Southside Bank in Tyler, Tex., is teaming up with a group of automobile financing specialists to form a portfolio-acquiring joint venture.
Late Tuesday the bank's $1.8 billion-asset parent company, Southside Bancshares Inc., said the venture, Southside Financial Group LLC, will acquire automobile portfolios from lenders throughout the country.
Southside Bank will own 50% of the venture, and Rush Creek Financial Group LP will own the other half.
"The owners have a history of doing this business for years," said Jeryl Story, the senior executive vice president at Southside Bank. "They know what they are doing, we like what we see, and we think it can generate a revenue stream."
It will take a few years to build up the business, Mr. Story said, but eventually about 10% of Southside Bank's loan portfolio will be made up of car loans it acquires.
"The best time to buy something is when somebody else is trying to sell it," he said. "There is a huge market in this business."
Ken Burke will be the chief executive of the venture, which will be headquartered in Arlington. In 1997 he founded the automobile portfolio purchaser FSB Financial Ltd., which BB&T Corp. bought last year.
Tony Schrier will be the chief operating officer at Southside Financial. He held the same position at FSB Financial.
