Flagstar Bank announced Monday it closed on the purchase of the mortgage warehouse loan portfolio from Santander Bank, which included approximately $1.7 billion in mortgage warehouse loan commitments.

Terms of the transaction were not disclosed.

"We're delighted to welcome Santander's customers and employees to Flagstar," said Alessandro DiNello, president and CEO. "This transaction combines two talented warehouse teams dedicated to customer service, and the biggest winner is our new, combined customer base that will now be dealing with the fourth largest warehouse lender in the country. Customers can look forward to custom-crafted solutions delivered by knowledgeable, experienced warehouse lenders.”

"The purchase also adds volume in an attractive asset class with good spreads and very low credit risk. It's complementary to our existing business, bringing relationships that average around $40 million in commitments—four times larger than our existing book. While the pricing is slightly narrower than Flagstar's book, these loans typically have approximately 50% longer days-on-line and so enhance our net interest income. We plan to add the new business to our existing platform,” he added.

The acquisition is expected to reduce the Flagstar Bank’s Tier One leverage ratio by approximately 40 basis points and should be moderately accretive to 2018 earnings, the company explained in a press release.

The Santander portfolio acquisition is the latest in a series of moves by Flagstar. In January, the bank announced it was expanding its consumer direct lending operation by adding a team from Capital One. In 2017, the company acquired Stearns Lending’s delegated correspondent lending business. In May, Flagstar closed on its acquisition of “certain assets” of Opes Advisors, a full-service mortgage bank and financial advisory firm. And late last year, Flagstar acquired eight Desert Community Bank branches in San Bernardino County, Calif., from East West Bank.