Succeeding Together | STM Value Proposition Book

S O U T H E R N T R U S T M O R TG AG E

Succeeding Together Our Corporate and Cultural DNA

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table of contents Our History 4 DNA 5 A Word From Our Founder 8 Leadership 10 Sonabank 12 Operations 15 Ops Teams 16 Priority Approval 18 Meet the Experts 21 Marketing 22 Basecamp 24 STM Connect 26 The FACT App 28 Benefits / Licensing 30 Secondary 32 Products 34 Appraisals 37 Testimonials 38 Stats 40 Outreach 42 How Do We Compare? 44

our history

F

ounded in 1998, Southern Trust Mortgage (STM) is a full-service mortgage lender offering an extensive and diverse product line. The company is owned by majority shareholder, Jerry Flowers, STM partners, and Sonabank. Management remains under the direction of the executive management team of STM, where the focus is to create an environment where loan officers have the tools necessary for success, including an extensive product line, competitive rates, innovative marketing, and an experienced operations department.

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 the company’s ability to positively impact the lives of their customer base with mortgage products suited to every economic spectrum.

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dna : our core principles

We make it easy and intuitive for our loan officers to provide excellent service.

We design our processes with empathy for the customer and experiment until we find the best solution.

We instill confidence and build relationships by delivering excellence to every customer, every time.

Our goal is to make it easy for all of our loan officers to amaze every customer.

a word from our founder 8

We want our loan officers to have successful and rewarding careers where they are free to thrive, grow, and innovate professionally and personally.

Southern Trust provides them with the tools, teams, and support to do that. jerry flowers Founder / Executive Chairman

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Jerry Flowers

Anthony T. Reed

Jerry Flowers serves as the Founder and Executive Chairman of Southern Trust Mortgage, LLC and brings with him almost 40 years of experience in the mortgage banking industry. Jerry is a 1976 graduate of the School of Finance at the University of Richmond and he began his mortgage banking career in 1978 as a loan officer.

Anthony Tuck Reed was SVP for Corporate Strategy at Fannie Mae where he focused on positioning Fannie Mae for success in the secondary mortgage market.

FOUNDER / EXECUTIVE CHAIRMAN

In 1985, Jerry formed Merchants 1st Mortgage, which was later acquired

by Margaretten in 1988. He became Margaretten’s Regional Manager for over five years until he left to form his next mortgage company, First Home Mortgage.

In 1998, Jerry Flowers formed Southern Trust Mortgage. Shortly after, he was joined

by Dennis Sullivan and Jeff Jackson, who make up the three managing partners of Southern Trust Mortgage.

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CEO

Mr. Reed’s 22 years of mortgage industry experience also includes a senior-level position at Wells Fargo Home Mortgage as well as leading the capital markets groups of SunTrust Mortgage and Bank of America Mortgage.

Founder Jerry Flowers has said, “Tuck brings the industry experience, capital markets knowledge, and strategic thinking that will help us achieve our long-term vision.”

leadership SALES

DENNIS SULLIVAN VP / Chief Production Officer JEFF JACKSON VP / Partner BRIAN PICKER SVP, Regional Manager CLAYTON HICKS SVP, Regional Manager RITCHIE LOVE SVP, Regional Manager

Jack Lane PRESIDENT

A widely-respected leader in the industry, Mr. Lane has over 25 years of experience leading multibillion-dollar retail mortgage lenders, including 7 years as President at Monarch Mortgage and TowneBank.

The addition of Jack Lane as President of Southern Trust Mortgage is a key factor in the company’s upward trajectory.

According to Mr. Lane, “Given Southern Trust’s culture of putting their loan officers at the center of an amazing customer experience, this was the obvious choice for the next chapter in my career.”

ROBERT O’BDAY SVP, Regional Manager STEVE SAGER SVP, Regional Manager

SUPPORT

SHIRLEY FINUCAN EVP, Chief Operating Officer WILLIAM RAWLINGS Chief Financial Officer JEFF BEAN Director of Team Operations JARRETT STANLEY VP of Marketing HANCE THURSTON Head of Captial Markets KEVIN WEATHERSPOON VP of Production Training JENNIFER RAWLINGS VP, HR / Licensing Director

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sonabank Southern Trust enjoys a key partnership with Sonabank, a $2.5B+ asset national bank. This allows us to offer a wide range of portfolio products. Our relationship enables us to expand our footprint by providing mortgages to their 47 locations across Virginia, Maryland, and Washington D.C. Simply put, we are better together and can do more for our customers, teammates, shareholders, and communities.

