Mergers and acquisitions
valued at $811.8 billion have been announced this quarter globally, up
21% compared with Q1 of 2014, according to Thomson Reuters' data. For
some companies the deal activity in the first quarter was driven by
continuing cash accumulation at companies, CEO confidence, inexpensive
debt financing and pressure from activist shareholders. For many banks
and lenders it is simply the cost of doing business.
Seacoast
National Bank ($3.1B, FL) will acquire Grand Bank & Trust of
Florida ($208mm, FL) for about $16.2mm in cash and stock or roughly 1.2x
tangible book. SBM Financial, Inc. (Gardiner, ME) has agreed to merge
with Camden National Corporation (Camden, ME). The
Federal Savings Bank is pleased to announce that it has completed the
previously announced merger with Baytree National Bank & Trust
Company (Baytree) located in Lake Forest, IL. The merger results in an
institution with total assets of $270 Million. The transaction had been
awaiting regulatory approval, which now has been received. In Big Sky
Country First Interstate Bank ($8.6B, MT) will acquire United Bank
($75mm, MT) for $7.2mm in cash.
In Maryland (state motto: "If
it weren't for Washington, you couldn't find us") 1880 Bank ($192mm)
will acquire Easton Bank & Trust ($133mm) for $8mm in cash. In
Illinois Wintrust Financial ($20.1B) will acquire North Bank ($108mm)
for $17mm in cash. CertusBank ($1.5B, SC) will sell a branch in NC to
Aquesta Bank ($264mm, NC) and a branch in NC to Communityone Bank
($2.2B, NC). (After the sales, Certus will exit the state.) Mohave State
Bank ($317mm, AZ) will sell a branch in AZ to 1st Bank Yuma ($215mm,
AZ) for a deposit premium of 4.45%. The branch has about $17mm in
deposits and $18mm in loans. Sun National Bank ($2.7B, NJ) will sell a
branch in NJ to Cape Bank ($1.1B, NJ) for a deposit premium of 4.0%. The
branch has $34.1mm in deposits and $4.9mm in loans. Sun National said
it also intends to consolidate 9 branches into other locations, as it
seeks realigns its branch network following evaluation of market growth
potential, cost efficiencies and other factors.
In
the armadillo state Texas Bank and Trust Co. ($2.0B) will acquire
Vision Bank - Texas ($180mm). The Camden National Bank ($2.8B, NE) will
acquire The Bank of Maine ($806mm, ME) for $135mm in cash and in stock.
And because I haven't written about a Louisiana bank buying Texas
branches from a bank in Mississippi, Community Trust Bank ($3.7B, LA)
will acquire 4 branches in Houston, TX from Whitney Bank ($20.6B, MS).
The branches reportedly have $106mm in deposits and $15mm in loans.
Atlantic Capital Bank ($1.3B, GA) will acquire FSGBANK ($1.1B, TN) for
$160mm in cash and stock. Truliant Federal Credit Union ($1.8B, NC) said
it will open 10 branches and hire 120 employees in Charlotte, NC by the
end of 2016.
In mortgage banking-land, Olympia Capital Management, Inc. announced that its client - AMT Holdings - is acquiring Odyssey Funding, LLC, a NY based mortgage company. Odyssey is licensed in eleven states and is a full service mortgage banker.
Home
Point Financial Corporation a mortgage banking and financial services
company, has announced the acquisition of Maverick Funding Corp. Maverick's
business will serve as Home Point Financial's initial mortgage banking
platform. "With 30 retail branches across 10 states and a national third
party lending operation, Maverick originated over $3 billion of
residential mortgages since 2012. Maverick's founders, Ralph Vitiello
and Mike Petruccelli, will remain with the company and serve as senior
executives focused on the continued growth of the origination network."
(The release notes that "Home Point Financial is a nationwide mortgage
banking business focused on multi-channel residential mortgage
origination and servicing. Home Point Financial is a subsidiary of Home
Point Capital LP, a financial services holding company founded in 2014
and owned by members of management and by investment funds managed by
Stone Point Capital LLC.")
