00:12From Chicago, I'm Allison LaForgia with Housing Wire, and I am sitting down with two leaders
00:18from Western Alliance Bank. I'm with Mark Short and Chris Martin. Thank you all for joining me
00:24today. Thank you for having us. Now, I'm excited for you guys to talk about the Specialized Mortgage
00:31Services Group at Western Alliance Bank. How does it serve its clients' needs? Walk me through it.
00:37Yeah, I'll take that one, Chris. So I think for the bank, we're a little bit unique where we have
00:42like six or seven different units that sit under the SMS group, so we can service a lot of different
00:47clients. So we start off in 2009, so we've been doing warehouse financing for 17 years. So that's,
00:53you think about when we started that division in 2009, it was kind of a difficult time for
00:56mortgage lenders. And then we added MSR financing. So we've been doing that for 13, 14 years. And
01:02then we have another group inside that division called Note Finance, where we lend to private
01:06lenders kind of on a borrowing-based structure. And then we continue with, we bought a Marihome
01:10in 2021. So they have a lot of clients we have synergies with on the warehouse side. And the bank
01:15also buys, we have a whole loan group in our bank where we can buy loans, including scratch and dent
01:20loans for our customers. And then we have a treasury team, which Chris is part of on the
01:25treasury of sales side, but also sits inside the mortgage division. So they understand the space
01:29very well and can kind of satisfy our clients' needs depending on what they need. So that's,
01:34I think that sets us apart a little bit for most banks. It all sits in one division under David
01:38Bernardi.
01:39What have the changing market conditions over the years taught you about leading through
01:43uncertainty? And how has Western Alliance Bank positions itself to identify opportunities for
01:48growth? Chris, let's start with you. Yeah, no time like the president for that question. I mean,
01:53we're in a challenging environment right now with the rate environment. And I think what Western
01:58Alliance does really well is we're active listeners of our clients and what they need. And
02:02you know, all of us are trying to do the best to help people buy their greatest asset,
02:06which is a home. And so we're active listeners in what we can do. And so when our clients come
02:11to us
02:12and they've found new ways to try to be creative and get people into homes, we try to be adaptable
02:17in that way. And, you know, we're, we're quick to know, but we try to be creative and adaptable in
02:21a
02:21way that we can allow our, our, our clients to go out and lend to homeowners and, and, you know,
02:27again, help them get into a home. So we try to be flexible and creative in our lending structures
02:32to help our clients achieve their ultimate goal and drive up originations.
02:35What a fantastic goal to try to serve. I mean, at the end of the day, you guys are putting
02:39people
02:39in homes. Now, where do you see the biggest opportunities for greater collaboration across
02:46the mortgage ecosystem? And how does Western Alliance Bank work with clients and industry
02:51partners to help drive those connections? Mark?
02:54Yeah, I'll take that one. So I think we're a little bit unique spot with the, with owning AmeriHome.
02:58They have, they have hundreds of clients. So we try to cross sell warehouse lending to those customers
03:03and we offer pricing incentives, advanced rate enhancements and things of that to try to bring
03:08that business on. And what we haven't really been involved in really much in the, in the,
03:12in the past is non-delegated financing. So they have hundreds of those clients as well. So that's the,
03:16the smaller IMBs. So we're starting to reach out to those customers with smaller warehouse lines,
03:22provide the same benefits that I just talked about with the pricing. And so that's another avenue
03:26there. And then, you know, we have seen some consolidation in this space and we, we have a
03:31ability to syndicate deals. So whenever we have consolidation, if we're on both sides of that,
03:35we have really large lines to, to our clients. We can look to syndicate those, those exposures and
03:40bring in a fee for that syndication business. So that's something else we're starting to look at.
