Small Lender Expands into Arizona
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- Kara Johnson | December 01, 2010
Seeing expanded opportunities for smaller banks in the evolving mortgage market, Heartland Financial today announced a significant expansion into the Arizona market by purchasing the residential mortgage arm of a defunct thrift in that state.
The new operation, to be called National Residential, will focus on “traditional mortgage banking based on sound lending principles,” according to a company statement. That usually means the bank intends to lend its own money and collect the interest itself, rather than flipping loans over to investors as mortgage securities for a quick turnaround and fresh lending capital, as banks did increasingly during the runup of the subprime mortgage market.
“Recent legislative changes have opened the door to new opportunities in mortgage lending for local banking companies like Heartland,” said Lynn Fuller, Heartland’s chair, president and CEO. “As non-bank competitors in this space are beginning to disappear, we see significant opportunity in the future by expanding residential loan origination as a gateway retail product and a strategic line of business.”
The new unit had been a profitable division of the failed thrift, despite the ongoing woes of the Arizona real estate and mortgage markets. The unit will be staffed with 24 employees, including management, loan originators, processors, closers, secondary marketing specialists and support staff.
Heartland Financial, based in Dubuque, Iowa, is a $4 billion diversified financial services company offering banking, mortgage and other financial services to individuals and businesses. It presently has more than 60 offices in Iowa, Wisconsin, New Mexico, Arizona, Colorado and Minnesota.
The company recently earned $6.9 million in net income for the third quarter of the year, its best in three years and up from $3.5 million for the same period last year. A NASDAQ-traded company, Heartland earned 34 cents per common share in diluted earnings during the quarter, up from 13 cents last year.
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