Mortgage

CIT buys Mutual of Omaha Bank for $1 billion

Mutual of Omaha Mortgage, formerly known as Synergy One Lending, not in deal

CIT Bank N.A., the banking subsidiary of CIT Group, announced Thursday that it acquired Mutual of Omaha Bank, the banking arm of insurance giant Mutual of Omaha, for $1 billion.

The acquisition was first announced in August, with Mutual of Omaha telling HousingWire at the time that the bank’s mortgage business is not part of this acquisition.

Much of Mutual of Omaha Bank’s business is focused on homeowners association banking, but the company does have a growing mortgage arm, which is not included in this deal.

Mutual of Omaha Bank recently expanded its mortgage business when it acquired Synergy One Lending, a lender that offers a variety of home financing products and services, including mortgages and reverse mortgages, through a network of loan officers, mortgage brokers, and direct sales channels.

Synergy One later expanded by acquiring Illinois-based BBMC Mortgage. The company now operates as Mutual of Omaha Mortgage, as does Retirement Funding Solutions, which ranks among the top 10 reverse mortgage lenders in the U.S. and is a subsidiary of Synergy One.

Synergy One and Retirement Funding Solutions operated under the Mutual of Omaha Bank umbrella, but Mutual of Omaha did not sell the mortgage business.

Rather, the company transitioned Mutual of Omaha Mortgage from the bank to Mutual of Omaha Insurance Co., the parent company.

Meanwhile, the sale of Mutual of Omaha Bank is complete.

“The completion of this transaction accelerates CIT’s strategic plan to further enhance our capability as a leading national bank and create additional long-term shareholder value,” said CIT Chairwoman and CEO Ellen Alemany.

“The addition of the homeowner association deposit channel has significant growth potential and will reduce CIT’s overall cost of funds, and the middle market banking franchise will expand our footprint and customer base,” Alemany added. “These capabilities complement CIT’s core strengths and will allow us to unlock greater potential and create an even stronger company.”

The purchase price for Mutual of Omaha Bank is approximately $1 billion, comprised of $850 million in cash and roughly 3.1 million shares of CIT stock.

The deal includes $6.8 billion in deposits, $4.5 billion of which are community association deposits; and $8.3 billion of total assets, including $3.9 billion of middle-market commercial loans.

Mutual of Omaha Bank will now begin transitioning to the CIT brand, with the retail branch locations adopting the CIT Bank brand over the coming months.

“We are excited to welcome the teammates and clients of Mutual of Omaha Bank to the CIT family,” Alemany concluded. “We look forward to strengthening existing relationships, building new ones, and continuing to deliver value for our customers, colleagues, shareholders and communities.”

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