The
delinquency rate for loans on one-to-four unit residential properties
dropped to a seasonally adjusted rate of 5.68 percent, the lowest level
since Q3 of 2007.
According to the MBA's fourth quarter 2014 National Delinquency Survey,
mortgage delinquencies are continuing to decline. The delinquency rate
decreased 17 basis points from the previous quarter and 71 basis points
from a year earlier. The delinquency rates include loans that are at
least one payment past due but does not include loans in the foreclosure
process. The amount of loans in the process of foreclosure at the end
of 2014 was 2.27 percent, a 12 basis point drop from the third quarter
in 2014. The serious delinquency rate, where loans are more than 90 days
past due or in the process of foreclosure, was 4.52 percent, a 13 basis
point decline from the previous quarter.
Richey May & Co. has released its fourth quarter 2014 Trend Report for Independent Mortgage Bankers.
The Trend Report includes the operating results of more than 40
independent mortgage companies throughout the United States and covers
all operating models and production volumes. According
to the report, the 4th quarter of 2014 was representative of the year
as a whole, with "decent production and good margins, but minimal
pre-tax profits." During
Q4, total production increased 3.9 percent over Q3, gross loan margins
were up by 4.3 basis points (bps) and pre-tax profits shrank by 28.4
bps. Purchase
volume decreased by a modest 6 percent over the previous quarter and
refinance volume increased to 28.4 percent of overall volume due to
declining interest rates. Per-loan operating expenses increased during
the 4th quarter after declining over the first three quarters of the
year, averaging $1,873 per loan for the full year 2014, causing the dip
in profits, noted Kenneth Richey, managing partner of Richey May. "With
production volume and margins both up during the 4th quarter, the
increase in operating expenses on a per-loan basis is less an indication
of overcapacity and more a result of lenders making needed investments
in technology and infrastructure," Richey observed. "Expenditures like these typically precede any increase in production by at least a quarter."
KBW Research recently released the mortgage banking summary of fourth quarter 2014.
KBW Research tracks earnings from Wells Fargo, J.P Morgan Chase, Bank
of America, Citi, BB&T, PNC Financial, SunTrust, U.S. Bank and Fifth
Third Bank. The report indicated that banking revenues have increased
due to higher gain-on-sale margins. Mortgage volumes were down 4% QoQ
and 6.2% YoY. Mortgage applications were up going into the first
quarter of 2015. Gain-on-sale margins grew 9 bps (4.8%) and only Wells
Fargo and U.S Bank reported lower margins. The low interest rate
environment the past few months may be responsible for the positive
gain-on-sale margins. Mortgage servicing rights valuations were also
down due to low interest rates. Overall, the mortgage results for the
banks that have reported their fourth quarter earnings were better than
originally anticipated.
Altisource's Owners.com has announced the top 20 "for sale by owner (FSBO)" markets,
where consumers have sold their homes using the MLS model in 2014. The
best self-directed real estate markets include New York at the top of
the list with an average list price of $496,576, followed by Chicago,
Tampa-St. Petersburg-Sarasota, Dallas-Ft. Worth and Philadelphia. FSBO's
allow for individuals to sell and buy homes without having to utilize
full service real estate professionals, resulting in more transparency,
accessibility and savings. According to Owners.com, 2014 was a
high-growth year for self-directed real estate sales and sellers saved
about $9,500 in commissions through selling their homes on Owners.com.
Ever changing technology has allowed more consumers to take the selling
process into their own hands resulting in monetary savings.
Risks in the lending market? There might be a few. Wells Fargo writes, "Stronger
economic growth and improvement in household and corporate balance
sheets have encouraged banks to ease lending standards in recent
years...credit growth has expanded rapidly, which in turn has boosted
spending and investment. However, as the Fed begins to raise interest
rates later this year, will households and corporations find themselves
overleveraged? If so, which loan categories pose the most risk?" Wells addresses an important topic, that is, in a rising rate environment is all risk exposure the same? The short answer: it's not.
