Matrix Bancorp (NASDAQ:MTXC)
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Matrix Bancorp, Inc. (NASDAQ: MTXC)(the "Company")
announced today that it has sold certain assets of its Matrix Bancorp
Trading, Inc. ("MBT") subsidiary to SN Capital Markets, LLC ("SNCM").
SNCM is a newly formed limited liability company, co-founded by
several former employees of MBT, including its former President, Mr.
Chris Rooker, and Security National Holding Company, LLC. All of the
employees of MBT, 31 in number, left MBT to become employees of SNCM.
Historically, MBT provided brokerage and consulting services to
the Company and third-party financial institutions and financial
services companies in the mortgage banking industry, including the
brokering, acquisition and analysis of loans and mortgage servicing
rights. SNCM expects to continue to provide the same high-quality,
customer-focused services that MBT had provided prior the closing of
the sale.
The purchase price for the assets sold consisted of $1,330,000 in
cash paid at closing, as well as a promissory note from SNCM and its
affiliate, Security National Holding Company, LLC ("SNHC"), in the
original principal amount of $2,800,000. The note is guaranteed by
SNCM's and SNHC's parent, Security National Master Holding Company,
LLC ("SNMHC"), which holds substantial assets besides those companies.
The note bears interest at the current prime rate in effect, and calls
for equal monthly payments of principal plus accrued interest for the
next 24 months.
In addition, MBT agreed to finance the accounts receivables sold
to SNCM, in the amount of approximately $600,000, for a period of up
to 90 days. A demand promissory note evidencing such receivables
financing has been issued by SNCM and SNHC and such note is guaranteed
by SNMHC.
As part of the sale, for a period of 12 months, MBT and any of its
affiliates have agreed not to compete or have any ownership interest
in any business in the State of Colorado which is similar to SNCM's
business.
The Company expects to file a report on Form 8-K, including pro
forma financial statements reflecting the effect of the discontinuance
of MBT's operations for the year ending December 31, 2005, as early as
April 6, 2006.
In discussing the sale, Michael J. McCloskey, Chief Operating
Officer of the Company, commented: "We are pleased to announce what we
believe to be a mutually beneficial sale for both Matrix Bancorp and
SN Capital Markets. This sale allows Matrix Bancorp to take another
step towards our goal of re-positioning the company as a traditional
community bank serving the Colorado front range market. MBT and its
employees have always been valuable contributors to Matrix Bancorp;
however, the services provided by MBT are not core to our revamped
strategy. We thank the former MBT employees for their important
service to Matrix and wish them well in their new endeavor at SN
Capital Markets. The Company and our subsidiaries intend to continue
to utilize the high-quality services of SNCM for our brokerage, deal
sourcing and consulting needs."
Chris Rooker, former President of MBT and newly appointed
President of SNCM, commented: "We understand the new business strategy
and direction of Matrix Bancorp and support its goals. One of SN
Capital Markets' primary goals as a new stand-alone company is to
provide quality brokerage, analytics and consulting services to many,
many financial institutions throughout the U.S., including Matrix
Capital Bank and other Matrix subsidiaries. I believe operating
outside the Matrix structure will provide SN Capital Markets the
flexibility to take our service and business to a whole new level. I
view the sale as a win-win scenario for both Matrix and SN Capital
Markets."
Denver-based Matrix Bancorp, Inc. is focused on developing its
community-based banking network through its Matrix Capital Bank
subsidiary by strategically positioning branches across Colorado's
Front Range market. The Bank plans to grow its network to an estimated
five to seven community-based branches over the next three to five
years. The Company recently identified "United Western" as its
proposed new brand name and anticipates a formal change in legal and
trade names during second or third quarter of 2006, after receiving
applicable regulatory and shareholder approvals.
At December 31, 2005, the Company reported total consolidated
assets of $2.1 billion, total loans of $1.4 billion, total deposits of
$1.1 billion and total consolidated shareholders equity of $180.7
million (includes proceeds used for the Company's January 2006 tender
offer). For more information, please visit www.matrixbancorp.com.
Certain statements contained in this press release that are not
historical facts, including, but not limited to, statements that can
be identified by the use of forward-looking terminology such as "may,"
"will," "expect," "anticipate," "predict," "believe," "plan,"
"estimate" or "continue" or the negative thereof or other variations
thereon or comparable terminology, are forward-looking statements
within the meaning of the Private Securities Litigation Reform Act of
1995, and involve a number of risks and uncertainties. The actual
results of the future events described in such forward-looking
statements in this press release could differ materially from those
stated in such forward-looking statements. Among the factors that
could cause actual results to differ materially are: the timing of
regulatory approvals or consents for new branches or other
contemplated actions; the availability of suitable and desirable
locations for additional branches; the continuing strength of our
existing business, which may be affected by various factors,
including, but not limited to, interest rate fluctuations; level of
delinquencies; defaults and prepayments; general economic conditions;
competition; the delay in or failure to receive any required
shareholder approvals of the contemplated actions; the risks and
uncertainties discussed elsewhere in the Company's Annual Report on
Form 10-K for the year ended December 31, 2005 filed with the
Securities and Exchange Commission on March 15, 2006; and the
uncertainties set forth from time to time in the Company's periodic
reports, filings and other public statements.