AmeriHome had been going back and forth on its IPO plans. Instead, Western Alliance (NYSE: WAL) is buying the company for a reported $1 billion. Western Alliance is a bank with over $35 billion in assets, while AmeriHome is one of the largest U.S. residential mortgage acquirers and servicers.
More on AmeriHome
Founded in 2013, AmeriHome is a direct mortgage lender as well as a major loan servicer. In 2020, it ranked as the third-largest correspondent producer of mortgages and the 13th largest producer of mortgages overall in the United States.
AmeriHome has relationships with over 700 independent correspondent mortgage originator clients, including independent mortgage bankers, credit unions, and community and regional banks.
The company has been steadily growing over the last few years. AmeriHome expanded its production from $18.7 billion in 2015 to $64.5 billion for the twelve months ended Dec. 31, 2020, and its servicing portfolio from $18.9 billion to $98.8 billion as of December 31, 2020.
Why this makes sense for Western Alliance
The plan is for AmeriHome to operate under its current brand, AmeriHome, a Western Alliance Bank company, while it will continue to be led by Jim Furash, its current president and chief executive officer. There will reportedly be no layoffs.
Western Alliance also plans to offer AmeriHome warehouse lines (short-term revolving credit facilities extended to mortgage loan originators) that currently go to other banks for an expected savings of about $50 million.
Western Alliance operates mainly as a business-to-business bank rather than a consumer-focused retail lender. The AmeriHome acquisition is a spearhead into retail banking for Western Alliance.
Western Alliance President and Chief Executive Officer Ken Vecchione explained in a press release: