Hilltop Holdings Inc (HTH)

[Enterprising Investor]

Billionaire Gerald Ford's Dallas operation keeps profiting by buying and flipping banks (8/18/12)

Gerald J. Ford has something he wants to show off. He jumps into a golf cart and races toward one of the 11 barns on his lush, 1,000-acre Kentucky Thoroughbred farm. He speeds past tall sycamore trees, painted lawn jockeys and manicured fields of grass glistening from the morning dew.

Ford stables more than 100 horses here, including broodmares he breeds with his prized Pleasantly Perfect, winner of the $6 million Dubai World Cup in 2004.

“We’re going to see the babies,” said Ford, wearing a cap, khakis and hiking boots as he walks into the foaling barn.

Inside, Pleasantly Perfect’s latest offspring — a 120-pound chestnut foal born the night before — quivers next to its mother. “I love being out here,” said Ford, whose slight drawl reveals his roots in a rural town in the Texas Panhandle.

Ford, 68, will probably sell the foal, much as he did the banks and savings and loans that he flipped to make himself a billionaire. These days, he spends most of his time in Dallas at his primary operating company, Diamond A Ford Corp., which he named after the cattle brand from his New Mexico ranch.

Four years after the worst financial crisis in decades claimed Bear Stearns Cos. and Lehman Brothers Holdings Inc., Ford is nowhere near finished buying and consolidating healthy and distressed banks. While the largest U.S. firms repaid their bailouts to the $700 billion Troubled Asset Relief Program, more than 400 smaller ones are struggling to do so because they can’t raise new capital, according to an April report by Christy Romero, TARP’s special inspector general.

“There are 7,000 banks out there, and a big number of them still have outstanding TARP preferred stock,” said Ford, who’s not related to either the late U.S. president or the auto clan. “Somewhere in there is another opportunity to recapitalize a bank. We’ve bought banks for 37 years. Except from 2002 to 2010, we never went three years without buying a bank.”

Profitable ways

The buyout business has been hugely profitable for Ford. In March, he sold Pacific Capital Bancorp, parent of Santa Barbara Bank & Trust, to Japanese-controlled UnionBanCal Corp. for $1.5 billion, three times his initial investment of $500 million.

In August 2010, Ford took over Pacific Capital, which was made up of five separate banks with a combined $5.8 billion in assets. Pacific Capital hadn’t posted a profit since the beginning of 2008 because of soured residential construction loans. It owed $181 million to TARP.

In following their cost-cutting playbook, Ford’s team took out $177 million in expenses by merging the back-office operations of the five banks, firing 181 employees and closing five branches. It also wrote down $485 million in bad loans.

“When a bank gets in trouble, it’s just swimming against the current,” said Carl Webb, Ford’s second in command at Diamond A Ford. “We call them the walking wounded. That’s where we see the opportunity going forward.”

By sticking to this formula, Ford, the son of an auto body shop owner, has amassed about $1.3 billion, according to data compiled by Bloomberg. He has put his money into five properties: a home in University Park; a beachfront getaway in Southampton, N.Y.; an Upper East Side townhouse in Manhattan; the ranch in New Mexico; and the Kentucky horse farm.

Operating quietly

During the last decade, as private equity rock stars such as Henry Kravis and Stephen Schwarzman made megadeals for brand names, Ford avoided splashy buyouts. He has operated quietly, mostly in dusty backwaters such as Levelland, Texas, and Carrizozo, N.M.

Since 1975, he has snapped up almost 60 small firms, using his own money, capital from partners and a $500 million private equity fund.

Ford, a hands-on dealmaker, and Webb, 62, who manages operations, do these buyouts with the support of only 12 employees at their headquarters in Dallas. They have at times been backed by large federal subsidies, which has stirred protests from lawmakers.

“Carl is the stingiest son of a gun you would ever meet,” said Thomas Brown, whose New York-based Second Curve Capital LLC hedge fund has invested in Ford’s banking deals. “They operate a low-cost model.”

Southern Methodist University president R. Gerald Turner encountered Ford’s low-key style when he made a $20 million donation for a new football stadium. Turner says he had to persuade Ford, an SMU alum, to allow the school to name the 32,000-seat stadium after him.

“It took a while,” Turner said. “He’s a modest guy. I said, ‘Jerry, it has to have a name, and yours is by far the largest gift.’”

Ford endeavors to make money in almost everything he does. As much as he loves his foals in Kentucky, he auctions many of them for up to several hundred thousand dollars apiece.

Another of Ford’s favorite escapes is his 147,000-acre ranch, where he raises a herd of 3,500 cattle for market and also sells hunting trips. A three-day excursion for trophy elk goes for $9,000, and a mule deer hunt costs $3,300.

Ford also has a 188-foot yacht that he co-owned with billionaire Ronald Perelman before buying out his friend’s share. “He got the greatest bargain of all time from me,” Perelman said. When Ford isn’t yachting, he leases the boat for as much as $420,000 a week.

Seeking success

Ford says that working in an auto body shop as a teenager alongside his dad in Pampa spurred him to seek a better career. In high school, he carried around Ayn Rand’s libertarian tome Atlas Shrugged, about the pursuit of individual achievement.

“Her books talked about people being successful, and I identified with that,” Ford said. He earned an undergraduate economics degree at SMU and got his law degree from the school in 1969, because, he says, he saw that the prosperous people wearing ties in his small town were lawyers.

“Jerry always had an ambition to do something bigger and better than what he saw in his hometown,” SMU’s Turner said. “Dallas is full of people like that.”

After working as a general counsel for a group of closely held corporations, Ford decided he wanted to build his own company. At 31, with two partners and some borrowed money, he paid $1.2 million for 64 percent of First National Bank of Post in 1975.

“I wanted to run something, a business,” Ford said. “After we got it, one was good, two were better.”

Seven years later, Ford bought First National Bank in Lubbock and hired Webb to be president. The two men then went on a three-decade shopping spree. They have taken a conservative approach to buying troubled banks, scrutinizing customer loyalty and defaults to limit their risk.

They avoid firms that have lost more than 10 to 15 percent of deposits and shun buyouts if they expect defaults to rise to the point that they significantly eat into potential returns. “Banks get in trouble for one reason: They make bad loans,” Webb said.

By the mid-1980s, Ford and Webb had built up equity of $225 million on 23 small-town banks with a combined $4 billion in assets. They rolled them into First United Bank Group Inc. and sold it in 1994 to Norwest Corp. for stock valued at $495 million.

S&L deals

The S&L crisis in the late 1980s, brought on by the deregulation of the industry, provided Ford the opportunity to create one of his biggest and most controversial deals. Ford and Perelman took full advantage of a U.S. government rescue program that offered subsidies and tax breaks to entice investors to take over failing thrifts.

With Perelman’s financing, they paid $315 million in 1988 for five troubled S&Ls with combined assets of $11.4 billion. In exchange for taking on the risk of the renamed First Gibraltar Bank, the government provided them with up to $9.5 billion in guarantees to cover bad loans and up to $1.8 billion in tax benefits that Perelman was able to use to shelter profits in his other businesses, according to congressional estimates at the time.

Republican and Democratic congressmen protested that regulators were giving Ford and Perelman too generous a deal.

“I would almost be happier if there was a criminal conspiracy, but it appears that the government officials involved were just plain incompetent,” Matthew Rinaldo, the late New Jersey Republican representative, said before Congress in 1990.

Perelman, 69, said he and Ford were both shaken up by the criticism. “Here we thought we were doing exactly what the government wanted investors to do, and we raised our hand as the high bidder,” Perelman said. “All of a sudden, we found ourselves in a real strong negative backlash.”

After Webb merged back-office operations to make First Gibraltar profitable, Ford sold it piecemeal in 1992 to Bank of America Corp. and other buyers for a gain of $900 million.

Ford and Perelman struck again in the mid-1990s, this time scooping up S&Ls wounded by the bursting of California’s housing bubble. They paid $1.1 billion for First Nationwide Bank and then sold off everything except the S&L’s 45 California branches.

The bank spent $250 million in 1995 to acquire thrift SFFed Corp., which had $4.1 billion in assets, in San Francisco. Three years later, First Nationwide received the equivalent of $1.46 billion in stock of Golden State Bancorp Inc. of San Francisco for the bank.

Ford and Perelman assumed management of the combined company, which became the nation’s then-second-largest S&L. They flipped it to Citigroup Inc. in 2002 for $5.8 billion, giving Ford more than 20 million Citi shares valued at about $1 billion by the time he sold the stock.

Perelman says he and Ford had the perfect relationship. “Everything was always transparent, always straight with Jerry,” Perelman said. “He will always take advantage of opportunities and turn them into real value.”

Ford stumbled during the credit bubble in the mid-2000s, when a lack of reasonably priced deals scared him away from banks and into other industries. In 2004, a real estate firm he controlled paid $89.3 million in cash and stock for the since-renamed First Acceptance Corp., which operates a chain of 378 storefronts that sell nonstandard auto insurance.

The company has lost money on lower premiums for all but three years in which Ford has controlled it and bled $8.2 million in the first quarter of 2012. After hitting a high of $13.40 under Ford’s stewardship in 2006, the shares plunged almost 91 percent as of July 3.

“It is a lousy deal,” Ford said.

Ford returned to banking deals after the subprime crisis pushed the economy into a recession in late 2007. Since then, he has bought two banks. He agreed to spend almost $515 million in May for Dallas-based PlainsCapital Corp. after the bank canceled a public offering.

Ford is also raising $700 million for his second buyout fund after investing his entire first one in his 2010 purchase of Pacific Capital Bancorp.

Not slowing down

“There’s probably still a number of opportunities on the smaller side of things, talking sub-$500 million,” says Brad Milsaps, an Atlanta-based banking analyst and managing director with Sandler O’Neill & Partners LP.

Now approaching his eighth decade, Ford isn’t slowing down. He has four grown children from his first marriage and two more, ages 5 and 8, with his second wife. Two years ago, he made a move toward succession, installing his son Jeremy Ford as the head of Hilltop Holdings Inc., a small insurance and financial services company that he controls.

“Work is intellectual to him at this point,” Jeremy, 37, said during a visit to the Kentucky farm with his dad and extended family. “It’s so a part of who he is that I don’t think he’ll ever not want to do it.”

Seth Lubove,

Bloomberg News

http://www.dallasnews.com/business/headlines/20120818-billionaire-gerald-ford-s-dallas-operation-keeps-profiting-by-buying-and-flipping-banks.ece

[Enterprising Investor]

HTH Completes Acquisition of PlainsCapital Corporation (12/03/12)

DALLAS--(BUSINESS WIRE)--Hilltop Holdings Inc. (NYSE: HTH), a Dallas-based holding company, today announced that it has completed its acquisition of Dallas-based PlainsCapital Corporation, the financial services holding company for PlainsCapital Bank, PrimeLending, and FirstSouthwest. PlainsCapital Corporation is now a wholly owned subsidiary of Hilltop. Based on Hilltop’s closing market price of $14.29 as of November 30, 2012, the total value of the consideration for the acquisition was approximately $700 million.

The deal was recently ranked by SNL Financial as one of the top 10 biggest bank and thrift deals since Jan. 1, 2010.

“This transaction is a significant accomplishment for Hilltop and PlainsCapital,” said Gerald J. Ford, chairman of Hilltop. “This gives Hilltop the opportunity to own a financial services company that has a proven track record of success, strength and stability. In return, PlainsCapital has access to additional capital for future growth.”

PlainsCapital Corporation Chairman and CEO Alan B. White will continue to lead the PlainsCapital family of companies. He has also been named vice chairman of Hilltop and chairman of the executive committee for Hilltop. Jeremy B. Ford will continue to serve as president and CEO of Hilltop.

