Magazine article American Banker

Bay View Furthers Switch to Banking in $309M Deal

Magazine article American Banker

Bay View Furthers Switch to Banking in $309M Deal

Article excerpt

By JOSHUA BROCKMAN Bay View Capital Corp., which recently switched its charter from thrift to bank, moved further from its localized home-lending roots Thursday, announcing it would buy a Los Angeles small-business lender with offices in 20 states.

Bay View of San Mateo, Calif., will pay about $309 million for Franchise Mortgage Acceptance Co., by exchanging 0.5125 share of its stock or $10.25 in cash for each FMAC share in a transaction expected to close during the third quarter. FMAC focuses on franchise concept loans to restaurants, service stations, and convenience stores. One of its subsidiaries, Bankers Mutual, focuses on multifamily lending. FMAC is to operate as a subsidiary of Bay View Bank.

Edward H. Sondker, president and CEO of Bay View said the goal of the merger is to build assets and revenue, rather than to cut costs. He said he expects FMAC and Bankers Mutual to originate more than $2.8 billion of loans in the first year after the merger. This level of production would help Bay View overcome the challenges it faced in 1998 from higher than expected mortgage prepayments, he said.

The multifamily loans generated by Bankers Mutual will continue to be sold to Fannie Mae and Freddie Mac, but Mr. Sondker said that Bay View intends to retain some portion of the higher-yielding consumer and commercial franchise loans.

"With the low interest rates, prepayment rates have been a real nemesis of ours," Mr. Sondker said. The change in the balance sheet will help "completely obliterate the issue of prepayments. …

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.