Capital One Financial Corp.
) entered into a definite agreement to acquire Bethesda-based
Beech Street Capital. The transaction is expected to close by
fourth-quarter 2013. The terms and conditions of the deal have
not yet been disclosed.
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Founded in 2009, Beech Street offers government backed mortgage
loans through government sponsored companies -
) - along with the Federal Housing Administration (FHA). Notably,
the company is the sixth largest agency originator in the U.S.
and has a loan portfolio worth $10.0 million.
Until recently, Capital One derived the major portion of its
revenues from credit card sales. However, with the gradual
stabilization of the economy and the recovery of the housing
market, Capital One intends to expand its commercial real estate
business. The above-mentioned acquisition, once completed, will
expand Capital One's multifamily business and enable it to become
one of the top 5 multifamily lenders in the U.S.
Together with Beech Street, Capital One will offer services
comprising agency program loans, bank balance sheet loans,
treasury services and capital markets solutions. The latest deal
is therefore in line with Capital One's commitment to offer
customers a one-stop banking solution.
Further, the merged entity will be financially stronger,
supported by Capital One's diverse product offerings and Beech
Street's expertise in the field, enabling it to compete with huge
banking giants. Notably, other banks in the government-backed
multifamily mortgage business include
), JPMorgan Chase & Co. and Wells Fargo & Company.
Currently, Capital One carries a Zacks Rank #2 (Buy).