BENEFITS OF THE RELATIONSHIP • Access to portfolio products comparable with large bank lenders • Licensing relief • Warehouse lending

HOW THIS IMPACTS OUR LOAN OFFICERS • The relationship with SONA provides niche portfolio products for our loan officers, ensuring they have the right loan program for every situation.

• LOs are exempt from state licensing requirements.

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Through our partnership, we have small company service with big bank resources.

Speed and reliability comes built into our operations teams.

operations Operations at Southern Trust is structured to allow the originator an open line of communication with each team member involved in the loan process.

This gives you the advantage of open discussion on how to structure a quality loan, create a better customer service experience, and promote partnership in the processing, underwriting, and closing of the loan.

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ops teams On every loan, Southern Trust loan officers work with the same operations team—this consists of the same processors, underwriters, and closers.

Operations teams provide excellent service and constant innovation for our sales staff. This level of consistency leads to quicker turn times and confidence with every transaction.

KEY ADVANTAGES • Teams are structured around delivery of a final product instead of individual performance • Gain confidence by working with your dedicated team and having familiar support • Fosters permanent problem solving and continuous innovation • Team Leads to help with overall pipeline management • Feedback and training encouraged between team members

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Operations teams provide consistency, communication, collaboration, and also accountability.

priorit y approval Go from Application to Approval in less than 24 hours

The Priority Approval initiative is designed to provide a Simple, Creative, and Consistent method to obtain an underwriting decision in one day.

It’s also designed to give a Credit Underwriting Decision with an AUS Approved loan documented with income and asset documentation per the AUS findings. A Priority Approval will give you and your borrower the confidence of a loan approval within days of the initial application, before the loan is placed into processing.

KEY ADVANTAGES OF PRIORITY APPROVAL • Priority Approval is a great tool to recommend to your borrowers • Enables borrowers to shop with confidence • Agents gain more certainty up-front • Loan Approval at the beginning stages of the buying process • Loan Approval with AUS-required Income / Asset documentation • AUS findings determine documentation requirements

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APPLICATION LO takes complete application and runs AUS

I PA REQUESTED

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COMPLIANCE Compliance completes “Initial Discl Compl” date in PCL, completion of this date in conjunction with “Priority Approval Req” date (previously completed by LO with initial disclosure request will push the loan to the Priority Approval Review queue)

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4 1003 UPDATE After receipt and review of Borrower(s) Income and Asset documentation, LO updates initial 1003 application as applicable and re-runs AUS to ensure accuracy based on documents received

LO completes dates in PCL; “Initial Discl Req” and “Priority Approval Req”, requesting upfront disclosure and their desire for a Priority Approval underwriting review

INCOME & ASSETS LO requests Income and Asset documentation per AUS findings

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TAX RETURNS

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If applicable, LO submits Tax Returns to STM Income Specialist for income calculation

FINISH LINE Our reviewers and underwriters take over from here to provide an underwriting decision within one day of submission to the underwriting queue

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meet the experts

Cheryl Young

VP – PROJECT APPROVAL MGR

• Completes reviews for all existing condo projects and new project approvals.

• Here to help LOs navigate the approval process.

In-house experts that solve complex problems so that you can close more loans.

• Customer service oriented, accommodating with industry knowledge you can rely on.

Mike McNamara

VP – MORTGAGE CREDIT OFFICER

• Reviews 20-30 credit reports daily for consideration of credit rescores to improve credit scores and/or pricing improvements.

• Average time of 72 hrs to complete a Rapid Score.

• Teaches exclusive continuing education courses for Real Estate Agents at STM and credit education courses for borrowers.

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mar ket ing

Having business cards in your pocket and postcards that go out every month is no longer enough. To win the loyalty and business of today’s agent and consumer, you’ve got to be relevant in the spaces that they’re paying attention to. At Southern Trust, we have great marketing on all platforms today, but we’re also driven to find out why things work and use data to shape our brand for the future.

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CORPORATE CRM Our corporate CRM is free for all Southern Trust loan officers and will likely be your “go-to” for marketing to your contacts. Full integration with our pricing engine and LOS means that from the moment you meet a potential client or partner to long after they’ve closed, you’ll automatically be staying in front of them with contextual messaging.

IN-HOUSE CREATIVE TEAM Southern Trust has invested in growing and maintaining an in-house creative team. This makes graphic designers, photographers, videographers, and social media and digital strategists all available to you free of charge.

