UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES AND EXCHANGE ACT OF 1934
April 3, 1998
(Date of report)
HomeSide Lending, Inc.
(Exact name of registrant as specified in its charter)
Florida 1-12979 59-2725415
(State or other jurisdiction (Commission file number) (I.R.S. Employer
of incorporation) Identification No.)
7301 Baymeadows Way, Jacksonville, FL 32256
(Address of principal executive offices) (Zip Code)
(904) 281-3000
(Registrant's telephone number, including area code)
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Item 5. Other Events
On April 1, 1998, HomeSide Lending, Inc., an indirect wholly-owned
subsidiary of National Australia Bank, entered into an agreement with Banc One
Mortgage Corporation to acquire the mortgage servicing assets of Banc One
Mortgage Corporation. HomeSide Lending and Banc One Mortgage have also entered
into a Preferred Partner agreement, whereby Banc One Mortgage will sell a
significant portion of its residential mortgage loans to HomeSide Lending over
the next five years. The total purchase consideration is $201 million. The
transaction is subject to regulatory approvals and is expected to close late in
the second quarter of 1998. For more information see the joint press release
filed herewith as Exhibit 99.1.
Item 7. Financial Statements and Exhibits
(c) Exhibits
Exhibit 99.1 - Joint press release issued April 1, 1998
Signatures
Pursuant to the requirements of the securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
HomeSide Lending, Inc.
(Registrant)
Date: April 3, 1998 By:/s/Kevin D. Race
Kevin D. Race
Vice President, Chief Financial Officer
and Treasurer (Principal Financial
and Accounting Officer)
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Exhibit 99.1
NATIONAL AUSTRALIA BANK/ HOMESIDE ANNOUNCE STRATEGIC
ALLIANCE WITH BANC ONE
April 1, 1998 - The National Australia Bank (ASX:NAB) and BANC ONE CORPORATION
(NYSE:ONE) announced today that HomeSide Lending, the National's international
mortgage subsidiary, and Banc One Mortgage Corporation have entered into a
strategic alliance. Under a Preferred Partner arrangement, Banc One Mortgage
will sell a significant portion of its residential mortgage loans to HomeSide
over the next five years. Banc One Mortgage will continue to originate,
underwrite and close mortgage loans through its current distribution systems.
Hugh R. Harris, President and Chief Operating Officer of HomeSide Lending, said,
"The Banc One Mortgage Corporation arrangement furthers HomeSide's goal of
pursuing growth opportunities through strategic alliances. The partnership
allows HomeSide to continue to leverage its core competencies as well as
increase HomeSide's production in the Midwest and Southwest - areas where
HomeSide has wanted to grow."
HomeSide and BANC ONE have also signed a definitive agreement for HomeSide
Lending to acquire the mortgage servicing assets of Banc One Mortgage
Corporation. BANC ONE will retain the right to cross-sell banking products to
its customers.
The transaction is subject to regulatory approvals and is expected to close late
in the second quarter of 1998.
Donald K. Erling, President and Chief Executive Officer of Banc One Mortgage
Corporation, said, "This is a mutually beneficial partnership allowing us to
focus on our origination strategies. The alliance preserves our commitment to
excellent customer service, while maintaining BANC ONE's ability to cross-sell
banking products to mortgage customers, an area of opportunity and focus for the
organization."
"HomeSide's strategy of obtaining production through variable cost
origination channels is supported by its new owner, National Australia Bank,"
said Joe K. Pickett, HomeSide's Chairman and Chief Executive Officer. "We think
that we will continue to see banks move toward outsourcing their servicing
activities. And, from our many years of experience working with banks, we
believe HomeSide is well positioned to become a partner with them."
After completion of the transaction, HomeSide will rank as the fourth largest
mortgage producer and sixth largest mortgage servicing company in the United
States. In 1997, Banc One Mortgage originated US$3 billion. HomeSide's
production volume was approximately US$21.8 billion during the same time period.
The asset purchase will provide HomeSide with the servicing and sub-servicing
rights to approximately US$18 billion in mortgage loans representing 266,100
loans, adding scale to HomeSide's existing servicing portfolio of approximately
1.2 million loans. The result will be a US servicing portfolio of approximately
US$117 billion.
According to Don Argus, National Australia Bank's Chief Executive Officer,
"HomeSide, as a product specialist with a strong position in its market, is
uniquely positioned to benefit from the consolidation of the US mortgage
industry. We are pleased that a bank with the strength and quality of BANC ONE
has chosen HomeSide as a strategic partner for such a key relationship product
as mortgages."
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The Preferred Partner Agreement and servicing assets purchase are expected to
add approximately US$7 million per annum to HomeSide's, and National Australia
Bank's, net profit after tax. The purchase consideration is US$201 million, and
the transaction is not expected to have a material impact on the National's
capital ratios.
National Australia Bank, headquartered in Melbourne Australia, is an
international financial services company with the aim of providing a
comprehensive and integrated range of financial services to its customers in its
core markets of Australia, New Zealand, the United Kingdom, Ireland, the United
States and Asia. With assets totaling approximately US$149 (A$229) billion, the
National operates approximately 2,350 branches throughout the world. Further
information is available on the Internet, www.national.com.au.
BANC ONE CORPORATION had managed total assets of US$147.0 billion, total assets
of US$115.0 billion and common equity of US$10.2 billion at December 31, 1997.
BANC ONE operates more than 1,300 banking centers in 12 states. BANC ONE also
owns several additional corporations that engage in a full range of financial
services. Information about BANC ONE's financial results and its products and
services can be accessed on the Internet at: http://www.bankone.com; through
InvestQuest at http://www.investquest.com; or through Fax-on-demand at: (1-614)
844-3860.
HomeSide Lending, Inc. is an international mortgage company and one of the
largest full service residential mortgage companies in the United States.
Headquartered in Jacksonville, Florida, HomeSide services the mortgage loans of
over one million homeowners. Additional information about HomeSide is available
on its Internet Web site, www.homeloan.com.
This press release contains forward-looking statements which are subject to
risks and uncertainties that could cause actual results to vary materially from
those anticipated. Such risks and uncertainties include HomeSide's ability to
grow which depends on its ability to obtain additional financing in the future
for originating loans, investment in servicing rights, working capital, capital
expenditure, and general corporate purposes. Economic downturns may negatively
affect HomeSide's profitability because the frequency of loan defaults tends to
increase in such environments. In addition, changes in interest rates may affect
the volume of loan originations and acquisitions, the interest rate spread on
loans held for sale, the amount of gain or loss on the sale of loans and the
value of HomeSide's servicing portfolio. These risks and uncertainties are more
fully detailed in HomeSide's filings with the Securities and Exchange
Commission.