Rates stepped higher yesterday for a variety of reasons. Jobless
Claims fell by 20k, and are near their lowest level in 15 years. The
four-week moving average for claims, which evens out weekly volatility,
fell by 14,750 to 285,500 last week. The trade gap narrowed in February
to 5 year low - mostly due to oil imports: the deficit for petroleum
products fell to $8.1 billion, its lowest level since July 2002. On the
flip side Factory Orders rose in February for first time in 6 months.
But that wasn't enough to take the focus off of the jobs market.
On
the international front Iran has reached a deal with global powers that
will, among other things, give them three more months to hash out an
agreement. Apparently our own Congress isn't the only body that is good at kicking the can down the road (see "yearly budget crisis".)
Oil rallied following the announcement by President Obama, although it
remained down on the day. The yield on the 10-year moved higher to close
at 1.90% and current coupon agency MBS prices worsened about .250
resulting in some intra-day price changes.
But
today, with its 9AM PST bond market close, is a new day and we have the
March employment numbers to guide us. Nonfarm Payroll came in at 126k -
much lower than expected with revisions taking 69k off previous months, the Unemployment Rate at 5.5%, and Hourly Earnings were higher. On the weak news the 10-yr is down to 1.83% and agency MBS prices are better by .250-.500, depending on coupon.
Spring
is here, right? Lots of folks are married in the spring, and for others
it is time to propose. Stores, intersections, airports, hotels, gas
stations, office buildings now have cameras, why not ring boxes having cameras so that one can immortalize their gal's reaction?
Jobs and Announcements
As Guild Mortgage Company continues the march to establish themselves as the leading privately-held mortgage company in the nation, expansion continues in its Texas Region which includes Texas, Oklahoma, Arkansas, and Louisiana. Founded in 1960, Guild Mortgage
is licensed in 37 states and servicing currently exceeds over $17B.
Guild also has interest in purchasing or acquiring existing mortgage
origination operations. If
you are a branch manager or loan officer, looking to align with a
direct seller/servicer in one of these states, please contact Jed Rudd, District Manager, at 682-498-8990.
ResMac continues to expand its Wholesale and Correspondent sales footprint by hiring veteran Tim Verinder
as Regional Vice President of Sales. Tim brings over 20 years of
mortgage sales and leadership experience to ResMac and will be covering
the state of Texas responsible for the development of the Texas
Wholesale and Non-Delegated Correspondent sales team. "ResMac was an
easy choice for me. In addition to their competitive pricing and can do
attitude, I was very impressed with their current technology platform
and the enhancements yet to come. For me and my customer base, it's all
about strengthening the partnership and the ease of doing business,"
says Verinder. Founded in 2008, ResMac is a privately held mortgage
origination and servicing company headquartered in Boca Raton, FL. For additional Wholesale and Correspondent sales opportunities with ResMac, please email your resume in confidence to: Go ResMac
First California Mortgage Company,
a premiere mortgage lender, is looking for processors, government
underwriters and closers in Arizona, Texas, Colorado and California. If you are interested please confidentially contact Shannon Thomson.
Secure
Settlements is seeking qualified and experienced sales representatives
in the West, Southwest, Southeast and Midwest, and also a national sales
manager.
Excellent opportunity to share the fast growth of a company viewed as
the first and most respected closing table risk management firm. The SSI team
is comprised of men and women with mortgage, legal, title, IT and
accounting backgrounds. We offer a fun and rewarding work environment,
excellent benefits and an amazing opportunity to help shape risk
management programs and tools in the burgeoning consumer protection and
bank regulatory compliance environment. Preferred candidates will have
at least 5 years of experience in the sale of mortgage industry
products and services. Email us at info@securesettlements. com and fax resumes to 973 463 4299. SSI is an Equal Opportunity Employer.