A mortgage banking executive who is the new co-owner of a community bank’s assets and charter is continuing to look at other potential acquisitions of mortgage brokers and bankers.
“We are on the hunt,” said Stephen Calk, chairman and chief executive of National Bancorp Holdings, mortgage bank Chicago Bancorp and chairman of the newly acquired Generations Bank.
Calk said he is looking at acquiring more mortgage companies outright and making them part of his company’s retail residential origination network.
The company is interested in brokers “based on recent rulings,” as well as mortgage bankers that might be looking to ally themselves with a depository.
Licensing costs played a role in the mortgage banking executive’s decision to invest with his brother, another Chicago Bancorp executive, in Generations’ assets and federal charter. (The purchase price was not disclosed.)
The cost of doing business for a nonbank “used to be a small five-figure number, now it’s a seven figure number,” said Calk, noting that the costs of licensing individual loan officers in various jurisdictions, plus continuing education, became “absolutely usurious.
“No institution can absorb those costs ad infinitum, eventually those costs are going to be passed on to consumers and this allows us to avoid that.
“Through our federal charter we can continue to serve customers whether they’re buying a home in Kansas, buying a second home in Colorado or on the beach in Florida or whatever we can [do to] deepen that relationship...not only real estate financing needs but also [other banking services].”
“Chicago Bancorp as a whole was constantly asked about depository relationships and how those depository relationships could serve our customers,” Calk said. “Instead of just referring to local banks we had no affiliation with, now we have the ability to actually do that on a much more direct basis and know that the customers that will be referred to a depository institution will receive the same level of excellent service that we offer to our mortgage banking operation.”
Generations and Chicago Bancorp will operate completely separately, with Generations starting its own mortgage lending unit on track to originate $100 million this year, he said.
He said while the bank will have its own mortgage unit, the independent mortgage bank currently remains “important” as well.
When asked about the company’s end goal as far as acquisitions, Calk said it will be, “When it feels right. A lot of it will be based on the pace the regulators let us grow.”
“I think what regulators want to see is adherence to a business plan that represents safe and sound lending practices, confidence in management and to see that you can do everything you said you’re going to do,” he said, noting that if one does these things, the regulators will “allow you to expand appropriately.”
He added that, “our company is and always has for 15 years operated with no debt whatsoever and we did not take on any debt whatsoever to acquire a recapitalize (the assets of Generations Bank).”
However, Calk also said, “I guess...if the right opportunity came and we needed to leverage and/or borrow, then we would do that.”
