In Brief: Pa. Firms to Buy Stakes in Mortgage Lender

First Republic Bank, Philadelphia, agreed this month to buy up to 49% of Fidelity Bond & Mortgage Co. for $1.9 million cash, and a third local company, Phoenix Mortgage Co., is to buy no less than 31% of Fidelity in a stock swap.

The resulting company will keep the Fidelity name.

"We feel a combination of the three parties will result in a mortgage lender with much higher returns," said George S. Rapp, executive vice president and chief financial officer of $300 million-asset Republic. "Fidelity has been a good loan servicer, while Phoenix's strength is producing loans."

Fidelity is licensed to do business in 48 states and has more than $650 million in its mortgage loan servicing portfolio. Phoenix has annual originations exceeding $200 million.

The transaction is expected to close this quarter.

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