Our team is comprised of creatives who not only know great branding, but how to use it in the ever-changing mortgage industry.

CO-BRANDED MARKETING Strategically aligning your brand with your agents and builders is a huge priority for our team. One of the best ways to do that is through co-branded marketing. Our systems enable you to generate co-branded marketing material and listing flyers with pricing from Optimal Blue directly from our CRM. You can also choose from a large variety of social media images to post, create co-branding property websites for listings, and keep your clients and agents in the loop with loan status emails throughout the process. Need further customization?

Our design team is ready to work with you.

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basecamp A World-Class CRM Designed to make an impact at key moments 24

MLS CONNECTED CO-MARKETING Basecamp connects directly to MLS listings so that you can generate property-specific marketing pieces for your next new home or open house. Get what you need when you need it.

LEAD CAPTURE APPS Clipboard sign-in sheets are a thing of the past. Lead Capture Apps are web-based sign-in pages for your next open house or event that connect each person who signsin to your database and Basecamp will market to them automatically.

SINGLE PROPERTY WEBSITES IN SECONDS Basecamp can generate beautiful single property websites straight from your MLS listings. Choose from over 10 templates and deploy to your social media accounts and email database in minutes.

EASY LIFECYCLE AUTOMATION When a new lead or contact comes in, you can automatically assign them to groups based on the source they came in from and immediately begin contextually marketing to them. Birthdays, Loan Anniversary, and Holiday marketing as well as loan status notifications are all sent on your behalf.

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stm connect powered by:

home loans on the go

STM Connect is an easy-to-use mobile app for iOS and Andriod that provides the essential tools and resources you’ll need throughout your home buying or refinancing journey. This powerful tool puts you in control of your business from anywhere!

A true mobile mortgage experience!

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Pull Credit

Access Your Full Pipeline

Improve Borrowers’ Experience

SimpleNexus integrates with the top credit providers, so pulling credit is as simple as clicking a button.

If your borrower calls with a question, you don’t have to say, “I’ll get back to you.” SimpleNexus gives you access to your entire loan pipeline, so you can answer on the spot.

Your borrowers can use the app to check loan progress anytime they want, get a list of documents you need and deadlines, and have a means to communicate with you in whatever channels that work best for them.

Send Prequal Letters

Run Pricing

Scan/Send Documents

Creating a prequalification letter takes about 30 seconds using the app.

SimpleNexus partners with Optimal Blue, so you can quickly access and present different pricing scenarios to your customers—and knows that they’re accurate.

Instead of bringing in paperwork, your customers and realtors can scan and securely send documents and changes using nothing more than SimpleNexus and the camera on their mobile device.

Take Loan Applications

Set Up Alerts

Strengthen Realtor Relationships

Meet a prospective borrower at a realtor’s office at a social event.

No need to go back to the loan application. All you need is your mobile device.

Get your borrowers peace of mind by setting up automatic alerts when specific loan milestones are reached— or reminders when signed documents are due.

Give the app to all your realtor partners, which they can personalize and share with their buyers when house hunting begins. You can increase referrals and connect with prospects earlier in the process.

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THE

fact app 28

The FACT App from Southern Trust Mortgage— your link to the FACT Team, short for “Fast and Accurate Concierge Team”.

FEATURES • Lightning-fast support on our products and programs from experts on your smartphone.

• The best minds in our company all working to provide white-glove support to our sales team in the field.

• Information and support about our LOS, Underwriting, Products, and much more.

• Choose how you’d like to be contacted!

Get support over the phone, via email or text when you need it!

Expert loan officer support at your fingertips!

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benefits Southern Trust offers a full benefits package that includes medical, dental, vision, company paid life insurance, and LTD. To complement our health benefits package, we also offer voluntary supplemental insurance, FSA, HSA, pre-paid legal, and 401K.

multi-state Licensing Southern Trust Mortgage has a banking partnership with Sonabank and is regulated by the Federal Reserve. Southern Trust Mortgage is an approved lender in Alabama, Delaware, Florida, Georgia, Maryland, New Jersey, North Carolina, Ohio, Pennsylvania, South Carolina, Tennessee, Virginia, Washington D.C., and West Virginia.

Loan Originators at Southern Trust Mortgage are required to be licensed in Alabama, Georgia, New Jersey, South Carolina, and West Virginia.

Through our partnership with Sonabank, Loan Originators at Southern Trust Mortgage are exempt from licensing requirements in Delaware, Florida, Maryland, North Carolina, Ohio, Pennsylvania, Tennessee, Virginia, and Washington D.C.

