Better than BOGO for Genworth

What's better than "buy one, get one" free? How about "buy one, get more" free. That's the kind of deal Genworth Financial is looking for.

On Sunday the Richmond, VA based Fortune 500 company announced that they were applying to the Office of Thrift Supervision to become a savings and loan. Genworth isn't a bank or a thrift but a self proclaimed "financial security" company. And one of their main businesses is mortgage insurance - they are, in fact, the spinoff of GE's mortgage insurance unit.

So why does the company want to be a federally regulated bank? Because it wants to qualify for government assistance through the TARP (Troubled Assets Relief Program). As you can imagine the mortgage insurer hasn't been doing well lately, after an abysmal 3rd quarter and recent credit rating downgrade. I would guess that management is depending on government funding to stay afloat. And they know they they need to get in the handout line ASAP.

But in order to get money they need to spend money. In the same press release they announced that they have reached an agreement to buy a bank. Specifically, they're going to purchase Interbank FSB of Minnesota, which has $1b in assets.

At this point the sales price has not been disclosed and we don't know how much Genworth would receive (if any) from the US Treasury. But I doubt that they would go through the trouble just to break even.

Here's the Bloomberg story.