Banks and Mortgage Banks Buying Other Banks and Mortgage Banks

By rchrisman@robchrisman.com

 

Here is part 2 (of 3) of some very subtle humor about, "Can one boil down questions in Q&A sessions to certain categories?" about folks asking questions after speeches.

8. "Hi, I'd like to complain about as many things as possible before the moderator realizes I'm not building up to a question of any kind and cuts me off."

9. "I'm deeply unpleasant, and have run out of friends and family members who are willing to put up with my opinions."

10. "I used to like your work, but I don't now. Have you considered doing the things I like again?"

11. "Hi, I have a personal anecdote that I believe completely disproves the central thesis of your research."

12. "This is more of an observation than a question - in fact it's not a question at all - in fact it's less an observation than an open-ended series of unconnected thoughts wrapped in a thin veneer of criticism - I've never asked a question in my life."

13. "I have read a great many books. Please acknowledge how many books I have read. I will not stop listing them until you acknowledge it."

 

Welcome to a day of primary elections in New Jersey, Montana, New Mexico, South & North Dakota...and California. As one pundit pointed out, "The problem we have is that 47% of Americans, who pay ZERO federal income tax, voting on what to charge everyone else." Is change imminent in the political landscape? We'll see, but things are certainly changing in the lending company, products, & personnel landscape.

Under the "new products" banner, "Many originators & brokers come across borrowers that are fine credit risks but don't fit many company's guidelines. Greenbox Loans was founded based on the concept of 'out of the box' underwriting of residential loans. Raymond Eshaghian, President of Greenbox Loans believes that the "The residential lending environment has been plagued by regulatory challenges limiting credit to well qualified borrowers that do not fit in the box. We think outside the box with a common sense approach in helping qualified borrowers obtain the financing they need. Greenbox's proprietary programs and guidelines include 24 Months Bank Statement loans with 580+ FICO score - up to $2MM loan amounts, no income investor loans (borrowers qualify based on rental income up to 75% LTV), no income investor loans for Foreign National borrowers up to 70% LTV, Non-Prime loans up to $2MM with 500+ FICO score, Non-Prime loans for borrowers with recent short sale/foreclosure/BK discharge, and non-warrantable condo programs. For more information on programs or on becoming an approved broker, contact Greenbox Loans at (800) 919-1086; email wholesaleinfo@greenboxloans.com for additional program information.

We know many originators are having their best years, but want to invest the same amount of time (or less) and produce more. NMP U (National Mortgage Professional Magazine's professional development division) is hosting a webinar entitled How to Instantly Multiply Your Production and Referrals on Thursday, June 9 at 2PM EDT.  Generating consistent predictable growth in production is what most MLOs strive for. Click here to join Ron Vaimberg, Executive Director / Head Coach of NMP U as he shows you the secrets to increasing your originations no matter what is going on in the market.

 Next week PCBB (Pacific Coast Bankers Bank) is offering a free webinar for banks titled, "Fixed Rate Loans for Customers & A Floating Rate for You." "You can offer your business customers a long term fixed rate loan but keep a floating rate for your bank. Manage interest rate risk without hedge accounting issues. Sign up for a free webinar to learn more about the program and how it can benefit your bank: www.pcbb.com/company/events.

 The Dallas Mortgage Leadership Roundtable will bring together "prominent housing industry experts on June 16, 2016 to discuss the direction of the mortgage industry. The event is being hosted by National Mortgage Insurance Corporation (National MI), a California-based private mortgage insurer, and ISGN, a leading provider of award-winning technology solutions to the mortgage industry." Contact Tracy Berry.

 Maybe it's the time around the Memorial Day Holiday week, but announced bank mergers & acquisitions have quieted down a little. S&P Global Market Intelligence reports that through May 15, there have been almost 8% fewer bank M&A deal announcements vs. the same point last year (95 vs. 103).

 In mortgage banking, "The summer is hot and strong for many small to mid-tier mortgage banks ($250M-$1.5B per year), but again, the winter is around the corner, and many mortgage banks should expect pipelines to reduce by 40-50% - unless of course, they have the capital to continue their sales and marketing push to acquire new branches", says Dr. Rick Roque, (413.297.6895). "With the cost of marketing and compliance leaving many companies in this segment to look for capital partners or plainly to be acquired in order to better position them for growth while minimizing their risk. This will continue to motivate the M&A activity through 2017, and the high production volume today, will help inflate the purchase multiples for companies willing to explore being acquired by the right capital partner. 

