A pair of underperforming L.A. banks has been getting a lot of attention lately from investors.
Shares of Hanmi Financial Corp. and Saehan Bancorp, both headquartered in Koreatown, surged last week amid talk that each is in line to receive substantial capital infusions from overseas investors.
According to a report in a South Korean newspaper, Woori Finance Holdings Inc. is looking to invest between $100 million and $200 million in Hanmi, the holding company for L.A.’s largest Korean-American bank. The equity investment reportedly would give Woori a 51 percent stake.
In November, Hanmi received a pair of regulatory enforcement orders directing it to raise at least $100 million to replenish its capital reserves. The institution has been seeking an investment from IWL Partners, a Korean buyout company, but the deal had been running into regulatory hurdles, said Julianna Balicka, an analyst with New York-based Keefe Bruyette & Woods.
Last week’s report sparked widespread discussion on investment-focused online message boards and pushed Hanmi’s stock to a new 52-week high of $2.83, up 177 percent from its previous-week low of $1.02. Shares closed at $2.55 on Jan. 21.
While the deal is still little more than rumor, Balicka cautioned, a Woori investment would likely be looked at more favorably by regulators than previous capital-raising efforts.
“Hanmi is probably going to get bought by someone (and) Woori has liked Hanmi for a while,” she said. “Do I think there’s going to be a deal announced tomorrow? Unlikely, because there are a lot of issues that need to be ironed out before Hanmi or Woori would make an official announcement. But it’s a better outlook today than it was a week ago.”
David Yang, head of investors relations for Hanmi, said, “At this point, we do not have any comment on it.”
When asked if there could be an announcement soon, he said, “Possibly.”
According to media reports, Joseph Rho, Hanmi’s chairman, returned last week from a trip to Korea.
Saehan, meanwhile, is eyeing its own capital infusion.
The bank said last week that it received commitment letters from “various accredited” unnamed investors for $30.9 million, expected to be funded this week. Saehan will gain access to the capital if it can obtain at least $60 million in total commitments; if it cannot, the money will be returned to investors. (The deal is unrelated to the Hanmi transaction.)
Additionally, Saehan announced plans to conduct a private placement stock offering to raise additional capital.
Saehan, which is less than well-capitalized according to regulatory requirements, announced in December that it had received a consent order from regulators.
Rumors in the days before Saehan’s announcement sent the bank’s thinly traded shares, which traded for a low of 9 cents as recently as Jan. 12, to a high of $2.15 last week – a whopping 2,000 percent increase. Shares closed at $1.55 on Jan. 21.
Saehan executives did not return calls requesting comment.
Wilshire Bancorp Inc. and Nara Bancorp Inc., Koreatown’s Nos. 2 and 3 banks by assets, respectively, each have said they would be interested in acquiring Hanmi or Saehan if they became available.
