PNC Mortgage has bought Accubanc Mortgage's $8.6 billion servicing portfolio, bringing it into the top 15 among mortgage servicers.
The deal increases PNC's portfolio to $60 billion. It had been $40 billion at the end of last year. For Dallas-based Accubanc, the deal is a farewell to servicing.
"Some companies are beginning to decide they like the mortgage business, while others are beginning to find it more difficult," said Saiyid Naqvi, chief executive officer of PNC Mortgage.
Gerry Risi, a servicing broker at Atlantus Partners, Boca Raton, Fla., said he was surprised PNC won the package.
The company was "typically never willing to pay up in the bidding contest for big portfolios," he said. "This represents a little bit of shifting into higher gear."
Mr. Naqvi said his company's parent, PNC Bank Corp., Pittsburgh, had become "very comfortable with the mortgage business and the risks associated with it."
He would not disclose the price, but servicing brokers estimated the package could have sold for $150 million to $164 million.
William Starkey, Accubank's chief executive officer, said the portfolio sold for "one of the highest premiums paid for a servicing portfolio in recent months."
PNC Mortgage aims to grow out of the ranks of the midsize players and into the big leagues, Mr. Naqvi said. "We still have a way to go," he said. The top five servicers all have portfolios bigger than $100 billion.
The chief attraction of the portfolio was gaining the 83,000 customers, Mr. Naqvi added. "We want them to know it's not just a case of having to send payments to a different address," Mr. Naqvi said. PNC is "more financially capable of taking care of their needs" for refinancings, new home purchases, or other banking services than Accubanc was, he said.
"The larger your existing customer base and the more loyalty you're able to build in that base, the greater your chances of having predictable financial returns from investment in the mortgage servicing asset."
United Financial Inc., Denver, brokered the sale.
Mr. Starkey said his company was getting out of servicing to focus on production and that its goal is to become a top-10 originator.
The mortgage industry is "becoming more specialized," Mr. Starkey said. Noting the rise of "megaservicers," he said "it will take megaproduction originators to originate the fuel that's going to feed those megaservicers."
Accubanc "did a mediocre job servicing," Mr. Starkey added, "and in today's environment the premiums being paid on servicing are very attractive."
Accubank is using some of the proceeds of the sale to pay off its corporate debt, except for its warehouse credit lines, and the rest to expand loan production, he said.
Mr. Starkey declined to comment on rumors that the entire company had been for sale, but he said he had spent the last several months negotiating with shareholders to do a management buyout.
"The problem I've been having is to establish a purchase price and have an investment banker commit to that purchase price," he said. "It seems like whenever we get close to consummating a deal, something changes."
