|Growth through acquisitions appears to be the soup du jour, and mortgage brokerages are on the menu.
Global TransNet recently announced its 2005 financial services business plan, which consists of acquiring three distinct financial market segments that “are currently financially solid with excellent futures.” One is barter exchanges while the other two are conventional and unconventional mortgage-related businesses.
The holding company, based in Severna Park, Md., noted that conventional mortgages are expected to grow over the next 10 years as housing starts continue at the same or better rate as the previous decade. Purchase-money lending will be Global’s focus due to the market’s shift from refinancing.
Through the unconventional lending business, Global said it will only provide the higher-risk financing when there is ample collateral.
Paragon Financial Corp., of Ponte Vedra Beach, Fla., announced it recently closed on the deal to acquire First Charleston Mortgage. The transaction marks the first of a number of similarly planned acquisitions that will form part of Paragon’s plan to build a network of mortgage brokerages.
“We have spent the past several months restructuring our management team and reducing operating overhead,” Paragon chief executive Paul Danner said in the announcement. “Now that those necessary adjustments are nearly complete, we’re perfectly positioned to fully focus our energies on pursuing the original business strategy of acquiring mortgage origination companies with an eye to developing geographical diversification.”
The acquisition of the residential and commercial mortgage originator will provide Paragon a local operating presence in several markets around First Charleston’s headquarters location of Charleston, S.C.
Mercantile Bankshares Corp. will deepen its presence in the high growth Northern Virginia market with its acquisition of Community Bank of Northern Virginia. Mercantile will pay approximately $212 million in stock and cash and expects the merger to be completed by next quarter, according to a press release.
In a related strategic move, Mercantile will combine Mercantile-Safe Deposit and Trust and Mercantile Potomac Bank to create a new division based in Washington, D.C. Community Bank will be parented by the new MSD&T division, which will continue to do business as Mercantile Potomac Bank.
“By operating Mercantile Potomac Bank as a stand-alone division, we will be able to keep the local identity and local-decision making that is so important to our affiliate model,” said Mercantile chief executive Edward Kelly in the announcement. “Additionally, the consolidation streamlines the credit process for large commercial borrowers, as any need for loan participations is eliminated.”
Mercantile said it will add two to three current Community Bank directors to the board of MSD&T. It also expects to eliminate approximately 25% of the operating expenses of Community Bank through limited branch consolidation and elimination of administrative and operational redundancies.
The parent of Mercantile Mortgage reported full-year 2004 fundings of $5.8 billion in one-to-four family residential loans, of which $1.5 billion took place in fourth quarter and excluded home equity lines.
In Macon, Ga., Security Bank Corp. announced its entry into the metro Atlanta market by agreeing to acquire SouthBank in a cash and stock deal valued at approximately $32.2 million in the aggregate. The merger is expected to be completed during the second quarter.
SouthBank, of Woodstock, Ga., reportedly operates one full-service banking office and two loan production offices.
Security Bank’s banking subsidiary in Bibb County operates mortgage company Fairfield Financial Services Inc. Security Bank reported residential consumer real-estate loans of $97.8 million in 2004.
New Jersey-based ISO, a provider of mortgage risk-management products and services, announced it acquired fraud-detection services provider AppIntelligence. Terms of the deal were not disclosed.
AppIntelligence, a MortgageDaily.com advertiser, reports it has more than 600 customers that use its web-based analytic tools in the prequalification, processing, underwriting, quality control/quality assurance and compliance phases of the mortgage-lending process. Customers will not experience any service disruption from the transfer of AppIntelligence’s control, according to the announcement.
Coverage of new and existing net branch operations. Programs, payouts and other details. Profiles of brokers and net branch lawsuits.