A Rhode Island-based powerhouse just shelled out $511 million for one of Middle Tennessee’s best-known mortgage lenders.
On Thursday, Citizens Financial Group (NYSE: CFG) announced its acquisition of Franklin-based Franklin American Mortgage, giving the $153.5 billion lender its first physical presence in the Middle Tennessee market. The deal will triple Citizens’ off-balance sheet mortgage portfolio and expand the size of the bank’s mortgage portfolio to $78.9 billion.
Citizens’ entrance in to Middle Tennessee makes them the latest out-of-town lender to latch onto Nashville’s "It City" boom. The deal comes as the region’s economy soars and the area plans to absorb an additional million residents over the next 20 years.
Franklin American is best known locally for its sponsorship of the annual Music City Bowl. Franklin American is Greater Nashville’s 12th-largest mortgage lender, with more than $338.8 million in local mortgages in 2016, according to Nashville Business Journal research.
Franklin manages a $41 billion mortgage servicing portfolio, with the company generating nearly $14 billion in annualized originations during the first quarter, according to the news release.
“This transaction takes our mortgage business to the next level, expanding our reach and adding immediate scale in servicing as well as innovative correspondent and wholesale solutions,” Brad Conner, Citizens’ head of consumer banking, said in the release. “Franklin American Mortgage’s strong history of excellence in customer service is a great cultural fit with our organization and we are excited to welcome a new group of colleagues to Citizens.”
According to the release, the combined mortgage business will be led by Eric Schuppenhauer, Citizens’ president of home mortgage. Dan Crockett, Franklin American’s CEO, will become an advisor to Citizens, while Scott Tansil, Franklin American’s chief financial officer, will lead the acquired correspondent and wholesale origination businesses in Franklin.
“We view this transaction as an opportunity to add scale and capital to the outstanding platform and customer-centric culture that our employees have created,” Crockett said in a statement. “Citizens shares our deep and enduring focus on delivering for customers, as well as our strong commitment to colleagues and communities, which Franklin American Mortgage employees have long embraced. Together, we’ll be able to increase our positive impact on customers and grow the business platforms that are a great source of pride for us.”
Debevoise & Plimpton advised Citizens. Morgan Stanley and Baker, Donelson, Bearman, Caldwell & Berkowitz PC advised Franklin American.
While the deal marks Citizens’ first physical entry into the Nashville market, the bank has played a role in changing the city’s skyline. As of last year, Citizens had loaned $83.3 million for projects in Nashville, according to a NBJ analysis of construction loan data. For instance, Citizens gave Charlotte, N.C.-based developer Terwilliger Pappas Multifamily Partners a $43.4 million construction loan for the developer’s Solis North Gulch development, which will include 271 apartment units.
However, those loans were created by bankers in Citizens’ offices in Charlotte and Atlanta, according to Tim Leon, the bank’s regional director of commercial real estate financing.
Largest Mortgage Lenders in Nashville
Ranked by Local mortgage volume 2016
Rank Name Local mortgage volume 2016 1 Pinnacle Bank $611.67 million 2 Wells Fargo Home Mortgage $599.28 million 3 Quicken Loans $563.80 million View This List