Hampton Roads-based TowneBank struck a deal Tuesday to acquire at least a share of locally based Benchmark Mortgage.
Benchmark, a mortgage-banking firm headquartered in Innsbrook, will become part of TowneBank on Nov. 1.
Terms were not disclosed, and Benchmark chief executive Chris Beale would not discuss the structure of the transaction.
“I’m going to leave that confidential,” Beale said.
Whether the deal means TowneBank could have larger plans for the Richmond market remains unclear as chief executive Bob Aston did not return calls by press time. Benchmark closes about $200 million in loans annually, so the deal will give TowneBank a substantial mortgage presence in Richmond.
Benchmark was founded in the 1980s and was headquartered in Northern Virginia until Beale and partner Rob Roland bought it and moved it to Richmond in 1998. The company funds its own loans using a large line of credit and sells those loans into the secondary mortgage market.
Beale said that running a company the size of Benchmark has become increasingly difficult. Joining TowneBank will bring added stability with an in-house bank and a larger capital backing.
“We came to a point where, due to a lot of regulatory pressures and a very obvious indication that the government wants to take out companies of our size, it’s going to be very difficult to conduct business going forward,” Beale said.
“In the interest of security for our employees and the branding we want to continue to push, we thought a merger with TowneBank would make sense.”
With $4 billion in assets, TowneBank is the biggest bank headquartered in Hampton Roads and one of the largest community banks in the state, its closest peer being Richmond-based Union First Market Bank.
It has expanded over the years through acquisition but rarely ventures outside of Hampton Roads. All of its 26 bank branches and its various real estate and insurance subsidiaries are in Hampton Roads and northeastern North Carolina. It does have a mortgage and insurance operation in Raleigh. Towne’s closest branch to Richmond is in Williamsburg.
The deal will bring an end to the Benchmark name. Upon the closing of the deal, it will become “TowneBank Mortgage – Richmond.”
“It was emotionally charged,” Beale said, adding that losing the name was painful. “We had employees who felt very strongly about it and were visibly upset.”
But the deal allows all 52 Benchmark employees to keep their jobs.
As part of the deal, Beale, 50, and Roland, 42, will become executive vice presidents of TowneBank Mortgage.
In addition to Richmond, Benchmark has offices in Virginia Beach, Hampton, Fredericksburg, Missouri, Raleigh, Harrisonburg and Plymouth, N.C.
Beale, a University of Richmond graduate, has been in the mortgage business since the 1980s. He started his own mortgage company in 1991 and sold it to the former Resource Bank in Virginia Beach two years later.
“This is not the first time I’ve done this, but it is the last,” Beale said.
TowneBank is also no stranger to such deals. It has grown its bank operations over the years through acquisitions, including the former Harbor Bank in Portsmouth and more recently the branches of the former Bank of Currituck in northeastern North Carolina.
Michael Schwartz covers banking for BizSense. Please send news tips to [email protected]