Gateway Mortgage's owners are acquiring the majority interest in Farmers Exchange Bank and will merge the lender into the Cherokee, Okla.-based depository.
The Stitt Family Trusts, which collectively own all the shares of Gateway Mortgage, are purchasing an 85% stake in Farmers Exchange, which has five branches in Oklahoma. The bank has $274 million in deposits, and $321 million in assets, according to its most recent call report.
Terms of the deal were not disclosed.
Merging Gateway into Farmers Exchange will support the long-term growth of both institutions, as well as diversify the financial services offered, a press release said.
"We believe this acquisition is an important next step for Gateway that will allow for growth, providing greater opportunity for employees and the communities they serve," Stephen Curry, the Tulsa, Okla.-based lender's newly appointed CEO, said in the press release.
"Through this acquisition, both Farmers Exchange and Gateway can expect to gain improved products and technology that will enhance their ability to strengthen the families in their communities. We're excited about this new venture and the benefits it will provide to our customers."
Curry replaced Kevin Stitt as Gateway's CEO on Aug. 1. Curry was an advisor to Gateway for the past year, and was the founder of Everett Advisory Partners, a banking advisory firm headquartered in Tulsa. Between 2002 and 2008 he was a managing director at Bank of America and before that, chief operating officer of corporate and investment banking at Nationsbank.
Gateway originated $3.1 billion in mortgage loans in the first half of this year (60% retail, 40% correspondent) while its servicing portfolio is currently $17 billion. Farmers Exchange doesn't have much of a mortgage presence, with a portfolio of only $40 million.
"Gateway has always maintained a strategic eye on growth in Oklahoma, and we are proud of the great culture and workplace that we've been known and recognized for," said Stitt, who is now Gateway's chairman and will become the nonexecutive chairman of Farmers Exchange once the merger is completed.
After the deal closes, former Federal Deposit Insurance Corp. chairman Donald Powell will join the newly merged company's board of directors.