AmNet acquisition to cost $83 million
By MortgageDaily.com staff
9/14/2005

Wachovia Corp. has agreed to acquire an unprofitable mortgage lender based on the West Coast.

AmNet Mortgage and its subsidiary American Mortgage Network have agreed to be acquired by Wachovia for $83 million in cash, the companies jointly announced Tuesday. The transaction is expected to close in the upcoming quarter.

"This merger gives our stockholders the ability to maximize the value of our mortgage banking business which has been created over the last four years," stated John Robbins, AmNet cofounder, chairman and chief executive, in the announcement. "Our employees and our customers will also benefit from this alignment with a major financial institution."

AmNet, which expects higher mortgage volume this year but has not been able to maintain consistent profitability, said it will recommend that its stockholders approve the deal. While the lender expects to increase its annual production of $9 billion by 25 percent to 31 percent this year, it reported a net loss of $1.6 million in the most recent quarter, compared to net incomes of $507,000 in the first quarter and $208,000 a year earlier.

Following the merger, AmNet will remain headquartered in San Diego and become a subsidiary of Wachovia Bank N.A.

"We are excited about the AmNet Mortgage acquisition, and the strategic alignment of our residential mortgage and securities businesses," said Curtis Arledge, managing director and head of the fixed income division in Wachovia Securities, in a written statement. "The expansion of our residential mortgage business reflects an important enhancement to our market-leading structured products capabilities."

Wachovia, based in Charlotte, N.C., reported mortgage originations amounted to $45.5 billion last year.

AmNet reports it does business with over 7,000 mortgage brokers nationwide and has loan production offices in 20 states.

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