Commercial lender CapitalSource Inc. (CSE) said Monday that it has acquired substantially all of the assets of MainStreet Lender LLC, a Small Business Administration or SBA lender, for $100 million. The acquisition allows CapitalSource to expand its product offering.
Chevy Chase, Maryland-based CapitalSource noted that the deal includes the acquisition of a $111 million portfolio of small balance SBA and conventional loans, and the acquisition by its parent company of a non-bank SBA license, servicing rights associated with the bank-acquired portfolio and intellectual property.
John Delaney, Executive Chairman of CapitalSource said, "This acquisition is consistent with our articulated strategy of building our franchise with asset origination platforms that focus on commercial lending, which we view of particular value as the banking industry will likely face a significant asset gap across the next several years."
CapitalSource said that the acquisition of the assets of MainStreet Lender, also based in Chevy Chase, Maryland, are seen as a growth opportunity for the company and a chance to support the small and mid-size businesses in the U.S. as the recent SBA program enhancements are expected to result in substantial additional activity in coming months.
George Harrop, chief executive officer of MainStreet Lender, who will be joining CapitalSource to lead the SBA lending team, noted that CapitalSource would be able to immediately begin making new loans as it has received all necessary regulatory approvals. MainStreet origination, underwriting and servicing personnel will also join CapitalSource to manage and grow the SBA portfolio.
There are 14 non-bank commercial lenders authorized by the U.S. Small Business Administration to make SBA loans. Certain select lenders, after careful review and oversight, are placed in a special status, called the Preferred Lender Program.
MainStreet has been named a National Preferred Lender by the U.S. Small Business Administration, which means it has the authority to underwrite and close loans on behalf of the SBA anywhere in the United States. MainStreet makes loans of $250 thousand to $6 million and has originated over $3 billion of small business loans.
As of December 31, 2009, CapitalSource had total commercial assets of $9.2 billion and $4.5 billion in deposits.
In Monday's regular trading session, CSE is trading at $5.93, down $0.01 or 0.25% on a volume of 0.68 million shares.
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