CMAL Financial Corp., which owns a Tampa mortgage bank that does most of its business in the Southeast, said it has a deal that will make it more of a national lender.
The Florida company said it is buying a mortgage bank in California. CMAL's president, William M. Wetherell, would not identify the company but said it is mainly a retail lender and closed about $500 million in loans last year through four branches in the San Francisco Bay area.
Terms of the deal were not disclosed; it is likely to be completed by the end of the year, Mr. Wetherell said.
CMAL, which originated slightly more than $100 million in home loans last year, is hoping the combined company will produce more than $1 billion in mortgages in 1998.
Mr. Wetherell said CMAL will disclose its name in about a month, once employment packages for its employees are completed. The target company will probably retain its name, he said, but headquarters for the combined company will be in Tampa.
CMAL opened a wholesale office in Northern California this year to gauge the market and decided it could best increase its market share in the state with an acquisition.
"This will give us a stronger foothold in a real robust market," Mr. Wetherell said. He pointed out that Northern California mortgage loans average about four times as large those in the Southeast.
CMAL is the holding company for Continental Mortgage Associates, Tampa, a mortgage bank bought last year by investment banker Ramsay Mamneh. The company raised $500,000 in its initial public offering in June and is planning a secondary offering of one million shares for later this year.
Mr. Wetherell said proceeds from the stock offerings can be used to finance more acquisitions.
"We have plans to service loans. We may find another acquisition candidate that's got some servicing in place," he said.
In particular, CMAL is looking for servicing operations in California now that it will be originating loans there. The company also is looking to expand elsewhere on the West Coast.
The California company would help CMAL diversify in the types of loans its offers, Mr. Wetherell said. His own company now makes mostly home equity loans, he said, but it also originates conventional and government loans, and it lends to borrowers at all points on the credit spectrum, from A to D.
CMAL buys loans from a network of 2,000 brokers. Mr. Wetherell said the company hopes it can increase volume through its wholesale channels in the Southeast by offering loan products from the California mortgage lender it is buying.
And though the California operation is primarily a retail lender, Mr. Wetherell said CMAL will maintain a strategy of increasing its wholesale lending capabilities, since that is a lower-cost approach than retail.
"We don't want too much in the way of bricks and mortar," Mr. Wetherell said.
