Mortgage Daily

Published On: September 10, 2004
Mortgage Merger ManiaSeveral transactions in the works or recently closed

September 10, 2004



Consolidations continue in the real estate finance industry as several more mergers and acquisitions are either in the works or recently closed.

LendingTree Inc. announced it has entered into an agreement to acquire online direct mortgage lender Financial terms of the transaction were not disclosed. The deal is expected to close within three to four months.

“ has built an impressive online loan origination platform, and we believe its innovative and successful approach to automating the mortgage lending process will be a great benefit to our consumers,” said Doug Lebda, LendingTree founder and CEO, in a prepared statement. “This acquisition will help us to increase our profit per customer, have greater input over the consumer experience, more effectively cross-sell our Realty Services offering, and gain market share.”

LendingTree is an online lending exchange that connects consumers with lenders and REALTORS, and enables consumers to choose from multiple competitive loan offers from major, national, regional, and local lenders. LendingTree has reportedly facilitated nearly $87.7 billion in closed loans and real estate transactions since its inception in 1996.

HomeLoan is currently is one of the lenders on the North Carolina company’s network, but will be removed once the deal is closed, according to LendingTree spokeswoman Rebecca Anderson. LendingTree’s initial plan is to have the loan officers it acquires from HomeLoan serve call-in customers by presenting multiple loan offers from wholesale lenders.

The California retail lender will become branded as LendingTree, and no layoffs are expected; “this should be a growth driver for all of us,” Anderson said. HomeLoan said it currently has over 740 employees. Its founder and CEO Anthony Hsieh, along with president Tomo Yebisu, will remain with the company, according to the announcement, and Hsieh will report to Lebda.

In a prepared statement, Hsieh described the merger deal as a “direct win for consumers,” adding that “joining with LendingTree will now more than ever enable us to create a full technological infrastructure and deliver a broader variety of comprehensive programs to the full spectrum of consumers.”

In another transaction, Placer Sierra Bancshares and First Financial Bancorp, the holding company of Bank of Lodi, recently signed a definitive agreement for Placer Sierra to buy First Financial in an all-cash deal valued at $50.0 million, according to a joint announcement. The transaction is expected to close by year’s end and expand Placer Sierra’s footprint into the central region of California.

Ben Goehring, chairman of First Financial, said he was “very pleased to join forces with Placer Sierra Bancshares … Our board of directors believes that this transaction is in the best interest of our shareholders, and provides our employees and community with an expanded line of competitive products and services.”

First Financial shareholders would earn $25.40 per share of common stock and all outstanding options to purchase common stock, according to the announcement.

Placer Sierra, the bank holding company of commercial and residential mortgage lender Placer Sierra Bank, said it will use existing capital to fund the transaction — which is expected to add at least $0.30 per share to earnings in 2005.

Bank of Lodi, with $324 million in assets and nine branches in Central California, will be a division of Placer Sierra Bank, which has 32 branches in Southern and Northern California, the announcement said. The combined company will become the largest community bank in Central California, with approximately $1.8 billion in total assets, the report said, and the acquired branches will operate under the brand name Bank of Lodi.

Placer Sierra chairman and CEO Ron Bachli said in a written statement that “Bank of Lodi is an excellent cultural fit … They have had great success in attracting new deposit and lending relationships over the past several years, and we believe the combined resources of our two banks will further strengthen the ability to grow our presence in these markets in the future.”

Another North Carolina company announcing a merger was Southern Community Financial Corp. Its subsidiary, Southern Community Bank and Trust, acquired two residential mortgage offices of Davidson Mortgage, an originator in the Carolina states that sells mortgages to the secondary market on a servicing released basis.

Under the terms of the transaction, Davidson’s lease obligations were acquired, as well as certain fixed assets in the acquired offices, which are located in Lexington, S.C., and Cornelius, N.C., the announcement said. Financial terms were not disclosed.

The Cornelius office in particular bolsters the Bank’s area commercial mortgage operations. “We believe our construction lending expertise will complement the relationships Davidson Mortgage has established with the builder community in the thriving Lake Norman area,” said Jeff Clark, the Bank’s president, in a written statement. The subsidiary reportedly expects to convert the Lake Norman office into a full-service branch by the end of the year.

Davidson mortgage president, James Davidson, and the office employees reportedly joined the Bank.

“We are excited to have Jim Davidson and his team join our organization,” Clark said. “We also are excited about broadening our reach in residential mortgage banking by entering the greater Columbia, S.C., market through the Lexington office we have acquired.”

Davidson Mortgage’s offices in Mount Pleasant and Myrtle Beach, S.C., were not acquired.

Meanwhile, Miami, Flo.-based Dynamic Resource Inc., which specializes in real estate and mortgage-backed securitized investments, announced that its newly-acquired mortgage lending subsidiary of about two weeks ago — Prime Rate Lending Group Inc. — acquired brokerage Certified Money Mortgage Inc.

Prime Rate, like Certified, originates loans in Florida and offers residential and commercial mortgage loans. Certified is a correspondent and approved with more than 30 banks, Dynamic Resource reported. The two mortgage lenders give Dynamic Resource a total of 22 brokers, 5 loan processors and 3 loan underwriters, according to company CEO Carlos Fernandez.

The investment firm’s year-to-date residential and commercial mortgage production of $17.9 million consists of 652 units, and with the acquisition, “we’re expecting loan production to double within a year,” Fernandez said.

Another Florida merger was that of Success Financial Services Group Inc., which announced it recently acquired correspondent lender Seminole Funding Inc.

Seminole, a privately-owned corporation, reported gross mortgage sales of 47.9 million and gross fee income of nearly $1.5 million for the year ending Feb. 29, 2004.

Seminole joins the list of other companies Success Financial operates such as SIG Mortgage Company of Florida Inc.


Mergers and Acquisitions
The wave of consolidation in the mortgage industry appears to be in full force this quarter with a number of mergers and acquisitions announced.

Mergermania in Full Force
As the second quarter wound down, the wave of consolidation in the mortgage industry was apparent — with four separate merger transactions announced.


Coco Salazar is an assistant editor and staff writer for


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