Certus Bank looks to sell mortgage, wealth divisions

CertusBank said Monday it has entered into agreements to sell its mortgage and wealth divisions as the troubled bank winds down a restructuring strategy.

The Greenville, S.C.-based bank said AmeriSave Mortgage Corp. has submitted a letter of intent to acquire a large portion of Certus’ mortgage business. Separately, Eximius Holdings has submitted a letter of intent to acquire Certus Securities and Certus Investment Advisors.

The deals are not yet finalized.

Monday’s announcement comes as Certus has been seeking to exit certain business lines under a restructuring plan while at the same time battling a high-profile lawsuit brought by former top executives fired earlier this year.

The restructuring, led by new CEO John Poelker, is designed to return Certus to a more traditional community-banking model. The bank, whose headquarters were once in Charlotte, said Monday the sale of the two divisions brings the restructuring effort to a close.

Poelker was named interim CEO and president in April after the executives were fired over mounting losses at the bank and shareholder questions about expenses.

The executives – Milton Jones, Walter Davis and Angela Webb, former Bank of America and Wachovia executives who had led CertusBank since its formation – sued the bank and a hedge fund manager, alleging the hedge fund manager persuaded a majority of the bank’s board members to fire them.

The executives claim the hedge fund manager, Benjamin Weinger, sought to defame them with racial statements. Jones, Davis and Webb are black. Certus has maintained that the decision to fire the executives was based on a review of their performance at the bank and had nothing to do with race. In court filings, Weinger has denied making racial comments about the executives.

The lawsuit is pending in federal court in Greenville.

Poelker was named permanent CEO last month. In a statement Monday, he said the sale of the two divisions will better position Certus “for ongoing improvement in our financial performance.”

The acquisition by Atlanta-based AmeriSave is expected to include a majority of Certus’ mortgage employees and facilities, Certus said. New York-based Eximius Holdings is seeking to acquire Certus’ brokerage and investment advisory platform, in a deal expected to include many employees who work in those operations.

The impact of the deals on those employees is not immediately known, Certus said. In the Charlotte metropolitan area, Certus’ mortgage and wealth operations employ approximately 40 people, according to the bank.

The announcement of the deals comes after Certus reported its losses in the second quarter more than doubled from the same period a year ago. The lender posted a loss of $15 million in the quarter, up from a loss of $7.1 million a year earlier.

Certus said the higher losses stemmed from expenses related to its restructuring.