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Mortgage Units Shuffle Assets Amongst Each Other

Mortgage Units Shuffle Assets Amongst Each OtherRecent mortgage mergers and acquisitions

March 22, 2005


While some mortgage companies are looking to downsize, others are looking to expand. Recent deals between some of these entities appear to be matches made in heaven.

Irwin Mortgage Corp. has decided to sell a portion of its retail operations, and all of its net branch and credit union lending operations in two transactions expected to close by early April 2005, its parent Irwin Financial Corp. announced.

The move will allow Irwin to concentrate on growing its most profitable channels in wholesale, correspondent, and consumer direct lending, while sharpening its focus in traditional retail lending to serve low- to moderate-income and emerging market customers, the parent reported.

“Building on the strengths of these four operations will help us to enhance top line performance over the long term, focus our attention and resources on capturing market opportunities, and respond even more quickly to industry changes.” Irwin chief executive Robert Griffith said in the announcement.

Of the 40 retail and retail/net branches Irwin said it is selling, Pinnacle Financial Corp. will acquire 17, in addition to a Carson Calif., loan operations center.

Under the terms of the agreement, Pinnacle will extend employment to all 200 Irwin Mortgage employees working at the to-be-acquired office locations, according to the Orlando Business Journal.

“This acquisition is a key component of Pinnacle Financial’s national expansion plans for 2005,” Pinnacle chief executive Doug Long reportedly said in a prepared statement. “The loan operations center will anchor our company’s new nationwide expansion division and, along with the acquired branches, increase our loan origination volume by as much as 20 percent.”

American Home Mortgage Corp. will acquire the remaining 23 branches, located mostly in coastal states, in addition to a Concord, Calif., loan operations center and the entire credit union operation, Irwin said.

American Home said it expects annual originations, which totaled $23 billion in 2004, to increase between $500 million to $1 billion as a result of acquiring the branches and through the approximately 50 credit unions in which mortgage loans are marketed by onsite mortgage salespersons.

“The acquisition is consistent with our company’s ongoing strategy of building origination capabilities both through acquisitions and organic growth,” commented American Home chief executive Michael Strauss in a separate announcement. “The additional loan production gained through our purchase from Irwin will increase our company’s ability to add assets to our portfolio at less than their capital markets cost through self-origination, and is expected to contribute to our ongoing effort to enhance the return from our portfolio.”

American Home will also reportedly extend employment to Irwin employees of the offices it acquires.

First Horizon National Corp. announced it has agreed to acquire West Metro Financial Services Inc. of Dallas, Ga., in a $32 million cash-and-stock transaction expected to close by the third quarter.

The deal will allow its First Tennessee Bank National Association subsidiary to expand into the Georgia banking market with First National Bank West Metro under its arm. West Metro has more than $130 million in assets and two branches in Atlanta.

Upon completion of the acquisition, West Metro’s two branches will merge into First Tennessee, which is expanding its banking presence into selected markets across the country under the name First Horizon Bank.

Executive officers of First National Bank will continue with the combined organization in management roles, First Horizon said.

As part of the merger, some First Horizon Home Loans offices in Atlanta will reportedly become First Horizon Bank branches.

First Horizon will acquire all of West Metro’s shares.

Paragon Financial Corp. announced it has acquired the Jacksonville, Fla., branch of CFIC Home Mortgage and will operate it under the name of its Orlando-based subsidiary, Paragon Homefunding, according to an announcement.

With the acquisition, Paragon Homefunding will now have a presence in the growing North Florida market.

And, the deal is just the beginning of Paragon’s strategy to build a large, geographically diversified mortgage brokerage network.

“This particular arrangement is significant in that it is the first of a number of planned transactions to enhance the market presence of one of our existing operating subsidiaries,” said Paragon chief executive Paul Danner in the prepared statement. “We believe that providing Paragon Homefunding with a profitable, well-established presence in an active real estate market such as Jacksonville, on a turnkey basis, should have a timely and significant influence on building shareholder value.”

CFIC, formerly known as Challenge Mortgage, had been operating as a net branch for over five years, according to the announcement.

“I expect that the tangible benefits we gain through this affiliation will have a positive impact on our historic loan production volume, and will also greatly enhance our ability to recruit and retain top performing mortgage originators in the Jacksonville market” said CFIC branch manager Rachel Rogers in the announcement.

By June 2005, three Florida banks of Georgia-based Synovus will consolidate under one charter and be named Synovus Bank of Tampa Bay, according to a press release.

United Bank and Trust Company in St. Petersburg, United Bank of the Gulf Coast in Sarasota and Peoples Bank in Palm Harbor will operate under the new name, Synovus reported.

“We will eliminate market overlap in a number of areas, creating greater efficiency and strengthening our overall brand presence in the Tampa Bay market,” said Fred Green, a Synovus vice chairman, in the announcement. “This will also allow customers of all three banks to have easier access to our expanded branch network and enjoy a broader array of products and services offered to meet their needs.”

The new company’s chief executive will be David Dunbar, who currently holds that position at Peoples Bank. The chairman will be Neil Savage, who is currently the chief executive of United Bank and Trust, and as president will be Harold Winner, currently the president of United Bank and Trust.

Synovus Bank will reportedly be headquartered in St. Petersburg and its combined total asset size will be about $1 billion.

In New York, CharterMac announced that its subsidiary CM Investor LLC completed acquiring Capri Capital Finance.

CM paid an aggregate loan of about $90 billion for Capri and for 49% equity interest of Capri Capital Advisors, the former pension fund advisory affiliate of Capri’s parent company, the announcement said. CM is expected to acquire the portion of the advisory firm after Aug. 1, 2005, but no later than June 30, 2006.

As part of the merger, Capri’s mortgage banking business integrated into CharterMac Mortgage Capital, formerly PW Funding Inc. The CharterMac subsidiary is a multifamily lender that also manages one of the largest multifamily agency loan servicing portfolios, according to the announcement.

Daryl Carter, former cochairman of Capri is reportedly now the chief executive of CharterMac Mortgage.

Mortgage fraud prevention giant ISO, which acquired AppIntelligence earlier this year, announced a deal where it will acquire Sysdome.

“With today’s acquisition, ISO has enhanced its suite of state-of-the-art, best-of-breed technology solutions for the mortgage industry, and this positions us well to serve its future needs,” ISO executive Scott Stephenson said in the announcement. “This will be a comfortable situation for customers of both companies because there will be no diminution in the support for the products of either company.”

The combined entity will operate under a new division called ISO Mortgage Analytics, the announcement said.

Coco Salazar is an assistant editor and staff writer for

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