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Fidelity, Capital One Announce Upcoming Deals

Fidelity, Capital One Announce Upcoming DealsRecent mergers and acquisitions

January 12, 2005

By COCO SALAZAR

The latest moves in the game of mortgage monopoly involve not only mortgage operators, but also the companies that service them. And one upcoming transaction will land Capital One in the home equity business.

In Jacksonville, Fla., Fidelity National Financial Inc. and its unit, Fidelity National Information Services Inc., announced it will sell approximately 25 percent minority equity interest in the common stock of the subsidiary to an investment group led by Thomas H. Lee Partners L.P. and to Texas Pacific Group. The sale is expected to close this quarter.

The transaction, which will cost the buyers approximately $500 million, is reportedly a move toward the planned recapitalization of Fidelity National Information.

Fidelity National Financial says it provides products and outsourced services and solutions to financial institutions and the real estate industry. Through the software of Fidelity National Information, a technology solutions provider, it reportedly processes nearly 50 percent of all U.S. residential mortgages.

Also expected to close this quarter, is Capital One Financial Corp.’s acquisition of online originator eSmartloan and its related escrow company. The units are being purchased from National Bank of Kansas City and eSmartloan management for $155 million, according to an announcement.

Capital said the acquisition of eSmartloan, a company that “has succeeded in building a scalable technology platform, a highly skilled sales team, and an outstanding reputation for customer service and speed to close,” will enhance the growth of its home equity lending business. eSmartloan was reportedly expected to have volume of more than $1 billion in 2004.

eSmartloan’s chief executive, Lance Melber, will lead Capital One’s national home equity business after the merger has been finalized.

Melber said, the merger “is the natural next step for our company to continue to build on the success we have enjoyed over the past four years.”

Under terms of the agreement, Kansas-based eSmartloan will become a subsidiary of Capital One, F.S.B.

In Tulsa, Okla., BOK Financial Corp. announced it will acquire Phoenix-based Valley Commerce Bancorp Ltd. and its Valley Commerce Bank subsidiary. BOK will pay $32 million in cash for all outstanding shares of Valley Commerce Bancorp. The deal, which is reportedly part of a strategic move to expand BOK into growing metropolitan markets, is expected to close this quarter.

The acquisitions will give BOK its first full-service banking presence in Phoenix. The regional financial services company initially entered that market when it opened a commercial real estate loan production office there in the summer.

BOK says it has mortgage offices in seven states. The company reported third quarter mortgage loan fundings of $138.9 million and a servicing portfolio of $4.0 billion as of the end of that period.

Valley Commerce’s chief executive, Greg Anderson, said its “clients will benefit greatly from this new partnership because we will be able to offer not only larger loans, but also an even broader array of products and services to support their ever-expanding needs.”

Mississippi-headquartered BancorpSouth kicked off the new year with an announcement that it had completed its acquisitions of Business Holding Corporation Inc., of Baton Rouge, La., and Premier Bancorp Inc.

The merger with Tennessee-based Premier gives BancorpSouth an expanded presence in a suburb of Nashville, while Business Holding gives it banking presence in Baton Rouge.

BancorpSouth says it is a financial holding company with $10.6 billion in assets operating 247 banking and mortgage locations.

Bundled Broker Services Inc. announced it acquired Mortgage Processing Services, which together reportedly form the largest full service loan fulfillment center in the nation. The merged entity was renamed National Real Estate Processing Services, LLC.

The functionality of Fort Lauderdale, Fla.-based National Real Estate “can be tailored to address any number of tasks,” said Bruce Gilbert, the new company’s cofounder, in the announcement. “Many of our clients use [National Real Estate] to support all aspects of business, not just processing and origination. Our new corporate structure is just another example of our total commitment to our customers’ success.

To better carry out its functions and double or triple the 1,500 loans it processed per month last year, Gilbert told MortgageDaily.com that the company plans to add at least 150 employees to its staff throughout 2005.

Under the terms of the merger, the newly formed entity is tailoring its total fulfillment solution to integrate with the resources and technology of the two companies. As its initial investment, National Real Estate said it contacted Actioncore Inc., a top-ranked mortgage technology provider, to “provide online 24/7 access and tracking so our clients have instant knowledge of the status of their files.”


Coco Salazar is an assistant editor and staff writer for MortgageDaily.com.email: s3celeste@aol.com

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