MCLEAN, Va., March 26, 2014 (GLOBE NEWSWIRE) -- Southern National Bancorp of Virginia Inc. (Nasdaq:SONA), the holding company for Sonabank, Jerry Flowers of Southern Trust Mortgage (STM), and Eastern Virginia Bankshares (Nasdaq:EVBS) the holding company for EVB announced today that the two banks and Jerry Flowers have reached an agreement to purchase the 62 percent of STM currently owned by Middleburg Bank. Upon the closing of the transaction, Jerry Flowers and other STM executives will own 51.1 percent of STM, Sonabank will own 44 percent and EVB will own 4.9 percent.
STM is a mortgage banking company headquartered in Virginia Beach. It was founded in 1998 by Jerry Flowers, and has mortgage banking originators in Virginia, Maryland, North Carolina and South Carolina. Southern Trust Mortgage only originates retail mortgage production.
STM is an approved Fannie Mae, Freddie Mac, VA and FHA lender. In addition Southern Trust Mortgage is one of a select few lenders to have received approval from Ginnie Mae to issue securities on its behalf. Having all agency approvals greatly expands the mortgage products and therefore expands Sonabank's ability to positively impact the lives of our customer base with mortgage products suited to every economic spectrum. Southern Trust Mortgage is experienced in originating FHLB first time homebuyer grants for low to moderate income borrowers in their lending footprint. Sonabank is particularly excited about the future of FHLB programs for underserved markets and low income borrowers.
This relationship will provide us a partnership in which to expand our consumer real estate services with STM loan officers assigned to various Sonabank branches. STM will originate non-conforming residential mortgage loans for Sonabank's portfolio in its footprint in accordance with credit criteria provided by Sonabank. Southern Trust Mortgage has a history of originating portfolio loans for their banking partners with a focus on compliance and risk management. This is similar to arrangements already in place with Middleburg Bank.
Georgia Derrico, CEO of Sonabank commented: "Since its inception, Sonabank has been oriented towards small and medium sized business lending. That will continue. However, now we will be able to provide our customers with a full array of residential mortgage products through our STM relationship. In addition, the investment in STM will allow Sonabank to use its very strong capital position, combined with the expertise of STM and its extraordinary team to expand in an entirely new direction at a time when the rules on residential mortgage lending have been rewritten to the benefit of bank affiliated mortgage lenders."
Jerry Flowers, President of STM commented: "We are very excited to have Sonabank as our new Banking partner along with EVB who we have been doing business with for the past 7 years. Having Sonabank and EVB as partners will allow us to expand in their market areas and gives us a banking partner that not only wants to be a part of STM's existing model but would like for us to expand our mortgage footprint."
The investment by Sonabank is subject to regulatory approval.
Southern National Bancorp of Virginia, Inc. is a bank holding company with assets of $716 million at year end. Sonabank provides a range of financial services to individuals and small and medium sized businesses. Sonabank has a total of twenty branches, with fifteen of those branches in Virginia, located in Fairfax County (Reston, McLean and Fairfax), in Charlottesville, Warrenton (2), Middleburg, Leesburg (2), South Riding, Front Royal, New Market, Haymarket, Richmond and Clifton Forge. Sonabank's other five branches are in Maryland, in Rockville, Shady Grove, Germantown, Frederick and Bethesda.
In January 2014, Southern National Bancorp signed a definitive agreement to acquire Prince George's Federal Savings Bank which is to be merged into its subsidiary, Sonabank. The merger will give Sonabank four additional branches in Upper Marlboro, Dunkirk, Brandywine and Huntingtown.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that relate to future events or the future performance of Southern National Bancorp of Virginia, Inc. Forward-looking statements are not guarantees of performance or results. These forward-looking statements are based on the current beliefs and expectations of the respective management of Southern National Bancorp of Virginia, Inc. and Sonabank and are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond their respective control. In addition, these forward-looking statements are subject to assumptions with respect to future business strategies and decisions that are subject to change. Actual results may differ materially from the anticipated results discussed or implied in these forward-looking statements because of numerous possible uncertainties. Words like "may," "plan," "contemplate," "anticipate," "believe," "intend," "continue," "expect," "project," "predict," "estimate," "could," "should," "would," "will," and similar expressions, should be considered as identifying forward-looking statements, although other phrasing may be used. Such forward-looking statements involve risks and uncertainties and may not be realized due to a variety of factors. Additional factors that could cause actual results to differ materially from those expressed in the forward-looking statements are discussed in the reports (such as Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q) filed by Southern National Bancorp of Virginia, Inc. You should consider such factors and not place undue reliance on such forward-looking statements. No obligation is undertaken by Southern National Bancorp of Virginia, Inc. to update such forward-looking statements to reflect events or circumstances occurring after the issuance of this press release.