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Growing a mortgage portfolio: Encourage borrowers to bank local

January 15, 2015
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Finding one’s dream home can be a tedious, lengthy process. Financing it can feel even more cumbersome for many homebuyers. There are a lot of options on the table for mortgage applicants, and sometimes comparing interest rates and conditions can feel overwhelming, particularly for first-time homebuyers. Interestingly, the Consumer Financial Protection Bureau pointed out that nearly half of applicants don’t shop around for their mortgage. And that could be to their detriment.

With mortgage rates down in the US, many homebuyers are looking locally to their community banks to finance their new, potentially life-changing purchase. In the spirit of the go local movement, new data from Sageworks Bank Information peeked in on 10 cities to see which community banks were making an impact on local mortgage lending. The cities were chosen randomly, but are listed below in alphabetical order. For each city, highlighted is the top community bank by mortgage volume, along with their residential loan figure.

• Charlotte, North Carolina – Park Sterling Bank ($263 million)

• Cleveland, Ohio – First Federal Savings and Loan Association ($955 million)

• Dallas, Texas – PlainsCapital Bank ($1.89 billion)

• Denver, Colorado – Colorado Federal Savings Bank ($558 million)

• Detroit, Michigan – Flagstar Bank ($4.65 billion)

• Indianapolis, Indiana – First Internet Bank of Indiana ($249 million)

• Hartford, Connecticut – United Bank ($1.19 billion)

• Nashville, Tennessee – Pinnacle Bank ($432 million)

• Phoenix, Arizona – Arizona Bank & Trust ($102 million)

• Pittsburgh, Pennsylvania – Dollar Bank ($3.97 billion)


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The dataset was researched through Sageworks Bank Information, a web-based data platform that includes data on all U.S. banks and credit unions. All banks with under $10 billion in assets and within each MSA were identified. To determine the total volume of mortgage lending (closed-end loans secured by 1-4 family residential properties) for each institution, the metric “1-4 family first liens” was added to the “1-4 family junior liens” metric (both provided by the bank in their Q3 call report). All community banks within the MSA were then organized by mortgage volume, by most to least.

Flagstar Bank, headquartered in Troy, Michigan, just outside of Detroit, offered the largest volume of mortgage loans of the community banks identified, with more than four and a half billion dollars in mortgages. Residential mortgage lending is the bank’s specialty; that figure represents more than 48 percent of the institution’s total assets (at $9.56 billion). Flagstar capitalizes on going local, too. The bank is an active part of their local community as well, as an official partner to both the Detroit Red Wings and University of Michigan athletics.

Leveraging the go local movement to boost a bank’s lending portfolio may be as simple as targeted marketing. Advertising and promotions can make an impact on how a community bank makes their current customers aware of their lending practices, and attracts new ones – specifically those looking for a mortgage loan. Cleveland’s top community bank for mortgages, First Federal Savings and Loan, headquartered in Lakewood, Ohio, offers a $300 closing cost credit. Another home lending specialist, about 61 percent of the bank’s total assets ($1.56 billion) comes from residential mortgages. Dollar Bank out of Pittsburgh, with nearly $4 billion in mortgages, leverages their YouTube channel to offer customers and prospects insight into the institution’s lending options, as well as general know-how for current and future homebuyers.

For those areas that reported flat or near-flat home sales in 2014, such as Connecticut or Cleveland, community banks leveraging this economic news could serve to push mortgage applicants forward in 2015, leading to successful portfolio growth in Q1.

About the Author


Raleigh, N.C.-based Sageworks, a leading provider of lending, credit risk, and portfolio risk software that enables banks and credit unions to efficiently grow and improve the borrower experience, was founded in 1998. Using its platform, Sageworks analyzed over 11.5 million loans, aggregated the corresponding loan data, and created the largest

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