PSM Holdings, Inc.


PSM Holdings, Inc., (OTCBB:PSMH) through its wholly owned subsidiary, Prime Source Mortgage, Inc. (PSMI) provides mortgage brokerage and banking services across the United States. The company offers adjustable rate mortgages and fixed rate loans; and residential mortgage loans for purchases, refinancing, construction loans, second mortgages, debt consolidation, and home equity loans. It also solicits and receives applications for secured residential mortgage loans and provides mortgage banking services using warehouse lines of credit. PSMI is currently licensed in fourteen states with expansion plans in an additional fifteen states, and oversees the operations of more than 20 branches. The company embarked on an aggressive acquisition strategy in 2011 adding five independent mortgage companies in multiple markets.

Investment Date: February 7, 2013; April 3, 2014
Type of Investment: Convertible Preferred Stock
Board Representation: 2 Board Seats

Funding Need:

  • Capital needed to fund potential additional acquisitions and provide working capital to support wider growth initiatives, increased sales and marketing, and incremental personnel.
  • Funds used for the expansion and onboarding of new mortgage operations and for general working capital

Investment Overview:

  • A growing national mortgage originator executing effective roll-up strategy to become top 50 lender over the next 24 months. One of ten lenders selected to participate in Costco’s mortgage platform
  • Product Viability: Already FDA-approved; clinical studies verified results: PAL solved problems for hospitals, nurses, and parents.

Investment Highlights:

  • Successful track record of acquiring mature profitable mortgage lenders
  • Favorable industry trends and regulatory changes
  • Continued acquisition of mature mortgage operations
  • On-Boarding smaller profitable operations onto the company’s platform
  • Accelerated roll-out of Costco platform Margin expansion through greater scale
  • Multiple exit strategies
  • Conversion and sale in public markets
  • Acquisition by strategic buyer

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