Mortgage

Western Alliance buys main mortgage lender

Western Alliance Bancorp in Phoenix has agreed to buy Aris Mortgage Holding of Thousand Oaks, California.

The Western Alliance, valued at $ 35 billion, announced in a press release Tuesday that it would pay $ 1 billion in cash for AmeriHome Mortgage's parent company. The deal, which is expected to close in the second quarter, has valued Aris at 140% of its tangible book value.

AmeriHome, a Western Alliance customer for more than four years, purchased $ 65 billion of conventional compliant and federally insured loans last year. The company manages a $ 99 billion mortgage services portfolio and has relationships with more than 700 correspondent mortgage lenders, including mortgage lenders, credit unions, and small and medium-sized banks.

"We look forward to maximizing the strategic and financial opportunities created by partnering with AmeriHome," said Ken Vecchione, President and CEO of Western Alliance, in the press release.

"Acquiring this differentiated, high-performance mortgage platform provides a strong growth engine and expands the mortgage offering for existing clients, giving us flexible leverage to achieve consistent returns across market cycles," added Vecchione.

AmeriHome becomes a unit of the Western Alliance Bank. Jim Furash, AmeriHome President and CEO, will continue to lead the company upon conclusion of the contract.

Western Alliance expects the deal to increase earnings per share by more than 30%. The cost of the merger is expected to be $ 27 million, although Western Alliance expects to see annual after-tax cost synergies of $ 50 million.

Western Alliance plans to raise approximately $ 275 million through the sale of common stock in the second quarter.

Evercore, Guggenheim Securities and Troutman Pepper Hamilton Sanders advised the Western Alliance. Houlihan Lokey Capital, Wells Fargo Securities and Sidley Austin advised AmeriHome.

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