U.S. bank deal terminated by Taiwanese bank due to fluctuating market circumstances

In a recent announcement, Taichung Commercial Bank, based in Taipei, Taiwan, has decided to terminate the deal to purchase American Continental Bank, headquartered in the City of Industry, California. The deal, initially valued at nearly $82.1 million, was scheduled to close in the first quarter of 2023.

The termination was due to the consideration of rapidly changing global political and economic conditions. American Continental Bank, with total assets of approximately $357.4 million as of June 30, will continue to explore strategic alternatives that it believes will provide superior value to its shareholders.

Taichung Commercial Bank, which had total assets of roughly $26 billion as of June 2022, opened its first overseas branch in Labuan, Malaysia, in 2018 and later added marketing offices in Kuala Lumpur, Penang, and Kota Kinabalu. The bank had also expressed intentions to acquire a US private equity firm's stake with the goal of expanding its presence in the Taiwanese financial market and leveraging the bank's digital transformation efforts. However, this transaction was halted before completion.

American Continental Bank's mission is to serve its local community by providing a growing array of banking solutions to meet the needs of individuals and small business owners. The bank offers banking services to Chinese-American communities in various locations, including Los Angeles, Orange, Riverside, and San Bernardino counties in California, Bellevue, Washington, and has three loan offices in Washington, California, and Texas.

The deal with Taichung Commercial Bank would have expanded Taichung's footprint in Los Angeles, Washington, and Texas. David Jia, president of Taichung Commercial, stated that the business models, residential mortgage loan production platforms, and focus on the Chinese-American market of American Continental Bank aligned with that of Taichung Commercial Bank.

It's worth noting that earlier this year, TD and First Horizon terminated their proposed $13.4 billion merger, citing "uncertainty" as to when the deal might get a green light from the regulators. This event may have played a role in the decision to terminate the deal between Taichung Commercial and American Continental Bank.

Taichung Commercial plans to continue evaluating options to expand in the overseas market. American Continental Bank, in accordance with the agreement's terms, will receive a $500,000 payment from Taichung Commercial for the terminated deal. Both parties will move forward, focusing on their individual growth and strategic plans.