“The kids convinced me to make popcorn for breakfast. That makes me either the best or worst dad ever – not sure which.” Breakfast at home is a fond memory for many, and Zillow wants to show you the breakfast nook. “Zillow,” which has never set foot in a single house, is launching 3D home tours to give buyers and sellers a more immersive look at home listings Zillow 3D Homes uses an app to provide agents, builders, property managers and home owners the ability to capture an immersive 3D tour of their listing from their iPhone at no cost and publish it to their listing on Zillow and their brokerage website.
“Have you heard any kind of backlash against rapid bank statement products?” Yes – there is some resistance. Plenty of borrowers apparently are saying, “Whoa, wait a minute – I want to look at those bank statements first before the underwriter!”
Flagstar Bancorp swung to a fourth-quarter loss as the company took an $80 million noncash charge to earnings because of the tax reform bill. Ouch!
Versus non-depository lenders, where we can expect to hear plenty of merger/acquisition news, things are kind of steady out there in the bank mergers and acquisitions world. S&P Global Market Intelligence reports there were 261 bank and thrift M&A deals in 2017. Compare that to 241 in 2016, 279 in 2015 and 288 in 2014. Who were the Big Dogs? The top 10 banks by market capitalization as of the end of 2017 were JPMorgan ($371B in market cap), Bank of America ($308B), Wells Fargo ($299B), Citigroup ($197B), US Bancorp ($89B), PNC Financial ($69B), Bank of New York Mellon ($55B), Capital One ($48B), BB&T ($39B), and State Street ($36B).
What about fintech? Whether traditional banks are truly being challenged by online or mobile-based fintech startups. Ainsley Harris of FastCompany writes, “Most of the fintech startups I meet share a similar goal: they want to become the central hub for every transaction in your life…But for most of us, the bank remains our primary financial relationship. The problem for fintech startups, of course, is that banking relationships are enormously sticky. In a mature market, it’s hard to get anyone to switch.”
Some will say that no one really likes their bank. Some people tolerate their bank. Others are ambivalent. Jeremy Potter asks, “Shouldn’t your bank be a company you want to be associated with?” Most banks are important for putting all our money (liabilities) to work. Critics ask whether it’s in the most efficient way possible or to the benefit of the average customer.
What might convince consumers to choose a mobile-first bank? Jeremy Potter also points out that Chime thinks it has the answer: eliminating fees and automating savings behavior. The CEO of Chime is Chris Britt who believes that direct deposit is the stickiest part of the relationship.
What about credit unions? They want more than their 10% market share. They have been going after millennials through a combination of personalized, custom(er) service and local, relationship banking.
The recent bank earnings were a little bit of a non-event, with few surprises. Wells Fargo plans to close 900 branches despite $3.4 billion tax boost. It has certainly helped its stock price. “The Coach” took a $3.25 billion pre-tax hit to earnings from litigation accruals Its net interest margin improved in the fourth quarter, but loan growth was below expectations (although still positive) and Wells continues to be challenged in showing accelerating business momentum into 2018.
Given the announcements, in the last week or two M&A news continues to roll on with depositories. In Mississippi Bank of Commerce ($395mm) will acquire Tallahatchie County Bank ($58mm). In California special purpose acquisition company Nano Financial Holdings will acquire Commerce Bank of Temecula Valley ($77mm) for $23.3mm in cash (51%) and stock (49%) or about 1.7x tangible book, and Heritage Bank of Commerce ($3B) will acquire United American Bank ($336mm) for about $44.2mm in stock. In Missouri Bank Northwest ($127mm) will acquire Horizon State Bank ($20mm).
Community National Bank & Trust ($956mm, KS) will acquire Heritage State Bank ($139mm, MO). First Commonwealth Bank ($7.4B, PA) will acquire Foundation Bank ($216mm, OH) for about $58mm in cash (30%) and stock (70%). MetaBank ($5.2B, SD) will acquire Crestmark Bank ($1.2B, MI) for about $320.6mm in stock (100%). BankLiberty ($452mm, MO) will acquire Lawson Bank ($126mm, MO). Mid Penn Bank ($1.2B, PA) will acquire First Priority Bank ($612mm, PA) for about $82mm in stock or 1.94x tangible book. First Foundation Bank ($4.2B, CA) will acquire Premier Business Bank ($587mm, CA) for about $106mmin stock (100%) or 2.03x tangible book. First-Citizens Bank & Trust Co ($34B, NC) will acquire HomeBanc ($955mm, FL). And in the home of the Wolverines mBank ($1.0B) will acquire First Federal of Northern Michigan ($335mm) for about $33.8mm in stock or about 1.29x tangible book.
No policy changes by the Bank of Japan on Monday night, and a pushback on speculation of tightening, was welcome news for the US bond markets on Tuesday. In other central bank news, the Senate voted to confirm Jerome Powell as the next Federal Reserve chair Tuesday afternoon, by a vote of 85-12. The 10-year Treasury note rallied early and maintained that momentum through a strong 2-year auction to finish the daily yielding 2.63 percent. The market attracted buyers who sought to take advantage of multi-year high yields. While a one-day rally is nice, it is important not to read too much into a single day’s action as we do see corrections from time to time even when there has been a strong trend in the opposite direction.
