MVB Financial in Fairmont, W.Va., and Intercoastal Mortgage in Fairfax, Va., are creating a joint venture.
The $2 billion-asset MVB said in a press release Tuesday that its mortgage unit will merge into a new limited liability corporation that will operate as Intercoastal Mortgage. MVB said the new company will be one of the largest independently owned residential mortgage lenders in the mid-Atlantic.
As part of the partnership, MVB will contribute substantially all of its mortgage unit's assets in exchange for a 47% stake in the joint venture. MVB will also receive $7.5 million in preferred units.
MVB said it will recognize its ownership as a fair value equity investment and will no longer include the mortgage unit's operations in its financial results. MVB also said the transaction should increase its tangible book value by $1.40 a share.
Ed Dean, MVB Mortgage's chief executive, and Peter Cameron, the unit's president, will hold the same titiles at the new Intercoastal Mortgage. Tom Pyne, Intercoastal's chief operating officer, will have the same post at the new company.
“Timing is everything," Larry Mazza, MVB's president and CEO, said in the release.
"With the 10-year Treasury at a near all-time low ... this unique opportunity with Intercoastal Mortgage allows us to take a smaller piece of a much larger pie for greater returns for the short and long term," Mazza added. “This new relationship positions MVB to have a larger share of one of the best markets in the nation and to gain synergies and economies.”
The deal is expected to close after it receives regulatory approval.
