Mortgage servicer Hamilton Financial Services Corp. is being sold to Houston's Harbor Financial Group in a cash deal worth about $5.5 million, or 95 cents a share.
Hamilton has $1 billion of mortgage servicing rights, and services about $1 billion of loans for other companies. The company exited the origination side of the business in 1995, closing 32 offices.
Hamilton put itself on the auction block in October 1994, and stopped looking for a buyer five months later after a search by Keefe, Bruyette & Woods proved unfruitful. The company and Keefe began another search for a buyer last October.
Orin Kramer, a principal of Kramer Spellman, a Fort Lee, N.J., investment partnership with a larger stake in Hamilton, had begun pressuring the board of directors to sell last August. In a telephone interview, Mr. Kramer said he is grateful the situation is over. Other shareholders include Nicholas Adams of Wellington Management and Raymond Garea of Mutual Shares.
The company's stock, listed on Nasdaq, once traded as high as $4.125 a share in 1995.
Richard Ransom, vice president of finance at Hamilton, said the company could no longer compete with larger mortgage companies and deposit institutions because of what he said was irrational pricing on the secondary market. The $21 million raised through a public offering in 1993 to expand the company came just as the market contracted, Mr. Ransom said.
Harbor will keep Hamilton's servicing site in Scottsbluff, Neb., Mr. Ransom said.