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Boardroom Bargaining

Boardroom Bargaining

Recent mergers, acquisitions & other corporate activity

June 8, 2007

By COCO SALAZAR

photo of Coco Salazar
Banking regulators recently took several enforcement actions against more than a dozen banks — including one cease and desist order. In other boardroom activity, one mortgage company is picking up the pieces after shutting down its wholesale unit.

In banking, FNB United Corp. announced Mark A. Severson will take the position of chief financial officer when Jerry A. Little retires on Aug. 10.

Shore Bancshares Inc. said Monday that F. Winfield Trice will join the company as president and chief executive officer, replacing Daniel T. Cannon, who retired in January.

Huntington Bancshares Inc. said Monday it is well on its way to purchase Sky Financial Group Inc. as the Federal Reserve Board approved of the merger deal expected to close next quarter.

Chittenden Corp. will purchase Community Bank & Trust Co. for $124.1 million in cash and stock in a deal expected to close in the fourth quarter, the companies announced. As a result, Community will merge into Ocean National Bank.

The Federal Deposit Insurance Corp. announced that it processed a total of 17 orders in April, of which three were removal and prohibition orders, 10 consisted of civil money penalty orders, three were cease and desist orders and one terminated a cease and desist order against Liberty Bank of New York, which merged and is now known as Wilshire State Bank.

Within civil money penalty orders related to real estate, was one in which First State Bank of North Dakota agreed to pay $2,500 for allegedly violating a section of the Home Mortgage Disclosure Act, among other things. Another order required First State Bank to pay $4,600 for allegedly making mobile home loans for properties in special flood hazard areas without requiring that the collateral be covered by sufficient flood insurance.

Mcintosh State Bank had to pay $4,400 for allegedly failing to maintain a sufficient amount of flood insurance coverage on 10 out of 17 loans secured by improved real estate located in special flood hazard areas and provide borrowers with notice as to whether flood insurance was available for 12 of the 17 loans. Others receiving flood-related civil money penalties were Planters Bank & Trust Co. for $39,400, Community Trust & Banking Co. for $9,275, the Converse County Bank for $7.385, and Advantage Community Bank for $5,150.

Clifton Heights Savings & Loan Co. consented to a cease and desist order by the Office of Thrift Supervision and the Ohio Division of Financial Institutions for making loans to one borrower whose aggregate amounts exceeded the federal lending limit. The order called for Clifton to use a comprehensive loans-to-one borrower report to facilitate compliance and requires the board of directors to approve any loan or loans to a single buyer that exceeds $250,000, according to the order document.

On the commercial side, PIMCO Commercial Mortgage Securities Trust Inc. changed its name last week to PCM Fund Inc. but its ticker symbol, PCM, will remain unchanged. The Fund is a closed-end investment company investing primarily in commercial mortgage-backed securities and its portfolio is managed by Pacific Investment Management Company LLC, according to an announcement.

Dan Scouler, reportedly a financial restructuring industry authority, formed Scouler & Co., a restructuring, crisis management and transaction services firm serving companies, investors and lenders nationally. Through offices in New York and Los Angeles, Scouler will offer financial advisory, business stabilization, technology advisory, interim executive management, and transaction services, according to an announcement.

As of June 1, Lisa Duehring added to her role of president at Alliance Bancorp by taking on the position of CEO, succeeding Mehrdad Elie who retired, the company reported.

The U.S. Bankruptcy Court for the District of Delaware approved ResMAE Mortgage Corp.’s plan of reorganization, clearing the way for ResMAE to emerge from Chapter 11 as an entity of a Citadel Investment Group LLC affiliate, according to a press release. The plan will become effective around mid-June.

“ResMAE has built a solid platform in the subprime mortgage industry,” said Ken Griffin, Citadel president and CEO, in the written statement. “While the last several months have been trying for the industry as a whole, we are on course to position ResMAE as an industry leader.”

Metrocities Mortgage LLC will become part of newly formed Prospect Mortgage Company LLC, a portfolio company of Sterling Capital Partners, according to an announcement Thursday. The strategic investment marks the mortgage market entrance of Sterling Partners, a private equity fund group based in Chicago and Baltimore. Metrocities will keep its name.

“This recapitalization allows us to enhance all areas such as technology, marketing and loan products,” Metrocities said in the announcement. “It gives us new resources to continue our growth in 2007 and beyond.”

The strategic investment with Sterling Partners comes after Metrocities decided to wind down jumbo wholesaler No Red Tape Bancorp. Blake Scheifele, principal of No Red Tape, reportedly had indicated he planned to conduct future business with a new strategic partner.

 

Coco Salazar is an associate editor and staff writer for MortgageDaily.com.e-mail: MortgageWriter@aol.com

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