Northrim BanCorp in Anchorage, Alaska, has agreed to buy Residential Mortgage Holding Co.
The $1.4-billion-asset Northrim will pay $29.8 million for a 76.5% stake in Residential Mortgage Holding, the parent of Residential Mortgage LLC. The transaction is expected to close in the fourth quarter.
Northrim's bank was an original investor in Residential Mortgage when it was founded in 1998. The bank already has a 23.5% stake in the mortgage company, which is one of Alaska’s largest mortgage originators. Residential Mortgage LLC funded around $792 million in loans last year and $1.2 billion in 2012.
"We view this transaction as another opportunity to advance our vision to be Alaska's premier financial institution, deploy capital strategically, and increase our ability to provide financial services to our customers,” Marc Langland, Northrim’s chairman, president and chief executive, said in a press release Thursday.
Northrim intends to offer five-year employment contracts to each of Residential Mortgage's three principals. "We expect the transaction to be accretive to earnings in 2014 and that we will earn back the dilution to our tangible book value in less than seven years."
Northrim was advised by Panoramic Capital Advisors and Davis Wright Tremaine. Residential Mortgage Holding was advised by Durrell Law Group.