Mortgage lenders American Portfolio and Town Square announce merger deal

The companies will retain their names and brands, but will expand products offering and share technology resources

Amid the expectation of a wave of mergers and acquisitions in 2023, nonbank mortgage lenders American Portfolio Mortgage Corporation and Town Square Mortgage announced on Wednesday that the companies are merging their operations. 

The lenders, both privately held, will retain their names and brands after the transaction, but APMC will be the new legal entity as the companies come together. The financial terms of the deal were not disclosed.

The merger will result in an “increased lending footprint” to better serve clients, Paul Kessel, president of American Portfolio, said in a statement.

Lisa Thomas, chief executive officer of Town Square, added that the deal also brings “a portfolio of expanded loan products backed by a lending platform with state-of-the-art technology.” 

Founded in 1993, Chicago-based direct lender American Portfolio reached $685 million in volume over the last 12 months, according to the mortgage tech platform Modex. The company said it has a full-service retail origination platform that originates agency, government and investor portfolio loans. 

Headquartered in Dallas and founded in 2009, Town Square reached $805 million in volume in the last 12 months, the Modex data shows. Most of the originations were conventional and purchase loans. 

The combined lender will have a total of 36 state licenses, the companies said. According to Modex, the new company will also have about 35 branches and 200 active loan officers. 

Kessel and Thomas will be board members and officers of the merged company, as will Scott Vorreyer, current executive vice president of systems and operations at American Portfolio, and Adam Welwood, president and COO at Town Square. 

Still-rising mortgage rates have prompted the expectation of a wave of merger and acquisition deals this year. This week, Guild announced it has acquired Legacy Mortgage.

Brett Ludden, managing director of Sterling Point Advisors, a merger and acquisitions (M&A) advisory firm based in Virginia, estimates that up to 30% of the 1,000 largest independent mortgage banks are projected to disappear by the end of 2023 via sales, mergers or failures. 

Tom Capasse, managing partner and co-founder of New York-based Waterfall Asset Management, a global alternative investment manager with $11 billion in assets under management, predicts that about 20% of the IMB segment will disappear for the same reasons. 

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