Provident to buy mortgage company

September 17, 1992|By David Conn | David Conn,Staff Writer

Provident Bankshares Corp. said yesterday that it plans to buy a Philadelphia-based mortgage company that last year originated nearly $260 million in home mortgages. At the same time, the Baltimore company said it set up a separate subsidiary to handle all mortgage-related activities.

The acquisition of Consolidated Mortgage Corp. is not expected to be completed until Provident receives a license to conduct mortgage banking in Pennsylvania and New Jersey, where the five Consolidated Mortgage offices are located, according to Harold H. Johnson III, chief financial officer of Provident Bankshares.

Mr. Johnson said his company established the Provident Mortgage Corp. as a subsidiary of Provident Bank of Maryland, the banking company's primary unit, with $1.5 billion in assets.

Pete Georgopoulous, the newly appointed president of Provident Mortgage, will oversee both the Baltimore mortgage operations and the new Philadelphia and New Jersey offices. Mr. Johnson said the company was also considering expanding into Delaware.

Consolidated Mortgage will add about 85 people to Provident's mortgage banking operation, which currently has about 30 people, Mr. Johnson said. The purchase price wasn't disclosed, but Mr. Johnson noted that Consolidated's assets consist almost entirely of its offices and the ability of its workers.

The company originated $258 million in residential mortgages in the 12 months that ended June 30, compared with $30 million in mortgages Provident produced in 1991.

Provident produced a slim first-half profit of $1.5 million, which represented an annual return on assets of only 0.2 percent. The mortgage banking unit generated $704,000 in revenues for its parent.

While Provident's assets have remained flat over the past year, the company has reduced its loan portfolio sharply, converting those assets into investment securities.

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