Employees, Institutions Buy Bulk of Plaza’s Offering
More than 400 employees and about a dozen institutions bought the bulk of the shares of Plaza Home Mortgage Corp. during the company’s initial sale of stock to the public.
The holding company for Plaza Savings & Loan Assn. raised a total of $32.5 million in the initial offering of 5 million shares on Oct. 2. Shares were priced at $6.50 apiece on the NASDAQ market and have risen slightly to close at $6.75 Friday.
Institutional investors, including Arco Investment Management Co., bought about half of the shares that were offered, sources said. The investment subsidiary of Los Angeles chemicals giant Arco had committed to buying 10% of the shares before Plaza went public, sources said.
Chairman John T. French and his wife, Marilyn, who owned 47.8% of the company’s stock before the public stock offering, now control 26.9%. They continue to be the principal shareholders.
Of the money raised in the stock offering, $24.6 million will go to the company, $5.6 million to selling shareholders and $2.3 million to Plaza’s underwriters: Kidder, Peabody & Co., Paine Webber Inc. and Mabon Securities Corp. The underwriters have a 30-day option to buy as many as 750,000 additional shares.
Plaza officials say that they plan to use their share of the proceeds to increase loan origination and servicing capabilities, as well as to buy loan servicing rights. Subsidiary Plaza Savings & Loan, the eighth-largest mortgage lender in California, has one savings branch and 17 loan origination offices in California, Oregon, Arizona and Florida.
Plaza reported a profit of $7 million for the first six months of 1992, up 40% from $5 million for the same period last year. The company’s interest income climbed 22% to $13.4 million from $11 million. The parent company, based in Santa Ana, has assets of $314.7 million.
Plaza is the second Orange County mortgage-banking company to go public this year. Imperial Credit Industries, a Newport Beach subsidiary of Imperial Bank in Los Angeles, reported $17.1 million in net proceeds from its initial public stock offering on May 18. Its shares closed Friday at $11.63 a share, up from an offering price of $8.
Even so, times have been tough for initial public offerings in general, with many companies finding that their valuations are lower than expected. Last month, in its prospectus, Plaza said that it hoped to begin selling stock in a range of $8 to $10 a share. Imperial Credit planned on selling its first shares at $10 to $12.
“It’s a buyer’s market,” Imperial Chairman H. Wayne Snavely said earlier this week. “The buyers know they can get it for cheaper than they offer it. (Plaza) sold their stock cheap, but I think they had to because of the condition of the marketplace, not the condition of the company.”
