Flagstar Closes on Acquisition of Santander Mortgage Warehouse Portfolio
Flagstar has closed its previously announced transaction to purchase the mortgage warehouse loan portfolio from Santander Bank, including approximately $1.7 billion in mortgage warehouse loan commitments. Terms of the transaction were not disclosed, and Flagstar stated it will hire Santander’s existing relationship managers.
"We're delighted to welcome Santander's customers and employees to Flagstar," said Alessandro DiNello, President and Chief Executive Officer of Flagstar Bancorp. "This transaction combines two talented warehouse teams dedicated to customer service, and the biggest winner is our new, combined customer base that will now be dealing with the fourth largest warehouse lender in the country. Customers can look forward to custom-crafted solutions delivered by knowledgeable, experienced warehouse lenders.”
The acquisition is expected to reduce the Company's Tier One leverage ratio by approximately 40 basis points and should be moderately accretive to 2018 earnings.
"The purchase also adds volume in an attractive asset class with good spreads and very low credit risk,” added DiNello. “It's complementary to our existing business, bringing relationships that average around $40 million in commitments—four times larger than our existing book. While the pricing is slightly narrower than Flagstar's book, these loans typically have approximately 50 percent longer days online and so enhance our net interest income. We plan to add the new business to our existing platform."