ATLANTA -- SouthTrust Corp. moved to strengthen its Atlanta franchise Monday by announcing a letter of intent to acquire all the branches, deposits, and loans belonging to Homebanc.
Birmingham-based SouthTrust said it would buy, for an undisclosed sum, the thrift's seven Atlanta branches, along with $250 million in deposits and $350 million in loans.
SouthTrust Bank of Georgia, which is mostly confined to Atlanta, now has $2.5 billion in assets and 86 offices.
The purchase of Homebanc, the largest thrift left in Atlanta, still leaves SouthTrust with the sixth-ranked deposit share in Atlanta, behind Bank South Corp.
But it does strengthen SouthTrust's retail position in several affluent suburban neighborhoods and contributes a portfolio of small commercial loans.
"Homebanc is a very good, well-run S&L with a real solid retail deposit base," said Thomas H. Coley, chairman and CEO of SouthTrust's Georgia bank. "It helps deepen and widen our customer base in the Atlanta area."
SouthTrust, with $14.2 billion in total assets, first entered Atlanta in 1989 with the purchase of a community bank. It has since cobbled together a sizable franchise relatively cheaply by purchasing assets from other banks and thrifts.
For Homebanc, which has been a fixture of the Atlanta S&L scene since 1929, the branch divestiture signifies the company's evolution into a stand-alone mortgage company.
Homebanc, which is owned by Dutch investor John van Vlissingen through his Noro Group of Companies, had previously announced it was reorganizing its mortgage corporation into a separate, independent company called Homebanc Mortgage Corp.
"John just decided that his investment opportunities are better on the mortgage side, and now seems to be the most opportune time to sell the thrift, considering the value of bank stocks," said Robert F. Tomain, Homebanc's president and CEO.
Mr. Tomain said Mr. van Vlissingen would probably take the mortgage company public "in a couple of years." Homebanc Mortgage is one of the largest residential mortgage originators in Atlanta, with over $1 billion in annual servicing.
SouthTrust's letter of intent to buy Homebanc is still subject to due diligence and shareholder and regulatory approvals.
Local banking sources said Homebanc had attracted several competing offers from other major banks in the Atlanta area, suggesting that SouthTrust agreed to pay a full price for the thrift.