Caliber Home Loans, an Irving, Texas-based residential mortgage origination and servicing company is acquiring a regional residential mortgage lender that focuses on the Western part of the country, for the second time in less than a year.
Caliber acquired First Priority Financial just last year. First Priority Financial was a regional residential mortgage lender as well, with branches and originators servicing California, Oregon, Washington, Idaho and Iowa.
On Wednesday, Caliber announced its plans to acquire Banc Home Loans. Banc Home Loans is the mortgage banking division of Banc of California.
The acquisition involved Caliber acquiring “substantially all of the assets” of Banc of California, Caliber said in a release.
Banc Home Loans primarily originated agency, government and conforming residential mortgages. The company operates more than 60 locations in California, Oregon, Arizona, Nevada and Idaho.
In 2016, details provided by Caliber showed that Banc Home Loans originated more than 18,000 mortgages, totaling more than $5.1 billion.
Caliber did not disclose any of the financial terms of the deal or provide any more detail as to which parts of Banc Home Loans it will be acquiring. But, a Banc of California filing with the Securities and Exchange Commission sheds more light on the deal.
Caliber will acquire the “leases relating to the Bank’s dedicated mortgage loan origination offices and the Bank’s ‘pipeline’ of residential mortgage loan applications for loans,” according to the SEC filing.
Caliber will pay at least $25 million for Banc Home Loans, under the terms of the deal.
From the Banc of California’s SEC filing:
The Bank will receive a $25 million cash premium payment, in addition to the net book value of certain assets acquired by the Purchaser, totaling $2.7 million upon closing of the transaction. The Bank may receive up to an additional $5 million cash premium based on criteria tied to loan officer retention by the Purchaser. Additionally, the Bank will receive an earn-out, payable quarterly, based on the future performance of the Business over the 38 months following completion of the transaction. The Purchaser retains an option to buyout the future earn-out payable to the Bank in exchange for cash consideration of $35 million, less the aggregate amount of all earn-out payments made prior to the date on which the Purchaser makes the payment of the buyout amount.
Caliber will also pay an additional $36 million to acquire the mortgage servicing rights for approximately $3.8 billion in unpaid principal balance of conventional agency mortgages from Banc of California.