THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Tuesday, December 19, 1995 TAG: 9512190250
SECTION: BUSINESS PAGE: D2 EDITION: FINAL
SOURCE: BY TOM SHEAN, STAFF WRITER
LENGTH: Short : 44 lines
American Industrial Loan Association, a Virginia Beach-based residential lending concern, announced plans Monday to buy a major stake in a Northern Virginia thrift.
American Industrial said it agreed to buy at least 87 percent of the common stock in First Security Federal Savings Bank Inc. in Annandale.
The price will include a maximum premium of $150,000 over First Security's book value on the date of the closing, American Industrial said. The Virginia Beach company said it expected to complete the purchase next spring but did not elaborate on the terms.
The transaction still must be approved by federal regulators.
Organized in 1922, First Security has a single headquarters office in Annandale and six loan-origination offices throughout the Washington area, said Steve Stratos, vice president of the thrift's mortgage lending division.
First Security also had offices in Newport News and Virginia Beach but closed them earlier this year, Stratos said.
American Industrial said in a prepared statement that the acquisition would provide it with greater access to home loans that conform to Federal Home Loan Mortgage Corp. and Federal National Mortgage Association standards.
Federal National Mortgage, better known as Fannie Mae, and Federal Home Loan Mortgage, nicknamed Freddie Mac, buy blocks of home loans from residential lenders and repackage the loans for sale to large investors.
American Industrial has concentrated on making home loans, including second mortgages, that do not conform to Freddie Mac and Fannie Mae standards.
The proposed transaction comes after a period of losses and dramatic downsizing at First Security. The privately owned thrift reported a loss of $260,000 for the first half of 1995 and a $459,000 loss for all of 1994, according to Sheshunoff Information Services Inc., a financial research and publishing concern.
Meanwhile, First Security's assets had plunged to $7.82 million at mid-1995 from $68.13 million at the end of 1993, according to Sheshunoff. by CNB