Exit, Stage Left: MetLife to Pick Up First Horizon's National Mortgage Footprint, Servicing Portfolio
The rumors are true -- First Horizon National Corp. (FHN) said Wednesday morning that it will sell essentially its entire national mortgage footprint to MetLife Bank, N.A. in a deal that will see more than 230 retail and wholesale offices nationwide, and a $20 billion servicing portfolio and platform, change hands. For Tennessee-based First Horizon, the deal involving its First Tennessee Bank franchise marks an expected retreat to regional operations after years of astronomical national growth in the wholesale mortgage origination market: it will retain its 21 mortgage offices in and around Tennessee and associated employees, continuing to originate home loans for customers in its banking market footprint, it said in a press statement. First Horizon was the nation's 17th largest originator in 2007, according to statistics compiled by Inside Mortgage Finance, originating $30.56 billion during last year. It has ranked in the nation's top 25 originators for the last five years. For MetLife, the acquisition marks the bank's stunningly quick move into the national mortgage spotlight -- in April, the banking subsidiary of insurance giant MetLife, Inc. (MET) announced the purchase of Bloomfield, NJ-based EverBank Reverse Mortgage LLC, the former reverse mortgage footprint of Bank of New York. "We're excited about this acquisition," said Donna DeMaio, president, MetLife Bank. "This will significantly accelerate the growth potential of MetLife Bank's residential mortgage business as it allows us to acquire significant expertise, scale and platforms. Combined with our recently announced purchase of EverBank's reverse mortgage business, this acquisition effectively positions MetLife Bank to be a leader in the origination and servicing of mortgage products." The $20 billion in servicing rights acquired do not include subprime or Alt-A loans, MetLife said in a press statement. First Horizon will enter into a sub-servicing agreement for the remainder of its first lien servicing portfolio, both companies said, totalling $65 billion after closing. First Horizon CEO Jerry Baker has been looking to refocus the Tennessee-based bank on regional lending as the mortgage mess has taken a significant bite out of First Horizon's bottom line. In late April, the bank said it would sell up to $600 million in common stock and that it will shift dividend payments to stock in an effort to preserve cash. By allowing its warehouse loans to run off, in addition to the sale of its sizeable servicing portfolio, First Horizon said that it expected assets in its mortgage banking segment to decline by at least $3 billion by year-end 2008, freeing up at least $200 million of tangible capital. For more information, visit http://www.fhnc.com and http://www.metlifebank.com. Disclosure: The author held no positions in FHN or MET when this story was originally published. HW reporters and writers follow a strict disclosure policy, the first in the mortgage trade.