Western Alliance to acquire AmeriHome for $1B

Depository bank Western Alliance has reached a deal to acquire correspondent lender AmeriHome for $1 billion in cash, the firms announced late Tuesday afternoon.

With the acquisition, Western Alliance will grab full control of America’s third-largest correspondent lender from an affiliate of financial giant Apollo Global.

AmeriHome purchased approximately $65 billion in conventional conforming and government-insured originations in 2020. The nonbank lender works with a network of over 700 independent mortgage banks and credit unions. It also manages a mortgage servicing portfolio estimated at around $100 billion in unpaid balance.

Acquisition talks began in the fourth quarter, not long after Western Alliance bought non-QM aggregator Galton Funding for an undisclosed amount and AmeriHome’s IPO was delayed.

“It just so happened that AmeriHome approached us about potentially completing a transaction and we decided to look at it, that was in the fourth quarter,” Stephen Curley, division president of Western Alliance, said in an interview with HousingWire. “It came together really quickly. We’ve known the management longer than the four years that they’ve been a customer.”

The management team at AmeriHome, led by CEO Jim Furash, will remain in place and there will be no layoffs, Curley said. Synergies will result in about $50 million in savings, mostly through offering warehouse lines that currently go to other banks, Western Alliance said.

The purchase price represents approximately 1.4x adjusted tangible book value of AmeriHome. Before the end of the second quarter, Western Alliance intends to raise approximately $275 million of primary capital through the sale of common stock. The acquisition is expected to close in the second quarter of 2021.

“It’s a very financially compelling transaction, which produces 30% EPS (earnings per share) accretion for a full year,” Curley said. “We feel like it’s a really good acquisition for shareholders because it grows our earnings per share. It also diversifies our revenue profile so we’re going to see a nice increase in fee income. We’ve normally been a spread income lender, and we haven’t had as much fee income, so buying AmeriHome brings in an important source of fee income.”

The other factor, he said, is that banks these days are awash in liquidity. “We feel like AmeriHome can help us deploy that liquidity in higher-yielding, low-credit risk assets,” Curley said. “We are very familiar with their manufacturing process, we know that they produce high quality assets. We believe that’s a good fit for our balance sheet.”

Western Alliance, which operates more as a business-to-business bank rather than a consumer-focused retail lender, said they are looking at AmeriHome for its long-term potential.

“People will ask us, ‘Are you buying at the peak?’ so to speak,” said Curley. “We really looked at 2019, 2018 volumes. We really didn’t factor in 2020 volumes and profits into our strategy” because it was an outsize year, he said.

Source: housingwire.com

Guaranteed Rate acquires DTC lender Owning Corporation

Fresh off its acquisition of Stearns, Guaranteed Rate has picked up Owning Corporation, a direct-to-consumer mortgage lender.

The acquisition gives Guaranteed Rate, best known for its retail prowess, another engine to boost its growth in the direct-to-consumer channel.

Terms of the deal with Orange, California-based Owning were not disclosed.

According to Guaranteed Rate, Owning’s direct-to-consumer platform processed over $20 billion in total loan volume in 2020.

“We’re actively seeking strategic acquisition opportunities to strengthen our position in growth channels,” said Guaranteed Rate’s President and CEO Victor Ciardelli in a statement. “The addition of Owning complements our existing Consumer Direct business, building on our momentum and further accelerating expansion in that segment.”


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Like virtually all residential mortgage lenders, Chicago-based Guaranteed Rate had its best-ever year in 2020, originating about $73 billion in mortgages.

In early January, it acquired Stearns Holdings, a multichannel lender who originated about $20 billion in 2020.

With the acquisitions of Stearns and Owning, Guaranteed Rate now has a stable of profitable joint-ventures, some of the nation’s top-producing retail loan officers, access to the wholesale channel and a stronger direct-to-consumer platform to grow its refi business.

Guaranteed Rate, founded in 2001 in Chicago, is now firmly a top-10 mortgage lender in the U.S. It grew nearly 100% in 2020. Last year, the mortgage firm also had two loan originators produce over $1 billion in mortgages: Ben Cohen and Shant Banosian.

According to the NMLS, Owning has 62 loan officers and was formed in 2018. The company appears to be only licensed in California. It specializes in low-rate mortgage refinances, in which it originates a loan with no closing costs, including appraisal, credit report, escrow and title. The firm also has a zero down purchase mortgage program in California and several programs that appear related to iBuying.

Source: housingwire.com

PacWest Bancorp acquires non-QM lender Civic

Pacific Western Bank, the wholly owned subsidiary of PacWest Bancorp, announced Tuesday it had acquired Civic Financial Services, a private money lender that caters to real estate investors.

Wedgewood, a real estate investment firm that focuses on distressed properties, was the seller of Civic. Terms of the deal were not disclosed.

Pacific Western Bank hailed the acquisition as a strategic move into specialized areas of the non-QM market. Civic typically loans money to investors who need bridge loans, financing for flips, rentals or rehab projects. It also offers multifamily loans.

“This acquisition opens the door for us to grow in the private lending space with a proven market leader, creating value for both of our organizations. We are excited to welcome the talented CIVIC team to Pacific Western Bank,” said Pacific Western Bank President and CEO, Matt Wagner.

Civic has funded over 10,000 loans to real estate investors , totaling more than $4.4 billion since its inception in 2014, the company said. In 2020, it originated more than $1 billion as investors looked for new opportunities amid historically low interest rates.


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In recent years, Civic has worked to expand its reach in the non-QM market, launching a loan program in 2019 that targeted real estate investors who wish to acquire rental properties but “may not meet the requirements of the conventional lending space.”

That same month, CIVIC released a correspondent lending channel that would allow lenders to close real estate investor loans in their own names and access warehouse lines. The channel made it so that lenders that want to make loans to real estate investors can tap Civic directly for their funding.

“As a part of PacWest Bancorp, CIVIC is poised to dominate our market more fiercely than ever before,” said William Tessar, Civic’s president. “More importantly, PacWest Bancorp shares the values our company has been built upon as well as our vision and goals. With a strong capital base, we have the ability to continue to invest in scaling our infrastructure and operations and expand into new markets.”

PacWest’s latest acquisition is one of several subtle hints the company is planning some long-term moves. On Friday, the commercial bank announced the first step of a “Senior Leadership Transition Plan” set to take place over the next three years.

The plan will retain Wagner as President and CEO through Dec. 31 2023, after which the company will transition him to the role of executive chairman of PacWest Bancorp.

“Matt has built an incredible company from its humble beginnings as a $200 million asset San Diego bank into a $29 billion asset bank doing business nationwide. We believe that the executive team in place can build upon the success of the past 20 years,” John Eggemeyer, Chairman of the Board for PacWest Bancorp, said in a statement.

Who will succeed Wagner has yet to be disclosed.

Source: housingwire.com