Home Savings of America in Little Falls, Minn., has scuttled – for now – its merger with Cornerstone Mortgage after one of the bank's private equity investors backed out of the deal, according to a memo provided to National Mortgage News.
An email written by HoSA CEO Dirk Adams notes that, “Even though many of you have worked very hard on planning the integration with Cornerstone we were informed this week that Moelis decided to pull out of the proposed capital raise…”
The email was written a few weeks ago by Adams, sources said. Cornerstone is on track to originate $3 billion this year, making it a top 50 ranked firm. All of its production is retail based.
Moelis refers to Moelis Capital Partners, a private equity firm.
Cornerstone, which is based in Houston, declined to comment but sources close to the 24-year old company said the merger may still eventually go through and that HoSA is talking to other PE firms.
The two parties have been working on the transaction for roughly a year. The plan called for HoSA to move its charter to Texas, said one advisor.
The Adams memo notes that the bank will continue to strengthen its balance sheet as it talks to other potential investors in the deal.
Both firms are privately held.
