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Cloud banking solutions developer nCino Inc. continues to capitalize on its acquisition of mortgage technology provider SimpleNexus by signing new clients and cross-selling its new mortgage capabilities to existing customers.

Wilmington, North Carolina-based nCino acquired SimpleNexus in January 2022 for $933.6 million and rebranded the company as nCino Mortgage in September.

On Wednesday, nCino announced it had signed Camden National Bank, a nationwide lender with $5.8 billion in assets, as a mortgage client. The Maine-based bank said it’s replacing its legacy mortgage point-of-sale technology to modernize its origination processes and support fully remote online notarization.

James Dell’Anno

The native support for eSigning and eNotarization provided by nCino Mortgage “puts us ahead of competitors in providing faster, more convenient closings customers prefer,” Camden National Bank executive James Dell’Anno said, in a statement. “Customers can join from wherever they are — at work, between errands, or from their kitchen table.”

Pierre Naudé

In announcing third quarter results on Nov. 29, nCino Chairman and CEO Pierre Naudé said the company’s U.S. mortgage business achieved double-digit revenue growth, even as lenders saw loan originations shrink in the face of elevated mortgage rates.

“These results demonstrate the benefit of cross-selling into our installed base of banks and credit unions, the differentiation of our mortgage technology and the durability of our business model despite generationally-high interest rates,” Naudé said on a call with investment analysts.

During the quarter, an unnamed regional bank with more than $35 billion in assets added nCino’s mortgage point-of-sale solution to its existing agreement for commercial and consumer lending services. The expanded agreement represented “the largest cross-sell customer to adopt the nCino Mortgage Suite,” the company said.

“This is an exciting proof point for the scalability of our mortgage technology,” nCino President and Chief Revenue Officer Josh Glover said on the Nov. 29 call. “Having passed a rigorous selection process with one of our most sophisticated customers, we expect to deliver exceptional time-to-value with a quick ‘go live’ in the fourth quarter.”

Last summer, nCino announced it had signed WaterStone Bank, the parent company of Waterstone Mortgage, to use the company’s cloud banking platform for all commercial, consumer and residential in-house lending.

In October, nCino announced that Mukwonago, Wisconsin-based community lender Citizens Bank would use its commercial banking, portfolio analytics and mortgage solutions.

Glover said nCino is focused on adding more traditional banks and credit unions as mortgage clients, as consolidation thins the ranks of independent mortgage banks (IMBs). He said half of the eight new companies nCino signed as mortgage customers during the third quarter were financial institutions.

Josh Glover

“Our mortgage customer base is now 46 percent financial institutions on a logo basis, versus 25 percent at the time of the acquisition of SimpleNexus, and our mortgage pipeline on a dollar basis is now comprised of 60 financial institutions,” Glover said. “As interest rate pressures continue to drive consolidation of the longtail of IMBs in the industry, we are working with existing customers to see them through this downturn, and we are aggressively cross-selling into the underpenetrated banking and credit union markets. We continue to see our competitive differentiation of mortgage proven out by the market.”

SimpleNexus: nCino’s biggest acquisition to date

Valued at $1.2 billion when announced in November 2021, nCino eventually closed the SimpleNexus deal nearly two months later for about $300 million less, paying $286.1 million in cash and $647.5 million in stock.

At the time, SimpleNexus provided services to more than 41,000 mortgage loan originators who worked at upwards of 300 independent mortgage banks and 80-plus banks and credit unions. The company claimed its software touched more than 1 in 7 mortgages originated in the first nine months of 2021.

Growing customer base

NCino’s acquisition of SimpleNexus has helped drive growth of its total customer base, which as of Jan. 31 2023 also included 1,135 clients of nIQ, nCino’s artificial intelligence solution. Of the 475 SimpleNexus customers as of Jan. 31, 51 were also nCino Bank Operating System (BOS) customers or portfolio analytics customers. Source: nCino investor presentation.

In its most recent annual report to investors, nCino said it had more than 1,850 customers as of Jan. 31, 2023, including more than 470 clients of SimpleNexus.

“With the acquisition of SimpleNexus, nCino now offers a suite of products that enable loan officers, borrowers, real estate agents, settlement agents and others to easily engage in the homeownership process from any internet-enabled device,” the company said of the deal, its largest acquisition to date.

The $65.4 million in revenue SimpleNexus generated for nCino during the year ending Jan. 31, 2023 represented 16 percent of the company’s $408.8 million in total revenue. While revenue was up 49 percent from a year ago, nCino has racked up net losses every year since launching in late 2011.

During the quarter ending Oct. 31, nCino said revenue was up 16 percent from a year ago, to $121.9 million. Although the company trimmed its net loss for the quarter to $16.4 million, down 30 percent from a year ago, that brought cumulative losses to date to $354.4 million.

But nCino, which raised $268.4 million in a July 2020 initial public offering, had $100.5 million in cash and cash equivalents on hand at the end of October and also has access to up to $50 million through a revolving credit facility.

Since hitting a 52-week low of $19.58 in March, shares in nCino have rebounded by 70 percent. At just over $33 Wednesday, nCino’s price per share values the company at roughly $3.75 billion.

In a Dec. 29 regulatory filing, nCino said Pam Kilday, the lead independent director on the company’s governing board, planned to sell 12,988 shares of nCino common stock valued at $441,490 that she was granted in 2021 and 2022 as compensation for her service.

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Email Matt Carter

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