Cornerstone Home Lending to Acquire Roscoe State Bank
Houston-based non-bank mortgage lender Cornerstone Home Loan purchased Roscoe State Bank, a traditional custodian bank headquartered in Roscoe, Texas.
The transaction is subject to customary regulatory approvals. Financial terms of the deal have not been disclosed and it is not known when the deal will be concluded.
The potential merger – relatively rare for a non-bank mortgage lender – would create an organization with around $ 2 billion in assets and more than $ 300 million in equity, the companies said in a joint statement. The merged organization will be known as Cornerstone Capital Bank, and the mortgage division will continue to be known as Cornerstone Home Lending.
The Roscoe State Bank name will be retained at the Bastrop, Texas sites.
Owning a bank allows the mortgage lender “to significantly expand its product and service offerings to our hundreds of thousands of customers and referral sources across the country,” Marc Laird, CEO of Cornerstone, said in a statement.
Increase in lending and service capacity – regardless of rates
The low interest rate environment won’t last forever, and lenders and service providers need to be able to keep costs down while dealing with fluctuations in volume once things start to normalize.
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“This combination of two excellent teams will provide a wide range of additional mortgage lending products and services to the clients and communities served by Roscoe State Bank, and create additional growth opportunities for the Cornerstone and Roscoe team members.” , Laird said.
Cornerstone is currently the originator of mortgages in 39 states, as well as the District of Columbia. It usually gives conventional government mortgages and also offers a jumbo product.
According to Inside Mortgage Finance, Cornerstone, an independent company, is among the top 50 mortgage lenders. It funded $ 4.2 billion in loans in the first quarter of 2021, good for the 42nd nationwide in production volume. In 2020, Cornerstone generated around $ 16.4 billion, according to IMF data. Cornerstone has approximately 300 mortgage loan officers and performs processing and underwriting in-house.
Roscoe, who owns $ 212.6 million in assets, makes very little, if any, mortgages. In 2019, he issued just $ 6.3 million in mortgages, according to HMDA data collected by Finding polygons. No mortgage data was available for 2020. Roscoe’s website suggests he has five mortgage loan officers.
Judy Belanger, president of Cornerstone, said Roscoe State Bank has served the Texas suburbs of Roscoe, Sweetwater and Bastrop for 115 years – the last 46 under the leadership of John Jay and Clyde Jay. John Jay is expected to join the new board at closing.
“I think Cornerstone is the perfect fit for our bank as we combine two family organizations that share a similar culture and a commitment to building long-term relationships,” Jay said in the statement. “Their respectful approach to integrating our own successful business model makes me confident that this agreement will result in growth and stronger investments in the markets we currently serve and in expanding markets. We are very proud of Roscoe’s history of serving our communities through every economic cycle since 1906.