When Mark Hanna informed his banker mates that the Maryland-based group financial institution he leads was planning to purchase a mortgage lender, they “checked out me as if I had 5 eyes,” he recalled this week.
The underwhelming response got here as little shock, mentioned Hanna, who’s the president and CEO of Glen Burnie Bancorp. In any case, with rates of interest nonetheless stubbornly excessive, mortgage origination exercise is at lower than half of its 2021 peak, in line with knowledge from the Mortgage Bankers Affiliation.
And different banks proceed to exit the mortgage market.
Bucking that development, the $351 million-asset holding firm for the Financial institution of Glen Burnie introduced Monday that it had
For Financial institution of Glen Burnie, which has struggled to guide loans in recent times, the acquisition “makes loads of sense,” Hanna mentioned in an interview.Â
Financial institution of Glen Burnie is “very a lot in a progress mode,” and mortgage lending stays “an amazing strategy to develop and retain relationships,” Hanna informed American Banker. “We’re making an attempt to convey as many new relationships to the financial institution as we will. We’re additionally making an attempt to retain all our current shoppers.”Â
VA Wholesale, primarily based in Virginia Seashore, Virginia, closed about $125 million of dwelling loans in 2024. It is well-versed in making loans to veterans, in addition to Federal Housing Administration and first-time homebuyer transactions.
Financial institution of Glen Burnie has traditionally provided mortgages, however its lending was beforehand confined largely to 30-year fixed-rate offers with comparatively massive down funds. Its loan-to-value ratios usually went no larger than 80%.
“There have been folks in our communities that wanted mortgages, however we did not have the merchandise to serve them,” Hanna mentioned. “Now, we’ll be capable to assist nearly anyone who’s desirous about shopping for a house.”
For his half, VA Wholesale Mortgage CEO Eric Tan mentioned his firm, which can function as a division inside Financial institution of Glen Burnie, ought to be capable to do extra enterprise as a financial institution subsidiary.
“Having a dedicated funding supply will broaden our attain, permitting us to develop and meet the wants of our clients extra readily, whereas additionally growing lending quantity,” Tan mentioned Monday in a press launch.Â
Whereas VA Wholesale serves all homebuyers, it makes a speciality of providing loans to active-duty army personnel and veterans. That focus ought to work effectively in Financial institution of Glen Burnie’s footprint, which incorporates Fort Meade, one of many Military’s largest bases, the Nationwide Safety Company’s headquarters and the U.S. Naval Academy, in line with Hanna.
“We expect their enterprise mannequin interprets properly into the communities we serve,” Hanna mentioned. Â
Hanna began as CEO of Financial institution of Glen Burnie in October 2023. The 76-year-old firm excelled at service, however its cabinet was naked by way of merchandise, in line with Hanna. “We wanted to get again to rising shopper relationships, and embedded in that’s having the merchandise to compete,” he mentioned.Â
Over the previous 12 months, Financial institution of Glen Burnie has rolled out a set of treasury administration instruments, in addition to a high-yield cash market account. The financial institution’s mortgage and deposit portfolios, which had been trending down for a number of years, expanded within the second quarter. Hanna mentioned he is hopeful the acquisition of VA Wholesale, in addition to plans to launch a bank card product, will spur much more progress.
“That is actually the trail ahead,” Hanna mentioned. “There isn’t any secret sauce. We have to develop.”
