Solera in Colorado Adds Large Mortgage-Banking Team

Forget dipping its toe — Solera National Bank (SLRK) is diving into the mortgage business.

The Lakewood, Colo., bank has recruited a 40-person mortgage banking team in five offices across the state from a rival lender to start its residential-mortgage division. That's a big move for a five-year-old bank with one office, 25 employees and $155 million of assets.

"It dramatically increases our product offering," Douglas Crichfield, the president and chief executive of Solera, said in an interview. "It should also be very accretive to earnings in 2013 after a little period of startup expenses."

Solera reported earnings of $168,000 through Sept. 30, up 121% for the same period in 2011.

Its new mortgage team is led by Kathleen Stout, who will be an executive vice president. Stout and her team came from Universal Lending Corp., which she joined in 2011 as head of its Colorado division. She has worked for several Colorado community banks, including Vectra Bank, a unit of Zion Bancorp., during her 18-year career.

"We are excited to be able to join a young, healthy bank and be an important contributor to their growth plans over the coming years," Stout said in a press release.

The team will focus on originate-to-sell loans, but Solera is also looking to build a portfolio of residential loans that are nonconforming yet have low loan-to-value ratios and borrowers with high credit scores.

Some analysts have questioned how well banks will respond to the inevitable rise in interest rates and end of the refi boom. Solera's move is different, Crichfield said. Stout's team will do refinancing, but its focus will be on purchases — a strategy with stronger long-term prospects, he said.

"Home resales in the metro Denver region continue to increase at a relatively strong pace, with year-to-date growth of 17.1% over the same period in 2011," Solera said in its release, citing data compiled by the Metro Denver Economic Development Corp. in its monthly economic summary for November.

The new team has two offices in Colorado Springs and one each in Boulder, Denver and Durango.

Solera opened in 2007, with a plan to target Denver's Hispanic community and buy other banks.

It has been profitable for all but two quarters but suffered setbacks in 2010 when regulators ordered it to correct Bank Secrecy Act-related violations and did not approve a branch acquisition.

Solera seemed poised for growth again because of the removal of the regulatory order this summer and its high capital levels. Solera executives "could double our loan portfolio … in the next year,"Crichfield said in July.