Capital One Acquisition Among Mortgage Mergers

McLean, Va.-based Capital One Financial Corp. will soon acquire Hibernia Corp. in a stock-and-cash transaction valued at approximately $5.3 billion. The deal is expected to close in the third quarter, according to a recent press release.

The merged company will reportedly be one of the nation’s top 10 largest consumer lenders and one of the top 20 in total deposits.

The New Orleans-based holding company of Hibernia Mortgage operates in Texas and Louisiana, where it claims to be the largest depository institution.

Capital One chief executive Richard Fairbank said “Hibernia’s leading market share in Louisiana and its promising Texas branch expansion creates not only a solid growth platform as we continue to expand, but also an additional source of lower cost funding.”

Hibernia National Bank will become a subsidiary of Capital One with current Hibernia president and chief executive J. Herbert Boydstun as its president. Hibernia’s chairman, E.R. Campbell, will join Capital One’s board of directors.

Nevada-based Philadelphia Mortgage Corp. announced it intends to buy Thunderball Entertainment Inc. in exchange for 8,000,000 shares of Philadelphia Mortgage common stock comprised of “restricted securities.”

Thunderball, of Minnesota, develops and distributes products in what is called the “redemption game market,” where people receive tickets from the games they play and redeem them for prizes.

The definitive agreement between the companies is subject to certain requirements including completion of final documentation, due diligence and other customary preclosing conditions.

TD Bank Financial Group, of Toronto, Canada, recently acquired 51% of the outstanding shares of Banknorth Group Inc., according to an announcement.

The acquisition gives the Canadian bank U.S. presence in retail and commercial banking services.

Banknorth, of Portland, Maine, whose bank subsidiary owns Banknorth Mortgage, now operates as TD Banknorth Inc. and has reincorporated in Delaware.

Fitch Ratings upgraded long-term ratings of Banknorth and its bank subsidiary Banknorth NA as a result of the merger due to the enhanced support “highly rated” TD Bank provides as a majority shareholder should the acquired company “encounter financial difficulties.”

In Ontario, Calif., Citizens Business Bank completed its acquisition of Granite State Bank. The cash-and-stock transaction had an aggregate price of about $27 million, according to an announcement.

Citizens owns Golden West Financial Services, which provides mortgage brokerage services.

The acquisition gives Citizen greater presence in the Golden State.