Jersey state chartered commercial bank serving the East Coast Korean-American community with three branch offices, two in the State of New Jersey and one in the State of New York.

On November 20, 2013, the Company acquired Saehan for approximately $118.2 million.  Pursuant to the merger agreement, holders of Saehan Bancorp common stock had a right to elect to receive either (a) $0.4247 in cash, (b) 0.06080 shares of Wilshire common stock, or (c) a unit consisting of a mix of $0.21235 in cash and 0.03040 share of Wilshire common stock (subject to proration, adjustment and certain limitations set forth in the Merger Agreement), for each share of Saehan Bancorp common stock.  As a result, 7.2 million shares of the Company’s common stock were issued to former Saehan shareholders at $9.40 per share at the date of acquisition for a total value of $67.8 million.  Saehan was headquartered in Los Angeles, California and operated ten branches all located in Southern California and two LPO offices located in the states of Washington and New York.

The acquisition of BankAsiana was to expand our market presence in the East Coast market.  The customer base and locations of BankAsiana’s branches had significant overlap when compared to the Company’s East Coast customer base and branch locations.  This made BankAsiana a very good fit in terms of potential cost savings and future growth potential.  Saehan Bancorp also had a similar customer base and operated in the same markets as our Southern California operations.  Therefore, both acquisitions had the potential for large cost savings synergies with consolidation. With the levels of excess capital at the time, the acquisitions fit well into the Company’s growth strategy. The total fair value of assets acquired from BankAsiana and Saehan, were $204.1 million and $589.1 million, respectively.  We recorded goodwill of $10.8 million for the acquisition of BankAsiana and $50.0 million in goodwill from the acquisition of Saehan Bancorp.  The goodwill of $60.8 million from the acquisitions is largely the result of the benefits discussed above as well as creating a platform for future operations, strengthening the Company’s presence in existing markets.  The goodwill is not amortized for book purposes and is not tax deductible.

The acquisitions were accounted for in accordance with ASC 805 “Business Combinations,” using the acquisition method of accounting and were recorded at their estimated fair values on the dates of each acquisition. These fair value estimates were considered provisional, as additional analysis is ongoing on certain assets and liabilities in which fair values are primarily determined through the use of inputs that are not observable from market-based information. Management may further adjust the provisional fair values for a period of up to one year from the dates of the acquisitions. The assets and liabilities that continue to be provisional include loans, intangible assets, OREO, deferred tax assets, accrued assets and liabilities, and the residual effects that the adjustments would have on goodwill.