Stonegate Mortgage Corp. said it will begin trading Thursday on the New York Stock Exchange with an initial public offering the company estimates could raise as much as $156 million.
The Indianapolis-based company, in a recent filing with securities regulators, said that it expects to sell 7.1 million shares of common stock at $20 to $22 per share. The stock will trade under the ticker SGM.
Founder and CEO Jim Cutillo is scheduled to ring the opening bell at the exchange on Friday.
Stonegate is one of the nation’s fastest-growing non-bank mortgage originators, with loan volume soaring 298 percent in the first six months of this year vs. the same time in 2012. This year, it topped IBJ's list of the fast-growing private firms in Indiana, with 515-percent revenue growth from 2010 to 2012.
Last May, Stonegate completed a private offering through Long Ridge Equity Partners that generated $115 million, based on an offering price of $18 per share.
In addition to the 7.1 million shares being sold by the company in the IPO, existing investors plan to sell 1.5 million shares, collectively raising as much as $33 million. Long Ridge, the biggest seller, plans to cash in at least 1.3 million shares.
Stonegate originates, finances and services mortgage loans—a combination it says helps hedge against housing cycles and interest-rate swings. The company based near Interstate 465 and Keystone Avenue has 650 employees at nearly 30 offices around the country.
Stonegate will be the first company in Indianapolis to go public since ExactTarget in 2012. It aims to entice investors with a nationwide expansion, a diversified income stream, and the prospect that federal reforms will benefit such loan aggregators.
The company has been profitable every year since 2008, and last year earned a $17 million on revenue of $95.5 million, according to filings with the Securities and Exchange Commission.
Analysts say Stonegate will draw notice from potential investors, thanks to housing market improvements since the Great Recession.
“I would think so, because you are starting to see that recovery. People are starting to look for opportunities in that area … trying to find an inexpensive exposure to the housing market,” said Mark Foster, chief investment officer at Columbus, Ind.-based Kirr Marbach & Co.
“Coming out of 2008, it took a while for the housing market to get some traction," Foster said.
Housing-related stocks, including those of financial institutions, have been trending up, noted Donald Woodley, principal of Woodley Farra Manion Portfolio Management, in Indianapolis.
Lenders have cleaned up their bad loans, and interest rates are still low as the economy slowly grows.
“They’re out of the doghouse, these days,” Woodley added.
Correction: This story originally stated that the IPO would take place on Friday. IBJ regrets the error.