Bank / Credit Union

Midland States Bancorp sells commercial FHA platform, retains servicing business

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August 31, 2020

Midland States Bancorp, Inc. has completed the sale of its commercial FHA origination platform to Dwight Capital, a New York-based mortgage banking firm.

Midland States Bank will continue to service its Love Funding subsidiary's servicing portfolio of approximately $3.9 billion, which includes approximately $284 million in low-cost deposits, according to a press release. The transaction is part of Midland's ongoing effort to enhance efficiency and reduce instability in its financial performance.

"This transaction reflects our ongoing efforts to evaluate all aspects of our operations for opportunities to enhance efficiencies, increase our focus on the more profitable areas of our business, and improve our overall financial performance," Jeffrey G. Ludwig, president and CEO of Midland States Bancorp, said in the release.

Client transaction processing by Love Funding will continue to be managed and overseen by Love Funding and Dwight Capital pursuant to the transition rules of HUD and GNMA.

"We expect a smooth transition of Love's clients to Dwight. Our loan servicing team, which we will retain, has also played an integral part in Love Funding's success, as commercial loan servicing is an important part of our goal of having steady, predictable revenue and low-cost deposits," Jeff Mefford, executive vice president of Midland States Bank and CEO of Love Funding, said in the release.