Stephens Inc. served as financial advisor to Hilltop, and Wachtell, Lipton, Rosen & Katz served as legal advisor. JPMorgan Securities LLC served as financial advisor to PlainsCapital Corporation, and Sullivan & Cromwell and Haynes & Boone served as legal advisors.

About Hilltop Holdings

Hilltop Holdings is a Dallas-based financial holding company that is a regional commercial banking franchise through its wholly owned subsidiary, PlainsCapital Corporation, a diversified Dallas-based financial services company with $6.4 billion in assets as of September 30, 2012, and three operating companies: PlainsCapital Bank, PrimeLending, and FirstSouthwest. PlainsCapital employs 3,700 people and operates 330 locations in 42 states. Hilltop Holdings is also parent company to NLASCO, a property and casualty insurance holding company. Hilltop's common stock is listed on the New York Stock Exchange under the symbol "HTH." Find more information at Hilltop-Holdings.com and PlainsCapital.com.

FORWARD LOOKING STATEMENTS

This press release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause Hilltop’s actual results, performance or achievements to be materially different from any expected future results, performance, or achievements. Forward-looking statements speak only as of the date they are made and, except as required by law, Hilltop does not assume any duty to update forward-looking statements. Such forward-looking statements include, but are not limited to, statements about the future financial and operating results of the combined company, the combined company’s plans, objectives, expectations and intentions and other statements that are not historical facts. The following factors, among others, could cause actual results to differ from those set forth in the forward-looking statements: (i) the risk that the benefits from the transaction may not be fully realized or may take longer to realize than expected, including as a result of changes in general economic and market conditions, interest and exchange rates, monetary policy, laws and regulations and their enforcement, and the degree of competition in the geographic and business areas in which it operates; (ii) the ability to promptly and effectively integrate the businesses of Hilltop and PlainsCapital; (iii) the reaction of the companies’ customers, employees and counterparties to the transaction; and (iv) diversion of management time on integration-related issues. For more information, see the risk factors described in the registration statement on Form S-4 filed by Hilltop and Hilltop’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and other filings with the Securities and Exchange Commission (the “SEC”).

Contacts

Hilltop Holdings Inc.
Jeremy Ford, 214-855-2177
or
PlainsCapital Corporation
Carol Towne, 214-252-4142

http://www.businesswire.com/news/home/20121203005533/en/Hilltop-Holdings-Completes-Acquisition-PlainsCapital-Corporation

[Enterprising Investor]

Hilltop Holdings Inc. and PlainsCapital Corporation Announce Regulatory Approval of Planned Acquisition (11/13/12)

Closing of acquisition expected November 30, 2012

DALLAS--(BUSINESS WIRE)--Hilltop Holdings Inc. (NYSE: HTH), a Dallas-based holding company, and Dallas-based PlainsCapital Corporation, the financial services holding company for PlainsCapital Bank, PrimeLending, and FirstSouthwest, today jointly announced the receipt of regulatory approval from federal regulators to proceed with Hilltop’s acquisition of PlainsCapital Corporation. Hilltop also received approval to become a financial holding company upon consummation of the transaction.

The companies expect the acquisition to close on or about Nov. 30, 2012. Once completed, PlainsCapital Corporation will be a wholly owned subsidiary of Hilltop.

Stephens Inc. served as financial advisor to Hilltop, and Wachtell, Lipton, Rosen & Katz served as legal advisor. JPMorgan Securities LLC served as financial advisor to PlainsCapital Corporation, and Sullivan & Cromwell and Haynes & Boone served as legal advisors.

About Hilltop Holdings Inc.

Hilltop is a holding company that is endeavoring to make acquisitions and effect a business combination. As of September 30, 2012, Hilltop had approximately $524 million aggregate available cash that may be used for this purpose. Hilltop also provides fire and homeowners insurance to low value dwellings and manufactured homes primarily in Texas and other areas of the south through its wholly owned property and casualty insurance subsidiary, NLASCO, Inc.

About PlainsCapital Corporation

Founded in 1987, PlainsCapital Corporation is a Texas bank holding company and diversified financial services company headquartered in Dallas with more than $6.0 billion in assets, 3,400 employees and 330 locations in 40 states as of September 30, 2012. By providing responsive, highly personalized service, PlainsCapital builds enduring client relationships with middle market businesses, high net worth individuals, public sector entities, institutional investors, broker-dealers, investment advisors, and community banks through its family of companies: PlainsCapital Bank, FirstSouthwest, and PrimeLending.

FORWARD-LOOKING STATEMENTS

This press release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause Hilltop’s actual results, performance or achievements to be materially different from any expected future results, performance, or achievements. Forward-looking statements speak only as of the date they are made and, except as required by law, Hilltop does not assume any duty to update forward-looking statements. Such forward-looking statements include, but are not limited to, statements about the business combination transaction involving Hilltop and PlainsCapital, including future financial and operating results, the combined company’s plans, objectives, expectations and intentions and other statements that are not historical facts. The following factors, among others, could cause actual results to differ from those set forth in the forward-looking statements: (i) the risk that the transaction will not be consummated or that the benefits from the transaction may not be fully realized or may take longer to realize than expected, including as a result of changes in general economic and market conditions, interest and exchange rates, monetary policy, laws and regulations and their enforcement, and the degree of competition in the geographic and business areas in which Hilltop and PlainsCapital operate; (ii) the ability to promptly and effectively integrate the businesses of Hilltop and PlainsCapital; (iii) the reaction of the companies’ customers, employees and counterparties to the transaction; and (iv) diversion of management time on merger-related issues. For more information, see the risk factors described in the registration statement on Form S-4 filed by Hilltop and each of Hilltop’s and PlainsCapital’s Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and other filings with the Securities and Exchange Commission (the “SEC”).

ADDITIONAL INFORMATION

In connection with the proposed transaction, Hilltop filed with the SEC a registration statement on Form S-4 that includes a joint proxy statement of Hilltop and PlainsCapital that also constitutes a prospectus of Hilltop. Hilltop and PlainsCapital also filed other relevant documents with the SEC regarding the proposed transaction. INVESTORS ARE URGED TO READ THE JOINT PROXY STATEMENT/PROSPECTUS AND OTHER RELEVANT DOCUMENTS FILED WITH THE SEC BECAUSE THEY CONTAIN IMPORTANT INFORMATION. You may obtain a free copy of the joint proxy statement/prospectus and other relevant documents filed by Hilltop and PlainsCapital with the SEC at the SEC’s website at www.sec.gov. Copies of the documents filed by Hilltop with the SEC will be available free of charge on Hilltop’s website at www.hilltop-holdings.com or by contacting Hilltop Investor Relations at 214-855-2177. Copies of the documents filed by PlainsCapital with the SEC will be available free of charge on PlainsCapital’s website at www.plainscapital.com or by contacting PlainsCapital Investor Relations at 214-252-4155.

Contacts

Hilltop Holdings Inc.
Jeremy Ford, 214-855-2177
or
PlainsCapital Corporation
Carol Towne, 214-252-4142

http://www.businesswire.com/news/home/20121113006796/en/Hilltop-Holdings-PlainsCapital-Corporation-Announce-Regulatory-Approval

[Enterprising Investor]

Current HTH Board of Directors:

Rhodes Bobbitt

W. Joris Brinkerhoff

Charles R. Cummings

Gerald J. Ford

Jeremy B. Ford

J. Markham Green

Jess T. Hay

William T. Hill, Jr.

W. Robert Nichols III

C. Clifton Robinson

Kenneth D. Russell

Carl B. Webb

[Enterprising Investor]

Additions to the HTH Board of Directors.

Charlotte Jones Anderson

Tracey A. Bolt

Hill A. Feinberg

James R. Huffines

Andrew J. Littlefair

Lee Lewis

A. Haag Sherman

Robert C. Taylor, Jr.

Alan B. White

All but one of the are current members of the PlainsCapital board of directors.

These appointees will be in addition to the current members of the Board, all of whom the Company currently expects will remain members of the Board immediately following the closing of the Merger, for a total of 21 members.

[Enterprising Investor]

Special Meeting of Stockholders Results (9/20/12)

On September 20, 2012, Hilltop Holdings Inc held a Special Meeting of Stockholders in Dallas, Texas. At the Special Meeting, stockholders were asked to vote on the following four proposals:

Proposal No. 1: Approved the issuance of Hilltop Holdings Inc. common stock to PlainsCapital Corporation shareholders in connection with the merger of PlainsCapital Corporation with and into Meadow Corporation, a subsidiary of Hilltop Holdings Inc.

Proposal No. 2: Approved the adoption of the Hilltop Holdings Inc. 2012 Equity Incentive Plan.

Proposal No. 3: Approved of the adoption of the Hilltop Holdings Inc. Annual Incentive Plan.

Proposal No. 4: Approval of the adjournment of the Hilltop Holdings Inc. Special Meeting, if necessary or appropriate, to solicit additional proxies, in the event that there are not sufficient votes at the time of the Special Meeting to approve Proposal No. 1. Proposal No. 4 was withdrawn, as sufficient votes were cast at the Special Meeting to approve Proposal No. 1.

The merger remains subject to the satisfaction of certain closing conditions, including regulatory approvals.

http://sec.gov/Archives/edgar/data/1265131/000110465912064610/a12-21785_18k.htm

[Enterprising Investor]

Geography of PlainsCapital Corporation.

PlainsCapital Bank has locations in Arlington, Austin, Carrollton, Dallas, Fort Worth, Frisco, Lubbock, San Antonio and Weatherford.

https://www.plainscapital.com/personal-banking/pages/index.aspx

PrimeLending originates mortgage loans in all 50 states with over 200 branch locations.

http://www2.primelending.com/Default.aspx

FirstSouthwest is an investment banking firm best known for Public Finance. There are offices in Alaska, Arkansas, California, Colorado, Connecticut, the District of Columbia, Florida, Massachusetts, New York, North Carolina, Rhode Island and Texas.

http://www.firstsw.com/

[Enterprising Investor]

The History of PlainsCapital Corporation



A group of investors led by current PlainsCapital Corporation Chairman and CEO Alan B. White founded PlainsCapital Corporation in Lubbock, Texas, in March 1987.

The Corporation acquired Plains National Bank in Lubbock in February 1988. At the time, Plains National had $198.8 million in assets and was the fifth largest bank in Lubbock.

Over the next 11 years, Plains National’s market share and service offering grew, and it became the largest bank in Lubbock with approximately $878 million in assets.

With a solid asset base and a consistent source of deposits in Lubbock, the Corporation spent the next nine years entering new markets and expanding its service offering.

In 2000, PlainsCapital Corporation moved its headquarters to Dallas. The Bank was renamed PlainsCapital Bank in 2003.

Today, the Corporation is unique among its competitors for its diverse service offering which, in addition to banking, includes public finance advisory, investment banking and residential mortgages.

1988
The Corporation acquires Plains National Bank with $198.8 million in assets.



1999
The Corporation acquires PrimeLending, a Dallas-based mortgage company. The Bank opens its first Dallas branch.

2000
The Corporation moves its headquarters to Dallas and reaches $1 billion in assets. The Bank enters the Austin market..



