Home Capital has specified how much capital it has injected into CFF, and what it plans to do with the newly acquired Schedule I bank.
The leading lender said during its quarterly conference call last week that it has invested an additional $35 million into the newly acquired bank to “stabilize CFF Bank and to have sufficient capital for future profitable growth,” according to Gerald Soloway, CEO of Home Trust
Home Capital completed the acquisition of CFF Bank on October 1. The deal was for $18.2 million, subject to final adjustments.
“This is a relatively small investment for us, but it accomplishes a number of … things,” Soloway said during the conference call.
The acquisition allowed the leading alternative to attain a schedule I banking license, while also helping to diversify deposit taking.
Home Capital also acquired a distribution agreement with a network of 37 broker-owned CFF Centres, and provided another channel for originations, Soloway said.
When asked why the company had only invested a further $35 million into the bank, Soloway said Home Capital wanted to dip one toe in at a time, and not just jump right into the lake.
“If the demand for more capital is there, we will utilize it,” he said.
Home Capital said CFF Bank currently has $237 million in assets on the balance sheet.
Since the acquisition, many have wondered what Home Capital plans to do with its retail banking arm, Oaken Financial.
President Martin Reid confirmed during the conference call that Home plans to run a dual-entity, dual- issuer model that will allow both Oaken and CFF Bank to generate deposits.