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Wintrust Financial Completes Veterans First Mortgage Deal


Wintrust Financial Corporation’s WTFC subsidiary, Barrington Bank & Trust Company, N.A., through its Mortgage division, has completed the acquisition of certain assets and liabilities of iFreedom Direct Corporation DBA Veterans First Mortgage. The deal was announced in December 2017 with the aim of expanding in both size and structure.

Notably, the acquisition has also provided Wintrust Mortgage with Veterans First Mortgage’s servicing rights on nearly 8,300 loans, which total $1.4 billion in principal balance.

While the cash transaction is expected to be slightly accretive to Wintrust Financial’s earnings per share (EPS) in 2018, other terms of the deal are yet to be disclosed.

Nonetheless, of the total purchase price of the assets of Veterans First Mortgage, a significant portion is conditioned upon certain future profitability measures.

Being a consumer direct lender, Veterans First Mortgage specializes primarily in VA loans. VA loans are mortgage loans that are guaranteed by the United States Department of Veterans Affairs.

Veterans First Mortgage provides these loans specially for new home purchases and is a unique feature in the consumer direct lending business. As expected, the company raised more than $800 million in loans by the end of 2017 and currently employs nearly 400 people.

The acquisition is advantageous to Wintrust Financial, as it will now help the company build a more robust platform amalgamating the CRM technology, customized loan origination software and telephony systems.

Wintrust Financial’s shares have gained 14.7% in a year’s time, outperforming 5.4% growth for the industry it belongs to.

Currently, the stock has a Zacks Rank #2 (Buy).

A few other stocks from the same space worth considering are Enterprise Financial Services Corp EFSC, TCF Financial Corporation TCF and Associated Banc-Corp ASB.

Earnings estimates for Enterprise Financial Services have been revised 4% upward for 2018 over the past 60 days. Its share price has risen 10.4% in the past year. The stock currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

TCF Financial also has a Zacks Rank of 1. Its earnings estimates have been revised upward by 5.1% for 2018 in the past 60 days. Also, over the last twelve months, its share price has increased 5.6%.

Associated Banc-Corp has witnessed a marginal upward earnings estimate revision for 2018 over the past 60 days. Also, its share price has seen a 1.4% rise in a year’s time.

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