2003
The Corporation reaches $2 billion in assets. The Bank changes its name to PlainsCapital Bank.

2004
The Bank enters San Antonio and Fort Worth.

2006
The Bank enters the Weatherford market.

2007
Corporation assets reach $3 billion.



2008
The Corporation acquires FirstSouthwest, a Dallas-based investment bank. The Bank enters the Arlington market.

2009
Corporation assets reach $4 billion

2010
Corporation assets reach $5 billion.

https://www.plainscapital.com/about-plainscapital/plainscapital-corporation/history-and-timeline/Pages/index.aspx

[mrholty]

One of the biggest issues in California was insurance especially the Worker's comp area. I can tell you that it looks like we may be a trough pricing and losses in this area. That may be a good precursor for business investment in California if pricing has stabalized. Banks follow business growth.

[56Chevy]

On 2nd thought Calif/west coast may of been Mr. Fords' desired target site pre-PCC days but now that HTH's holdings are spread across 40 states...that may not be the case. It's wherever opportunity knocks. Will that knock come from the state closest to home for Mr. Ford - Texas?

[56Chevy]

I would expect that the focus would remain in California. I read an article in 2008 that verified it as Ford's target area (requires time to locate).

Found it - Although this article was put out in late 2008, I doubt the desired target area has changed.

Billionaire Ford Shops for Banks as Government Welcomes Buyers

By Ari Levy - December 17, 2008 00:00 EST

Ford declined to name the two banks he tried to buy in the past month. He did admit a fondness for California and said he bid for a bank with between $10 billion and $12 billion in assets. Downey had $12.8 billion, the only bank of that size to fail this year.

“We operated banks out there, we had a very positive experience out there,” Ford said. “We like California over the long run. Right now it has its challenges.” The state is home to the fourth-highest foreclosure rate in the country, according to November data from RealtyTrac Inc.

<read more>

http://www.bloomberg.com/apps/news?pid=newsarchive&refer=home&sid=aEXLJ6RgPSKk

[bacc]

awesome job Ei

[Enterprising Investor]

HTH Enters into Definitive Merger Agreement with PlainsCapital Corporation (5/09/12)

DALLAS--(BUSINESS WIRE)--Hilltop Holdings Inc. (NYSE: HTH) a Dallas-based holding company, and Dallas-based PlainsCapital Corporation, the financial services holding company for PlainsCapital Bank, PrimeLending, and FirstSouthwest, today jointly announced the companies have signed a definitive merger agreement pursuant to which PlainsCapital Corporation will become a subsidiary of Hilltop.

The purchase consideration to PlainsCapital Corporation common shareholders includes approximately 27.5 million shares of Hilltop common stock and $318 million of cash. Each share of PlainsCapital Corporation common stock will be converted into the right to receive $9.00 in cash and 0.776 shares of Hilltop common stock. Based on Hilltop’s closing market price of $7.96 as of May 8, 2012, this reflects a combined value of $15.18 per share for PlainsCapital Corporation common stock. The value of the stock consideration to be received in the merger will fluctuate based on the market share price of Hilltop common stock. The merger is subject to customary closing conditions, including regulatory approvals and approval of the shareholders of Hilltop and PlainsCapital Corporation, and is expected to be completed prior to the end of 2012. Certain directors and officers of both companies have provided voting agreements to support the transaction.

“We are pleased to embark on this merger with PlainsCapital Corporation,” said Gerald J. Ford, Chairman of Hilltop. “We look forward to working with PlainsCapital and pursuing opportunities to grow the company. We envision a long term and mutually beneficial relationship as we seek to expand the combined company’s footprint.”

PlainsCapital Corporation Chairman and CEO Alan B. White added, “I am elated to join forces with a well-respected and very successful financier such as Gerald Ford. We believe this transaction will benefit our shareholders, customers, employees, and the communities we serve.”

As part of the agreement, White will become Vice Chairman of Hilltop and Chairman of the Executive Committee for Hilltop. White will also retain his role as Chairman and CEO of PlainsCapital Corporation. Gerald J. Ford will continue to serve as Chairman of Hilltop’s board and Jeremy B. Ford will continue to serve as President and CEO of Hilltop.

Stephens Inc. acted as financial advisor to Hilltop, and Wachtell, Lipton, Rosen & Katz acted as legal advisor. JPMorgan Securities LLC acted as financial advisor to PlainsCapital Corporation, and Sullivan & Cromwell acted as legal advisor.

About Hilltop Holdings Inc.

Hilltop is a holding company that is endeavoring to make acquisitions and effect a business combination. As of March 31, 2012, Hilltop had approximately $528 million aggregate available cash that may be used for this purpose. Hilltop also provides fire and homeowners insurance to low value dwellings and manufactured homes primarily in Texas and other areas of the south through its wholly-owned property and casualty insurance subsidiary, NLASCO, Inc.

About PlainsCapital Corporation

Founded in 1987, PlainsCapital Corporation is a Texas bank holding company and diversified financial services company headquartered in Dallas with more than $5.7 billion in assets, 3,400 employees and 330 locations in 40 states as of December 31, 2011. By providing responsive, highly personalized service, PlainsCapital builds enduring client relationships with middle market businesses, high net worth individuals, public sector entities, institutional investors, broker-dealers, investment advisors, and community banks through its family of companies: PlainsCapital Bank, FirstSouthwest, and PrimeLending.

FORWARD LOOKING STATEMENTS

This press release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause Hilltop’s or PlainsCapital’s actual results, performance or achievements to be materially different from any expected future results, performance, or achievements. Forward-looking statements speak only as of the date they are made and neither Hilltop nor PlainsCapital assumes any duty to update forward looking statements. Such forward-looking statements include, but are not limited to, statements about the benefits of the business combination transaction involving Hilltop and PlainsCapital, including future financial and operating results, the combined company’s plans, objectives, expectations and intentions and other statements that are not historical facts. The following factors, among others, could cause actual results to differ from those set forth in the forward-looking statements: (i) the possibility that the merger does not close when expected or at all because required regulatory, shareholder or other approvals and other conditions to closing are not received or satisfied on a timely basis or at all; (ii) changes in Hilltop’s stock price before closing, including as a result of PlainsCapital’s earnings, broader stock market movements, and the performance of financial companies and peer group companies, (iii) the risk that the benefits from the transaction may not be fully realized or may take longer to realize than expected, including as a result of changes in general economic and market conditions, interest and exchange rates, monetary policy, laws and regulations and their enforcement, and the degree of competition in the geographic and business areas in which PlainsCapital operates; (iv) the ability to promptly and effectively integrate the businesses of Hilltop and PlainsCapital; (v) the reaction of the companies’ customers, employees and counterparties to the transaction; and (vi) diversion of management time on merger-related issues. For more information, see the risk factors described in each of Hilltop’s and PlainsCapital’s Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and other filings with the Securities and Exchange Commission (the “SEC”).

ADDITIONAL INFORMATION

In connection with the proposed transaction, Hilltop expects to file with the SEC a registration statement on Form S-4 that will include a joint proxy statement of Hilltop and PlainsCapital that also constitutes a prospectus of Hilltop, and the final joint proxy statement/prospectus will be mailed to shareholders of PlainsCapital and Hilltop. Hilltop and PlainsCapital also plan to file other relevant documents with the SEC regarding the proposed transaction. INVESTORS ARE URGED TO READ THE JOINT PROXY STATEMENT/PROSPECTUS AND OTHER RELEVANT DOCUMENTS FILED WITH THE SEC IF AND WHEN THEY BECOME AVAILABLE, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. You may obtain a free copy of the joint proxy statement/prospectus (if and when it becomes available) and other relevant documents filed by Hilltop and PlainsCapital with the SEC at the SEC’s website at www.sec.gov. Copies of the documents filed by Hilltop with the SEC will be available free of charge on Hilltop’s website at www.hilltop-holdings.com or by contacting Hilltop Investor Relations at 214-855-2177. Copies of the documents filed by PlainsCapital with the SEC will be available free of charge on PlainsCapital’s website at www.plainscapital.com or by contacting PlainsCapital Investor Relations at 214-252-4155.

Hilltop and PlainsCapital and their respective directors and executive officers and other members of management and employees may be deemed to be participants in the solicitation of proxies in respect of the proposed transaction. You can find information about Hilltop’s executive officers and directors in Hilltop’s Annual Report on Form 10-K filed with the SEC on March 9, 2012 (as it may be amended from time to time) and its definitive proxy statement filed with the SEC on April 30, 2012. You can find information about PlainsCapital’s executive officers and directors in PlainsCapital’s Annual Report on Form 10-K filed with the SEC on March 16, 2012 (as it may be amended from time to time) and its definitive proxy statement filed with the SEC on April 3, 2012. Additional information regarding the interests of such potential participants will be included in the joint proxy statement/prospectus and other relevant documents filed with the SEC if and when they become available. Investors should read the joint proxy statement/prospectus carefully when it becomes available before making any voting or investment decisions. You may obtain free copies of these documents from Hilltop or PlainsCapital using the sources indicated above.

This document shall not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offering of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the U.S. Securities Act of 1933, as amended.

Contacts
Hilltop Holdings Inc.
Jeremy Ford, 214-855-2177
or
PlainsCapital Corporation
214-252-4155

http://www.businesswire.com/news/home/20120509005698/en/Hilltop-Holdings-Enters-Definitive-Merger-Agreement-PlainsCapital

[Enterprising Investor]

Zacks Bull of the Day Highlights: HTH (3/20/12)

Chicago, IL – March 20, 2012 – Zacks Equity Research highlights Hilltop Holdings, Inc. ( HTH) as the Bull of the Day and Guess? Inc.'s ( GES) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on JPMorgan Chase & Co. ( JPM), Bank of America Corporation ( BAC) and Citigroup Inc. ( C).

Bull of the Day:

We are upgrading our recommendation on Hilltop Holdings, Inc. ( HTH) to Outperform based on its fourth quarter earnings that modestly surpassed the Zacks Consensus Estimate, based on a higher-than-expected top line that benefited from improved premiums, investment income and net realized gain coupled with lower-than-expected expenses.

Hilltop's capital position remains sound along with a risk-free balance sheet that lays scope for efficient capital deployment. This is also evident from the new share buyback program, fostering shareholders' confidence in the stock.

Overall, Hilltop should continue to tread ahead with its strategic approach in order to capitalize on the opportunities that the markets provide on stabilization. Our six-month price target is $10.00 per share, reflecting about 0.8x our book value estimate of $12.33 per share at September 30, 2012. This target price implies an expected total return of 15.9% over that period.

http://ih.advfn.com/p.php?pid=nmona&article=51697457

[Penny Roger$]

~ Monday! $HTH ~ Earnings posted, pending or coming soon! In Charts and Links Below!

~ $HTH ~ Earnings expected on Monday *
Want more like this? Search Keyword: MACMONEY >>> http://tinyurl.com/MACMONEY <<<
One or more of many earnings sites has alerted this security has or will be posting earnings on or around the day of this message.








http://stockcharts.com/h-sc/ui?s=HTH&p=D&b=3&g=0&id=p88783918276&a=237480049




http://stockcharts.com/h-sc/ui?s=HTH&p=W&b=3&g=0&id=p54550695994



~ Google Finance: http://www.google.com/finance?q=HTH
~ Google Fin Options: hhttp://www.google.com/finance/option_chain?q=HTH#
~ Yahoo! Finance ~ Stats: http://finance.yahoo.com/q/ks?s=HTH+Key+Statistics
~ Yahoo! Finance ~ Profile: http://finance.yahoo.com/q/pr?s=HTH
Finviz: http://finviz.com/quote.ashx?t=HTH
~ BusyStock: http://busystock.com/i.php?s=HTH&v=2


<<<<<< http://www.earningswhispers.com/stocks.asp?symbol=HTH >>>>>>



http://investorshub.advfn.com/boards/post_prvt.aspx?user=251916

*If the earnings date is in error please ignore error. I do my best.

