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Mortgage M&A

Mortgage M&A

Latest mergers, acquisitions & corporate activity

February 12, 2007


photo of Coco Salazar
The acquisition of a troubled subprime wholesaler wasn’t the first deal of its kind, but it did top the latest week’s mergers, acquisitions and other corporate activity.

Peter Goldberg was named president of Ohio Savings Bank/AmTrust Bank, replacing Robert Goldberg, who now serves as the chief executive officer, according to a recent announcement.

On Thursday, Fannie Mae announced new guidance on the timing of financial reports with the U.S. Securities and Exchange Commission, saying it will file the 2006 annual report before the year is over and the annual report for 2005 no later than the end of August.

Allied Home Mortgage Capital Corp., the self-described “largest privately held mortgage banker/broker” in the country, announced that it opened a new branch in Austin, Texas.

MGIC Investment Corp. will buy Radian Group Inc., according to an announcement. The combined company, to be dubbed MGIC Radian Financial Group Inc., will have more than $290 billion of primary mortgage insurance in force.

Current MGIC Chairman and CEO Curt S. Culver will maintain those posts at the merged company, while current Radian CEO S.A. Ibrahim will take over both positions by 2010, the announcement said.

After the announcement, Fitch Ratings placed the AA+ insurer financial strength ratings of MGIC and the A+ senior debt rating of MGIC Investment on Rating Watch Negative.

“The announced merger makes economic and strategic sense, and if consummated, the new entity will solidify its position as the premier mortgage insurer in the U.S.,” Fitch said.

“That said, the combination of the two organizations will increase MGIC’s risk profile relative to historical norms,” the ratings agency added.

U.S. Bancorp announced that it has completed acquiring United Financial Corp.Bank, a transaction expected to strengthen its presence in Montana. The branches of Heritage Bank, a subsidiary of United, will take on the U.S. Bank name in upcoming months.

Mercantile Bancorp Inc. agreed to purchase privately-held HNB Financial Services Inc., Hannibal, Mo., for $30.2 million in cash, according to a press release. Upon the acquisition, Mercantile plans to combine its Perry State Bank with HNB Bank and will use the HNB name for the combined bank.

The Grange Bank will exit the banking business by selling it to American Bank Holdings Inc., which in the purchase transaction, expected to close midyear, will acquire approximately $95 million of home equity lines of credit, fixed rate home equity loans, commercial business loans and commercial real estate loans, according to an announcement.

Grange will also reportedly sell its residential mortgage loan and other portfolios in other transactions that are yet to be finalized in order to focus on its original business of providing insurance products and claims services.

Marshall & Ilsley Corp. today said it has agreed to acquire Excel Bank Corp. in $105 million cash-and-stock transaction expected to close in the third quarter. Marshall noted that it has had “a very important correspondent banking relationship” with Excel.

Bear Stearns completed its acquisition of the wholesale operations of troubled ECC Capital Corp., according to an announcement today. The deal cost Bear $26 million in cash, and the investment banker agreed to assume certain lease liabilities.

ECC, which made several moves over the last year to save the operation, will retain its residual interests in its securitizations as well as loan repurchase liabilities from loan sales prior to Oct. 10, 2007, the statement said.

Other recent mortgage acquisitions by investment banking firms include Merrill Lynch & Co.’s acquisition of First Franklin in January, Morgan Stanley’s acquisition of Saxon Capital Inc. in December and Deutsche Bank’s acquisition of MortgageIT Holdings Inc.

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