When First Michigan Bank acquired the operations of Citizens First Bank on April 30, it went from a single branch operation with 40 employees to a 23-branch business with almost 400 employees-and it also laid the groundwork for a statewide retail mortgage operation.
Not only did the company grow its business on the retail banking side with the merger, First Michigan's mortgage banking operation grew substantially as well.
The executive managing director of mortgage operations at First Michigan, Patrick Ervin, said previously the bank had been a correspondent lender with 16 or 17 employees. The addition of Citizens First drove it to over 60.
Not only that, but the scale of the acquisition and the expertise of the people from Citizens First has allowed First Michigan to bring it up another notch.
Ervin said First Michigan had plans to grow its mortgage operation organically, but the deal thrust things forward.
Taking a step back, in early April Citizens First was terminated as a Freddie Mac seller/servicer. In a Securities and Exchange Commission filing, Citizens First related that Freddie Mac's notice said the termination was for cause.
Approximately two-and-one-half months after Freddie Mac took its actions against Citizens First, it has granted First Michigan seller/servicer status.
Ervin said there was a need to get things up and operational quickly. Michigan First contacted Freddie Mac and found them to be very cooperative.
It didn't hurt, he added, that Michigan First is a well-capitalized bank. It was able to attract private equity investors and obtained a pledge of $400 million; it only needed $200 million for the Citizens First deal.
Michigan First is based in Troy, Mich., which was the home of another very familiar name in the state's mortgage landscape, Standard Federal Bank (whose wholesale affiliate was InterFirst). Ervin comes from Standard Federal and his team at Michigan First draws from both that company and InterFirst.
Plans are to build a high-quality Michigan-based retail mortgage lender with operations across the state and do that in the next 12 to 18 months. He called First Michigan "a diamond in the rough." He added First Michigan would look for opportunities to purchase other troubled institutions in the state.
First Michigan has its own servicing platform, the former Citizens First operation in Port Huron.
It has been doing some portfolio lending and it will reopen the construction lending business.
Ervin noted that there are healthy builders in the state who have been able to sell new homes, albeit at a lower price point, to healthy borrowers.
First Michigan has approval as a Fannie Mae servicer and should shortly receive approval as a seller. The bank was formed three years ago with David T. Provost as its chairman. Provost was an executive with The Bank of Bloomfield Hills, now known as The PrivateBank. His goal at First Michigan is to provide clients with highly personalized service.
Mortgage product offerings at First Michigan include jumbo, FHA, conventional 15-year and 30-year fixed rate mortgages, as well as reverse mortgages.