[Enterprising Investor]

Jeremy Ford and Prestridge Awarded Stock Options (11/02/11)

On November 2, 2011, the Compensation Committee of the Board of Directors of Hilltop Holdings Inc., or the Company, awarded Jeremy B. Ford, the Company’s President and Chief Executive Officer, and Corey G. Prestidge, the Company’s General Counsel and Secretary, stock options to purchase 500,000 shares and 100,000 shares, respectively, of Company common stock. These stock options have an exercise price of $7.70 per share, vest in five equal installments on each of November 2, 2011, 2012, 2013, 2014 and 2015 and expire on November 2, 2016. The description of these stock options is qualified by reference to the Form of 2003 Equity Incentive Plan Non-Qualified Stock Option Agreement, a copy of which is filed as Exhibit 10.2.3 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2010.

http://sec.gov/Archives/edgar/data/1265131/000110465911062190/a11-29449_18k.htm

[HTH closed at $7.72 on 11/02/11]

[Enterprising Investor]

HTH owns 10,171,039 SWS shares (11/16/11)

Controls 24.6 percent.

From November 15, 2011 through November 25, 2011, the Reporting Person purchased 1,117,987 shares of Common Stock in the open market and through a block purchase for an aggregate cash purchase price of $5,949,977. The Reporting Person made these purchases utilizing funds from its available working capital.

[Average cost is $5.32 per share. Total open market purchases are 1,475,387 shares for a cost of $7,662,512 or $5.19 per share.]

a) Includes 8,695,652 shares of common stock that are acquirable upon the exercise of a warrant. The warrant is exercisable at any time for five years from the date of original issuance, but will expire to the extent that SWS Group, Inc. prepays the loan made to it by Hilltop Holdings Inc. and the holder does not exercise a corresponding portion of the warrant. The exercise price and number of shares of common stock acquirable upon exercise of the warrant is subject to adjustment as set forth in the warrant.

http://sec.gov/Archives/edgar/data/878520/000110465911067199/a11-30875_1sc13da.htm

[Enterprising Investor]

HTH owns 9,053,052 SWS shares (9/13/11)

Controls 22 percent.

From September 6, 2011 through September 13, 2011, the Reporting Person purchased 357,400 shares of Common Stock in the open market for an aggregate cash purchase price of $1,712,535. The Reporting Person made these purchases utilizing funds from its available working capital.

[Average cost is $4.80 per share]

a) Includes 8,695,652 shares of common stock that are acquirable upon the exercise of a warrant. The warrant is exercisable at any time for five years from the date of original issuance, but will expire to the extent that SWS Group, Inc. prepays the loan made to it by Hilltop Holdings Inc. and the holder does not exercise a corresponding portion of the warrant. The exercise price and number of shares of common stock acquirable upon exercise of the warrant is subject to adjustment as set forth in the warrant.

http://sec.gov/Archives/edgar/data/878520/000110465911052135/a11-26575_1sc13da.htm

[Enterprising Investor]

HTH owns 8,695,652 SWS shares (7/29/11)

Controls 21.1 percent.

a) Includes 8,695,652 shares of common stock that are acquirable upon the exercise of a warrant. The warrant is exercisable at any time for five years from the date of original issuance, but will expire to the extent that SWS Group, Inc. prepays the loan made to it by Hilltop Holdings Inc. and the holder does not exercise a corresponding portion of the warrant. The exercise price and number of shares of common stock acquirable upon exercise of the warrant is subject to adjustment as set forth in the warrant.

http://sec.gov/Archives/edgar/data/878520/000110465911044918/a11-23952_1sc13d.htm

[Enterprising Investor]

SWS Group Completes $100 Million Capital Raise (8/01/11)

Gerald J. Ford and J. Taylor Crandall Join SWS Group Board of Directors

DALLAS, Aug. 1, 2011 /PRNewswire/ -- SWS Group, Inc. (NYSE: SWS) today announced the completion of its $100 million capital raise with Hilltop Holdings Inc. (NYSE: HTH) and Oak Hill Capital Partners. The capital will be used to address asset quality issues at its banking subsidiary, Southwest Securities, FSB, ("the Bank") and for other corporate purposes, including growth opportunities for its broker-dealer.

Pursuant to the transaction, Hilltop and Oak Hill Capital (the "Investors") each made a $50 million loan to SWS Group, and SWS Group issued each of Hilltop and Oak Hill Capital a warrant to purchase shares of common stock of SWS Group at an exercise price of $5.75 per share. Upon full exercise of the warrants, Hilltop and Oak Hill Capital would each own approximately 17 percent of the Company.

In connection with the closing of the transaction, the Company also announced that Gerald J. Ford, Chairman of the Board of Hilltop, and J. Taylor Crandall, Managing Partner of Oak Hill Capital, have joined the Board of Directors of SWS Group, effective immediately. In addition to the board seats held by Mr. Ford and Mr. Crandall, Hilltop and Oak Hill Capital will each appoint a non-voting observer to the Board of Directors.

"We are pleased to announce the successful completion of this important transaction, and I would like to thank the many shareholders, employees and customers who have been supportive throughout this process," said James H. Ross, Chief Executive Officer of SWS Group. "This investment represents a significant opportunity for SWS Group as we chart a course for future growth and success. We welcome Mr. Ford and Mr. Crandall to the Board of Directors and look forward to the benefit of their unique expertise and insight."

Mr. Ford has served as Chairman of the Board of Hilltop since August 2007 and has served as a director of Hilltop since June 2005. Mr. Ford is a banking and financial institutions entrepreneur who has been involved in numerous mergers and acquisitions of private and public sector financial institutions, primarily in the Southwestern United States, over the past 35 years.

Mr. Crandall is a Managing Partner of Oak Hill Capital and has been a member of the firm since 1986. He has senior responsibility for originating, structuring and managing investments for the firm's Media and Telecom and Technology industry groups. Prior to joining Oak Hill Capital, Mr. Crandall was a Vice President with the First National Bank of Boston, where he managed a leveraged buyout group and the bank's Dallas energy office. Mr. Crandall earned a B.A. degree, magna cum laude, from Bowdoin College, where he has served on the Board of Overseers. Mr. Crandall also received an honorary doctorate in humane letters from Bowdoin College in 2010.

Stephens Inc. acted as financial advisor to each of Hilltop and Oak Hill Capital, and Sandler O'Neill + Partners acted as financial advisor to SWS Group. Andrews Kurth LLP and Richards, Layton & Finger, P.A. served as legal advisors to SWS Group. Wachtell, Lipton, Rosen & Katz LLP served as legal advisor to Hilltop. Simpson Thacher & Bartlett LLP served as legal advisor to Oak Hill Capital.

About SWS Group

SWS Group, Inc. is a Dallas-based company offering a broad range of investment and financial services through its subsidiaries. The Company's common stock is listed and traded on the New York Stock Exchange under the symbol SWS. SWS Group, Inc. subsidiaries include Southwest Securities, Inc., a national clearing firm, registered investment adviser and registered broker-dealer; SWS Financial Services, Inc., a registered investment adviser and a registered broker-dealer serving independent securities brokers and their clients; and Southwest Securities, FSB, one of the largest banks headquartered in the Dallas-Fort Worth metropolitan area.

About Hilltop Holdings Inc.

Hilltop Holdings Inc. is a public holding company that has substantial cash to pursue transactions. Its Chairman, Gerald J. Ford, is one of the nation's most accomplished financial services executives. Hilltop also owns NLASCO, a company that specializes in providing fire and homeowners insurance to low value dwellings and manufactured homes primarily in Texas and other southern states. NLASCO operates through its wholly-owned subsidiaries, National Lloyds Insurance Company and American Summit Insurance Company.

About Oak Hill Capital Partners

Oak Hill Capital Partners is a private equity firm managing more than $8 billion of committed capital from leading entrepreneurs, endowments, foundations, corporations, pension funds and global financial institutions. Robert M. Bass is the lead investor. Over a period of more than 25 years, the professionals at Oak Hill Capital Partners and its predecessors have invested in more than 70 significant private equity transactions. Oak Hill Capital invests across broad segments of the U.S. and global economies with an industry-focused, theme-based approach. Oak Hill Capital Partners is one of several independently managed firms operating with the Oak Hill name and investing in various asset classes. For more information about Oak Hill Capital Partners, please visit www.oakhillcapital.com.

http://www.prnewswire.com/news-releases/sws-group-completes-100-million-capital-raise-with-hilltop-holdings-and-oak-hill-capital-partners-126507873.html

[Enterprising Investor]

SWS Group Stockholders Approve $100 Million Capital Raise (5/18/11)

DALLAS, May 18, 2011 /PRNewswire/ -- SWS Group, Inc. (NYSE: SWS) announced that at the Company's special meeting of stockholders held today, SWS Group's stockholders voted to approve the proposed $100 million capital raise with Hilltop Holdings Inc. (NYSE: HTH) and Oak Hill Capital Partners.

"We are pleased that today's vote overwhelmingly reaffirmed the unanimous recommendation of the Board of Directors and confirmed the Board's view that this investment is in the best interest of stockholders and the future of SWS Group," said James H. Ross, Chief Executive Officer of SWS Group. "On behalf of the Board of Directors and management team, I want to thank our stockholders, customers and dedicated employees for their support throughout this process. We look forward to completing this transaction as soon as possible and continuing to meet the needs of our customers for many years to come."

As previously announced, Hilltop and Oak Hill Capital have each agreed to make a $50 million loan to SWS Group, and SWS Group agreed to issue each of Hilltop and Oak Hill Capital a warrant to purchase shares of common stock of SWS Group. Upon exercise of the warrants, Hilltop Holdings and Oak Hill Capital would each own approximately 17 percent of the Company.

The capital raise is conditioned on requisite regulatory approvals or consents and satisfaction of customary conditions. The transaction is expected to close as soon as practicable following receipt of regulatory approval.

Sandler O'Neill + Partners, L.P., is serving as financial advisor to SWS Group, and Andrews Kurth LLP is serving as its legal advisor.

About SWS Group

SWS Group, Inc. is a Dallas-based company offering a broad range of investment and financial services through its subsidiaries. The Company's common stock is listed and traded on the New York Stock Exchange under the symbol SWS. SWS Group, Inc. subsidiaries include Southwest Securities, Inc., a national clearing firm, registered investment adviser and registered broker-dealer; SWS Financial Services, Inc., a registered investment adviser and a registered broker-dealer serving independent securities brokers and their clients, and Southwest Securities, FSB, one of the largest banks headquartered in the Dallas-Fort Worth metropolitan area.

http://www.prnewswire.com/news-releases/sws-group-stockholders-approve-100-million-capital-raise-with-hilltop-holdings-and-oak-hill-capital-partners-122153454.html

[Enterprising Investor]

SWS Commences Mailing of Definitive Proxy Statement In Connection With Proposed $100 Million Capital Raise (4/12/11)

Special Meeting of Stockholders Scheduled for May 18, 2011

DALLAS, April 12, 2011 /PRNewswire/ -- SWS Group, Inc. (NYSE: SWS) today announced it has filed with the Securities and Exchange Commission definitive proxy materials in connection with its definitive Funding Agreement with Hilltop Holdings Inc. (NYSE: HTH) and Oak Hill Capital Partners (the "Investors"). The company expects to commence mailing of the definitive proxy materials to SWS Group stockholders today. As previously announced on March 21, 2011, pursuant to the Funding Agreement, Hilltop and Oak Hill Capital each agreed to invest in SWS Group through a $50 million loan, and SWS Group agreed to issue each of Hilltop and Oak Hill Capital a warrant to purchase common shares of SWS Group.

