Regions buying California commercial real estate lender

Regions Financial of Birmingham, Alabama, is expanding its capital markets business with a deal for a California lender specializing in low-balance commercial real estate loans.

The $ 156 billion asset bank will acquire the credit and services businesses of Sabal Capital Partners in a transaction that is expected to close in the fourth quarter. Financial terms of the transaction were not disclosed.

Sabal is a leading originator of small commercial real estate loans backed by Fannie Mae and Freddie Mac and has also expanded its non-agency mortgage-backed securities loans, Regions said in its announcement. The company has borrowed $ 6 billion since its inception in 2009 and currently maintains a $ 5 billion service portfolio.

Regions highlighted a proprietary tool that Sabal calls its SNAP platform as a selling point for the deal. This tool relies on features such as real-time commercial real estate finance scenarios and online loan applications to improve credit and communication processes with customers and investors.

Regions Financial’s purchase agreement to acquire Sabal Capital Partners follows the purchase of a home finance lender this year and an equipment finance firm last year.

Gary Tramontina

“Sabal’s industry-leading technology platform and leadership in small commercial real estate make it a great partner for regions,” said Joel Stephens, Regions’ head of capital markets, in a press release. “Our current affordable, high-volume Fannie Mae and Freddie Mac products, combined with Sabal’s small balance capabilities, will enable regions to offer real estate solutions across the spectrum of agency offerings.”

The deal for Sabal follows the recent closing of the deal for EnerBank USA, an industrial loan company specializing in home finance, which was first announced in June. Last year, Regions bought Ascentium Capital, an equipment finance company based in Texas.

Regions plans to maintain Sabal’s flagship offices in Irvine, California and Pasadena, California, as well as the New York City office. The transaction does not include Sabal’s investment management business, which will remain with the sellers, including CEO Pat Jackson, and the mutual funds managed by Stone Point Capital, according to the press release.

Jackson and Mike Wilhelms, Sabal’s chief financial officer, will remain in the investment management business while other members of the company’s executive team will move to Regions, the bank said.