Fairmont-based MVB Bank buys Va. mortgage firm
CHARLESTON, W.Va. -- MVB Financial Corp., the corporate parent of Fairmont-based MVB Bank, is buying Potomac Mortgage Group of Fairfax, Va., said Larry Mazza, MVB's chief executive officer.
"Potomac Mortgage Group is one of the top 100 mortgage lenders in the country," Mazza said.
Ed Dean is Potomac Mortgage's chief executive officer. "Ed is originally from Clarksburg," Mazza said. "I've known him since he was 12 years old. We hired him when he was 22 years old and I was at Empire National Bank. Twenty years later, he has built a fantastic company."
With the addition of Potomac Mortgage Group's annual production of mortgages, MVB Bank and Potomac Mortgage Group are expected to produce about $1 billion in mortgages a year, Mazza said.
A residential mortgage company, Potomac Mortgage Group has 68 employees and offices in Fairfax, McLean and Reston, Va.
Mazza said Potomac Mortgage currently sells 100 percent of the mortgages it originates to other institutions. "We're going to change some of that -- we'll keep some high-quality mortgages and service some of that inside MVB," he said. "That will be a big advantage and very profitable for us. This will give us an opportunity to double our earnings in a year."
When mortgages are sold to other institutions the originator receives a fee. This means the acquisition of Potomac Mortgage Group will give MVB more non-interest income. Mazza said this is important in today's ultra-low interest rate environment, when there is a slim margin between what banks pay for money and what they earn on loans.
The acquisition also "gives us a beachhead in northern Virginia," Mazza said. "I think, unequivocally, northern Virginia, specifically Fairfax County, is one of the best banking markets in the country. During the Great Recession the closer you were to D.C. the better you withstood the recession.
"There are seven million people in that market and it has a transient nature to it because of the government and government contractors," Mazza said. "That makes it a good mortgage market. I think it's great from a franchise and profitability standpoint."
Mazza said the key members of Potomac Mortgage Group have decades of experience. "They've all been in the industry for 25 years. Anyone who has done well during the Great Recession, it speaks well for them because a lot of these companies went out of business. This is a great partnership for us."
Dean said in a prepared statement, "Joining forces with an organization the caliber of MVB Bank is a unique opportunity to allow PMG to lend beyond its current geographic scope and our combined operations and systems will support significant mortgage lending growth potential. We're very pleased to become part of MVB."
MVB said it will purchase Potomac Mortgage Group's assets for about $19 million in cash and MVB common shares. The purchase includes a 50 percent stake in an operations center joint venture with another mortgage broker in the metropolitan D.C. area, MVB said. The operations center has 30 employees.
MVB recently announced plans to raise $20 million to $25 million in capital from investors in the markets it serves. Buying Potomac Mortgage Group means "this capital will be deployed immediately," Mazza said. "It won't be sitting around."
The deal is expected to close before the end of the year, MVB said.
In October Mazza said MVB plans to enter the Charleston market by opening a branch on Washington Street East across from Embassy Suites. The company has branches in Marion, Monongalia, Harrison, Berkeley and Jefferson counties. Contact writer George Hohmann at firstname.lastname@example.org or 304-348-4836.