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secondary PRICING & FLEXIBILITY • We price competitively upfront, but build in flexibility so that you can win in today’s competitive market • We understand the need to be extra competitive when an important deal or relationship is at stake • Our LOs are serious professionals who we trust to know how and when to use this power • We know you often work late, so we offer after hours rate lock protection

Hance Thurston

HEAD OF CAPITAL MARKETS

• We use Optimal Blue for our pricing engine—it’s easy to use and is helpful for any scenario

LOCK DESK OVERVIEW • Responsive and knowledgeable staff that can assist with any product or pricing scenario • Hedging our own pipeline ensures we are incurring the lowest possible hedge costs • Evaluating many possible execution alternatives ensures our execution is optimized and our pricing is competitive

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A dedicated Capital Markets team working for your success

advantages

BANKING PARTNER SONABANK

STREAMLINED LOCK DESK

PRICING AND FLEXIBILITY

PRODUCT PORTFOLIO

EASY TO USE PRICING ENGINE

FANNIE AND FREDDIE APPROVALS

MINIMAL OVERLAYS

RELATIONSHIPS W/ MULTIPLE CORRESPONDENT INVESTORS

APPROVED GINNIE MAE SERVICER

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products standard

STM offers a full compliment of FHA, VA, USDA, FNMA, FHLMC, and state bond lending programs.

RENOVATION LENDING 203k & Homestyle program and Agency Simple Reno product

We also offer a suite of niche products that accommodate more unique lending situations including our SONABANK portfolio products as well as a 95% no MI product.

EXTENDED LOCKS Extended lock options available on all agency, FHA, and VA loans.

LOCK AND SHOP Borrowers can lock in their rate on a “TBD” transaction.

The best products, even in niche lending situations.

FHLB GRANTS Available through our partnership with SONABANK

specialty STM 5/5 ARM

• Up to 95% NO MI! • Primary Residence or Second Home

Exclusive investor relationship is behind this gem of a product. Easy to sell to both borrowers and referral partners.

720+

Credit Score 34

95%

Loan to Value

• SFD, PUDs, 2-4 Units, or Condos • Loan Amounts up to $729,750

43% DTI

No

Mortgage Insurance

specialty cont.

SONA Portfolio

• Primary Residence, Second, and Investment Properties included

Non-conforming offering available in 30yr Fixed, 15yr Fixed, 5/1, 7/1, and 10/1 ARMs and underwritten to LP.

• SFD, Townhomes, PUDs, Condos (including non-warrantable) • Loan amounts up to $3.5MM (up to $10MM on exception basis)

700+

80%

Credit Score

SONA Medical

720+

DTI

• 95% LTV

Non-conforming product offering for medical professionals (includes licensed practicing MDs, Medical Residents, DOs, Dentists, and Optometrists).

Credit Score

50%

Loan to Value

95%

• 15yr Fixed, 5/1, 7/1, and 10/1 ARMs • No Mortgage Insurance

50%

Loan to Value

DTI

SONA 1x Close C/P

No

Mortgage Insurance

• Primary Residence or Second Home

Construction lending for non-conforming products.

• 15yr Fixed, 5/1, 7/1, and 10/1 ARMs • 12 month IO for construction phase (MI Option for 90% Max LTV) • Single Family Detached

700+

Credit Score

80%

Loan to Value

50% DTI

SONA Construction Only

• Primary Residence or Second Home

Construction lending for non-conforming products.

• Rate is FIXED (not tied to Prime) • 12 month IO on outstanding balance • Single Family Detached

700+

Credit Score ( Credit requirements are state-specific )

90%

Loan to Value

43% DTI

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in-house

Appraisal management

Strong appraisals and appraisal processes are critical to the Southern Trust loan process.

While we comply with all lending laws, Southern Trust has opted to use our in-house Appraisal Management department. Our ordering platform, Mercury Network, ensures that we stay AIR compliant. Southern Trust does not use a national appraisal management company (AMC). The platform, ordering processes, and underwriting are managed by a team of Southern Trust employees.

FEATURES • Branches build and add their own panel of appraisers to be used in blind rotation.

• Our Appraisal Management Team is the direct contact for each Appraiser, and provides continuous updates during the order process.

• You are automatically alerted when the appraisal report is in.

• The Team coordinates directly with the Collateral Underwriters to provide timely underwriting of your appraisals.

