BNCCORP, INC. announced that its wholly owned subsidiary, BNC National Bank (BNC Bank), has entered into a definitive agreement with First Federal Bank under which First Federal will purchase certain operating assets and assume certain liabilities of BNC Bank’s mortgage division as part of BNCC’s strategic decision to exit the residential mortgage origination business. BNC Bank’s mortgage division is principally composed of its Overland Park, Kansas based nationwide consumer direct mortgage platform. The purchase is subject to customary conditions and is expected to close in the second quarter of 2023. Terms of the transaction were not disclosed.
As a result of the transaction, First Federal will continue mortgage origination activities in the Overland Park, KS, Moline, IL, Bismarck, ND and Glendale, AZ regions currently served by BNC Bank.
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After the sale, BNC Bank will continue to arrange or facilitate residential mortgage loans for its bank and wealth management customers as part of its full range of banking services.
BNC Chairman Michael Vekich said, “The Board of Directors made the decision to exit our nationwide residential mortgage origination business after extensive deliberations and concluding that this change in strategy is in the best long-term interests of BNC Bank, BNCC’s shareholders, and the communities we serve.”
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Mr. Vekich continued, “In the last year, we have taken substantial steps to improve the profitability of our mortgage banking origination business in response to the persistent challenges facing the mortgage banking industry. We are proud of the resiliency and dedication of our mortgage banking team which has built a reputation for providing quality service. However, it is unclear when and to what extent mortgage industry conditions will improve. A number of factors, including competitive, technological and regulatory changes and the volatility of the demand for mortgages have made it more difficult to run a mortgage company within a community bank. Simply put, since we expanded our mortgage banking operations in 2008 the landscape has changed. This transaction enables us to focus on our core banking activities to the benefit of our shareholders and the communities that we serve.”
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