A special meeting of SWS Group stockholders to consider and vote upon the proposed transaction will be held at Renaissance Tower, 1201 Elm Street, Suite 4200, Dallas, Texas 75270, at 9:00 a.m., local time, on May 18, 2011. All SWS Group stockholders of record at the close of business on April 7, 2011, are entitled to vote on the matters presented at the special meeting.

SWS Group's Board of Directors has unanimously approved the transaction and recommends that all SWS Group stockholders vote "FOR" the proposed issuance of the warrants and the securities issuable upon the exercise of the warrants.

The extension of the loan and issuance of the warrants are conditioned on, among other things, receipt of requisite regulatory approvals and consents, approval by the stockholders of SWS Group of the issuance of the warrants and the securities issuable upon the exercise of the warrants, maintenance by SWS Group of specified levels of deposits and other customary conditions. Closing of these transactions is expected in the third calendar quarter of 2011.

SWS Group stockholders are encouraged to read the company's definitive proxy materials in their entirety as they provide, among other things, a detailed discussion of the process that led to the proposed transaction and the reasons behind the Board of Directors' unanimous recommendation that stockholders vote "FOR" the approval of the transaction.

SWS stockholders who have questions about the transaction or need assistance in submitting their proxy or voting their shares should contact the company's proxy solicitor, MacKenzie Partners, located at 105 Madison Avenue, New York, NY 10016 at [phone] (call collect) or [phone] (toll-free).

Sandler O'Neill + Partners, L.P. is serving as financial advisor to SWS Group and Andrews Kurth LLP is serving as its legal advisor.

http://www.prnewswire.com/news-releases/sws-group-to-commence-mailing-of-definitive-proxy-statement-in-connection-with-proposed-100-million-capital-raise-119722339.html

[Enterprising Investor]

Link to SWS board:

http://investorshub.advfn.com/boards/board.aspx?board_id=11107

[56Chevy]

The Bass family has done well (overall) with its investment strategy. Richard Rainwater, with whom Robert Bass attended Stanford Business School, helped turn the family's modest $50 million fortune into one worth upwards of $5 billion after about 15 years working with the family


I knew I had seen the name Richard Rainwater before and then it came to me it was during the Thornhurg Mortgage days.

http://www.businessweek.com/bwdaily/dnflash/content/mar2008/db20080313_957094.htm

[Enterprising Investor]

Oak Hill Capital is controled by Robert Bass.

Robert Bass is ranked 74 on the Forbes 400. His uncle, Sid Richardson, was once worth $810 million. He and his three brothers Lee (182), Ed (269), and Sid Bass (182) all attended Yale University. Working together with his brothers at first as Bass Brothers Enterprises and then working independently, Robert Bass made many successful investments through his own firm, the Robert M. Bass Group, later Keystone Inc. In 2004, he started Aerion Corp to develop supersonic corporate jets, which is the beneficiary of lucrative Federal DARPA contracts.

The Bass family has done well (overall) with its investment strategy. Richard Rainwater, with whom Robert Bass attended Stanford Business School, helped turn the family's modest $50 million fortune into one worth upwards of $5 billion after about 15 years working with the family.

The Bass family is noted for their developments in Tarrant County, Texas and their efforts to revitalize an area in downtown Fort Worth called Sundance Square. The Sid Richardson Museum is located there.

http://www.sidrichardsonmuseum.org/nu_site/sid_richardson_museum.php/museum/highlights

[Enterprising Investor]

Some clarification (may require a scorecard).

HTH should be considered a holding company, much like BRK.

It had approximately $600 million aggregate available cash and cash equivalents for acquisitions at 12/31/10. Potential targets are evaluated from across all industries - not just banking.

HTH originally received its shelf charter in November 2008. Due to the length of time that has passed since the original application and various other changes, the OCC requested that a full, updated application be re-filed. HTH withdrew the original shelf charter application and re-filed an application that reflects updates and other changes made since the original application. A "shelf charter" would valuable.

I would expect that the focus would remain in California. I read an article in 2008 that verified it as Ford's target area (requires time to locate). Geographical reach could include a bank with branches across neighboring state lines (Nevada, Arizona and Oregon).

[56Chevy]

<An excerpt from the link below>

Ford is chairman of a pair of private equity funds that finished raising $1.28 billion at the start of October with the aim to buy weakened banks. At the same time, he has filed to start a national bank under the name Ford Bank Group.

http://www.bizjournals.com/dallas/stories/2008/10/27/story2.html

According to this his aspirations go beyond a regional West Coast operations. No?

[Enterprising Investor]

SWS Group Inc Announces $100 Million Capital Raise (3/21/11)

Hilltop Holdings and Oak Hill Capital Partners Each to Invest $50 Million

Investment to Address Asset Quality Issues at Bank and Provide Growth Opportunities for Broker-Dealer

DALLAS, March 21, 2011 /PRNewswire/ -- SWS Group, Inc. (NYSE: SWS) today announced that it has entered into a definitive Funding Agreement with Hilltop Holdings Inc. (NYSE: HTH) and Oak Hill Capital Partners. Pursuant to the Agreement, Hilltop and Oak Hill Capital each agreed to invest in the Company through a $50 million loan, and SWS Group agreed to issue each of Hilltop and Oak Hill Capital a warrant to purchase common shares of SWS Group.

Upon satisfaction of the conditions of the Funding Agreement, Hilltop and Oak Hill Capital will extend a senior unsecured loan to SWS Group in aggregate principal amount of $100 million pursuant to a Credit Agreement. The loans will bear interest of 8.0% per annum, have a maturity of five years and will be prepayable by SWS Group under certain conditions after three years. Simultaneously with the making of the loan, SWS Group will issue a warrant to each of Hilltop and Oak Hill Capital to purchase 8,695,652 shares of common stock of SWS Group at an exercise price of $5.75, subject to anti-dilution adjustments. Upon exercise, Hilltop Holdings and Oak Hill Capital will each own approximately 17% of the Company. SWS Group will also appoint one representative from Hilltop and one from Oak Hill Capital to its Board of Directors at the time that the loan is extended. Gerald J. Ford is the Hilltop representative expected to join the Board, and J. Taylor Crandall is the Oak Hill Capital representative expected to join the Board.

Deterioration in the commercial real estate loan portfolio at SWS Group's bank, Southwest Securities, FSB, has led to increased credit costs and classified asset levels. The bank entered into an Order to Cease and Desist (C&D) with the Office of Thrift Supervision on February 4, 2011. As previously reported, the Company has been actively exploring various capital raising alternatives for several months. SWS Group believes that the $100 million capital raise will address the asset quality issues at the bank while adhering to the increased capital requirements imposed by the C&D. SWS Group also believes that the financial services expertise of Hilltop and Oak Hill Capital will allow the Company to focus on the opportunities to enhance all areas of its business.

"This transaction will provide the Company with the capital necessary to address the challenges at the bank and help ensure its long-term strength," said James H. Ross, Chief Executive Officer of SWS Group. "In addition, we believe this strategic partnership will enable us to grow other parts of our business and is an excellent opportunity for all shareholders to participate in the Company's upside potential.

"Both Hilltop and Oak Hill Capital are ideal partners that bring extensive experience and a track record of success as a strategic investor in the financial services sector." Ross added, "I would also like to thank our many shareholders, customers and employees for their support. We look forward to continuing to meet our customers' needs for many years to come."

"We are excited about this partnership and, based upon our comprehensive diligence, believe that SWS Group will be well positioned for future growth and success once the bank issues are addressed," said Gerald J. Ford, Chairman of Hilltop Holdings.

"We are pleased to be part of SWS Group's capital raise," said J. Taylor Crandall, Managing Partner of Oak Hill Capital. "After months spent reviewing all aspects of the Company's business, we believe the new capital will assist substantially in strengthening the bank and we are confident in the Company's long-term growth potential."

The extension of the loan and issuance of the warrants are conditioned on, among other things, receipt of requisite regulatory approvals, approval by the stockholders of SWS Group of the issuance of the warrants, maintenance by SWS Group of specified levels of deposits and other customary conditions. Closing of these transactions is expected in the third calendar quarter of 2011.

Stephens Inc. acted as financial advisor to each of Hilltop and Oak Hill Capital, and Sandler O'Neill + Partners acted as financial advisor to SWS Group. Andrews Kurth LLP and Richards, Layton & Finger, P.A. served as legal advisors to SWS Group. Wachtell, Lipton, Rosen & Katz served as legal advisor to Hilltop. Simpson Thacher & Bartlett LLP served as legal advisor to Oak Hill Capital.

About SWS Group

SWS Group, Inc. is a Dallas-based company offering a broad range of investment and financial services through its subsidiaries. The company's common stock is listed and traded on the New York Stock Exchange under the symbol SWS. SWS Group, Inc. subsidiaries include Southwest Securities, Inc., a national clearing firm, registered investment adviser and registered broker-dealer, SWS Financial Services, Inc., a registered investment adviser and a registered broker-dealer serving independent securities brokers and their clients, and Southwest Securities, FSB, one of the largest banks headquartered in the Dallas-Fort Worth metropolitan area.

About Hilltop Holdings Inc.

Hilltop Holdings Inc. is a public holding company that has substantial cash to pursue transactions. Its Chairman, Gerald J. Ford, is one of the nation's most accomplished financial services executives. Hilltop also owns NLASCO, a company that specializes in providing fire and homeowners insurance to low value dwellings and manufactured homes primarily in Texas and other areas of the south, southeastern and southwestern United States. NLASCO operates through its wholly-owned subsidiaries, National Lloyds Insurance Company and American Summit Insurance Company.

About Oak Hill Capital Partners

Oak Hill Capital Partners is a private equity firm with more than $8.2 billion of committed capital from leading entrepreneurs, endowments, foundations, corporations, pension funds and global financial institutions. Robert M. Bass is the lead investor. Over a period of more than 24 years, the professionals at Oak Hill Capital Partners and its predecessors have invested in more than 60 significant private equity transactions. Oak Hill Capital Partners is one of several Oak Hill partnerships, each of which has a dedicated and independent management team. These Oak Hill partnerships comprise over $30 billion of investment capital across multiple asset classes. For more information about Oak Hill Capital Partners, please visit www.oakhillcapital.com.

Forward Looking Statements

Certain information contained in the press release may include "forward-looking statements." These forward-looking statements relate to the Company's plans for raising capital, including the closing of the transaction described in the press release. Such statements also relate to the potential success of the Company's future plans to strengthen its balance sheet. There can be no assurance that the Company will be able to achieve its goals, close on the transaction with investors and obtain required capital, or that other actual results, performance or achievements of the Company will not differ materially from those expressed or implied by the forward-looking statements. Factors that could cause actual events or results to differ significantly from those described in or implied by the forward-looking statements include, but are not limited to, (1) our ability to complete the transaction announced today, (2) our ability to attract new deposits and loans; (3) local, regional, and national economic conditions and events and the impact they may have on us and our customers; (4) increasing levels of classified assets, including nonperforming assets, which could adversely affect our earnings and liquidity; (5) market interest rate volatility; (6) changes in legal or regulatory requirements or the results of regulatory examinations that could restrict growth and constrain our activities, including the terms of our Order to Cease and Desist entered into with the Office of Thrift Supervision; and (7) changes in accounting standards and interpretations. For details on these and other factors that could affect expectations, see the cautionary language included under the headings "Risk Factors" and "Forward- Looking Statements" in the Company's Annual Report on Form 10-K for the year ended June 25, 2010 and other filings with the Securities and Exchange Commission (the "SEC").

