Mortgage Bankers Buying a Bank; Fair Issac; Michigan Delinquencies; Commission Splits
Lots of mortgage bankers talk about buying a bank, but aside from this writer, very few have ever done it. So a huge round of applause to Rob Hirt, owner of RPM Mortgage, for closing on his purchase of Darien Rowayton Bank in Darien, Ct. We advised RPM on his acquisition plans in the very beginning of the process, but we take very little credit. It was all a result of Rob Hirt’s persistence, doggedness and total focus. Way to go, Rob.
No way were actors better in the old days. Johnny Depp is one of the current greats, and one of his most obscure movies, Cry Baby, showed that he’s more than just a great actor. Watch these clips to see what a great singer and dancer he is. And equally fun is this one, also showing his great talent as a singer and stage performer. Like all Johnny Depp movies, this one takes place in good old Baltimore. And like all John Waters movies, this one features Patty Hearst in a cameo role. Yes, that Patty Hearst. Now shouldn’t you get back to selling your loans or hedging or something?
It looks like Viewpoint Bank (FPFG) is going to fully demutualize, and this is one that actually merits investing in. So many mutuals don’t have a real growth strategy and few use the capital for new lending growth. The new capital raised will be good for their warehouse customers.
Isn’t it just perfect when two historical trends intersect at the exact same time? Last Wednesday's WSJ showed that movie-rental chain Movie Gallery will file for bankruptcy and close 1,200 of their 1,800 stores. The very same day, Netflix reported that they now have 12.3 million subscribers, up by 31% in the last year, and that they generated revenues for the quarter of $445 million. What a perfect example of what Schumpeter called the Capitalist Storm of Creative Destruction.
Texas Capital had an outstanding quarter. Non performing loans stabilized, and they had loan growth + expansion of their net interest margin. Kind of a trifecta.
Probably no one would find this of interest, but we were looking at the year-end numbers for Fair Isaac, and they’re sitting with $382 million of cash and cash equivalents + equity of $586 million.
Michigan is a tough state to lend in. Capitol Bancorp (CBC) has only 32% of its loan portfolio in Michigan, but 47% of their Non Performing Loans are there.
We studied compensation plans among our client data base a few years back. Our conclusion was that higher commission splits seemed to have an initially positive impact on overall revenue as more loan officers joined the company, but once the higher commission splits had become the norm, it appeared to have a negative impact on overall profitability. Commission structures need to reward the company and not just the loan officer.
We’re speaking next month at the Seattle Mortgage Bankers Association dinner, and if you have nothing better to do on February 23rd, this is a pretty sharp group. READ MORE
A legend passed away last Wednesday. J.D. Salinger (1919-2010) wrote Catcher in the Rye in 1945, and this wonderful novel went on to sell 60 million copies and is still used in high school classes everywhere. When you first read it at 14, it’s hilarious. When you read it in your 20’s, there’s a sadness to it, and in your 30’s you read it again and realize it’s the tragic story of a young boy’s life spiraling out of control. On the last page, ‘”That’s all I’m going to tell about. I’m sorry I told so many people. About all I know is, I sort of miss everybody I told you about. Don’t ever tell anybody anything. If you do, you start missing everyone.” Goodnight Mr. Salinger. Goodnight Holden. You were America’s first teenager, and while the writer who created you has died, you’ll live on forever.
We’ve run out of things to write about, so as Arnold said in the Terminator, hasta la vista, baby. And when the Terminator came back from the future, isn’t it weird that he’d have an Austrian accent?