Bank of Commerce Acquires Stake in CA Lender

Bank of Commerce Holdings, Redding, Calif., is acquiring a majority stake in Simonich Corp., which does business as BWC Mortgage Services, San Ramon, Calif. BOCH will take a 51% stake in BWC Mortgage. According to a Securities and Exchange Commission filing, the total price of the purchase is $2.5 million, with $1.5 million paid at closing and the additional $1.0 million to be earned-out over a period of three years based upon delivering an established level of profits. It is possible to earn out the $1.0 million in a shorter period of time if the profit levels exceed expectations. Previously the two companies had an affiliated business arrangement, where BWC Mortgage underwrote or brokered mortgage products and managed the independent contractors, supporting staff and broker relationships with secondary market lenders. BOCH provided office space, equipment and marketing support. BWC Mortgage will be re-branded Bank of Commerce Mortgage, which is the name of the BOCH mortgage brokerage operation. BWC Mortgage has over 100 employees in nine branch locations. Until May 2006, BWC Mortgage was majority owned by the Bank of Walnut Creek, but as part of that company's pending acquisition by First Republic Bank, Simonich Corp. acquired all of the equity in the mortgage unit. BOCH will receive 51% of the earnings of BWC Mortgage through quarterly dividend payments.