First Federal Bank has signed a definitive agreement to acquire certain assets and liabilities of BNC National Bank’s mortgage division for an undisclosed sum.
BNC National Bank is a wholly owned subsidiary of BNCCORP, a bank holding company that operates community banking and wealth management businesses in North Dakota and Arizona.
According to BNCCORP (BNCC), the agreement is part of its strategic decision to exit the residential mortgage origination business.
BNC Bank’s mortgage division primarily constitutes its Overland Park, Kansas-based nationwide consumer direct mortgage platform.
The transaction is expected to be completed in the second quarter of 2023, subject to customary conditions.
Upon closing of the transaction, First Federal will continue the mortgage origination activities from the BNC Bank’s existing locations in Georgia, Wisconsin and Florida.
BNC Bank can continue to offer residential mortgage loans to its bank and wealth management customers as part of its full range of banking services.
BNC chairman Michael Vekich said: “The Board of Directors made the decision to exit our nationwide residential mortgage origination business after extensive deliberations and concluding that this change in strategy is in the best long-term interests of BNC Bank, BNCC’s shareholders, and the communities we serve.
“In the last year, we have taken substantial steps to improve the profitability of our mortgage banking origination business in response to the persistent challenges facing the mortgage banking industry.
“We are proud of the resiliency and dedication of our mortgage banking team which has built a reputation for providing quality service. However, it is unclear when and to what extent mortgage industry conditions will improve.”
Based in Lake City, Florida, First Federal Bank is a community-based mutual bank owned by its customers, which has 25 branches in the Southeast and operations in the Midwest.
With the acquisition of BNC National Bank’s mortgage division, the community bank will obtain a nationwide consumer direct mortgage platform.
It is enabled to offer additional technology tools and an expanded product offering and extend the benefits of community banking to the expanded customer base.
First Federal Bank will transition the BNC platform to the First Federal brand, along with all the employees of BNC Bank’s mortgage division.
Robert Flowers of Bradley Arant Boult Cummings served as an advisor to First Federal Bank, while Kaplan, Strangis and Kaplan as an advisor to BNC National Bank on the transaction.
First Federal president and CEO John Medina said: “Our mission is to provide solutions from a financially stable institution that is a great place to work and bank. This acquisition underscores our commitment to our customers and the residential mortgage sector.
“We look forward to serving the BNC mortgage customers with the same excellence they came to expect from the BNC team.”
