Impac to buy Pinnacle in mortgage lender merger
NEW YORK, May 21 (Reuters) - Impac Mortgage Holdings Inc. IMH.N on Monday said it agreed to buy the retail and wholesale lending business of Pinnacle Financial Corp., which it said operates more than 133 branches in 26 U.S. states.
Terms were not disclosed. Irvine, California-based Impac said it will offer jobs to "substantially all" Pinnacle employees.
Orlando, Florida-based Pinnacle lists more than 440 loan officers on its Web site. The firm was founded in 1988.
Impac, a real estate investment trust, specializes in "Alt-A," short for "Alternative-A," loans, which often go to borrowers who cannot fully document income or assets. Pinnacle specializes in Alt-A and prime loans, Impac said.
"The transaction with Pinnacle, which has been a long-time customer, is a critical step" in diversifying Impac's Alt-A exposure, Impac Chief Executive Joseph Tomkinson said in a statement. "We immediately become a nationwide retail lender with specific expertise in the prime agency business, including the first-time homebuyer and emerging markets."
Impac spokeswoman Tania Jernigan did not immediately return a call seeking comment.
Impac shares are down 41 percent this year amid concern that rising defaults might spread beyond "subprime" lenders, and hurt lenders that make home loans to borrowers with better credit.
On May 10, Impac reported a first-quarter loss of $121.7 million as it wrote down the value of some derivatives and reported a lower gain on sale of loans. It said its mortgage operations bought and originated $2.2 billion of mortgages, down from the fourth quarter's $4.1 billion.
Impac expects the Pinnacle transaction to close this month. Pinnacle co-founders Douglas Long and Jeffrey Vratanina will become executive vice presidents of Impac Home Lending, a new affiliate, Impac said.
Milestone Advisors LLC and the law firm Foley & Lardner LLP advised Pinnacle. The law firm Latham & Watkins LLP advised Impac.
Shares of Impac closed Monday up 12 cents at $5.16 on the New York Stock Exchange. To view additional stories about the subprime lending crisis, click on [ID:nN16195443]
