Boca snags mortgage firm - First NLC relocating its headquarters from Deerfield Beach in April 2007

In South Florida, companies tend to go where the CEO calls home.

That has proved true again, with expanding residential mortgage company First NLC Financial Services. The Deerfield Beach company will move its corporate headquarters next April from Deerfield Beach to Boca Raton, the Business Development Board of Palm Beach County announced Thursday. The company said it will bring 450 jobs with it and will add 200 new jobs over the next two years.

"I like Palm Beach County. That's where I live," said Jeffrey Henschel, president of First NLC. Chief Executive Neal Henschel, Jeffrey's father, also resides in Boca Raton.

The company will lease 120,000 square feet in Boca Corporate Center and Campus, the former T-Rex Corporate Center, off Yamato Road in Boca Raton. The new office will provide support for First NLC's six regional operating centers and 70 branches nationwide. The additional jobs, including accounting, legal, human resources and corporate executives, will have salaries ranging from $30,000 to more than $100,000, Henschel said.

The development board announced its latest catch with champagne at a VIP reception before the economic development agency's quarterly luncheon on Thursday. What board officials didn't tell the audience of Palm Beach County commissioners and business leaders is that First NLC was unprofitable for fiscal year 2005 and earlier this year announced plans to reduce costs, including job cuts.

"It's a big commitment to Palm Beach County and certainly a big win," said Kelly Smallridge, president of the development board. She said the group was "aware they had trimmed some employees," but "that's only an issue had this company received incentives."

"It's too early to doubt them," Smallridge said.

Smallridge also defended the development board's involvement in finding the Broward County firm new office space. "We did not steal this company from Broward County," she said. "We were working very closely with the Broward Alliance. Our goal was to retain this company in South Florida."

James Tarlton, who heads Broward's economic development agency, said First NLC notified the Broward Alliance late in the process. "They really restricted their search to a five-mile radius. They didn't want to go 20 miles further south," he said. "We don't want to lose them in Broward County, but we don't want to lose them to South Florida, either."

First NLC is not eligible for any county or state incentives for the cross-county move, but has applied for a Workforce Alliance employee training grant, Smallridge said.

The company is a subsidiary of Friedman, Billings, Ramsey Group Inc., of Arlington, Va., which purchased First NLC for $101 million in cash and stock in February 2005.

First NLC specializes in making mortgage loans to the customer who "typically does not meet stringent standards of banks," Henschel said. The company specializes in debt consolidations or cash-out refinancings in which borrowers receive proceeds to pay off other debt or meet other financial needs. First NLC, which operates in 42 states, has regional operations centers in Tampa; Anaheim, Calif.; Concord, Calif.; Orange, Calif.; Itasca, Ill.; and Overland Park, Kan.

In its third quarter, First NLC posted a net after-tax loss of $7.4 million, the result of a $23 million loss primarily related to additional reserves to buy back loans related to early pay defaults. Without the reserve, First NLC said it would have had net after-tax earnings of about $3 million.

In its year-end financial release on Feb. 23, First NLC's parent company said the adverse interest rate climate contributed to a difficult environment for the mortgage lender. Despite recording a $15.5 million loss in fourth quarter 2005, FNLC said it originated $6 billion in mortgages for the year, an 81 percent increase over 2004.

Henschel said he was not concerned about expanding in a time when the real estate market has been in a slowdown. "We know the mortgage market will be back. We feel we'll be well-positioned. When an upswing comes, we'll be ready," he said.