Two executives from a mortgage banker last week used a method to close on the acquisition of the assets, liabilities and charter of a distressed institution that one of the executives said hasn’t been seen in more than three years.
“There are a lot of big players who would love to do this. They just haven’t been able to figure out a way to do it,” said Stephen Calk, who is chairman of acquiring company National Bancorp Holdings as well as the newly acquired Kansas community bank Generations Bank and mortgage bank Chicago Bancorp. (Generations and Chicago Bancorp will be separate and have “no affiliate arrangements” he stressed.)
The acquisition involved a situation where the previous holding company for the institution went bankrupt and they had pledged the stock of the bank for a loan.
The holder of the loan’s collateral, which had foreclosed on the note, sold the aforementioned assets, liabilities and charter to Stephen Calk and his brother, who are both executives at Chicago Bancorp.
Calk credits their lead counsel and strategic advisor with the successful structuring of the deal.
“People have heard about [deals structured like this]. They have seen them on paper.
“There have been case studies...but we really haven’t seen anything like this for awhile,” he told this publication. “You just have to be patient: follow the rules, go through the checklist.
“We looked at distressed institutions for over six months,” added Calk. The company did due diligence on over 20 distressed institutions before settling on Generations, he told this publication.
Regulators were more helpful than he expected in approving the deal, although they made it clear there were no shortcuts whatsoever, he said.
When asked if he would do a similar deal again, Calk said, “Absolutely, we feel like we’ve developed an expertise in both how to explain this to the regulators as well as how to actually execute the strategy.”
The company is “looking at other potential acquisitions, specifically brokers as well as mortgage bankers that based on the recent ruling that just feel they’re better affiliated with a depository, especially one with a lot of mortgage banking experience,” he said.
