Stark Bank to buy Pelican Financial for up to $27 Million

Pelican Financial Inc. has agreed to be acquired by a newly formed subsidiary of Stark Bank Group Ltd., the holding company for First American Bank, the two parties said in a statement on Friday.

Shareholders of Pelican Financial will receive $6 for each common share held, subject to adjustment if certain costs incurred by Pelican Financial exceed $3 million, the companies said.

Pelican Financial, the holding company for Pelican National Bank, has about 4.5 million common shares outstanding, valuing the deal at up to $27 million.

The proposed all-cash deal is subject to approval by Pelican shareholders and regulators and to a final due diligence by the Stark Bank Group by Nov. 14.

The merger is expected to be completed in the first quarter of 2006, the statement said.

The proposed agreement also requires Stark Bank Group to purchase $4 million of a newly created series of convertible preferred stock of Pelican Financial.

What are people saying about mortgages today:

Rates on 30-year mortgages edged down last week to a seven-month low. Mortgage-giant Freddie Mac reported Thursday that 30-year, fixed-rate mortgages fell to 6.3 percent, down slightly from 6.31 percent two weeks ago. It put rates at the lowest level since they were at 6.24 percent the first week of March.

Bank of Hawaii, Central Pacific Bank, Territorial Savings Bank and Wells Fargo Home Mortgages all cut their 30-year mortgage rates to 5.75 percent this week.

Most people think of a mortgage as a means to an end. After all, you buy a house, not a home loan. But a mortgage is much more than the path to homeownership. It is a financial instrument that must be managed, just like any other financial investment.