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Press release content from Business Wire. The AP news staff was not involved in its creation.

Commerce Home Mortgage Closes Follow-On Preferred Equity Offering

December 30, 2020 GMT

IRVINE, Calif.--(BUSINESS WIRE)--Dec 30, 2020--

Commerce Home Mortgage, LLC (“Commerce”) – one of America’s largest Community Development Financial Institutions (“CDFI”) – announced today the pricing and closing of a private placement (the “Offering”) of $31.5 million of cumulative, perpetual preferred equity units (the “Preferred Equity Units”). The Offering brings Commerce’s outstanding Preferred Equity Units to $81.5 million. Investors in the Preferred Equity Units include 18 socially responsible banks seeking to expand access to capital to low-income borrowers and communities throughout their market service areas.

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Commerce will use the net proceeds from the Offering to increase lending to Black, Latino, low-income, and underbanked borrowers and communities – including those in the Southwest, Midwest, and Southeast. Commerce expects to grow its lending to over $10 billion in 2021 to further its community development mission of lending to the underbanked.

Rev. Everett Bell, Chair of Commerce’s Community Advisory Board, stated, “We are honored that our platform continues to serve as an effective conduit for socially responsible banks to increase access to capital for minority and low-to-moderate income communities often left behind by traditional financial institutions. This additional capital will continue to strengthen our mission to address the needs of Black, Latino, low-income and historically underserved communities across the country. We thank our new partners for their participation in our commitment to bringing greater social equity to many of the communities that we serve.”

Steven Sugarman, Founder of The Capital Corps, LLC – the CDFI-certified venture fund that acquired Commerce in 2018, added, “We are excited to increase our bank partnerships as we expand our lending across America. Commerce’s ability to partner with depository institutions on terms consistent with our investment grade rating ratifies our team’s hard work, contributes to our company’s strength, and empowers our critical mission. We look forward to further expanding our partnerships, services, and reach in the new year.”

The Preferred Equity Units, which received an investment grade BBB+ rating from Egan Jones, bear a cumulative, preferred return of 5.00% per annum, paid quarterly (subject to an annual adjustment based on community development regulatory credit earned by bank investors).

Performance Trust Capital Partners served as an exclusive financial advisor to Commerce and sole placement agent in the Offering. Michelman & Robinson, LLP served as Commerce’s legal counsel and Hunton Andrews Kurth LLP served as Performance Trust’s legal counsel in the Offering.

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About Commerce Home Mortgage, LLC
Commerce Home Mortgage, founded in 1993, is a national mortgage banking company that is certified by the United States Department of the Treasury and the State of California as a Community Development Financial Institution.

For more information: http://www.commercehomemortgage.com/

About The Capital Corps, LLC
The Capital Corps is certified by the United States Department of the Treasury and the State of California as a Community Development Financial Institution and oversees its subsidiaries, including Commerce Home Mortgage.

For more information: http://www.thecapitalcorps.com/

No Offer or Solicitation
This press release does not constitute an offer to sell, a solicitation of an offer to sell or the solicitation of an offer to buy any securities. There will be no sale of securities in any jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.

Forward Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Any statements about our expectations, beliefs, plans, predictions, protections, forecasts, objectives, assumptions or future events or performance are not historical facts and may be forward-looking. Forward-looking statements are typically, but not exclusively, identified by the use of forward-looking terminology such as “believes,” “expects,” “could,” “may,” “will, “should,” “seeks,” “likely,” “intends” “plans,” “pro forma,” “projects,” “estimates” or “anticipates” or the negative of these words and phrases or similar words or phrases that are predictions of or indicate future events or trends and that do not relate solely to historical matters. You can also identify forward-looking statements by discussions of strategy, plans or intentions. Forward-looking statements involve numerous risks and uncertainties and you should not rely on them as predictions of future events. The following factors, among others, could cause actual results and future events to differ materially from those set forth or contemplated in the forward-looking statements: business and economic conditions generally and in the bank and non-bank financial services industries, nationally and within our local market areas; our ability to mitigate our risk exposures; our ability to maintain our historical earnings trends; our ability to successfully identify and address the risks associated with any possible future acquisitions, including risks related to integration; changes in management personnel; interest rate risk; credit risk associated with our loan portfolio; deteriorating asset quality and higher loan charge-offs; time and effort necessary to resolve nonperforming assets; inaccuracy of the assumptions and estimates we make in establishing reserves for probable loan losses and other estimates and projections; lack of liquidity; fluctuations in the fair value and liquidity of the securities we hold for sale; impairment of investment securities, goodwill, other intangible assets or deferred tax assets; our risk management strategies; increased competition in the bank and non-bank financial services industries, nationally, regionally or locally, which may adversely affect pricing and terms; the accuracy of our financial statements and related disclosures; system failures or failures to prevent breaches of our network security; the institution and outcome of litigation and other legal proceedings against us or to which we become subject; changes in federal tax law or policy; the impact of recent and future legislative and regulatory changes, including changes in banking, securities and tax laws and regulations, and their application by our regulators; governmental monetary and fiscal policies; and increases in our capital requirements.

While forward-looking statements reflect our good-faith beliefs, they are not guarantees of future performance. All forward-looking statements are necessarily only estimates of future results. Accordingly, actual results may differ materially from those expressed in or contemplated by the particular forward-looking statement, and, therefore, you are cautioned not to place undue reliance on such statements. Further, any forward-looking statement speaks only as of the date on which it is made, and we undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events or circumstances, except as required by applicable law.

View source version on businesswire.com:https://www.businesswire.com/news/home/20201230005050/en/

CONTACT: Blake Brooks

Blake.Brooks@thecapitalcorps.com

310-310-0514

KEYWORD: UNITED STATES NORTH AMERICA CALIFORNIA

INDUSTRY KEYWORD: FINANCE BANKING PROFESSIONAL SERVICES RESIDENTIAL BUILDING & REAL ESTATE CONSTRUCTION & PROPERTY

SOURCE: Commerce Home Mortgage, LLC

Copyright Business Wire 2020.

PUB: 12/30/2020 08:00 AM/DISC: 12/30/2020 08:00 AM

http://www.businesswire.com/news/home/20201230005050/en