03:45Yeah. I mean, you've got the good seat. I feel like I'm twisted this way. My side profile is not
03:50as good as my front profile, but I agree. I do agree. I think if I were to expand on
03:56that,
03:56I would say that I really feel like we've been in the business 17 years and we've continued to grow
04:02the ecosystem. We were fortunate enough to be able to acquire AmeriHome, an incredible company with very
04:07smart, intelligent people. You know, we continue to think about the ways that we're going to expand on
04:12the MSR side and help our clients with their liquidity. And you know, other banks have gotten
04:17out of the space and we just continue to dive in through good times and bad, be creative and continue
04:22to grow inside the ecosystem of mortgage because the bank really loves mortgage. And so I feel like
04:27that is really good for us that we're digging in, others might get out and we continue to dive in.
04:33So,
04:33you know, we love the space. You're leaning in. Yeah. That's what we do. He is leaning in.
04:38I'm literally leaning in. He is literally leaning in. So at Western Alliance Bank continues to grow
04:45and adapt to changing market needs. How do you determine when your teams need to evolve and what
04:50qualities do you look for in the next generation of leaders? Yep. So I could, I can start with that
04:56one. I mean, our bank is, if you follow our bank at all, the growth has been pretty, pretty enormous.
05:00So I started six years ago. We were a 40, 45 billion dollar bank and now we're approaching 100
05:05billion. So the challenge is trying to keep our culture together while you're growing. So we have
05:11to go out and hire new people. Are those people going to fit the culture? Our bank has always been
05:14a work and office bank, which really helps. So when we have new hires, they're learning from the people
05:19that have been there, learning how we treat customers. How do we return phone calls? What's the
05:23timing around all of that? And those people work in the office to kind of learn that. And we're also
05:28bringing younger people into the industry. As you know, it's a fairly old industry. And so we have,
05:33we have a young person that works for us on the sales side. And there aren't that many people on
05:37warehouse sales that are, you know, below 25 years old. We're trying to kind of educate the
05:42younger generation about the space and then just teach them about our culture by being in the office.
05:48Now, looking ahead, what are you most optimistic about in mortgage finance? And where do you see the
05:53greatest opportunities for growth for clients and institutions like Western Alliance Bank?
05:59Well, I think I'll take that one. I feel like the greatest opportunity for us,
06:04you talked about leaning in earlier. I think the greatest thing we can do is continue to lean
06:08into the ecosystem. We're strong lending partners. We're going to prove that we're going to provide
06:12liquidity solutions that will continue. We'll be adaptive and creative as the industry continues to
06:17shift and change through these volatile times. But most importantly, I think with the bank,
06:22the next step for us is going to be on the payment side. We, over the last four years,
06:26have been really focused on what partners we want to integrate with and embed the bank payment rails
06:31behind those technologies to create a frictionless payment environment. And for us, I think that's
06:36the next evolution of the bank is to be a large remittance provider on the payment space inside the
06:42ecosystem of mortgage. And I feel like that'll be the next evolution to continue us leaning into this
06:47industry. Yeah, Chris, if I can add one more thing to Chris's statement. One of the really unique
06:52things about the bank and that I really enjoy working here is we're, it's a really horizontal
06:56or flat bank. And so what happens is all our senior, our C-suites, we've got the CFO, the CEO,
07:02chief credit officer, they approve almost all of our deals. And they were heavily involved in the
07:06purchase of AmeriHome. So when something happens in the industry, we can move quicker than any other
07:11bank. It's like a quick phone call to the executive team, tell them what's going on in the mortgage
07:15space. And we can make changes for our clients and meet their needs and help out with liquidity
07:19issues or whatever it might be, depending on what's going on. And that's very unique in my
07:23experience in the industry, to be able to react that quickly when things do change, whether it's
07:28the value of the collateral, or it's what's happening with the investor space where they're slowing down.
07:33I've been at the big six years, we've always been really quick to adapt to changes.
07:37Mark, Chris, thank you so much for sitting with me today and telling me all about Western Alliance
07:44Bank and how the Specialized Mortgage Services Group is leaning in at a time that can be uncertain
07:49for others. You guys are doing the hard work, you're fulfilling that mission, putting people
07:54in homes, and you're doing a fantastic job doing it. I can't wait to see what growth you guys have.
08:01It was great meeting with you. Thanks for taking the time.
08:02And thanks for the support in the industry.