Yesterday’s Richmond Fed survey of business activity continued January’s trend of slower, but still positive expansion metrics. Meanwhile, Redbook same-store sales is at its strongest pace of the year. Today’s calendar brings MBA Mortgage Applications (at +4.5% up three straight weeks!), the FHFA House Price Index, January Existing Home Sales and a $34bln 5-year note auction. After the initial spate of numbers, we find rates giving back yesterday’s move with the 10-year yielding 2.66% and agency MBS prices worse .250.
Products and Events
Floify has just rolled out several exciting and powerful enhancements to make their leading solution even better for top LOs! Floify’s latest feature release includes dramatic visual improvements to their borrower-facing mobile user interface, additional credit reporting apps and automations, and infrastructure updates to provide greater scalability and reliability within the platform. Additionally, Floify, the mortgage automation and point-of-sale app for top-producing LOs, has invested heavily in updating its popular Partner Portal, which real estate agents can tap into to self-generate pre-approval letters and stay up-to-date on every step of the mortgage process. To check out Floify’s newest improvements, and get the inside scoop on upcoming changes, request a live demo. If you’re already excited about Floify, and how their current and future enhancements will positively impact your mortgage business, then get started with a free trial, plus 25% OFF your first 4 months.
Don’t miss out! The American Pacific Mortgage VA Financing Boot Camp multi-city tour is in full swing. This event gives you the perfect opportunity to become informed, inspired, and educated about the unmatched benefits of VA home loans allowing you to better serve the VA community. You will hear directly from APM’s Jeff Wilson, who is considered a national expert on the VA Loan Guaranty program having served for over 27 years with the Department of Veterans Affairs. In this interactive session, Jeff will dispel some of the common myths about VA financing. The VA Boot Camp is being held in key cities in California, Colorado, Missouri, Texas and Utah. Click here to find and register for an event near you.
Increase your 2018 sales to millennials! Millennials represent one in three home purchases; therefore, understanding this highly sought-after generation is key to maximizing your profits. Leading millennials and generation Z researcher and speaker, Jason Dorsey, will keynote at CalyxVision 18 and share strategies to unlock the power of generations to grow your business. In “Cashing in with Millennials” you will learn how millennials prefer to do business and what they look for during the home buying process. “Recruit, Engage and Retain Millennials” will show you how to create an effective recruiting strategy and millennial-friendly culture for key employee retention. Receive 50% off your CalyxVision registration using discount code 50CV18. Register today!
Caliber Home Loans, Inc. understands the value that technology can add to our level of service for your buyers. Caliber’s digital mortgage tools are just one of the reasons Caliber is the fastest growing top ten mortgage company in America! High-tech tools to support all aspects of our business include our proprietary LOS H2Online, our web portal for agents and builders MyPipelineConnect, and the Ultimate Home Buying Experience that combines digital mortgage technology with our personalized guidance. In a few weeks, Caliber will launch the first of three new mobile apps, which we’ve had designed and customized for the needs of our producers, brokers, realtors, builders and customers. The suite of mobile apps will include a borrower app that offers both originations and servicing features. Experience a new way to work with Caliber in 2018. Loan Officers looking to grow their sales career by integrating high-tech tools, can visit www.joincalibernow.com or email Jeremy DeRosa.
New Penn Financial announces the launch of its new SMART Loan Series. Focusing solely on non-Agency/non-QM, New Penn has created a new dedicated operations and open access underwriting team for a smooth, consistent file flow to deliver a positive lending experience. This series includes SmartSelf, a bank statement program, SmartTrac for borrowers with a recent bankruptcy, short sale, DIL or multiple 30-day lates, and SmartEdge for highly-qualified borrowers requiring non-QM features or that fall into a near-miss agency scenario with loan amounts up to $3M. To learn more about New Penn’s new SMART Series of products, please visit gonewpenn.com or call 1-888-988-1695 to speak with an Account Executive.
Jobs and Personnel Moves
Wintrust Mortgage, a fast growing 50-state lender with an incredible menu of products and marketing tools designed to help LOs grow their business is looking for quality production Originators, Branch Managers and Teams to build on its $5B platform. Known for high integrity, transparency and right-minded prudent lending, Wintrust is a mortgage company that happens to be owned by a $27+ billion bank holding company but is led by lifelong mortgage professionals invested in helping their salespeople grow their careers. Headquartered in Rosemont, IL with offices throughout the country, Wintrust has the tools, products and commitment to mortgage lending so often missing in the market. If you are interested in a company you can call home in the long run, contact Bob Shield, EVP of National Production, at 847.939.9361 for a confidential discussion.
Orange Coast Title Company, an industry leader since 1974 and one of the largest independently owned title insurance companies, is growing again and has an excellent opportunity for a National Sales Executive. “As our National Sales Executive, you will acquire, build, and maintain strong, long-lasting client relationships with the top mortgage lenders in the country. The ideal candidate will possess a broad knowledge of the loan origination and servicing space, have sales experience with a proven track record of exceeding goals, and be self-motivated to succeed in a fast-paced, competitive environment.” Interested candidates should send their resumes to Tim Curtis, National Sales Manager.
Hamilton Group Funding, Inc., a rapidly growing, privately held mortgage banking firm headquartered in Florida has appointed Tommy Adkins as SVP of Strategic Growth. Congrats! Tommy’s career includes roles involving business development, sales management and revenue generation in TPO, retail, and warehouse lending, and will be responsible for the national growth of Hamilton.