Capital City Bank plans to buy majority stake in BrandMortgage
Florida-based depository Capital City Bank has struck a deal to purchase a 51% share in regional lender BrandMortgage, according to a press release issued Wednesday.
Financial terms of the deal were not disclosed.
The two companies' boards approved the deal and the transaction is expected to close in the first quarter of next year, subject to customary closing conditions, including regulatory approvals.
Greg Shumate, CEO and managing partner of BrandMortgage, will become an elected officer at Capital City Bank under the terms of the transaction. Shumate and BrandMortgage President Alex Koutouzis will continue to lead the home-loan unit as an independent operation.
BrandMortgage's 21 home-loan production offices will be added to the 57 full-service banking offices Capital City has. The mortgage company will remain headquartered in and continue to operate out of its existing office in Lawrenceville, Ga.
Lower rates that have spurred increased refinancing activity and higher volumes of home-loan production in the past year have made mortgages more attractive to depositories.
If BrandMortgage's originations had been added to City Capital’s in 2019, it would have tripled the bank's historical level of production, according to the two companies’ press release.
Home-loan production levels in the industry were approximately 23% higher on an annual basis in 2019, according the Mortgage Bankers Association. Originations are expected to remain historically strong but drop by 8% year-over-year in 2020.
BrandMortgage previously was part of Brand Group Holding prior to the group's acquisition by Renasant Corp. in 2018. Renasant forced the group to divest the mortgage unit and sold it to an undisclosed buyer that year.