A leading Mergers & Acquisitions (M&A) firm is seeking mortgage banks in the Midwest or Mid-Atlantic markets to be purchased either by selling their stock or assets. Applicable mortgage companies would have closed between $300M-$1.2B in 2015, or on pace to doing so in 2016, either consumer direct or referral partner (Realtor) based originations. No Agency approvals are necessary since they are already in place. If you would like to have your firm acquired, possibly receive a 2-4x after tax multiple, maintain your leadership and control, but rapidly accelerate your growth with significant access to capital, a broad array of new / innovative and non QM products, please contact me for a confidential discussion - principals and agents are encouraged to respond. (Please specify opportunity.)

 Coming back to banks, S&P reports the median price-to-tangible book ratio this year has been 130.20% vs. 136.11% as of the same point last year (about a 4% decline). In the last week or so the only news has been that three-bank holding company QCR Holdings ($2.6B, IL) will acquire Community State Bank ($595mm, IA) for $80mm in cash or about 1.24x tangible book. mBank ($729mm, MI) will acquire The First National Bank of Niagara ($68mm, WI) for about $7.3 million in cash. RCB Bank ($2.5B, OK) will acquire Cornerbank ($271mm, KS).

 And there are plenty of developments in the residential lending arena.

 Nashville-based FirstBank's FirstBank Mortgage has completed the asset acquisition of Finance of America Mortgage's Correspondent Division (Formerly PMAC Correspondent Lending). The new venture will be known as FirstBank Correspondent Lending. "We are honored and eager to welcome the Correspondent Lending group to FirstBank Mortgage," said Wib Evans, President of FirstBank Ventures. "We look forward to having Bill Scammell and his seasoned mortgage specialists on our team!" As part of the acquisition, FirstBank Correspondent Lending will proudly utilize the innovative loan delivery software, Fusion.

 California's Guild Mortgage Co., an independent mortgage banking company, has announced its agreement to acquire Tenura Holding's AmeriPro Home Loans based in Austin, Texas. "The new acquisition will add $750 million in loan volume and is expected to close July 1, making Guild one of the largest companies in Texas. From 2010 to 2015, Guild grew from its western base into the Southeast and Southwest, increasing its number of branches and satellites from 75 to more than 230. AmeriPro has 29 branches in states such as Oklahoma, Florida, Colorado, California and Utah. Guild is no slouch, providing jumbo home loans through its relationship with Mutual of Omaha Bank and currently servicing over $22 billion.

 And Guild is hiring. "As Guild Mortgage Company continues the march to establish themselves as the leading privately-held mortgage company in the nation, expansion continues in its Texas Region which includes Texas, Oklahoma, Arkansas, and Louisiana. Founded in 1960, Guild Mortgage is licensed in 37 states. If you are a branch manager or loan officer, looking to align with a direct seller/servicer in one of these states, please contact Jed Rudd, District Manager (682.498.8990).

 In other personnel news, Pennsylvania's GMH Mortgage Services, LLC, announced the appointment of Joseph Nattans, Jr. as President effective June 1. Nattans recently served as GMH Mortgage's Senior Vice President of National Retail Sales and has been with the company since 2010.

 Shifting gears to interest rates, yesterday the bond market gave back some of its Friday improvement. Regardless, we're still in the range we've been in for most of 2016. We began the day slightly worse, but most of the bond market's movement was due to Fed Chair Yellen's downplaying the significance of the May jobs report...but did not do so forcefully enough to convince traders that the June 15th rate decision could potentially hold the second hike in this cycle. She was upbeat on the economic outlook while noting that "uncertainties are sizeable."

 On everyone's radar screens is the June 23 Brexit referendum (British exit) should also keep those expectations at bay and move the market's focus to the July meeting. There is also insufficient U.S. economic data out over the next eight days to give the Fed confidence to tighten policy - or do anything for that matter.

 Speaking of economic data, today we've had the Q1 Productivity and Unit Labor Costs (-.6% as expected, +4.5, respectively) - not generally market-movers - and later is a $24 billion 3-year Treasury auction. Yesterday, by the time the MBS traders hit the subways, the 10-year note closed down/worse nearly .250 in price, yielding 1.72% but MBS prices were only worse a smidge. This morning the 10-year is unchanged at 1.72% and agency MBS prices are better a smidge.