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Diverse Mortgage Mergers

Diverse Mortgage Mergers

Recent acquisitions and other corporate activity

December 5, 2005

By COCO SALAZAR

photo of Coco Salazar
Among recent corporate transactions in the mortgage industry are announcements by two major mortgage insurers, the closing of a lead company acquisition and a small bank’s triumph in getting government approval to acquire another despite accusations of discriminatory lending.

In New York, Bankrate Inc. announced Thursday it completed acquiring Internet leads generator FastFind.

The $10 million cash purchase of the San Francisco, Calif.-based company suggests Bankrate.com’s lead generation status will be enhanced — Bankrate.com describes itself as the leading aggregator of more than 300 financial products, including mortgages and home equity loans.

PMI Group Inc. announced Thursday that its chief executive officer W. Roger Haughton will retire June 1, 2006.

Succeeding Haughton will be L. Stephen Smith, president and chief operating officer of PMI since 1998. Smith has held numerous management positions during his 27 years at PMI and has 34 years of experience in mortgage insurance, housing finance, and banking, the private mortgage insurer said. The Stanford Executive Program graduate currently serves as president of the Mortgage Insurance Companies of America and is on the board of the National Association of Hispanic Real Estate Professionals.

Haughton has been with PMI for 36 years, during which the Walnut Creek, Calif.-based company went public and has diversified beyond its original base in domestic mortgage insurance to provide mortgage insurance internationally as well as financial guaranty products and services. He will remain chairman until the 2007 annual shareholder meeting.

In Burr Ridge, Ill., BankFinancial Corp. said it will acquire University National Bank from University Bancorporation by purchasing all of the subsidiary’s stock for $24 million in cash. The transaction is expected to close in the second quarter 2006.

BankFinancial said University National’s two banking offices in Chicago complement its branch network “very well.”

University National said the merger will allow it to offer greater convenience and a broader range of services and products, which include home loans. A commenter opposed the proposal of the merger, alleging that Home Mortgage Disclosure Act data showed that ABC discriminated minority individuals in its home mortgage lending operations. However, the Fed determined that the lender was “active in helping to meet the credit needs” of its entire community base.

Millennium Bankshares Corp. said Tuesday that its shareholders rejected the proposal to acquire Albemarle First Bank, noting that “a proposal to amend Millennium Bankshares’ articles of incorporation to increase the number of its authorized shares for issuance in the merger, required the affirmative supermajority vote of the holders of two-thirds of Millennium Bankshares’ outstanding shares.”

“We’re disappointed,” Anita L. Shull, Millennium president, reportedly told The Washington Post. “We thought Charlottesville was going to be a great market. But we’re poised and ready to move forward in 2006.”

Millennium expects to incur expenses within a range of $500,000 to $600,000 this quarter as a result of the termination of the transaction, which was originally announced in June and valued at $29 million. 

Meanwhile, General Electric continued the spin off it began in May 2004 of Genworth Financial, a Richmond, Va.-headquartered mortgage insurer.

In a secondary public offering Thursday, General Electric agreed to sell 38 million of Genworth’s class A common stock shares for $34.66 each to Morgan Stanley & Co., according to a press release.

At the close of trading that day, Genworth incorporated the S&P 500 Index, replacing Calpine Corp., which with market capitalization of approximately $307 million had ranked 500th on Tuesday, Standard & Poor’s announced.

GE also said it granted an over-allotment option to permit the underwriter to purchase an additional 2.85 million shares, which fully exercised will leave GE with approximately 18 percent of Genworth’s common stock, and, if not executed, will leave it with 19 percent. Genworth will not receive any proceeds from the transaction.

GE announced Wednesday it would do the secondary public offering, saying that the timing of the sale would meet anticipated investor demand for Genworth shares after S&P announced it would add Genworth to the S&P 500 at the market’s close Thursday. GE also said in that announcement it would not offer additional Genworth shares in 2005 and that it expected to sell its remaining Genworth shares by the end of 2006.

The Federal Reserve recently approved for ABC Bancorp to acquire First National Banc Inc. The transaction must be consummated before March 2006.

A commenter opposed the proposal of the merger, alleging that Home Mortgage Disclosure Act data showed that ABC discriminated minority individuals in its home mortgage lending operations. However, the Fed determined that the lender was “active in helping to meet the credit needs” of its entire community base.


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

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