UCBH, which dominates banking for Chinese people in the US, will buy all shares in the company to provide a platform for it expand into the fast-growing Chinese market.
It is thought that the deal will afford UCBH the opportunity to offer banking services to companies as well as personal banking.
Thomas Wu, chief executive of UCBH, told Bloomberg: "We've looked at different targets and came to the conclusion that this bank will offer us lots of synergies and potential because we're both focusing on small-to-medium sized businesses.
"This acquisition is expected to save us at least 4-5 years in achieving our expansion plans in China .After the completion of this transaction, we will be able to provide full banking services to our customers who are doing business in China," he added.
UCBH, which caters mostly to California's Chinese community through its 50 branches in the state, has assets of $10.35 billion.
Meanwhile, Development Bank has outlets in Beijing, Shantou and Guangzhou and has assets of $217.2 million.