Banks beef up mortgage divisions

The mortgage departments of two Springfield banks are expanding, and while some familiar faces are moving between the two, leaders at both banks say the shifts are coincidental and independent of one another.

When Aaron Jernigan left BancorpSouth and joined OakStar Bank on Dec. 21 as vice president of mortgage banking, OakStar officials indicated their intent to add more originators to the team, which also had brought on board Sherry Burnett, an originator that also previously was at BancorpSouth. In the weeks since, four additional originators and two mortgage loan specialists - all from BancorpSouth - have joined the OakStar mortgage division.

At the same time, Metropolitan National Bank on Jan. 8 announced it was expanding its mortgage division. That bank added five team members - Senior Vice President Julie Barker, mortgage loan officers Darren Stewart and Lisa Schupbach and two mortgage loan specialists - to its mortgage department. All five previously worked together at OakStar Bank.

Sticking together

OakStar President and CEO Randy Johnson said the exodus of some team members to Metropolitan National and the influx of BancorpSouth employees resulted from shifts that are fairly common in the banking industry.

"When an originator makes a move (and has) a good relationship with their loan assistant (and) loan processor, it's not unusual for those people to pick up and move when their loan officer or loan originator moves," Johnson said. "You've got a little of that going on here in both directions."

Johnson emphasized that the new hires weren't recruited by Jernigan, though they may have sought opportunities at OakStar in order to continue working with him.

"There were some people that we called on - we being myself and other people at the bank staff, not Aaron - and there were some people who came over and made application," Johnson said.

Johnson said Barker left in the fall, prior to Jernigan's hiring, but the other former OakStar employees were still with the bank when he came on board, leaving after Barker landed at Metropolitan National, likely because they wanted to continue working with her.

Metropolitan National Chief Operating Officer Sterling Huff Jr. agreed that the timing of the two banks' expansions is coincidental. He said Metropolitan had been looking for a new mortgage leader after Senior Vice President Mike McGoldrick shifted his focus to commercial lending.

"We'd been looking the last several months for a veteran manager for secondary market operations and felt very fortunate that Julie was available," Huff said.

Barker, a 27-year banking veteran who spent the last 16 years working with mortgages, said the secondary market comprises fixed-rate mortgages that are sold to large national lenders and not kept in the originating bank's portfolio.

Barker declined to comment on why she left OakStar, but she said there were several positive reasons why she joined Metropolitan National, which also has banks in the Branson lakes area, Marshfield and Barton County.

"One of the reasons I came here was because of the multimarket reach of Metropolitan," Barker said.

Poised for growth

As new team members settle in, growth is on the minds of leaders at both banks.

Johnson, giving a nod to his previous employees, noted that the group brought OakStar a record loan volume of $70 million last year.

Barker said Metropolitan posted $31.8 million in secondary mortgage volume in 2009. Beyond the desire for volume growth, Barker and Huff said another goal for the bank's 11-member mortgage team is to expand the bank's mortgage product offerings.

With its new hires, OakStar is hoping to break its record. Jernigan, whose résumé shows 2009 production of $78 million alone, said the team that joined him at OakStar is capable of making that happen.

"In 2009, the group's production exceeded $200 million," he said.

Interest rates, which Barker said were hovering between 5 percent and 5.25 percent as of Jan. 20, will be a key factor for loan growth in 2010.

"If the government continues to buy mortgage-backed securities and kind of helps prop up the liquidity in that market, my sense is that those 30-year fixed rates will remain fairly flat," Huff said. "But there's also rhetoric out there that says at some point, they're going to stop buying those mortgage-backed securities, which may prompt an increase in those 30-year rates, and at the same time, you've got this expansion that we're hopefully beginning (that will) drive, in general, rates up."

He said the question of interest rate hikes revolves around timing.

"I think we all know they're going up; it's a matter of when are they going up, and you have to manage around that," Huff added. "My sense is that they're going to stay relatively flat in 2010 and then inch up in 2011."

OakStar's Johnson, however, noted that the benefits of tapping experienced mortgage personnel mitigate the interest rate effect to a degree.

"People that perform at high levels - even though they're subject to the overall economic conditions, such as an increase in interest rates - they still get more than their share in comparison to their benchmark competition," Johnson said.