Guild Mortgage's CEO Terry Schmidt talks Academy acquisition

Guild's CEO Terry Schmidt talks Academy Mortgage acquisition

February 14, 2024 4:24 PM

Guild Mortgage's acquisition of Academy Mortgage started to come together at the end of last year.

"Adam [Kessler, CEO of Academy Mortgage] and I have known each other for a long time and really been very friendly competitors," said Guild's CEO Terry Schmidt Wednesday. "We knew and felt like the type of people that our companies were attracting into our organizations were very alike because we both have similar cultures."

"We just recently started discussing a transaction…at the end of 2023 really," Schmidt added.

The deal will close at the end of the first quarter, during which Academy Mortgage employees will fully transition over to the San Diego-based shop, she said. The asset purchase will bring a little more than 800 loan officers to the shop, with the addition of sales operations, underwriters and processors. Guild's CEO declined to provide details regarding the price tag of the purchase.

With Guild cementing its place as a top 10 lender in the country, it is looking to keep on growing. "It's a great time to continue to grow, so that's what we're planning," Schmidt said.

Since 2022, Guild has purchased six mortgage shops, including First Centennial Mortgage, Cherry Creek Mortgage and Legacy Mortgage.

How did the deal to purchase Academy Mortgage come to fruition? What was the timeline between negotiations to finalizing a deal?

Adam [Kessler, CEO of Academy Mortgage] and I have known each other for a long time and have been very friendly competitors. [There's been] lots of recruiting on both sides where we both were looking at bringing on new talent and seemed like it was always between Guild and Academy.

We knew and felt like the type of people our companies attracted [were similar] because we have very similar cultures.

So we've always kept in contact [with Academy] over the years and I've always had a great respect for them. They've always had good respect for Guild as well. We just started recently discussing a transaction…at the end of 2023 really.

The closing is scheduled at the end of the first quarter.

What is Guild getting as a part of the transaction?

It's an asset transaction, so we bring on all of the sales and the related sales, fulfillment and support staff. The thought is they have their branch offices and salespeople, local fulfillment as well to support the salespeople locally and we really want to make sure that they keep their origination platform together and all of the loan officers that have local processing, funding and underwriting that support them. We want to make sure that support stays intact.

There's some redundancies in certain positions, it's pretty standard, but you know, although everybody in the organization is important, those final decisions really are more on the Academy side as far as how the redundancies and how that's handled.

Academy employees will be integrated into our platform, they'll use our technology. From day one, all of the pipeline that they have comes over onto the Guild platform. At closing, all of the employees will be incorporated into Guild.

The acquisition of Academy makes Guild the eighth largest non-bank lender in the country. Is the company looking to continue climbing the ranks, maybe vying to get into the top-five ranking?

We have a national footprint, but with that national footprint, there's so much open space across the country still that we feel like we have a lot of growth potential.

In the future, and this year especially, I feel that the markets are still going to be challenging, and it's still going to be an opportunity for mortgage lenders like Guild...if you have a good platform, good capital and that capital is available to invest, to continue to grow. So that's what we're planning.

In terms of future acquisitions, any particular geographic areas where you’d like to expand Guild’s presence in?

All the Southern states, Southeast states and a lot of the Midwest. We still have a lot of open space to explore.

We still have a pretty active pipeline and we really look to like minded companies that are focused on the retail side of the business. Companies that are really community based, realtor and builder based and that have a local presence in their makers. Any area where we don't have strong market share, we're interested!