Firm to Buy North American Mortgage

Dime Bancorp Inc. said it agreed to buy North American Mortgage Co. of Santa Rosa for $374 million in stock, as the New York thrift expands its national mortgage lending business. Dime agreed to pay 1.37 shares for each share of North American in a tax-free transaction. The offer is worth $26.03 per share at Dime’s Friday closing price, about 1.79 times its book value and 8.4 times estimated earnings next year. Dime also approved a program to repurchase 6.9 million shares of Dime common stock, or about 35% of the shares that will be issued to buy North American. The purchase is expected to boost per-share earnings in the first year. The combined companies will have the rights to service a portfolio with $30 billion in home loans, giving it the 21st-largest servicing business in the United States. Dime shares fell $1.125 to close at $17.875; North American rose 62.5 cents to close at $23.875. Both companies trade on the NYSE.