Genworth Files for Savings and Loan Holding Company Status
Genworth Financial Inc. (GNW) announced Monday it had filed for a savings and loan holding company status with the Office of Thrift Supervision. The Raleigh, N.C.-based global financial security company operates a mortgage insurance branch in Richmond, Va. The announcement came with respect to the acquisition of Maple Grove, Minn.-based InterBank fsb. Genworth said in a press statement Monday that it had reached an agreement in principle with InterBank, subject to negotiation of a definitive agreement. Genworth also filed an application for the U.S. Treasury Department's Capital Purchase Program under the Troubled Asset Relief Program (TARP). Both of these applications were subject to regulatory approval at the time of the announcement Monday. Genworth was one of a handful of insurers that on Friday petitioned the government for permission to buy a thrift and become eligible for bailout funding through the TARP. The move came days after the U.S. Treasury secretary Henry Paulson announced Wednesday the TARP funds would no longer be used to purchase troubled mortgage-backed assets. Genworth, along with Hartford Financial Services Group Inc., Lincoln National Corp. and Aegon NV, acted quickly in the face of Paulson's announcement to move into the line for TARP funds and secure a futre in the insurer industry. "Progress in our…insurance businesses has been overshadowed by concerns about the future of U.S. mortgage insurance," said CEO Michael Frazier in a late September media statement, which announced possible "strategic alternatives" for the company's MI business, including a potential spinoff. Weeks after that announcement, an early November report out of the Mortgage Insurance Companies of America showed the industry-wide jump in mortgage defaults as cures fell slightly, due in part to the contribution of reports out of Genworth's MI portfolio. Write to Diana Golobay at firstname.lastname@example.org. Disclosure: The author held no relevant investment positions when this story was published. Indirect holdings may exist via mutual fund investments. HW reporters and writers follow a strict disclosure policy, the first in the mortgage trade.