A bank with more than $2 billion in assets is getting into the wholesale mortgage lending business.
As of June 30, First Bank had 546 employees and $2 billion in total assets based on data reported by the Federal Deposit Insurance Corp. Included among the assets were $432 million in residential mortgages.
But the Lexington, Tenn.-based bank’s mortgage holdings are likely to increase as a result of an upcoming acquisition.
The 105-year-old institution has agreed to acquire StellarOne Bank’s wholesale mortgage banking business, according to an announcement Friday. The acquisition includes net assets, goodwill and going concern value.
The deal is expected to be done by Dec. 31.
The wholesale lending business, which is based in Greer, S.C., reportedly generated $2.3 billion in gross revenues during the first nine month of this year.
For its part, StellarOne Bank said in the statement that it is executing a strategy of streamlining its business structure, and resources from the sale will be redirected toward growing and improving its retail mortgage banking business, among other things.
“We believe this transaction will improve our ability to manage the business strategy and associated return with our mortgage banking unit, and will help the company achieve improved efficiency and growth objectives as set within our corporate strategy,” Jeffrey W. Farrar, executive vice president and chief financial officer of parent StellarOne Corp., stated in the news release.
StellarOne said in January that it paid out $1.45 million in repurchase demands and “make-whole” indemnification claims. The payments resolved claims on loans originated prior to 2009, representing 80 percent of its outstanding claims.