A New Mexico mortgage banker is pursuing an aggressive growth strategy, acquiring mortgage banking and mortgage brokerage companies all over the country.
PSM Holdings Inc. of Roswell, N.M., the parent of PrimeSource Mortgage Inc., has announced two acquisition deals and completed a third this year, and it is looking for more. "We have the capacity. Now we're ready to grow," said Rick Roque, senior vice president for growth and strategy at the 20-year-old company.
PrimeSource has 30 offices around the country. "I suspect we'll probably double that by the end of the year," Roque said.
It is licensed in around 22 states, he said, and by yearend he expects it to be licensed in 35 states. "Our focus is smart, tactical growth," Roque said. "Our goal is to have a significant presence in key markets around the country."
He's looking for a quality company in a desirable metropolitan area, with a good, steady production pipeline and a "higher-than-normal" market share.
"I have an acute understanding of companies that have done well, and those that struggle," he said.
PrimeSource employs 60 people, Roque said, with more on the way. PrimeSource's offices are mainly in the Southwest and Midwest, but recent expansion efforts have opened the New York, New Jersey and New England markets to it.
A key element in PSM's acquisition strategy is its status as a stock-owned company, Roque said. (PSM is traded on the Over the Counter Bulletin Board. It was trading recently for 75 cents a share. PSM went public in October 2005.) Stock status enables it to offer cash and stock to owners of prospective mortgage bankers and brokerages. Roque said he likes both kinds of companies.
"I don't really have a preference. I love dealing with brokers because they're passionate about the business," he said. "I love dealing with bankers because they know the business."
Many of PrimeSource's loan officers and consumers own stock as well, Roque said. Having an ownership stake sets PrimeSource apart from so-called net branch companies, where individual offices can be jealous of one another and the home office. Having stock also helps consumers to do repeat business with the company, such as on refinancings of mortgages.
Roque is expecting to announce an inflow of talented people in the next 30 days, including a nationally known mortgage banker, and he said he thinks loan production at PrimeSource can jump by $40 million in the next 45 days and by $90 million in 90 to 120 days, because of expansion.
So far this year PSM has acquired United Community Mortgage Corp. of New Jersey, and announced deals to buy Brookside Mortgage in Tulsa, Okla., and American Trust Mortgage Inc., which is based near Boston.
Roque said PrimeSource has a warehouse relationship with Spirit Mortgage in Oklahoma and sells its loans to investors such as Wells Fargo and Bank of America.
Roque was formerly with the vendor Calyx Software and on his own as an industry consultant. He said that he studied mortgage company production when he worked at Calyx.
