PLAZA HOME MORTGAGE ANNOUNCES COMPLETION OF ACQUISITION OF SANDIA MORTGAGE CORP.
Doubling of Plaza Loan Servicing Portfolio to $6.5 Billion Expected to Positively Impact Earnings Capacity SANTA ANA, Calif., June 28 /PRNewswire/ -- Plaza Home Mortgage Corp. (NASDAQ: PHMC) today announced that it has completed the previously announced acquisition of Sandia Mortgage Corp., a privately owned mortgage loan servicing company based in Albuquerque, N.M. Jack French, chairman and chief executive officer, said, "The Sandia acquisition fits nicely with our overall strategy to grow and build shareholder value through expansion, diversification and acquisition. We are increasingly convinced the efficiencies and economies of scale achieved as a result of this acquisition will have a significant positive impact on our future servicing income. Efforts to effect a smooth consolidation of loan servicing portfolios, servicing platforms and other assets are already underway and expected to be completed by late September. "Plaza will continue to evaluate and aggressively pursue other expansion opportunities in the mortgage banking marketplace that can offer earnings leverage and operational benefits similar to the Sandia deal," French added. Under the terms of the Sandia transaction, as disclosed on May 25, Plaza purchased all of the outstanding Sandia shares for $6.5 million in cash, up to 600,000 shares of Plaza common stock and the assumption of approximately $40 million of outstanding Sandia liabilities. Plaza acquired Sandia's $3.3 billion residential loan servicing rights portfolio and other assets including their Albuquerque loan servicing facility, receivables, escrow advances, property and equipment. The number of Plaza shares to be issued is subject to later downward adjustment based upon the performance of the Sandia loan servicing portfolio. French, in his earlier comments, said, "The more than doubling of our loan servicing portfolio will substantially boost that source of non-cyclical income. Additionally, we believe the Sandia portfolio has excellent value due to the high quality of the loans it contains, and its 48-state diversity will complement our existing portfolio and broaden it geographically. We expect to significantly lower our per- loan servicing costs as economies of scale are realized and servicing operations are consolidated and streamlined." Plaza Home Mortgage is a mortgage banking company specializing in the origination, sale and servicing of one to four-family residential mortgage loans. Plaza conducts mortgage banking activities through its 27 loan origination offices in eight states, and is ranked the ninth- largest mortgage loan originator in California, the 22nd-largest nationwide. For information on Plaza by fax, dial 800-PRO-INFO, ext. 132. -0- 6/28/93 /CONTACT: Brad Morrice, executive VP and general counsel of Plaza Home Mortgage, 714-564-8036; or John H. Shaw (LA), 818-783-2400, or Regina K. Ryan (NY), 212-661-8030, both of The Financial Relations Board for Plaza Home Mortgage/ (PHMC)
CO: Plaza Home Mortgage Corp.; Sandia Mortgage Corp. ST: California, New Mexico IN: FIN SU: TNM
JL -- NYON3 -- 6043 06/28/93 05:00 EDT
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|Date:||Jun 28, 1993|
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