Washington Mutual - in the midst of becoming one of California's biggest mortgage lenders through a megadeal to acquire American Savings Bank - is also about to become No. 1 in Utah.
The Seattle thrift said Monday that it had agreed to buy United Western Financial Group, a Salt Lake City-based lender with seven mortgage offices, including two in Utah. Washington Mutual agreed to pay $80.3 million in cash for the operation, made up of United Savings Bank and its Western Mortgage Loan subsidiary.
The deal for United Western, which has $403.9 million of assets and $291.9 million of deposits, should be accretive to earnings within a year, a Washington Mutual spokesman said.
The acquisition would make Washington Mutual the largest mortgage lender in Utah, the spokesman said. Originations by United Western operations, Washington Mutual's existing business in Utah, and Utah Federal Savings Bank, which Washington Mutual agreed to purchase in March, totaled $296.8 million in the first half.
The pending Utah acquisitions are part of Washington Mutual's strategy to be among the top mortgage lenders in the five states where it operates. "We want to be positioned at or near the top," the spokesman said. "The view from there is a little bit better than anywhere else."
United Western, which services $3.5 billion in loans and subservices another $800 million, "is good infill" for Washington Mutual in Utah, said Campbell Chaney, a thrift analyst with Rodman & Renshaw, San Francisco.
The deal also shows that executives at Washington Mutual are not "letting any grass grow under their feet," while awaiting necessary approvals to buy American Savings, Mr. Chaney said. "Why step out of the game for six months and let opportunities slip through your fingers?"
In July, Washington Mutual declared its intention to enter California by purchasing American Savings, one of the state's largest mortgage lenders among thrifts. The $1.2 billion deal would almost double Washington Mutual's assets, to $42 billion.
Washington Mutual expects to complete the purchase of American Savings Bank and the two Utah financial institutions by yearend, the spokesman said.