Group Tries to Block Bank Merger

In connection with its election to be taxed as a real estate investment trust, CapitalSource Inc. announced Wednesday it will purchase $1.6 billion in agency mortgage pass-through certificates.

The mortgage securities, which comprise five pools issued by Freddie Mac, are backed by conforming prime mortgage loans originated as 7/1 hybrid adjustable rate mortgages and seasoned approximately two years, according to the announcement.

The “successful identification, analysis, structuring and acquisition of these pools is a very good start in” the effort “to build a portfolio that generates targeted returns with minimal credit and interest rate risk,” said John K. Delaney, chairman and chief executive, in the statement.

Additionally, CapitalSource completed a $100 million offering of trust preferred securities, issued by newly-formed statutory-trust CapitalSource Trust Preferred Securities 2005-1. “The trust preferred represents a new source of funding for the company,” the Chevy Chase, Md.-based company said.

On Monday, Fieldstone Investment Corp. said its board of directors authorized a $40 million outstanding common stock buyback program that will extend through Dec. 31, 2006 and be funded with the company’s working capital.

Market pricing pressures have contributed to a slower-than planned growth in the company’s investment portfolio, and “we have not yet reached our targeted leverage,” the Columbia, Md.-headquartered real estate investment trust said.

“A limited share repurchase program represents a prudent use of capital in this market,” said the Fieldstone Mortgage Co. parent in the statement. “At the same time, we will continue to build our investment portfolio of mortgage loans we have originated and we will continue to expand our origination franchise.”

In La Grange, Texas, Texas United Bancshares Inc. said it will buy Northwest Bancshares Inc. in a $31 million cash-and-stock deal expected to close in next year’s second quarter.

As part of the deal, Northwest Bank will merge with and into Texas United subsidiary, GNB Financial.

The acquisition of the Roanoke, Texas-based company is “a continuation of our strategy to expand into high-growth suburban markets in major metropolitan areas of Texas,” said Texas United, which expects that the additional pending acquisitions of Gateway Holding Company Inc. and Express Bank of Texas will all increase its presence in the Dallas/Fort Worth metroplex.

In a $30.6 million cash-and-stock deal expected to be completed in the second quarter 2006, Macon, Ga.-based Security Bank Corp. will acquire Neighbors Bancshares Inc., according to an announcement.

Security Bank, parent of mortgage subsidiary Fairfield Financial Service, said the merger with the Alpharetta, Ga.-based company will provide it with banking, loan production and retail mortgage offices throughout the central, coastal and north Georgia markets.

New York advocacy group, Inner City Press/Fair Finance Watch, reported it recently asked the Federal Reserve to prevent Fulton Financial Corp. from acquiring Columbia Bancorp.

“Fulton Financial has been expanding by purchases of relatively small banks with, ICP contends, insufficient scrutiny by the Federal Reserve Board, including on Community Reinvestment Act and fair lending issues,” the group said in its updated CRA Report.

Shortly after acquiring SVB Financial Services Inc. this summer, the Lancaster, Penn.-based parent of Fulton Mortgage Co. and Resource Mortgage announced it expected to close the $313 million deal to purchase Columbia during the first quarter 2006.

Inner City Press/Fair Finance Watch said its analysis of 2004 Home Mortgage Disclosure Act data showed that Fulton’s affiliates in Richmond, Va., Washington, D.C., Elkton, Md. and Virginia Beach regions disproportionately denied loans to minorities and charged higher interest rates to minorities who did get loans.

The advocacy group said that for refinance loans in the Virginia Beach-Norfolk area Fulton denied African Americans 12.3 times more frequently than whites and that it confined African Americans to higher cost, rate spread loans 7.6 times more frequently than whites.

The Fed allows a commentary period on proposals for mergers and conducts a review prior to approving or denying a merger.

Sky Financial Group and Associated Bank recently obtained the Fed’s approval to merge despite comments alleging disparate treatment of minority individuals in home mortgage operations.

Synovus Financial Corp. said Wednesday that its board of directors voted to terminate the company’s shareholder rights plan, commonly known as a “poison pill,” well before the planned expiration date.

The plan has been amended to have the existing rights plan expire on Dec. 31, 2005, rather than May 5, 2009, according to the announcement.

“The termination of the rights plan at the end of this year is consistent with our commitment to sound corporate governance practices and provides the Board with the ability to act in the best interests of our shareholders,” Synovus’ Chief Executive Officer and President Richard E. Anthony said in the announcement.

Synovus says it provides mortgages, among other integrated financial services, through 39 banks and other offices in Georgia, Alabama, South Carolina, Florida and Tennessee.