A pair of Black-led banks have merged to form an institution worth more than $1 billion

New York(CNN Business) A pair of Black-led banks on opposite coasts are joining forces to become the largest minority-owned depository institution in the United States, according to FDIC data.

City First Bank and Broadway Federal Bank announced their merger on Wednesday. Combined, the lenders said they would have more than $1 billion in assets.

City First President and CEO Brian E. Argrett said the two banks have been working on their deal for a year.

"We were going to do this deal because it made sense and because it would deliver additional resources to our communities," Argrett told CNN Business on Thursday.

Los Angeles-based Broadway Federal is a community-oriented savings bank dedicated to providing conventional loans to minority consumers who often are ignored by mainstream commercial banks, according to the company's website.

City First, which is based in Washington DC, describes itself as an "impact-driven" institution that specializes in lending to underprivileged people and communities. Argrett said combining their resources will allow the two banks to accomplish more than they could separately.

"It gives us more lending power," Argrett said. "It brings additional financial capacity to be able to serve Back-owned businesses."

Argrett said he expects the banks to complete their merger early next year.