American Home Bank is being acquired by the parent of First National Bank of Chester County for $18.2 million, it was announced today.
American Home's residential mortgage operations — the bulk of its business — will operate as a separate division of First National under the American Home name.
However, American Home's consumer and commercial banking operations will be absorbed into First National's.
The impact on American Home's 280 employees, including 90 at its Mountville headquarters, its sole location here, remains to be determined.
First National's John A. Featherman III, chairman and chief executive officer, was enthusiastic about the prospect of entering the Lancaster County market and adding American Home's mortgage business.
"There's a strong opportunity for a community bank of our size that provides a wide range of services but is still small enough to provide personal service," he said.
Featherman said the opportunity is the result of takeovers of banks here — most recently, PNC's purchase of Bank of Lancaster County — that have put the local market in "turmoil."
First National, with $1 billion in assets, has 21 offices — 18 in Chester County, two in Delaware County and one in Montgomery County.
American Home, with $268 million in assets, has consumer and commercial banking offices at its Mountville headquarters and in Carlisle. It also offers mortgages there, plus at 39 other offices.
Featherman was delighted to be acquiring American Home's mortgage business, saying First National will merge its mortgage business into American Home's.
"They have a very strong and well-run mortgage operation," he said, noting it originates $1 billion in mortgages a year in 39 states, mostly in Pennsylvania, New Jersey and Maryland.
"That will continue and, in fact, expand," said Featherman, with the help of a "very sophisticated" mortgage processing system recently developed by American Home.
Both First National and American Home have avoided funding subprime mortgages, said First National President Kevin C. Quinn.
First National's parent, First Chester County Corp., is expected to complete the purchase of American Home by year-end, subject to the approval of regulators and American Home shareholders.
When the deal is finalized, American Home founder, chairman and CEO James M. Deitch will join the First Chester and First National boards and become managing director of First National's American Home division.
A.R. Miller Smith, American Home president and chief operating officer, will become president of the American Home division.
Deitch launched American Home in 2001 with a mere 18 employees on Estelle Drive, off Centerville Road, building the enterprise into a major mortgage business.
American Home moved to its $6.5 million headquarters at Stony Battery and Hempland roads in Mountville in 2005.
Staff writer Tim Mekeel can be reached at tmekeel@LNPnews.com or 481-6030.
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