First Federal Bank to acquire BNC National Bank’s mortgage business

First Federal Bank will acquire the mortgage division of BNC National Bank, which will give the Florida-headquartered community-based bank a nationwide consumer direct mortgage platform.

The two banks announced they have signed a definitive agreement for First Federal to acquire certain assets and liabilities of BNC National Bank’s mortgage division on Wednesday. The purchase, which includes the bank’s consumer-direct technology platform, is expected to close in the second quarter of 2023. 

The BNC platform is expected to transition to the First Federal branch within a few months of closing. Terms of the transaction were not disclosed.

Headquartered in Bismarck, North Dakota, BNC National Bank is a registered bank holding company focused on providing banking and wealth management services to businesses and consumers in its local markets. 

“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 the BNC, its shareholders and the communities we serve,” Michael Vekich, BNC National Bank’s chairman, said in a statement. 

As with the entire mortgage industry, BNC National Bank was heavily impacted by rising interest rates last year. The bank’s production volume more than halved to $1.04 billion in 2022 from the previous year’s $2.37 billion, according to data from Modex. NMLS showed the bank has 63 registered loan officers.

First Federal expects to retain substantially all employees to its residential lending team, Paul Ottendorf, division president of First Federal, said.

First Federal Bank, a community-based mutual institution headquartered in Lake City, Florida, has assets of more than $3.6 billion, according to its website. The bank, consisting of 25 branches in the Southeast and operations in the Midwest, serves mortgage, small business administration (SBA) and USDA customers.

First Federal will serve BNC National Bank’s mortgage customers from its existing locations in Overland Park, Kansas; Moline, Illinois and Bismarck, North Dakota locations and in the Phoenix, Arizona market upon completion of the transaction.