NetBank Acquiring RBMG

Combined production more than $1 billion monthly
By SAM GARCIA
11/20/2001

In a transaction that will combine operations from what was a year ago seven separate organizations, NetBank, Inc. (NASDAQ: NTBK) announced this week that it will acquire Resource Bancshares Mortgage Group, Inc. (RBMG) (NASDAQ: RBMG). According to an announcement jointly issued by the two companies, RBMG's conforming mortgage business will operate as a wholly owned subsidiary of the bank.

NetBank Inc. is a bank holding company that wholly owns the outstanding stock of NetBank, a federal savings bank, and NetBank Partners LLC, a partnership involved in strategic partnering opportunities.

Terms of the deal call for RBMG shareholders to receive 1.1382 shares of NetBank for each share of RBMG common stock. NetBank's current Chairman, T. Stephen Johnson, and Vice Chairman, D.R. Grimes, will continue to serve in those posts and RBMG CEO Douglas K. Freeman will become CEO of the combined entity. The board of directors will consist of 11 members -- 6 from the NetBank board, 4 from the RBMG board and one member who currently serves on both boards.

In September, RBMG's subprime subsidiary, Meritage Mortgage Corp., bought 15 NationsCredit Financial Services' branches from a Bank of America subsidiary. Other RBMG acquisitions this year include First Jefferson Mortgage Corporation and Atlantic Mortgage and Investment. Market Street Mortgage, located in Clearwater, Florida, was acquired by NetBank earlier this year. NetBank also acquired the deposits of Compubank this year.

One analyst told MortgageDaily.com that NetBank's acquisition of RBMG is an attractive transaction because they get Doug Freeman in the deal. He is a "very sharp individual" that is also entrepreneurial, said John "Buddy" Howard, an analyst with Equity Research Services who previously covered RBMG. The new organization will have the "makings of a real strong senior executive team," Howard added.

The combined company will have assets totaling $3.6 billion and approximately 1,950 employees. Following is a snapshot of selected data for both companies.

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