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Merger Mania Maintains

Merger Mania MaintainsRecent mortgage industry merger activity

October 5, 2004


Mortgage activity is running at a healthy pace. Unfortunately, the activity isn’t with mortgage applications.

In Lake Forest, Ill., Wintrust Financial Corp. announced it completed the acquisition of Northview Financial Corp. Under terms of the agreement, each share of Northview common stock outstanding was converted into the right to receive 2.865 shares of Wintrust’s common stock and $123.75 in cash. Northview had 165,880 outstanding shares at the time of closing and in-the-money options to acquire approximately 10,850 shares of common stock at an average exercise price of $98.53.

Edward Wehmer, president and CEO of Wintrust, and Blair Robinson, who serves the same functions for Northview, described the transaction as “a great fit for both companies.”

While Wehmer pointed out the merger helps fulfill Wintrust’s plans to continue expanding into suburban Chicago metropolitan communities, Robinson highlighted that Northview customers will gain access to Wintrust’s wider range of products and services.

Northview Financial, which reportedly had $344 million in assets at the second quarter’s end, is the parent company of Northview Mortgage LLC.

Wintrust, reportedly a $5.3 billion asset financial holding company, has ten suburban Chicago community bank subsidiaries and is parent of WestAmerica Mortgage Co., which engages primarily in the origination and purchase of residential mortgages for sale into the secondary market.

In California, San Diego-based AME Financial announced it sold the majority of its Wholesale Lending Division to Universal Savings Bank. Financial details were not disclosed.

The transaction allows AME, which has grown consistently over the past two decades, to focus and accelerate its expansion on its core business — retail lending, CEO Judy Dunham said in the announcement.

AME Financial is reportedly one of the largest privately held mortgage lenders in San Diego County with mortgage volume of over $2 billion in 2003. The lenders’ seven affiliate divisions, include Teamwork Mortgage, Pacific Capital Mortgage, Union Affiliates, TransAmerican Mortgage, Elite Mortgage, and Millennium Funding Group.

Universal Savings, of Milwaukee, Wis., is a federally chartered bank with $166.3 million in assets and a 15-year history of providing home mortgages, equity lines of credit, savings and credit card products, the announcement said.

Another completed transaction was the acquisition of mortgage banker Sidus Financial LLC by Yadkin Valley Bank and Trust Co., according to an announcement. Financial terms were not disclosed.

Sidus Financial, created by an investment group that included several North Carolina community banks, operates its five retail mortgage origination offices under the name First Mortgage Corp. and also operates Sidus Wholesale, the report said.

In addition to its headquarters in Elkin, N.C., community bank Yadkin Valley reportedly has 19 full-service banking offices, of which some operate under the names Piedmont Bank and High Country Bank.

Prime Rate Investors Inc. announced that its president Richard Astrom purchased certain assets of Tampa Bay Mortgage Services Inc. in exchange for all his common stock in Prime Rate and the common stock of its other majority interest shareholders.

After exchanging 15 billion of its shares for the purchase of a television station, Prime Rate, a multimedia holding company, then sold its wholly owned subsidiary, Tampa Bay Mortgage to National Hospitality Group Inc. In this transaction, each Prime Rate shareholder on record at close of business on Sept. 24 will receive one share of National Hospitality for each 100 Prime Rate shares owned, according to the announcement.

Damian Guthrie, president of Tampa Bay Mortgage, will remain in this positions and is now the president of National Hospitality, the report said.

Prime Rate said its present officers and directors have resigned and the new president is Daniel Burgess.

Tampa Bay Mortgage is reportedly a direct lender specializing in short-term asset based lending.

On the list of upcoming mergers is FSF Financial Corp., which announced that at its stockholders’ meeting last week, shareholders approved its plan to merge with MidCountry Interim Corp. II, a newly formed subsidiary of MidCountry Financial Corp.

The merger is expected to close this quarter and upon completion each outstanding share of FSF Financial common stock will be converted into the right to receive $35.00 in cash, without interest, according to the press release.

FSF Financial is reportedly a Minnesota-based financial services company that has four affiliated companies, including residential mortgage originator Homeowners Mortgage Corp.

Meanwhile, IBERIABANK Corp., of Lafayette, La., has signed a definitive agreement to acquire American Horizons in a cash-and-stock deal valued at $48.2 million, according to the companies’ joint announcement. The acquisition will expand IBERIABANK’s footprint in the Northeastern region of its home state and is expected to be consummated during the first quarter of 2005.

“We are thrilled to partner with one of North Louisiana’s most successful financial institutions,” IBERIABANK president and chief executive officer Daryl G. Byrd said in the announcement. “We believe that the combination of our two organizations will deliver exceptional value to our clients, shareholders, and communities.”

Upon completion of the merger and operating system conversion, American Horizons Bank branches will operate under the IBERIABANK name. American Horizons of Monroe, La., has eight offices, which according to its Web site includes two mortgage loan offices, and the acquiring company reportedly has a total of 42 offices. The merger will give IBERIABANK the title of the fifth largest bank holding company in Louisiana when its assets of $2.4 billion convert to a combined total of over $2.7 billion, according to the announcement.

American Horizons Bank chief executive officer Will Pratt said in a written statement that IBERIABANK “brings the best of all worlds” because it “offers the stability and resources of a larger organization, yet local decision-making and a focus on client needs that result in an organization that delivers both the agility and client focus of an outstanding community bank, such as American Horizons.”

Pratt said the Monroe-based bank’s president, Van Pardu, will serve as Northeast Louisiana Market President for the combined entity.

IBERIABANK reported mortgage originations of $67 million in the second quarter.

Other previously announced transactions expected to be completed this quarter include Peoples Bank’s acquisition of some Advantage Bank offices, National City’s acquisition of Wayne Bancorp Inc., and SunTrust Banks Inc. merger with National Commerce Financial Corp.

Coco Salazar is an assistant editor and staff writer for

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