Zais Financial Corp., a real estate investment trust in Red Bank, N.J., has acquired the privately owned mortgage company GMFS in Baton Rouge, La., for approximately $61 million.
GMFS originates and services residential mortgage loans primarily in the south. The company is licensed as a mortgage banker in 29 states and currently originates loans that are eligible to be purchased, guaranteed or insured by Fannie Mae, Freddie Mac, the Federal Housing Administration, Department of Veterans Affairs and the Department of Agriculture through retail, correspondent and broker channels.
Last year, GMFS originated approximately $1.4 billion in mortgage loans. GMFS's mortgage servicing rights portfolio was about $2.2 billion in unpaid principal balance at the end of 2013.
When the acquisition closes in the fourth quarter, GMFS will continue to operate under its existing name and current management team, Zais said in press release on Wednesday. The merger is expected to be slightly dilutive to 2014 earnings, primarily due to transaction expenses, and accretive to earnings beginning next year.
"This acquisition is the next step in our evolution as a mortgage operating company," said Michael Szymanski, chief executive officer of Zais Financial, in the release. "GMFS already has a solid mortgage banking franchise with significant retail operations that have continued to outperform in the current loan origination environment."
Houlihan Lokey Capital is acting as financial adviser to Zais during this transaction. Sandler O'Neill & Partners is the financial adviser on behalf of GMFS.