Additional Information

SWS Group will be filing a proxy statement with the SEC with respect to the issuance of the warrant in the proposed transaction. Shareholders of SWS Group are urged to read the proxy statement when it becomes available, as well as other documents filed with the SEC, because they will contain important information. The final proxy statement will be mailed to stockholders of SWS Group. Investors and security holders may obtain free copies of these documents (when they are available) and other documents filed with the SEC at the SEC's web site at www.sec.gov, or by contacting SWS Group at [phone].

Participants

SWS Group and its directors, executive officers and other members of management and employees may be deemed to be participants in the solicitation of proxies in respect of the transaction. Information concerning SWS Group's executive officers and directors is set forth in its definitive proxy statement filed with the SEC on October 8, 2010. Additional information regarding the interests of participants of SWS Group in the solicitation of proxies in respect of the transaction will be included in the above-referenced proxy statement when it becomes available. You can obtain free copies of these documents from SWS Group using the contact information above.

SOURCE SWS Group, Inc.

http://www.prnewswire.com/news-releases/sws-group-inc-announces-100-million-capital-raise-118354409.html

[Enterprising Investor]

[BKU] Secret to Bank's Comeback: A Rich Uncle Named Sam (1/28/11)

By ROBIN SIDEL

MIAMI LAKES, Fla.—Before BankUnited FSB collapsed in May 2009, employees lit candles and prayed that Florida's biggest bank would survive the bad loans it made before the housing bubble burst.

The miracle came in the form of Uncle Sam, or more precisely, the Federal Deposit Insurance Corp., which sold the failed BankUnited to a group of Wall Street financiers led by a longtime New York banker. The FDIC agreed to reimburse as much as $10.5 billion in future loan losses—and gave the new owners $2.2 billion in cash. The buyers paid $945 million.

Since then, BankUnited has become one of the most profitable, highly capitalized financial institutions in the U.S. Deposits are pouring in, loans are flowing to businesses, and executives are itching to buy banks in Florida and New York City.

After the closing bell Thursday, BankUnited sold 29 million shares at $27 each in an initial public offering that values the company at roughly $2.6 billion. The deal is the first IPO by a bank raised from the dead during the financial crisis.

The owners of what is now called BankUnited Inc. are expected to collect more than $500 million from the sale, while keeping a roughly 70% stake in the company, and the FDIC will get at least $25 million from the stock sale. Shares of the BankUnited are expected to start trading Friday on the New York Stock Exchange.

"I wish I had access to that kind of money," says Keith Costello, chief executive at Broward Bank of Commerce, based in Fort Lauderdale, Fla. He says his bank recently lost a potential customer to BankUnited because it was too small to make the loan the borrower needed.

As the nation's roughly 7,700 banks and savings institutions try to recover from about $493 billion in loan losses since the start of 2007, BankUnited is emerging as a case study of how government largess in the immediate wake of the crisis has allowed certain lucky institutions to thrive—while others, whose timing was less opportune, continue to struggle.

As the economy stabilized, the FDIC's incentives to lure buyers became less generous than those enjoyed by the new owners of BankUnited.

The bank is also proving that it's still possible to wring money out of humdrum banking. Instead of relying on the adjustable-rate mortgages that doomed the old bank, BankUnited now dangles sales incentives at employees to make conventional loans. It funnels deposits into plain-vanilla consumer and commercial loans, and makes money the old-fashioned way, from the difference between the interest it pays depositors and what it collects on the loans. Through the first nine months of 2010, BankUnited earned $156.9 million in profits. Return on equity was 18%, compared with 10% at J.P. Morgan Chase & Co. and 12% at U.S. Bancorp, the strongest giant banks in the U.S.

The bank's revival has come at a price: So far, BankUnited's failure has cost the FDIC more than $3.2 billion, including the initial cash pay-out and subsequent reimbursements for losses on loans that have soured. The agency estimates that the failure will ultimately cost its deposit-insurance fund $5.7 billion. The FDIC is funded by the nation's banks, which have had to pony up extra money over the past two years to cover the cost of industry failures.

Other Florida bankers acknowledge the terms received by BankUnited's new owners were generous, but also note that there were few other buyers willing or able to step up and take on the risks. "They still have to put in a lot of work. They're earning their money," says David Seleski, chief executive officer of Stonegate Bank in Fort Lauderdale.

And the FDIC estimates the final tally will still be $1.5 billion less than what it would have cost the agency if it hadn't found a buyer and absorbed the losses itself. "The fact that BankUnited can issue an IPO which will result in more capital for the institution and a more diverse set of investors is a very positive development and indicative of the change in market conditions since the original transaction," says James Wigand, who oversaw until recently the FDIC's sales of assets from failed banks.

BankUnited declined to comment, citing Securities and Exchange Commission rules against speaking publicly just before an initial public offering. In a securities filing last week, the company said: "We believe that our customers are attracted to us because we offer the resources and sophistication of a large bank as well as the responsiveness and relationship-based approach of a community bank."

Other banks, chastened by their recent losses and 332 bank failures since the start of 2007, also are getting back to basics.

Bank of America Corp. is shedding assets outside the U.S. and trying to talk checking-account customers into moving money into Merrill Lynch retirement accounts. Wells Fargo & Co. wants to double the number of services it sells to its business customers. City National Corp., a Los Angeles bank with entertainment-industry roots, recently opened a branch in New York's Times Square and is pitching checking accounts to Broadway actors.

"Our industry needs to become a simpler place for the broad majority of mass-market customers we serve," Brian Moynihan, Bank of America's chief executive, said in November.

BankUnited got a head start on the rest of the banking industry. The biggest reason: As part of the deal with regulators, the FDIC reimburses BankUnited for 80% of all losses on about $4 billion in loans made before it failed—and 95% of losses on an additional $7.7 billion. The FDIC wires the money directly to BankUnited: more than $1 billion as of the end of 2010. The loss-sharing agreement lasts as long as 10 years, depending on the loan.

"It was the perfect deal at the perfect time," says Carlos Fernandez-Guzman, a former BankUnited senior executive vice president who left last spring to become president and CEO of Pacific National Bank in Miami. "I think everyone involved made out like a bandit: the regulators, the private-equity firms, the customers and certainly the folks that are going to invest."

BankUnited's owners include private-equity firms Carlyle Group LP, Blackstone Group LP and Centerbridge Partners LP, financier Wilbur Ross and several smaller investors. Until the crisis, private-equity firms usually steered clear of buying banks because returns were lackluster compared with other companies. Regulators were also wary of these firms, worried that such investors cared only about making a quick buck.

After the crisis hit, federal officials, desperate to attract capital to reeling U.S. banks, were more welcoming to private-equity groups. They now get essentially the same terms as traditional banks when buying failed institutions, though private-equity firms are subject to more rules.

As a result, private-equity firms have pumped billions of dollars into more than 50 financial institutions since 2008. IndyMac Bank FSB, the Pasadena, Calif., lender that failed in July 2008, came back to life as OneWest Bank FSB. Its current owners include billionaire George Soros and Dell Inc. CEO Michael Dell. OneWest has raked in nearly $1.5 billion of profits so far and bought two other California banks that failed.

BankUnited's turnaround is led by John Kanas, 64 years old, who turned a sleepy Long Island, N.Y., thrift into regional-bank powerhouse North Fork Bancorp during the 1990s. He pocketed an estimated $185 million after selling North Fork to Capital One Financial Corp. in 2006, but soon left and started looking for new investment opportunities.

In mid-2008, Mr. Kanas was approached by Andrew Senchak at Keefe, Bruyette & Woods Inc., a boutique investment bank that specializes in the financial-services industry. Mr. Senchak was trying to help BankUnited raise capital and urged Mr. Kanas to take a look. Started in 1984 by a Florida lawyer, the bank rode the boom in adjustable-rate mortgages, which let borrowers make minimal initial payments on their home loans but face sharply higher ones later.

As the housing market sank, BankUnited executives tried to maintain employee morale by throwing a Halloween costume contest, handing out $25 gas cards and letting workers wear jeans on Friday, according to employees. To keep nervous depositors from pulling their money out, BankUnited jacked up interest rates.

Mr. Kanas wasn't ready to make a bid. Over the next six months, he sifted through the books of 75 stumbling financial institutions in California, Las Vegas and the Midwest.

As BankUnited grew sicker, though, Mr. Kanas began to think it might be more attractive. In January 2009, he received a phone call from Olivier Sarkozy, a former investment banker in charge of Carlyle's financial-services investments who was also considering buying BankUnited. Mr. Kanas and another Carlyle banker flew to Atlanta to meet with representatives of the FDIC and Office of Thrift Supervision.

"If and when this bank gets on your [failure] list, I'd like to be considered," Mr. Kanas told government officials, according to a person who heard the comment.

Regulators soon declared BankUnited "critically undercapitalized" and ordered it to raise new capital or sell itself. Because nearly 20% of the bank's loan portfolio had gone bad, Mr. Kanas and other bidders balked at buying BankUnited without assistance from the government.

As FDIC officials prepared to seize BankUnited, more than 60 potential buyers were invited to examine the bank's financial statements and loan records. In the end, there were just three bidders, including the Kanas-led group.

"I tried to find the worst bank in the country, and I did," Mr. Kanas quipped in a presentation to bank-industry investors shortly after the BankUnited acquisition.

Mr. Kanas, who invested $23.5 million in the deal and commutes to Florida each week, declined to be interviewed for this article.

"Everybody would like to repeat what John did, but that's not happening," says Herb Boydstun, CEO of First Southern Bank in Boca Raton, Fla., since the FDIC's terms aren't as generous anymore.

After taking control, Mr. Kanas, now BankUnited's chairman, president and CEO, brought in three former North Fork lieutenants, closed branches in unappealing neighborhoods and slashed interest rates paid on certificates of deposit.

He also shook up the bank's high-rent corporate culture. The headquarters moved from a wood-paneled penthouse in downtown Coral Cables to a low-rise office complex about 30 miles away in Miami Lakes. Mr. Kanas threw a "welcome home" party in the parking lot for employees, and promised to provide more picnic tables so people could eat lunch outside.

Across the street is a pasture where Mr. Kanas regularly walks to visit about two dozen cows who graze there. "For Sale or Lease" signs stick up in front of nearby office buildings, casualties of the battered real-estate market.

BankUnited's private-equity ownership comes with some restrictions. Regulators prohibit the bank from doing business with any of the scores of companies that are owned by Blackstone, Carlyle or the other investors, in order to avoid potential conflicts. These include a range of business, such as Hilton, Hertz and SeaWorld.

When Mr. Kanas wanted new software for BankUnited's loan-servicing department, he had to hire his second choice because his first was owned by Carlyle. The restrictions also affect this week's IPO because Carlyle recently acquired a stake in Sandler O'Neill + Partners LP, which had advised the old BankUnited and Mr. Kanas. As a result, the investment bank is prohibited from handling the underwriting.

Since the failure in May 2009, deposits, not including CDs, at BankUnited have surged about 80% through September. The bank has made $429.5 million in new loans and had $11.2 billion in total assets as of Sept. 30. BankUnited hasn't reported fourth-quarter results.

Mr. Kanas has seven new branches in the works. He wrote a series of cheeky ads in local newspapers that encouraged "unhappy Florida bankers" to quit their jobs and bring their clients to BankUnited. He pried some away by offering extra cash and restricted stock if they met certain goals.

"It is not the kind of sportsmanship that we are used to," one rival banker says.

Some bankers say Mr. Kanas will get a run for his money once other financial institutions in Florida rebuild their capital and start generating consistent profits. "The returns that John Kanas has had are phenomenal, but you couldn't get them in a real banking environment," says Bruce Keir, chief executive of Community Bank of Broward, based in Weston, Fla.

