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Net Branch Co. to Change Owners

Net Branch Co. to Change Owners

Mortgage mergers, acquisitions and corporate activity

April 11, 2006


photo of Coco Salazar
In the latest mortgage mergers, acquisitions and other corporate activity, U.S. bankers oppose Wal-Mart’s attempt to open its own bank, and a California-based net branch operation will be sold to a debt resolution provider.

In St. Louis, Mo., TALX Corp. recently announced it acquired Performance Assessment Network Inc. for approximately $75 million.

TALX, which says mortgage lenders use its employment and income verification service, said Performance Assessment “has a solid reputation and proven expertise in assisting clients with talent assessment testing and automating the candidate hiring cycle.”

As a means to expand financial services to include home loans, Houston, Texas-based Patriot Bank acquired Principal Mortgage Group Inc. and will rename the unit Patriot Mortgage, according to the Houston Business Journal.

Carver Bancorp Inc. will pay $11.1 million to acquire Community Capital, according to a press release.

The merger of the two institutions “with deep community banking experience in New York City’s urban neighborhoods,” positions the combined company to capitalize on “one of the fastest growing and affluent minority consumer and small business markets in the country,” Carver reported.

Carver said its residential lending arm will join with Community Capital’s Small Business Administration lending operations.

Community Capital President & CEO Charles F. Koehler will become president of Carver’s Community Capital subsidiary, responsible for overseeing all lending operations of the combined entity, the announcement said.

Texas United Bancshares Inc. said it finalized its acquisition of Northwest Bancshares Inc., which will expand Texas United’s presence in the Dallas/Fort Worth metroplex and help attract top banking talent from the area.

Meanwhile, Wells Fargo Home Mortgage and Dominion Homes Inc. recently announced the launch of their joint venture Centennial Home Mortgage LLC, which will originate, process and fund mortgage loans for Dominion Homes’ customers, in Ohio, Kentucky, and Indiana, as well as for the general public.

Mike Biagi, a Wells Fargo assistant vice president and branch manager, will serve as the managing officer of Centennial, which will allow Dominion to concentrate on its core business of selling and building homes, the announcement said.

And in San Diego, Calif., student loan provider College Loan Corp. created CLC Home Loans, expected to launch this month, to extend its services into the mortgage market.

Centra Financial Holdings Inc. recently submitted an application for approval from the Federal Reserve Board to acquire up to 100 percent of the voting shares of Smithfield State Bank, according to a Fed notice.

Comments regarding Centra’s request reportedly must be in to the Fed no later than April 17.

FNB Corp. and Integrity Financial Corp. recently gained approval from their shareholders to merge Integrity into FNB this month.

The merger, which will result in FNB’s name change to FNB United Corp., will enable the growth of FNB “within some of the greatest markets North Carolina offers” and create a $1.8 billion bank holding company, according to an announcement.

But Asheboro, N.C.-based FNB plans to take a break from seeking acquisition deals for at least 12 to 18 months as it integrates Integrity, the Charlotte Business Journal reported.

“This is such a huge deal to us,” FNB CEO, Michael Miller, reportedly told the Journal. “We need to take the extra care and extra steps to make sure there is as little customer dissatisfaction as possible.”

Wal-Mart is seeking permission from the Federal Deposit Insurance Corp. to open a Salt Lake City, Utah-based industrial loan company.

Due to the “considerable” public interest the retail giant’s July 2005 application for permission generated, the FDIC scheduled a public hearing agenda that includes hearings today in Arlington, Va., and on April 25 in Overland Park, Kan., according to announcements.

A written testimony by Jane J. Thompson, Wal-Mart Financial Services, submitted to the FDIC Monday, said “the purpose of the proposed Wal-Mart Bank would be to sponsor credit card, debit card and electronic check transactions — nothing more.”

“The proposed Wal-Mart Bank would serve as the legally required bank ‘sponsor’ so that Wal-Mart can submit payments to the payments systems, but the bank would not have computers and systems to perform the actual processing of payments,” Thompson added.

But amongst those opposing Wal-Mart’s request were the American Bankers Association and America’s Community Bankers.

“This application brings into focus the concerns of our membership about the extent to which the current regulatory structure for industrial banks and industrial loan corporations can result in a broad erosion of the separation between banking and non-financial commerce that has served our banking industry and our nation so well,” said Arthur C. Johnson, chairman of the ABA government relations council, in a written testimony.

Noting that community banks already bear a greater relative burden of regulatory costs compared to large banks, ACB representative Kenneth J. Redding said approval of Wal-Mart’s application would lay “the groundwork for Wal-Mart to expand info full retail banking without additional regulatory approval, thereby further threatening the viability of community banks.”

Arizona-based Clear Choice Financial Inc. recently announced the execution of a letter of intent to acquire Irvine, Calif-based Allstate Home Loans Inc. — a net branch operation.

Clear Choice says it helps delinquent borrowers return to mainstream financial wellness. Allstate says it originates nonprime and conventional mortgages and is licensed in 27 states.

“We anticipate that Allstate’s diverse product line, common market segment, loan officer and broker network, and established volume will quickly grow our company and help us realize part of our strategic vision — to become a truly full-service financial solutions provider with a national presence,” said Steve Luke, Clear Choice president, in an announcement.

The letter of intent follows the recent signing of a definitive agreement for Clear Choice to buy full-service mortgage provider, Bay Capital Corp.

Coco Salazar is an assistant editor and staff writer for

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