Popular Inc. said today that it agreed to sell its consumer lending unit Equity One to a division of AIG for roughly $1.5 billion.
The sale to AIG’s American General Finance includes about $1.47 billion of Equity One’s subprime mortgage and consumer loan portfolio.
“Equity One’s portfolio complements our existing business and we are excited by the opportunity to increase the number of customers American General Finance lends to around the country,” said American General Chairman and Chief Executive Frederick W. Geissinger.
The move will allow Popular, a unit of Banco Popular, to focus on its core banking business, without the stress of relying on its faltering mortgage business, which caused third-quarter profit to fall 56 percent.
“We are doing the things we have to do in the U.S. mainland as we focus on our core banking franchise,” Popular Chairman and Chief Executive Richard L. Carrion said.
As a result of the deal, AIG may retain 24 of Equity One’s 130 branches and 250 of its 512 employees.
The outstanding branches will be closed, and it is believed that remaining employees will either be laid off or relocated if possible.
Popular expects the transaction to close in the first quarter, pending regulatory approval, creating a $19.5 million charge related to severance and lease terminations.
According to their website, Equity One has been around for 15 years, originating first-mortgages, home equity loans, mixed use loans, and personal loans.
The mortgage lender’s offerings include jumbo loans, no income loans, and other nonconforming loan programs.
Check out the big list of mortgage layoffs, closed lenders, and mergers.
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