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Motivation to Merge

Bell Mortgage acquires Banker Mortgage

April 22, 2008

By JERRY DeMUTH


Senior executives of a Minneapolis-based mortgage banker with $1 billion in annual originations and the smaller cross-town rival it acquired talk about the logic and motivation to do the merger. Along with two more similar deals in the works, headcount is likely to increase by more than 50.

Bell Mortgage has acquired the 20-member staff and the two Minnesota offices and one Wisconsin office of Bankers Mortgage Co.

"It's a whole team, a very good team of mortgage bankers, that's been together for quite a few years at Bankers," Bell owner and CEO Gary Kirt told MortgageDaily.com. "We integrated Bankers' Minnesota and Wisconsin offices right away. Bankers seasoned staff is a perfect fit for a company like Bell."

"There is a great synergy between both companies," said Jim Bires, Burnsville, Minn.-based Bankers Mortgage's former chief manager and now a Bell Mortgage loan officer, in a statement. "This partnership allows us to continue to build our business as part of Bell Mortgage, a brand that carries an unprecedented reputation for Mortgage Banking expertise and ethics, strong community commitment, and longevity that spans more than 127 years."

Bell is currently negotiating to acquire two other mortgage companies, said Kirt, who described the Bankers Mortgage deal as "not a true asset sale."

Bankers Mortgage also has an office in Jacksonville, Fla., and Kirt told MortgageDaily.com that no decision regarding that office has been made.

"We have to determine whether it would create good synergy with Bell," he commented.

Minneapolis-based Bell Mortgage, in addition to the Burnsville and Hastings, Minn., and Spooner, Wis., offices acquired from Bankers Mortgage, has offices in Coon Rapids, Minn., Edina, Minn., Chandler, Ariz., and Bozeman, Montana.

Bell did slightly less than $900 million in originations in 2007 and is "on track" to do $1.2 billion in 2008, according to Kirt.

"Our peak year was 2004 when we hit $2 billion," he said.

Bankers Mortgage did $162.66 million in originations last year, Bires said.

Including the acquisition of Bankers Mortgage's staff, Bell now has about 90 loan officers out of a total staff of 180, up from about 65 loan officers a year ago, Kirt estimated. And by year's end the number of originators should be more than 100 just in its Midwest offices, he said.

Kirt described Bankers Mortgage as "not a weakened competitor but a competitor looking at the future and deciding that to compete you need a lot more tools." This required them to choose between investing a significant amount and becoming a full-fledged mortgage banker or aligning themselves with an established company, either a giant like a Wells Fargo or to "someone like Bell," he explained.

"They wanted or needed to move to a mortgage banking company that has a full mortgage banking infrastructure. Bell is a good alternative to a Wells Fargo or US Bank. You can bring your whole team over.

"And Bell is 100 percent retail. Our whole world revolves around retail mortgage banking, working with the retail and home building communities," he said. "That's another reason loan officers choose Bell. If you go to a Wells Fargo or US Bank, they have wholesale or correspondent channels as big as their retail channels."

Both of the other two deals Kirt said he is working on involve lenders with profiles similar to that of Bankers Mortgage.

Bell says it is the largest, privately-held mortgage lending company in Minnesota. It began in 1880 when David C. Bell started originating mortgages and selling them to New York City banks, according a company history posted bon its Web site. In 1888, his business, now David C. Bell Investment Co., created its first mortgage bond.

The company has remained a family business although in 1995 it reached an agreement to be sold to BancBoston Mortgage Corp., subsequently HomeSide Lending, which was looking to increase its retail presence in the Midwest, Kirt explained. But that two-year deal fell through and Bell Mortgage was repurchased, he said.

A May 1995 announcement on that sales agreement stated that Bell Mortgage "originated some $275 million in residential mortgage loans in 1994."


Jerry DeMuth is an award winning journalist who has been reporting for four decades.

e-mail Jerry at [email protected]
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