First Security Corp. said Monday it will acquire CrossLand Mortgage Acquisition Corp., parent company of CrossLand Mortgage Corp., for $112 million.
The aquisition affects Crossland Mortgage Corp., based in Murray. (The Murray Crossland Mortgage is not affiliated with CrossLand Savings Bank, FSB.)First Security said it will operate CrossLand Mortgage as a separate subsidiary of First Security Bank of Utah. The deal is subject to the usual regulatory approvals and is is expected to close in the second quarter.
First Security has agreed to pay $112 million in cash for all the capital stock of CrossLand Mortgage Acquisition Corp.
CrossLand Mortgage makes and services mortgages in 60 offices in 18 states. In 1993, CrossLand Mortgage originated a record $4.3 billion in mortgage loans, including $1.5 billion and $2.8 billion through its retail and wholesale branch network, respectively.
On Jan. 1 it was servicing $7 billion in mortgages in 41 states.
Last year, First Security Bank generated a record $2.1 billion in residential mortgage loans - $1.7 billion in term loans and $400 million in construction loans. At the beginning of the year, it was servicing $3 billion in mortgages.
Spencer F. Eccles, chairman of First Security Corp., termed the CrossLand acquisition an important step for the financial services company.
"It enables (First Security)) to substantially expand an already strong and profitable existing line of business and provides us with a significant source of additional fee income and earning assets," said Eccles.
"CrossLand Mortgage Corp. is a successful, well-managed and well-respected company. About 95 percent of its 925 employees are directly involved in generating revenue for the company. With low overhead, it is an efficient, low-cost producer and servicer of mortgage loans."
In addition to being geographically diverse, Eccles said Cross-Land also will add significant escrow deposits to First Security's balance sheet.
"We are looking forward to becoming an integral part of an organization that recently completed the most successful year in its 65-year history," said Christopher J. Sumner, president of CrossLand Mortgage.
"The acquisition will produce substantial savings for us at CrossLand . . . by eliminating costs associated with financing and operating an independent mortgage company and providing us with access to lower cost funds."
Sumner said joining First Security will allow CrossLand to expand its product offerings.
"The synergistic benefits resulting from the acquisition will enable CrossLand Mortgage Corp. to become even more competitive in the mortgage banking marketplace, while at the same time expanding the availability of certain First Security products to our existing customer base," said Sumner.