Metropolitan Life Will Buy CrossLand Capital
Metropolitan Life Insurance Co. has agreed to acquire Los Angeles-based CrossLand Capital Corp., one of the nation’s oldest and largest mortgage banking firms, for more than $200 million, the two companies said Monday.
CrossLand Capital is the successor to Ralph C. Sutro Co., a firm founded in 1910 and run by the Sutro family until 1979, when it was sold to Greenwich Savings Bank of New York. Metropolitan Life, with more than $60 billion in assets, is the nation’s second-largest life insurance firm.
The final sale price is expected to be “slightly in excess” of $200 million, a CrossLand spokesman said. That’s about eight times what the firm sold for only three years ago, when it last changed hands. The amount includes cash and the “assumption of other obligations,” the spokesman noted, adding that “it’s a done deal. It should take about a month to close.”
Mortgage banking companies are popular acquisitions these days because they offer steady income and are a natural for large firms looking to expand their financial-service operations.
Earlier this month, Goldome Bank for Savings in Buffalo, N.Y., embarked on a major westward expansion in financial services by acquiring Bankers’ Funding Corp. of Newport Beach for an undisclosed amount. Metropolitan Life said Monday that the CrossLand acquisition will beef up its existing mortgage banking operations.
Mortgage banks normally make money on fee income generated by originating and servicing mortgage loans. They charge a fee for making the loan and taking in the monthly payments but sell the loan itself into the secondary market, usually to large investors.
CrossLand Capital commanded a hefty sale price even though it earned only $2 million in 1984. That’s because “CrossLand Capital has been growing rapidly, which has impacted its earnings,” said Glen Coverdale, an executive vice president for Metropolitan Life.
3rd Sale in 6 Years
CrossLand Capital’s mortgage service portfolio, which includes both residential and commercial loans, has surpassed $9 billion, more than double what it was three years ago, said company President Robert Griffin. The company boasts that it is the nation’s fifth-largest full-service mortgage banks.
If the sale goes through, it will be the third time in six years that the venerable banking firm has been sold.
The last time was in 1982, when it was acquired for $26 million in cash from Greenwich Savings by Metropolitan Savings Bank, a firm unrelated to the life insurance company. The Ralph C. Sutro name was changed to CrossLand Capital in 1984 when New York-based Metropolitan Savings changed its name to CrossLand Savings Bank.
CrossLand Capital now has offices in California, New York, Arizona, New Mexico, Florida and Puerto Rico. The California offices are in Newport Beach, San Diego, Covina, Westminster and Walnut Creek.