1st Tennessee close to deal for Dallas home lender.

First Tennessee Bank, continuing an aggressive push into home lending, is forging a deal to buy Sunbelt National Mortgage Co., a major mortgage bank in Dallas, according to placed sources.

The acquisition, expected to be announced as early as today, could make First Tennessee one of the top 20 mortgage originators in the country and one of the top 35 servicers. Until recently, it was a virtual unknown on the national mortgage scene.

Part of a Trend

The deal would be the latest in a series of mortgage banking acquisitions by commercial banks. Earlier this year, for example, PNC Corp. agreed to buy Sears Mortgage Corp. and Chase Manhattan Corp. acquired Troy & Nichols, a sizable mortgage bank in Louisiana.

Just three months ago, First Tennessee itself announced an agreement to buy Maryland National Mortgage Corp. - a company similar in size to Sunbelt - for $116 million in cash.

Terms of the latest deal could not be learned, but observers suggested the price would belower than that of the Maryland National acquisition - possibly around $80 million.

A First Tennessee official declined to comment, and Sunbelt officials could not be reached for comment.

Sunbelt is owned by an investor group headed by Thomas J. Wageman and including Continental Equity Venture Capital, the direct investment arm of Continental Bank.

The group purchased Sunbelt from the Resolution Trust Corp. in August of 1992. The company had been a unit of Sunbelt Savings, which was seized in 1991.

Sources say the investor group will realize a tidy profit on the sale, partly because Sunbelt has beefed up its origination capabilities over the past year.

The mortgage company is expected to produce about $3 billion of loans this year, and it services about $5.5 billion of loans.

First Tennessee and Maryland National are thought to be originating a total of about $4 billion of loans a year. Thus the Sunbelt acquisition would boost total production to about $7 billion - just enough to rank among the top 20 lenders, according to SMR Research, Budd Lake, N.J.

Big Boost to Servicing

The acquisition would increase by nearly 90% the servicing load handled by First Tennessee and Maryland National. The combined portfolio Would be the 33d largest in the country, based on midyear rankings by American Banker.

Servicing, often the most profitable part of mortgage banking, entails funneling monthly payments from home owners to holders of mortgage-backed securities. First Tennessee and other banks have been building up their servicing businesses as part of broader drives to increase fee income.

Observers called Sunbelt a good strategic fit for First Tennessee, noting that it will greatly expand the bank's geographic reach in home loans.

Sunbelt has a far-flung originations network but is concentrated in areas - such as the Southwest and California - where First Tennessee has no mortgage presence.

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