Norwest Bank Acquires Ryland's Mortgage Securities Administration Business

Strategic Insights -

Norwest Bank Minnesota and The Ryland Group, Inc. have announced a definitive agreement for Norwest to acquire the mortgage securities administration business of Ryland's mortgage company subsidiary. The purchase price is $47 million in cash, subject to certain adjustments. This transaction is expected to close in the second or third quarter of 1995. The acquired business includes master servicing, securities administration, investor information services, and tax calculation and reporting.

Key Takeaways:

  • Norwest Bank Minnesota is acquiring Ryland's mortgage securities administration business for $47 million in cash, subject to certain adjustments.
  • The transaction includes master servicing, securities administration, investor information services, and tax calculation and reporting.
  • The acquired business employs approximately 140 people and services 546 securities with a principal balance of $42.8 billion as of March 31.
  • Norwest expects the transaction to add to per share earnings beginning in 1996.
  • The acquisition allows Norwest to provide one-stop shopping for mortgage securities issuers, meeting their needs for mortgage document custody and trustee services.
  • The acquired business has a strong market position and a history of excellent profits.
  • Ryland will continue to own and operate its homebuilding, mortgage origination, and mortgage servicing businesses.
  • Ryland Mortgage Company has financed more than 115,000 home mortgages for families across the country since its founding in 1978.

Statistics:

  • Acquisition price: $47 million in cash, subject to certain adjustments.
  • Number of employees: Approximately 140 people.
  • Securities serviced: 546 securities with a principal balance of $42.8 billion as of March 31.
  • Expected earnings impact: Adds to per share earnings beginning in 1996.
  • Ryland Mortgage Company loan production: $2.1 billion during 1994.
  • Number of homes built by Ryland: 125,000 since its founding in 1967.
  • Number of home mortgages financed by Ryland Mortgage Company: 115,000 since its founding in 1978.

Sources:

  • PR Newswire, April 11, 1995
  • Ryland Group, Inc.
  • Norwest Bank
  • Norwest Corporation
  • Dillon, Read & Co., Inc.