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Andrew Kellam

PRODUCTION MANAGER

I joined Southern Trust Mortgage in November of 1998 as a loan officer and have spent the past 14+ years growing with the company. Over the years, I have had numerous opportunities to leave Southern Trust for management / originator positions at other companies, but have stayed put for many reasons.

From the Corporate Operations Manager to the President of the Company, you will not find a more accessible group of mortgage professionals to assist a highly motivated loan officer. They realize the cornerstone of success for the loan officer and the company is closing loans and closing on time.

Above all else, my loyalty to Southern Trust is a product of their loyalty to me. I am fortunate to work with a group that recognizes talent, desire, and hard work. I truly feel my voice is heard and I am just as much a part of Southern Trust’s success as they are part of my own.

I truly feel my voice is heard‌ 38

testimonials

Brian Canady BRANCH MANAGER

Having spent 16 years as a top producer with two of the top national lenders in the mortgage business, I’ve asked myself many times why I didn’t come to Southern Trust Mortgage sooner.

I joined Southern Trust in September 2011 and have rediscovered how fun this business can be—you can make promises and deliver on those promises at Southern Trust. Since joining, I have consistently increased my business because I spend more time in front of my referral sources, as opposed to fighting unnecessary battles with underwriters due to their lack of experience or company overlays.

I have found a home at Southern Trust Mortgage, which I anticipate will be where I end my career in the mortgage business, and I still have 20 years to go. Can you say that about your company? If not, call someone at Southern Trust.

...I’ve asked myself many times why I didn’t come to Southern Trust Mortgage sooner.

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s t a st C O M PAN

Y

HEADQUARTERS

Virginia Beach, VA

OWNERSHIP

Jerry Flowers AND

Sonabank Along with having dozens of highly recognized investor relationship approvals, Southern Trust is also privileged to sell direct to FNMA/ FHLMC and we are approved to issue our own GNMA mortgage backed securities. These Agency relationships put Southern Trust on equal playing ground with the big banks.

Facts of Southern Trust

7 yrs

Average loan officer tenure

70K+

Families / individuals served since 1998

20%

29%

$15MM

0%

LO’s with 15+ years at Southern Trust

LO’s with at least $20MM in origination in past year

Avg LO volume per year ( Industry avg is $7MM )

Turnover among top producers since 2016

*Prior to recent rapid growth

Priority Approval Stats

72%

Off all Southern Trust loans utilize Priority Approval

5 bps

Incentive to loan officers to use Priority Approval

100%

Of PA loans receive a decision within 24 hrs of submission to underwriting

10 days

PA loans receive a credit decision on avg 10 days faster than non-PA loans

56%

Southern Trust loan officers use Priority Approval for all of their loans.

*Information accurate as of 5/2019

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outreach A

t Southern Trust, we are committed to making an impact in our communities. We support numerous local and national charitable causes. Examples of our most recent support efforts include Els for Autism, the Susan G. Komen Foundation, Free to Breathe, Habitat for Humanity, hurricane relief through the Red Cross, and Roc Solid Foundation.

We are also passionate about supporting our nation’s heroes—the United States Armed Forces. We are proud to have reached the “Sentries” level in giving with over $180,000 in donations to the Wounded Warrior ProjectTM. We also support the SEAL Legacy Foundation and currently donate $25 to “Our Fallen Heroes” for every FHA and VA loan closed.

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We’re going to give back because it’s the right thing to do, & it’s what we want to do.

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how do we compare?

COMPETITIVE RATES

Priority Approval FACT App & Team Operations Teams In-House Marketing Team Diverse Portfolio Products Condo, Income, & Credit Specialist Localized Appraisals Multi-State Licensing Comprehensive Onboarding STM Connect Mobile App

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SOUTHERN TRUST

OTHERS

We are excited to be part of your journey and look forward to you succeeding with us!

u o y k n a th

WWW.S

O U T H E R N T R U S T.COM

Southern Trust Mortgage, LLC - NMLS #2921 (NMLSConsumerAccess.org) lends as a Registered Lender in DE, MD, NC, OH, PA, TN, VA; in DC (Mortgage Dual Authority Lic #MLB-2921), as a Mortgage Lender in SC (ML Lic #MLB-2921) and WV (ML Lic #ML34191). Southern Trust Mortgage LLC dba Southern Residential Lending LLC in AL (Consumer Credit Lic #22560), FL, GA (Mortgage Lic #16579) and NJ. Southern Trust Mortgage LLC is proud to be an Equal Housing Lender and Equal Opportunity Lender.