Bingham Financial Services Corp to purchase Franklin Bank for 1.01 times revenue

Weekly Corporate Growth Report, Mar 27, 2000

The Deal: The Bingham Financial Services Corp has agreed to purchase Franklin Bank N.A., which is based in the Detroit-area, for $44.2 million in stock. Bingham Financial has been rapidly expanding due to numerous acquisitions. After the news of the acquisition was announced, Bingham's shares fell $1.0625, to $7, while Franklin's shares rose 37.5 cents, to $9.50.

Discussion: Franklin Bank is a commercial bank that serves small to midsize businesses in the Oakland County and Gross Pointe communities of southeastern Michigan. Its four locations provide checking, savings, and money market accounts and CDs. Commercial mortgage, lease financing, and commercial loans each make up about 25 percent of Franklin's lending portfolio, which also includes residential mortgage and home equity loans, construction loans and consumer loans. The bank uses humorous ads and offers networking for businesses and free courier services to attract customers. Franklin also owns the Franklin Finance Corporation, a real estate investment trust.

Bingham Financial Services makes loans for new and used manufactured homes. Sun Communities, a real estate investment trust that owns and manages more than 100 mobile-- home communities, formed Bingham in 1996 as an affiliate. Sun refers borrowers to Bingham Financial, which provides a variety of services, including sales of repossessed homes. Subsidiaries provide commercial loans, property/casualty, credit life and warranty insurance. Bingham intends to build its business by gaining referrals from other mobile-home communities.