BankAmerica today said it has signed a definitive agreement to acquire the assets and operations of Honolulu Mortgage from Jacksonville, Fla.-based Homeside Lending Inc. Terms of the deal, which is subject to regulatory approval, were not disclosed. BankAmerica said it hopes to complete the purchase in the first quarter.
"This acquisition makes BankAmerica one of the top mortgage lenders in Hawaii and it fits well with our national growth strategy for the mortgage business," said Arthur Ringwald, group executive vice president of BankAmerica Mortgage. "Our intention is to grow the business."
The buyer said it will combine the 98-employee Honolulu Mortgage with the local operations of its BankAmerica Mortgage group, which has 19 employees in Hawaii.
Both will operate under the Honolulu Mortgage name.
The merged company will have about $400 million in loan originations in Hawaii, making it the state's third largest mortgage lender behind Bank of Hawaii and American Savings Bank, said Carl Cunningham, president and chief operating officer of Honolulu Mortgage.
BankAmerica said it is reviewing staffing decisions. But it said that Honolulu Mortgage's local managers, including Cunningham who will head the company, will continue to play a role.
The deal comes as BankAmerica has already expanded its presence in Hawaii's mortgage lending business. Last July, the company increased its local mortgage lending staff and began to offer more loan products when it shifted its mortgage business from Bank of America-Hawaii to Bank-America Mortgage.
Bank of America-Hawaii, formerly known as Honfed Bank, was one of the state's largest mortgage lenders prior to its acquisition by BankAmerica in 1992. Since then, the volume of the firm's mortgage lending activities has dwindled.
Homeside - a joint venture between Barnett Banks Inc., Bank of Boston Corp. and Thomas H. Lee Co. - put the profitable Honolulu Mortgage for sale in October because it wasn't an ideal fit with the Florida company's plans. Homeside, the nation's seventh largest mortgage servicing company, is a national wholesaler of residential mortgages, meaning that it buys and sells loans from lenders.
Honolulu Mortgage is in the retail residential mortgage business, meaning that it issues mortgages to home buyers.
Founded in 1954 by local developer Charles Pietsch, Honolulu Mortgage originated $303 million in home loans last year, down from $364 million in 1995. As of the end of last year, the company has a $1.93 billion mortgage servicing portfolio.
Homeside acquired Honolulu Mortgage in April 1996 when previous owner Barnett Banks teamed up with Bank of Boston and Thomas H. Lee to form Homeside. Barnett Banks acquired Honolulu Mortgage in 1992 from Texas-based BancPlus Mortgage Corp., which was then controlled by well-known Fort Worth investors Sid and Lee Bass.
BankAmerica is the nation's third-largest bank holding company and one of the nation's largest mortgage originators. Last year, the company had a mortgage serving portfolio of $82.63 billion.