InterBank agrees on sale to Genworth
Minneapolis / St. Paul Business Journal - by Katharine Grayson and Jennifer Niemela Staff Writer
InterBank has agreed to be sold to insurer Genworth Financial Inc. for an undisclosed amount.
The acquisition allows Genworth to apply for status as a savings-and-loan holding company, in turn making it eligible for funding through the federal bailout program. Maple Grove-based InterBank, one of the state’s largest savings banks with assets of $895 million, announced the agreement on Sunday. The same day, Richmond, Va.-based Genworth (NYSE: GNW) said it had filed to become a savings and loan. The move sent its stock up about 25 percent Monday.
InterBank said in a statement the deal, which has not been finalized, is “intended to provide enhanced services by a larger financial-services company to its customers, communities and constituencies.”
The InterBank-Genworth merger was one of four between struggling thrifts and large insurance companies to be arranged by the Office of Thrift Supervision this week. Unnamed sources told American Banker that the insurance companies approached the OTS, which matched them up with the four thrifts.
In reacting to news reports that the banks were courted by the OTS and the insurance companies because of their troubled status, InterBank president Fred Stelter said that his bank is well-capitalized.
“We are looking forward to the future whether or not this merger is consummated,” he said, declining to comment further because of the sensitivity of the deal’s ongoing negotiations.
In September, InterBank was slapped with a cease-and-desist order by the OTS for engaging in unsafe banking practices that violated the USA Patriot Act and the Bank Secrecy Act. In March, one of its loan officers received an order of prohibition for defrauding the bank of $59,000.
As the state’s second-largest savings and loan, InterBank has also been hit hard by the housing crisis. In the second quarter of 2008, the last data available from the Federal Deposit Insurance Corp., it lost $3.5 million.
kgrayson@bizjournals.com | (612) 288-2106 jniemela@bizjournals.com | (612) 288-2138
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