As FirstBank prepares to acquire the Chattanooga area operations of Atlantic Capital Bank and shutter three local branches, the parent company of FirstBank, FB Financial Corp., announced plans Monday to also exit the wholesale mortgage and correspondent banking business.
FirstBank said it has signed an agreement to sell its third party origination channel to Renasant Bank, which is expected to retain most of the 100 employees who work in the division.
Chris HolmesThe Nashville-based FirstBank will retain its retail mortgage operations, but the sale is expected to cut what was a money-losing operation for the bank in the fourth quarter of 2018.
Additionally, FirstBank has entered into a non-binding indication of interest to sell its correspondent channel to a separate unrelated third party.
"We have reviewed our mortgage operations and concluded that the exit of these wholesale channels better aligns mortgage with our strategic plan and long-term vision for the company," FirstBank CEO Chris Holmes said Monday. "The exit also allows additional focus on our retail and consumer direct (online) origination channels."
FB Financial expects to record a restructuring charge of up to $2.5 million to cover deal related expenses, severance and other items related to its mortgage operations.
The wholesale mortgage loan and correspondent bank loan operations comprised about half of the $6 billion of total loan volume by FirstBank last year. But FirstBank Chief Financial Officer James Gordon said the businesses to be sold were less profitable "and don't fit into what we are trying to do from an overall basis, particularly with where our mortgage loan business is right now."
The business realignment comes after FirstBank completed major acquisitions in Knoxville and the Chattanooga markets over the past three years, including Northwest Georgia Bank in 2015 and Clayton Bank and American City Bank in Knoxville in 2017. Last November, FirstBank announced plans to buy the East Tennessee and Northwest Georgia branches of Atlantic Capital Bank, which the Atlanta-based bank had bought four years ago from the former FSG Bank.
FirstBank, a 113-year-old bank based in Nashville with nearly 60 offices, is the third biggest bank in Tennessee and will become the fifth biggest bank in Hamilton County with its pending purchase of the East Tennessee and Dalton, Georgia operation of Atlantic Capital.
FirstBank announced earlier this year it will shut down the Atlantic Capital branches it is acquiring on Gunbarrel Road in East Brainerd, on Highway 153 in Hixson and in Warehouse Row downtown as FirstBank consolidates overlapping branches in the Chattanooga area once the purchase is complete.
Contact Dave Flessner at dflessner@timesfreepress.com or at 757-6340.