UBS Securities has expanded its specialized investment banking group that services the mortgage lending industry.

The most recent addition to the group is Michael McMahon, a former vice president of warehouse lending at First Interstate Bank. He is now an equity analyst in the San Francisco office of UBS Securities, a subsidiary of Union Bank of Switzerland.

The Swiss bank laid the foundation for its financial institutions group in May 1995, when it hired Brenda White, the group's managing director, and others from Salomon Brothers. At the time, there was a widespread defection from Salomon in the wake of a change in the investment bank's compensation plan. Since then, the financial institutions group has grown to 25.

"A little bit of success breeds success," Ms. White said in a telephone interview. "Once it was clear we were going to be active, it became easier to attract high-caliber people," she said.

Since Ms. White joined, UBS has closed six mortgage banking deals, including the merger of Barnett Bank's mortgage unit with HomeSide Lending in March, and First Nationwide Mortgage's acquisition of the near-bankrupt Lomas Mortgage in September 1995. In her 12-year career, Ms. White has participated in more than $3 billion of mortgage banking deals.

Ms. White leads the mortgage banking effort within the financial institutions group. Jack Leventhal, vice president, works closely with her. Before joining UBS he was an investment banker at Lehman Brothers, where he worked on mortgage banking transactions. Before that, he was at Salomon Brothers.

Anthony Viscardi, an associate who analyzes and values mortgage servicing portfolios, joined UBS in November from Bear Sterns.

"I don't believe in subcontracting out" servicing valuation, Ms. White said. "The asset is such a large piece of a company's value that it shouldn't be one step removed."

She said the group has built financial models based specifically on mortgage banking, rather than trying to force a generic model on a mortgage servicing portfolio.

Gareth Plank, a managing director of equity research in UBS' San Francisco office, called Mr. McMahon's 16 years of mortgage banking experience a vital addition to the group's professional knowledge.

"Mike knows the industry participants, because he has insight on companies from a credit standpoint," Mr. Plank said. As a warehouse lender, Mr. McMahon's analysis was more conservative than an equity analyst's, Mr. Plank said.

"Equity analysts are probably willing to accept more risk than a warehouse lender," Mr. Plank said. "His highly disciplined approach will lend a solid dimension to the group."

Not all clients they have advised have been successful. A UBS client unsuccessfully bid on Prudential Home Mortgage, the largest mortgage lender ever put up for sale.

Ms. White said she thinks her clients appreciate investment banking advice from people who understand the business, and not from investment bankers who do mortgage deals only when the market is hot.

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