Continuing to cherry-pick mortgage companies in markets around the country, First Tennessee National Corp. bought the loan origination services of Atlanta's HomeBanc Mortgage Corp. for about $7 million.
HomeBanc is the largest mortgage lender in Atlanta, with $600 million of loans last year. But since that amounts to only 5% of Atlanta's highly competitive market, the acquisition of what is basically a marketing organization is a minor investment for First Tennessee, which has $10.9 billion of assets.
"We're basically through buying large mortgage companies," said J. Kenneth Glass, president of First Tennessee's banking group, which oversees the company's mortgage banking operation. "Our strategy now really is to find those markets where we don't have a presence and do fill-in acquisitions of small companies."
HomeBanc, which was spun off in 1994 by a like-named thrift, employs a loan origination staff of 160 in Atlanta and two Florida offices: Orlando and Deerfield Beach. Mr. Glass said the purchase price includes computer equipment and some loans.
"HomeBanc gives us a real good base in the Georgia market, plus the two offices they have in Florida," Mr. Glass said. "They're a big deal for us in the Southeast."
HomeBanc will retain its name and most of its top management after the deal closes July 1. Vice president Patrick S. Flood will assume the presidency from Robert Cannon, who is leaving the company.
In a separate transaction, HomeBanc sold its loan servicing division to Carolina First Corp., Greenville, S.C., for $13 million. All 25 jobs in that department will be lost.
First Tennessee was only a regional player in mortgages until 1993 when it embarked upon a major acquisition program. The purchase of Maryland National Mortgage Corp. and Dallas-based Sunbelt National Co. helped catapult the Memphis-based bank into its current status as 10th-ranked retail/wholesale originator nationally.
When recent acquisitions are included, First Tennessee originated $6.6 billion of residential mortgages last year and serviced a $14 billion portfolio. The mortgage division operates 156 offices in 27 states.