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Executive Shuffle

Executive Shuffle

Mortgage mergers, acquisitions & corp activity

January 23, 2007


photo of Coco Salazar
Executive changes dominated recent corporate activity in mortgage finance — though at least one wholesale mortgage unit is trading hands.

But first, the Federal Home Loan Bank of Seattle recently announced that Standard & Poor’s Rating Services improved the bank’s outlook to “stable” because of a “low-risk asset profile, conservative risk management, strong liquidity, and solid risk-based capital.”

The change followed announcement that the Federal Housing Finance Board terminated a written agreement with the bank, which the bank says was due its full compliance with the agreement and significant progress it has made in implementing its business and capital management plan.

The American Association of Lending Professionals, which provides professional certification, was launched, according to an announcement.

“Our membership candidates must meet our strict eligibility requirements which include checking for criminal backgrounds, competency, clean work history, references and the willingness to abide by AAOLP membership guidelines at all times,” Scott Marshall, president and founder of the association, explained in the statement.

Rafael Saldana recently assumed the title of president of R-G Crown Bank, the Florida-based federal savings bank subsidiary of Puerto Rican-based R&G Financial Corp., according to an announcement.

U.S. Bancorp announced it named Andrew Cecere the successor of David M. Moffett as vice chairman and chief financial officer, effective Feb. 27. Moffett, who will retire upon the filing of the 2006 annual report, will remain in an advisory role to the company’s president and chief executive officer for up to one year.

At Fifth Third Bancorp, company president Kevin T. Kabat will become the CEO on April 17, according to a press release. Kabat, who is only the sixth person to hold the bank’s CEO title since 1932, will replace 16-year CEO George A. Schaefe Jr., who will remain in his role of chairman.

Mercantile Trust & Savings Bank announced H. Blaine Strock III will assume role president on Mar. 1, replacing Ted T. Awerkamp, who is slated to become president and CEO of parent Mercantile Bancorp Inc. on the same day.

The Home Savings and Loan Co. announced that it promoted Patrick W. Bevack to president and Patrick A Kelly to CFO on Jan. 17, and that David G. Lodge was appointed to president and chief operating officer of parent company United Community Financial Corp.

At HomeBanc Corp., President, COO and CFO Kevin D. Race reportedly replaced Patrick S. Flood as the company’s CEO, and James B. Witherow, a director, was appointed as the non-executive chairman.

“The currently prevailing market conditions in the mortgage industry continue to present mortgage banking companies like HomeBanc with a number of challenges,” Race stated in an announcement. “We believe that these conditions will begin to stabilize and improve, and that we are taking actions that will position our company to take advantage of these improved market conditions,” such as continuing to pursue the previously announced decision for HomeBanc to stop operating as a real estate investment trust.

Following its announcement of the ABN AMRO Mortgage acquisition, Citigroup Inc. said, on Monday, that its chief financial officer, Sallie L. Krawcheck, will continue in that role only until a successor is found. At that time, she will start serving as chairman and chief executive officer of Citigroup’s global wealth management division.

Late last week, Norman R. Bobins, president & CEO of LaSalle Bank Corp. and head of ABN AMRO’s North American businesses, announced that he plans to retire by yearend 2007.

In Greenbay, Wis., Associated Banc-Corp. announced that, on Jan. 29, Lisa B. Binder will become the new chief operating officer and replace Paul S. Beideman as president. Beideman will retain his role of CEO and assume the title of chairman, succeeding Robert C. Gallagher who will become the lead director of the board.

Subsequent to that announcement, Associated said that it will acquire Minnesota-based First National Bank of Hudson, as its “presence in the rapidly growing corridor from Minneapolis-St. Paul to the eastern metro suburbs and into Wisconsin make it a natural fit for Associated.”

An affiliate of Terwin Holdings LLC acquired the due diligence business of Hanover Capital Mortgage Holdings Inc., according to an announcement.

LNB Bancorp Inc. has reportedly agreed to buy Morgan Bancorp Inc. in a $26.5 million stock-and-cash transaction expected to occur in the third quarter.

Chittenden Corp .agreed to buy Merrill Merchants Bancshares Inc. in a $111.4 million cash-and-stock deal expected to close next quarter. Following the transaction, Merrill Merchants Bank will operate as a separate unit of Chittenden and maintain its name and senior management team.

Transnational Financial Network Inc., a California-based mortgage wholesale and retail lender, signed a letter of intent to acquire AMC Mortgage, a Texas-based mortgage banker that closes about $130 million annually, in a deal expected to close next month.

The deal “demonstrates our commitment to diversifying our franchise beyond our historical core markets in California and Arizona,” said Joseph Kristul, Transnational chief executive, in the announcement.

The company recently acquired Texas Capital Bank’s mortgage division — doubling the size of the company and reducing its exposure to California and Arizona, the statement said.

On Friday, Barclays Bank PLC announced that it will purchase EquiFirst Corp, the nonprime mortgage arm of Regions Financial Corp., for $225 million in a transaction expected to close in the first half of the year. The merger deal builds on Barclays’ purchase of HomEq, a mortgage servicing platform, last November.

EquiFirst, which reportedly originates loans through over 9,000 brokers in 47 states and is the 12th largest U.S. nonprime wholesaler, will be combined with Barclays’ mortgage servicing and capital markets capabilities “to create a vertically integrated mortgage franchise.”

Other wholesalers that have recently made headlines include ResMae Financial, which has been negotiating a merger, Mortgage Lenders Network USA, which stopped funding broker originations, and Aegis Mortgage Corp., which slimmed down subprime wholesale business.

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