BankUnited's initial public offering raised nearly $800 million, based on the $27 price. It will rank among the 20 largest-ever financial-services deals, according to Dealogic Inc.

http://online.wsj.com/article/SB20001424052748704279704576101823931818868.html

[Enterprising Investor]

NOLs at 9/30/10 approximately $45.5 million.

The amounts which expire if not utilized is $18.0 million in 2023, $20.6 million in 2024 and $6.9 million in 2025.

[Enterprising Investor]

Jeremy B. Ford is President and CEO effective 3/11/10.

Jeremy B. Ford, age 35, has worked in the financial services industry for over ten years, primarily focused on investments in and acquisitions of depository institutions and insurance and finance companies. He also is one of the individuals who provided services to the Company under the Management Services Agreement with Diamond A Administration Company, LLC. Accordingly, he has been actively involved in numerous potential acquisitions for the Company, the acquisition of NLASCO, Inc. in 2007, and the divestiture of the Company’s mobile home communities business in 2007. Jeremy Ford also is currently a director of First Acceptance Insurance Company, Inc. (a subsidiary of First Acceptance Corporation) and a principal of Ford Financial Fund, L.P. (a private equity fund). From 2004 to 2008, he worked for Diamond A-Ford Corporation, where he was involved in various investments made by a family limited partnership. Prior to that, he worked at Liberté Investors Inc. (now First Acceptance Corporation) from 2002 to 2004, California Federal Bank, FSB (acquired by Citigroup Inc. in November 2002) from 1999 to 2000, and Salomon Smith Barney (now Citigroup Inc.) from 1997 to 1999. Jeremy Ford previously served as a director of First Acceptance Corporation from 2000 to 2004. He holds a BBA in finance from The University of Texas at Austin and a MBA from Columbia Business School. Jeremy B. Ford is the son of Gerald J. Ford, the Chairman of the Board of the Company, and the brother-in-law of Corey G. Prestidge, the General Counsel and Secretary of the Company.

Gerald J. Ford remains Chairman of the Board.

[Enterprising Investor]

California deal gives Ford new vehicle

Acquisition of Pacific Capital gives investor better access to potential bank deals

Dallas Business Journal - by Chad Eric Watt Staff Writer

Billionaire Gerald J. Ford’s $500 million investment in Pacific Capital Bancorp didn’t unfold the way he and his advisers had planned.

Instead of scooping up the good bits of a failed bank, Ford is paying $500 million for most of a struggling California bank holding company in a discounted stock deal.

The transaction, first reported on April 29 at dallasbusinessjournal.com, is still subject to approval from shareholders and regulators. If it goes through, Ford will be positioned to make more open-market bank acquisitions, and better positioned to bid on failed banks.

He began his business career as a West Texas lawyer turned banker, and built his fortune by developing and selling financial franchises in West Texas and California.

The turnaround artist’s return to banking comes at a time when the industry needs someone with Ford’s skill sets — and his bankroll, said Dory Wiley, president of Commerce Street Capital in Dallas. Nearly all banks could use more capital, and bank executives skilled at integrating acquisitions and navigating choppy economic times are in short supply, Wiley said.

Seeing the opportunity, Ford and his advisers raised $1.28 billion from private equity sources in late 2008 and got special permission from bank regulators to bid on failed banks. But the bidding didn’t go well. In at least three offers for sizable failed banks, operating banks outbid Ford or regulators passed over his bids.

“It’s no secret that he’s looked at a bunch and hasn’t gotten close so far,” said Jacob Thompson, managing director at Samco Capital Markets, a Dallas broker-dealer.

Ford has been at a disadvantage because operating banks can factor in cost savings from job and infrastructure cuts when making their bids, Thompson said. “(The Ford group) needed the bank infrastructure around them to make them a real competitive bidder for some of these deals,” he said.

Picky about who can buy

Many banks need additional money, and most would be happy to gain new investors — at the right terms, according to Commerce Street’s Wiley. But bank regulators are particular picky about who is allowed to buy into banks, he said. “It has to be people that they’re comfortable with in order for them to approve,” Wiley said.

Ford has credibility, but his early attempts to buy a failed bank with private equity backing were not as well received as his bid for Pacific Capital, which came from his own resources, Wiley said. That’s because bank regulators prefer to work with experienced bankers, and are reticent to bring in private equity types who historically rely on leverage to boost their returns.

Pacific Capital (Nasdaq: PCBC) received funding from the Troubled Asset Relief Program. Pacific Capital ceased making payments to the Treasury in June 2009. It lost $79.9 million in the first quarter of 2010, and was in danger of becoming so undercapitalized it faced government seizure.

Faced with a money-losing investment, it’s likely bank regulators were more accepting of non-bank investors stepping in, said Linus Wilson, a finance professor at the University of Louisiana at Lafayette, who is studying the TARP initiative.

“Treasury is trying to work with private equity investors to avoid having these banks seized,” Wilson said.

To accommodate the Ford investment, the Treasury’s stake in Pacific Capital will be changed, basically trading the past-due payments for stock in the bank, albeit at a discount, Wilson said

http://dallas.bizjournals.com/dallas/stories/2010/05/17/story12.html?b=1274068800%5E3348051&s=industry&i=banking_financial_services

[Enterprising Investor]

OCC Conditionally Approves First National Bank “Shelf Charter” to Expand Pool of Qualified Bidders for Troubled Institutions

WASHINGTON — The Office of the Comptroller of the Currency announced today it had granted its first conditional preliminary approval of a new type of national bank “shelf-charter,” designed to facilitate new equity investments in troubled depository institutions.

The new mechanism involves the granting of preliminary approval to investors for a national bank charter. The charter remains inactive, or “on the shelf” until such time as the investor group is in a position to acquire a troubled institution. By granting the preliminary approval, the OCC expands the pool of potential buyers available to buy troubled institutions, and in particular the new equity capital available to bid on troubled institutions through the Federal Deposit Insurance Corporation’s bid process.

The first such approval was granted Monday to establish the Ford Group Bank, National Association.

The process involves several stages:

In the initial review, the OCC evaluates the qualifications of the proposed management team, the sources and amount of capital that would be available to the bank, and a streamlined business plan that describes how the acquired bank will be operated. At the end of this process, the OCC can grant conditional preliminary approval of a national bank charter, subject to certain conditions and to requirements that more detailed operating plans, satisfactory to the OCC, be submitted if the bank targets a specific institution for acquisition. The investor group is thereby positioned to make proposals to acquire troubled institutions, and, in particular, to be cleared to view the FDIC’s list of failing or troubled institutions and to submit bids for those institutions. Through the conditions imposed in connection with the approval and the operating plan, the OCC retains the ability to oversee how the shelf charter will activate and provide for the new institution to be operated on a safe and sound basis.

In the case of an FDIC resolution of a failing institution, after a bid is submitted, the OCC will evaluate the specific proposal. If it is found to be acceptable, and if the FDIC approves the bid, final charter approval can be granted, together with final approval of deposit insurance by the FDIC. If the bid is not accepted by the FDIC, the charter remains on the shelf for up to 18 months. During that time, the charter can be used for other bids.

Related Links: Conditional Preliminary Approval Letter (http://www.occ.gov/ftp/release/2008-137a.pdf)


http://www.occ.treas.gov/ftp/release/2008-137.htm

[Enterprising Investor]

PCBC would eliminate need for "Shelf Charter" deal.

HTH has preliminary approval from the Comptroller of Currency, The Office of Thrift Supervision and the Federal Deposit Insurance Corporation to on government-assisted financial institution transactions. The approvals from the OCC and the OTS expire on 5/17/10 and 11/30/10, respectively. HTH had approximately $737 million aggregate available cash and cash equivalents at 12/31/09 that may be used for this purpose

[56Chevy]

Home equity loans are a relatively new invention for Texans (1997). The loans are limited to 80 percent LTV, not 100 percent (or even 125 percent that was once available in California). The rules are very strict. Out-of-state lenders hate them!

It makes alot of sense [80% LTV] and worked well in Texas to keep things "real" for borrowers and lenders. I consider this a success story as compared to the total housing meltdown that 100% LTV helped create. Has this Texas "model" been noticed/recognized throughout the mortgage industry?

[Enterprising Investor]

The savior...

Home equity loans are a relatively new invention for Texans (1997). The loans are limited to 80 percent LTV, not 100 percent (or even 125 percent that was once available in California). The rules are very strict. Out-of-state lenders hate them!

http://www.expertlaw.com/library/finance/Texas-home-equity.html#2

Land is never an issue in the Lone Star State.

Texas went through the same issues faced today back in beginning in the mid-1980's when large number of companies and people moved from the Rust Belt and Northeast.

[Enterprising Investor]

From the Department of Errors and Omissions.

On 8/21/09, Guaranty Bank, Austin, TX was closed by the Office of Thrift Supervision, and the Federal Deposit Insurance Corporation (FDIC) was named Receiver.

Guaranty Bank was actually acquired by BBVA Compass, Birmingham, AL, not any entity related to Gerald J. Ford.

http://www.fdic.gov/BANK/INDIVIDUAL/FAILED/guaranty-tx.html

I am sorry for the oversight.

[Enterprising Investor]

Form 8-K:

http://sec.gov/Archives/edgar/data/357264/000115752310002493/a6270116ex99_1.htm

[56Chevy]

Guaranty has about 160 branches in Texas and California. About 100 of them are in Texas. It's unclear if regulators would sell the bank as a whole or in pieces.

"Texas would be a terrific state for any acquirer," said Stephen Skaggs, president of the Bank Advisory Group LLC in Austin.

"People have perceived that Texas has a demographic profile that would result in growth that would surpass the nation's," he said. "That proved to be true throughout the late '90s and early 2000s.
-------------------------------

A couple of comments & question sort of un-related to this bank but related to the comments made above.

I've heard that Texas did experience less of this recessions' wrath than most...is that a fair statement?

I've also noticed that housing costs in Texas are way under national averages...which indicates to me they're probably more in line with the actual value of a home as opposed to the west coast & Florida where homes prices were nowhere near reality. How did Texas avoid (for the most part) the "flipper bubble" iyo?

[Enterprising Investor]

Ford Spurns FDIC as Private Equity Seeks Quicker Bank Deals

April 30 (Bloomberg) -- Gerald J. Ford, who became a billionaire by purchasing distressed lenders during the last banking crisis, isn’t waiting around during this one for Sheila Bair’s Federal Deposit Insurance Corp. to offer him a deal.

After bidding unsuccessfully on several lenders seized by the FDIC, Ford said he’s pushing ahead with a $500 million injection for Pacific Capital Bancorp, a California lender that has said it may collapse. He’s among the private-equity investors who are now willing to buy banks without an FDIC guarantee on loan losses.

“We’re trying to do this one sooner rather than later,” Ford, 65, said in an interview yesterday. “We’ve been out there looking for a long time.”

Private-equity firms are going after live banks after complaining the FDIC put up too many obstacles and changed the rules for buying failed lenders, which are piling up at the fastest rate in two decades. Three days before Ford’s deal, private-equity firm Thomas H. Lee Partners LP agreed to pay $134.7 million for a stake in Sterling Financial Corp., a Spokane, Washington-based lender that’s still open after posting two annual losses.

Both deals depend on the U.S. Treasury Department agreeing to take a loss on the stake held by its bank bailout fund. The Treasury signed on to the Sterling deal yesterday, according to the bank.

