Regions Financial in Birmingham, Alabama, is building out its capital markets business with a deal for a California lender that specializes in small-balance commercial real estate loans.
The $156 billion-asset bank will acquire the lending and servicing business of Sabal Capital Partners in a deal expected to close in the fourth quarter. Financial terms of the transaction were not disclosed.
Sabal is a top originator of small-balance commercial real estate loans backed by Fannie Mae and Freddie Mac, and has also been growing its non-agency commercial mortgage-backed securities loan originations, Regions said in its announcement. The company has originated $6 billion in loans since it was founded in 2009 and currently maintains a servicing portfolio of $5 billion.
Regions highlighted a proprietary tool, which Sabal calls its SNAP platform, as a selling point in the deal. That tool relies on capabilities like real-time commercial property financing scenarios and online loan applications to improve lending and communications processes with clients and investors.
Regions Financial’s deal to acquire Sabal Capital Partners follows its purchase of a home-improvement lender this year and an equipment finance firm last year.
“Sabal’s industry-leading technology platform and its leadership in the small-balance commercial real estate arena make the company a great match for Regions,” Joel Stephens, Regions’ head of capital markets, said in a press release. “Our current affordable and large-balance Fannie Mae and Freddie Mac products, combined with Sabal’s small-balance agency capabilities, will allow Regions to offer real estate solutions across the full spectrum of agency offerings.”
The deal for Sabal follows the recent closing of its deal for EnerBank USA, an industrial loan company specializing in home improvement lending, which it first announced in June. Last year, Regions bought Ascentium Capital, an equipment finance firm based in Texas.
Regions plans to maintain Sabal’s flagship offices in Irvine, California, and Pasadena, California, as well as its New York City office. The deal does not include Sabal’s investment management business, which will remain with the sellers, including CEO Pat Jackson, and investment funds managed by Stone Point Capital, according to the press release.
Jackson and Mike Wilhelms, Sabal’s chief financial officer, will remain with the investment management business, while other members of the company’s leadership team will join Regions, the bank said.