The company that began two decades ago as the mortgage arm of HomeBanc Federal Savings is transitioning into its new status as a publicly traded real estate investment trust.

Atlanta-based HomeBanc Corp. went public July 14, during the same time many mortgage lenders are warning of lay-offs and declining revenues because of the drop off in refinancings. In announcing the completion of its initial public offering of 34.5 million shares of its common stock, the company said it was the largest REIT IPO ever. Yet the circumstances other lenders find themselves in apparently haven’t deterred the company, which closed $5.92 billion in mortgage loans last year.

“We believe that going public at this point as a real estate investment trust should present timely opportunities to grow our company, should increase our access to capital and should provide opportunities to develop new mortgage products,” said Kevin Race, HomeBanc’s president and COO. “Additionally, as a REIT, HomeBanc will hold and service many adjustable rate mortgage products that today are sold into the secondary market. Servicing our adjustable rate products should allow the company to market to customers after loan closing and should help increase our customer retention.”

Shares sold for $7.50 apiece during the company’s initial public offering. Since then, the stock has climbed, and although it has had a few dips, it now trades at about $8.39 a share. That’s about a 12 percent increase in price. The volume of shares traded has fluctuated since the IPO.

Also, last week, the company completed an almost $1 billion public offering of mortgage-backed notes.

Because the company went public just last month, it has not yet released financial data. Second quarter information is set to be released later this year. But of HomeBanc’s 2003 mortgage volume, 67 percent was purchase money. Refinance transactions made up the remainder.

HomeBanc Chairman and CEO Patrick Flood has said the focus on the purchase mortgage market has been the key to prospering at a time when other companies are laying off employees and closing offices. Other companies have chased refinance volume, but HomeBanc’s purchase money focus has allowed it to chart a predictable growth rate, maintaining predictable volume and returns. That in turn has allowed the company to hire responsibly and open new markets.

The company has offices in Georgia, Florida and North Carolina. In March it opened new offices in the Naples-Fort Myers and Sarasota, Fla., areas, as well as in Raleigh, N.C. Each of these offices has between 14 and 18 employees, including loan officers and loan processing and support staffs.

HomeBanc began about 20 years ago as part of HomeBanc Federal Savings, which was charted in 1929. By 1992, HomeBanc Federal Savings’ residential mortgage division had grown into one of the largest mortgage loan originators in the Atlanta market.

In 1995, a subsidiary of First Tennessee Bank National Association acquired HomeBanc Federal’s mortgage division. Then in May 2000, the Atlanta-based management of First Tennessee Bank’s mortgage division completed a leveraged buyout of the operations conducted under the HomeBanc Mortgage Corp. name.

HomeBanc Mortgage Corp. is a wholly owned subsidiary of HomeBanc Corp., formed as a Georgia corporation in March as the parent holding company of the mortgage corporation.

The transition from private to public company so far has been smooth, Race said. A few new faces have joined the company’s executive suite and finance area, but that’s about it in terms of large changes, he said.

One of those new faces is Nicolas Chater, newly hired chief financial officer for the mortgage corporation. Before joining HomeBanc Mortgage, Chater was a CFO for eight years with several business units of Cap Gemini Ernst & Young, a worldwide management and information technology consultancy.

Send tips or a Letter to the Editor to or call (510) 658-9252, ext. 140.

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