Midland States in Illinois to sell FHA origination platform
Midland States Bancorp in Effingham, Ill., has agreed to sell its commercial Federal Housing Administration origination platform to New York mortgage lender Dwight Capital.
The $6.6 billion-asset Midland States said it will continue to service a $3.9 billion portfolio tied to the business, which operates as Love Funding. The portfolio includes about $284 million in deposits.
Midland said that the sale will be neutral to its earnings and that the purchase price is roughly equal to the goodwill remaining on its books since it bought Love Funding in 2014.
The sale “reflects our ongoing efforts to evaluate all aspects of our operations for opportunities to enhance efficiencies, increase our focus on the more profitable areas of our business, and improve our overall financial performance,” Jeffrey Ludwig, Midland State’s president and CEO, said in a press release.
Selling the origination platform “will reduce volatility in our earnings stream and provide capital that can be more profitably deployed into other areas of our business,” Ludwig added. “Retaining the servicing portion … will allow us to maintain the low-cost funding generated by this business and continue earning servicing income.”