SOURCE: Shearson Home Loans

August 01, 2006 13:15 ET

Shearson Home Loans Signs Agreement to Acquire Allstate Funding

LAS VEGAS, NV -- (MARKET WIRE) -- August 1, 2006 -- Shearson Home Loans (OTCBB: SFNN) (SFNN), a fast-growing mortgage provider, today announced that it has executed an agreement to acquire for a combination of stock and cash Irvine, CA-based Allstate Funding, a mortgage banking enterprise licensed as a mortgage bank in 33 states, and writing approximately $440 million in mortgages in 2005. Closing of the acquisition, valued at approximately $5 million, is a milestone for both organizations whose combined mortgage loan production tops $1 billion annually.

Chairman & CEO Michael A. Barron said, "We have been working for some months on this business combination, and believe strongly that the synergies create a powerful marketing and funding force in the mortgage industry. The combined companies will now have loan volume in excess of $1 billion annually and a strong regional banking presence in the West. We have over 450 employees, and are able to expand our banking products into many more geographic markets. We anticipate that together we will be generating significant revenue and profits by the end of 2006."

Greg Shanberg, President of Allstate, stated, "Together we will greatly expand our mortgage banking profit center by adding additional warehouse banking capacity -- which in turn will give us more than enough room to double our revenue over the next six months. We expect to be banking $80 million per month later this year, which should yield between 1% - 2% of that volume in additional revenue per month."

For 2005 SFNN had closed-loan volume of $807 million for all combined companies; Allstate had closed-loan volume of $440 million, which generated revenue of $24 million. The new Shearson Home Loans would account on a pro forma basis for over $30 million in revenue for 2006.

Allstate is now eighty-five percent owned by Shearson Home Loans, and will continue to do business under its current name and from its current locations, although both companies will examine redundancies to maximize the effects of consolidating the two businesses. Barron will remain Chairman and CEO of Shearson Home Loans; Shanberg will continue as Executive Vice President of Allstate.

About Allstate Funding

Allstate Funding is a wholesale and retail mortgage banking company primarily engaged in the business of originating and selling loans secured by real property with one to four units. The Company offers a wide range of products and historically, targeted high quality, low risk borrowers. The Company recently expanded into the higher risk sub-prime market to assist in efforts to diversify lending practices. Income is generated from loan origination fees and from gains from sales of mortgage loans on the secondary mortgage market and to private investors. Allstate Funding closed $440 million in loans in 2005.

About Shearson Home Loans

Shearson Home Loans (OTCBB: SFNN) is a fast-growing provider of residential mortgages. It employs over 450 people who are residential mortgage real estate brokerage professionals who have closed loan volume of over $807 million for the year ended December 31, 2005. Shearson operates 54,000 sq. ft. of branch office space nationally. Emerging as a national leader in mortgage banking/ brokerage and ancillary services, the company plans to have 10 regional hubs across the United States by the end of 2008. The company has been a successful consolidator of independent mortgage brokerages having made five acquisitions in the industry over the last two years. The company plans to continue this strategy and is actively looking for acquisition candidates.

Statements in this press release other than statements of historical fact, including statements regarding the company's plans, beliefs, and estimates as to projected results and market size are "forward-looking statements." Such statements are subject to certain risks and uncertainties, including factors listed from time to time in the company's SEC filings, and actual results could differ materially. These forward-looking statements represent the company's judgment as of the date of this release. The company disclaims, however, any intent of obligation to update these forward-looking statements.

Contact Information

  • CONTACT:
    Shearson Home Loans
    Andy Austin
    619-334-5644