Western Alliance Bancorp. in Phoenix has agreed to buy Aris Mortgage Holding in Thousand Oaks, Calif.
The $35 billion-asset Western Alliance said it will pay $1 billion in cash for the parent of AmeriHome Mortgage. The deal, which is expected to close in the second quarter, priced Aris at 140% of its tangible book value.
AmeriHome, which has been a Western Alliance client for more than four years, bought $65 billion in conventional conforming and government-insured loans last year. It manages a $99 billion mortgage servicing portfolio and has relationships with more than 700 correspondent mortgage originators, including mortgage lenders, credit unions and small and midsize banks.
“We look forward to maximizing the strategic and financial opportunities created by partnering with AmeriHome,” Ken Vecchione, Western Alliance’s president and CEO, said in a press release Tuesday.
“Acquiring this differentiated, high-performing mortgage platform provides a powerful growth engine and expands mortgage offerings to existing clients that give us flexible levers to drive consistent returns throughout market cycles,” Vecchione added.
AmeriHome will become a unit of Western Alliance Bank. Jim Furash, AmeriHome’s president and CEO, will continue to run the company after the deal closes.
Western Alliance said it expects the deal to be more than 30% accretive to its earnings per share. Merger-related expenses should total $27 million, though Western Alliance said it expects to achieve $50 million in annual after-tax funding cost synergies.
Western Alliance plans to raise about $275 million in the second quarter by selling common stock.
Evercore, Guggenheim Securities and Troutman Pepper Hamilton Sanders advised Western Alliance. Houlihan Lokey Capital, Wells Fargo Securities and Sidley Austin advised AmeriHome.
