Patriot Bank of Houston has bought Principal Mortgage Group Inc., a Houston mortgage banker that focuses on courting business from builders and realty firms.
The deal, announced Thursday, closed March 29. The 3-year-old Principal Mortgage, which is unrelated to insurer Principal Financial Group Inc.'s former mortgage unit, was renamed Patriot Mortgage and is now a Patriot Bank unit.
Darryl Rock, Principal Mortgage's founder and president, is the unit's president. It will keep three retail offices in Houston and add loan officers to each of Patriot Bank's four branches in Texas.
The $227-million-asset Patriot's chairman and chief executive, Don Ellis, said in a press release it bought the lender to better meet bank customers' home-loan needs.
Mr. Rock said in an interview his lender originated nearly $100 million of loans in the fiscal year that ended March 29. It has a dozen loan officers and two marketing specialists who support them.
It had abandoned a focus on formal alliances and joint ventures with builders and real estate brokerages, because of compliance concerns, Mr. Rock said. (It now has two joint ventures, down from about a dozen.) But, it continues to work closely with such intermediaries, getting about two thirds of its business from their clients and the rest from past customers, he said.
Patriot did not say how much it paid, but Mr. Rock said that it paid a premium and that his lender remained "very profitable" last year.
He also said he sold the business to expand it. He cited Patriot's stronger finances, its complementary construction lending, and the ability to start "recruiting with the power of a bank behind you."
