Genworth Financial Inc. said it has an agreement in principle to buy a Minnesota-based savings bank, a move that will let it tap into the U.S. Treasury's bailout program.
Genworth and InterBank FSB confirmed the agreement yesterday afternoon, but gave no details.
Al Orendorff, a spokesman for the Henrico County-based financial giant, said talks are in progress and terms are being negotiated.
Genworth has been hit hard from two directions by the mortgage markets meltdown: Its U.S. mortgage insurance business is losing money because claims payments exceed premium revenue, while the plunge in value of mortgage-based securities, of which it holds more than $1 billion, has carved away at its capital.
Buying a savings bank would give it access to the federal bailout program, which insurers Hartford Financial Services Group Inc., Lincoln National Corp. and Aegon NV, a Dutch company that owns U.S. insurer Transamerica, are also seeking to do. Each last week asked the Office of Thrift Supervision for permission to acquire an existing savings and loan.
Last night, InterBank, confirming that it is seeking to negotiate a definitive agreement with Genworth, said its goal is to provide enhanced services by a larger financial services company to its customers and communities.
InterBank had assets of about $962 million as of Dec 31, 2007.
InterBank has about $283 million worth of mortgages, $178 million of commercial real estate and $270 million of consumer loans on its books. Its capital as of the end of last year stood at a relatively healthy 7 percent of assets.
Times-Dispatch staff writer David Ress contributed to this report.
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