Window Closes

Some private-equity investors are striking as the current crisis is ebbing, with Bair telling CNBC on April 23 that the pace of failures may slow as sick lenders find capital to get off the agency’s 702-company “problem” bank list.

“There’s a growing sense that a lot of opportunity for private-equity deals with failed banks is gone,” said Chip MacDonald, a partner with Jones Day in Atlanta who specializes in bank deals. “There’s uncertainty around the FDIC’s private- equity policy statement, and a lot of hoops to jump through to bid.”

Private-equity investors hesitated to bid after the FDIC required their firms to maintain higher capital ratios and prohibited them from selling for at least three years. The rules were issued in August, then clarified with a set of “frequently asked questions” that was posted and withdrawn in December and re-released in January, according to a report from law firm Fried, Frank, Harris, Shriver & Jacobson LLP in Washington. That left investors to puzzle over “inconsistencies” with other federal agencies, the law firm wrote in January.

‘Good Reason’

“We’ve done these things for good reason,” Bair, chairman of the FDIC, said in an interview with Bloomberg last month. “We don’t want bidders coming in just for the benefit of a loss-share and a quick flip of the bank and make a quick profit and get out. We want people who are committed to running banks and serving communities.”

As for the reluctance of private-equity firms, Bair said, “maybe some of them don’t like those restrictions and so they complain, but I don’t think the rules have changed.” FDIC spokesman Andrew Gray didn’t comment for this article.

Ford’s group was one of the first private-equity firms to seek official permission from regulators to buy failed banks, receiving a so-called shelf registration in November 2008. Several groups, some led by experienced bank managers, have raised funds to buy lenders from the FDIC. Most haven’t completed any deals; the largest private-equity purchases included banking operations of IndyMac Bancorp Inc. and BankUnited Financial Corp.

Investors may also be chasing banks that are still open because they can avoid competitive bidding in an FDIC auction for failed lenders, said Thomas Vartanian, a partner at Fried, Frank.

Ford’s Future

“If you find an institution you think is a jewel, and all it needs is some new capital, then you can cut your deal with the management and shareholders, and you got it,” Vartanian said.

Ford’s group would get a 91 percent stake in Santa Barbara- based Pacific Capital. The deal gives Ford, of Texas, a chance to increase the fortune he built during the savings and loan crisis of the 1980s and 1990s by acquiring distressed banks and turning them around. Ford led investors who transformed California-based Golden State Bancorp Inc. into the second- largest U.S. thrift, which he sold to Citigroup Inc. in 2002 for $5.3 billion.

“We’ve been in the banking business on the West Coast before, and we liked it, and we think this is an outstanding franchise,” Ford said.

Treasury Assistance

The Sterling accord calls for the bank to raise a total of $720 million and would give Boston-based Lee a 19.9 percent stake. The U.S. agreed to swap its $303 million stake for new securities valued at $75.8 million, Sterling said in a statement on April 29. Treasury spokesman Andrew Williams declined to comment and Richard Walsh Jr. at Thomas H. Lee didn’t immediately respond to a request for comment.

At Pacific Capital, the agency would be required to exchange $180.6 million for common shares at about 20 cents on the dollar, according to a statement. Pacific Capital has told investors it may not survive without new capital.

Private-equity firms became wary of buying banks without government guarantees to cover losses after David Bonderman’s TPG lost $1.3 billion investing in Washington Mutual Inc. as the bank was trying to avoid collapse. The stake was wiped out when Seattle-based WaMu’s banking unit was seized by regulators in September 2008, the biggest failure in U.S. history.

Market Timing

Regulators may be less accommodating as the crisis recedes because they see the market for distressed banks improving, said Kevin Petrasic, a Washington-based lawyer at Paul, Hastings, Janofsky & Walker LLP and former counsel at the Office of Thrift Supervision. Meanwhile, private-equity firms and the investors who back them are less willing to tolerate the delays and extra work needed to deal with a bank that’s been seized, he said.

“There’s probably some pressure being brought to bear at the private-equity firms in terms of needing to deploy those funds,” Petrasic said.

http://www.bloomberg.com/apps/news?pid=conewsstory&tkr=PCBC%3AUS&sid=adhj0P1DD_9s

[Enterprising Investor]

Dallas billionaire Gerald Ford strikes $500 million deal for troubled Pacific Capital bank

08:31 AM CDT on Friday, April 30, 2010
By BRENDAN CASE / The Dallas Morning News
[e-mail]

A private equity firm headed by Dallas billionaire Gerald Ford will pay $500 million for what is expected to be a 91 percent stake in troubled Pacific Capital Bancorp, the Santa Barbara, Calif.-based lender said Thursday.

Pacific Capital, hit hard by deterioration in California's residential and commercial real estate markets, has lost money every quarter since early 2008.

It said its banking subsidiary, Pacific Capital Bank, was not in compliance with minimum requirements to be considered well-capitalized.

Ford, 65, who built his fortune buying distressed lenders and turning them into moneymakers, has been looking for opportunities in today's banking industry. The Pacific Capital investment is coming from a unit of Ford Financial Fund LP.

"It took them awhile to find something, but this is a good opportunity," said Dan Bass, managing director of FBR Capital Markets in Houston.

Pacific Capital's stock closed at $2.19 Thursday, down $1.92. Its shares traded above $30 as recently as 2007.

Ford's infusion is "the best alternative available to us to assure the company's future," said Edward Birch, chairman of Pacific Capital, which had $5.4 billion in deposits as of March 31.

Ford and New York billionaire Ronald Perelman acquired a number of thrifts in the 1980s and 1990s and ended up with Golden State Bancorp, a large California-based savings and loan. Citigroup Inc. acquired Golden State in 2002 for about $5.3 billion.

Ford's net worth is estimated by Forbes magazine at $1.3 billion. Southern Methodist University's football stadium bears his name.

His deal with Pacific Capital is subject to certain conditions, including one involving the U.S. Treasury's Troubled Asset Relief Program.

Pacific Capital received $180.6 million from TARP, providing preferred shares in exchange. Under the Ford deal, the government would have to trade those shares for common shares worth an expected 7 percent stake in Pacific Capital. A Treasury spokesman declined to comment.

Existing shareholders would own the remaining 2 percent, although they could buy some additional shares in a rights offering.

Trading of Pacific Capital put options – or contracts to sell the company's stock at a certain price within a certain time – reached a record last week before Thursday's announcement knocked down the share price, according to Bloomberg News. Ford told Bloomberg he wasn't aware of the trading.

http://www.dallasnews.com/sharedcontent/dws/bus/stories/DN-Ford_30bus.ART0.State.Edition1.3d4fb33.html

[Enterprising Investor]

Wells Fargo and Co files 13G

Owns 2,993,015 shares or 5.3 percent.

http://sec.gov/Archives/edgar/data/72971/000007297110000110/wf_hilltophol-432748101.htm

[Enterprising Investor]

Larry D. Willard to retire effective 12/31/09.

Willard announced his resignation as President and CEO on 11/30. Gerald J. Ford will assume those roles.

http://sec.gov/Archives/edgar/data/1265131/000110465909068609/a09-34854_18k.htm

[Enterprising Investor]

Guaranty Financial draws bid -sources

http://www.reuters.com/article/americasMergersNews/idUSWEN259120090818

[Enterprising Investor]

Blackstone, U.S. Bancorp, Ford May Bid for Ailing Guaranty Bank.

http://www.bloomberg.com/apps/news?pid=conewsstory&tkr=GFG%3AUS&sid=a9U2i3YXd1UE

[Enterprising Investor]

Guaranty Bank may have a buyer soon, analysts say

12:00 AM CDT on Wednesday, August 12, 2009
By BRENDAN CASE / The Dallas Morning News

A number of investors are considering bids for the assets of Guaranty Bank and federal regulators could announce a winner by next week, said banking industry executives familiar with the bidding process.

"Today that's the timeline, but that could change," said Dan Bass, a Houston-based managing director of Carson Medlin Co., an investment banking firm.

Another Texas banking executive, who asked not to be named, also said Tuesday that a winner in the bidding process could be announced by next week.

A spokesman for the Federal Deposit Insurance Corp. declined to comment.

Bass and other analysts speculated that the list of potential bidders could include Gerald Ford, a Dallas billionaire who built his fortune in banking; BBVA Compass, a unit of Spanish bank giant BBVA; and a group of investors that earlier this year bought IndyMac, a Pasadena, Calif., bank that failed last year.

"I think the Ford group is definitely one of the front-runners," he said. "Ford no doubt, and BBVA Compass. And the private equity groups that bought IndyMac."

Ford and a spokeswoman for OneWest Bank, the new name of IndyMac, could not be reached for comment. A spokesman for BBVA Compass declined to comment.

Analysts said other potential bidders include Minneapolis-based U.S. Bancorp, parent of U.S. Bank, and Iberiabank Corp., the Lafayette, La., parent of Iberiabank. Executives at both firms declined to comment.

Also in the running, according to a Tuesday report by Bloomberg News, is the Blackstone Group LP, a high-profile private equity firm based in New York. A Blackstone spokesman declined to comment.

"The Ford group's interest in Guaranty has been speculated for a while," said Curtis Carpenter, managing director of Sheshunoff & Co. Investment Banking in Austin, referring to Gerald Ford.

"I think he's got the resources to pull off a transaction of this size, as would U.S. Bancorp and Blackstone," Carpenter said.

Guaranty Bank is "critically undercapitalized" after recent write-downs related to its mortgage-backed securities portfolio, according to a regulatory filing last month by its parent, Guaranty Financial Group Inc. Guaranty's primary shareholders are unwilling to inject additional capital, the company said.

"In light of these developments, the company believes that it is probable that it will not be able to continue as a going concern," Guaranty said.

Guaranty's shareholders include Dallas billionaire Robert Rowling and New York billionaire Carl Icahn. Guaranty Bank, which had assets of $13.4 billion as of March 31, is technically based in Austin, but its top executives work in Dallas.

Guaranty has about 160 branches in Texas and California. About 100 of them are in Texas. It's unclear if regulators would sell the bank as a whole or in pieces.

"Texas would be a terrific state for any acquirer," said Stephen Skaggs, president of the Bank Advisory Group LLC in Austin.

"People have perceived that Texas has a demographic profile that would result in growth that would surpass the nation's," he said. "That proved to be true throughout the late '90s and early 2000s.

"Even today, while there's going to be some hiccups, I don't think the hiccups are going to be nearly as severe here as in Florida and California," Skaggs said.

[Enterprising Investor]

HTH hits bew 52-week high (8/13/09)

HILLTOP HOLDINGS(NYSE: HTH)
After Hours: 12.65 0.00 (0.00%) 4:19PM EThelp
Last Trade: 12.65
Trade Time: Aug 13
Change: 0.35 (2.85%)
Prev Close: 12.30
Open: 12.40
Bid: N/A
Ask: N/A
1y Target Est: 12.00
Day's Range: 12.27 - 12.67
52wk Range: 7.74 - 12.67
Volume: 601,167
Avg Vol (3m): 256,778
Market Cap: 714.50M
P/E (ttm): N/A
EPS (ttm): -0.29
Div & Yield: N/A (N/A

[Enterprising Investor]

Billionaire Ford eyes weak banks

http://www.bizjournals.com/dallas/stories/2008/10/27/story2.html

[Enterprising Investor]

Gerald J. Ford bio

http://phx.corporate-ir.net/phoenix.zhtml?c=147468&p=irol-govBio&ID=169792

[Enterprising Investor]

Billionaire Ford Shops for Banks as Government Welcomes Buyers

http://www.bloomberg.com/apps/news?pid=20601109&sid=aEXLJ6RgPSKk&refer=home