RBC Mortgage Co., a subsidiary of Royal Bank, will pay US$100 million to acquire Sterling Capital Mortgage Co, the companies said Thursday.

The transaction is expected to close in the fall of 2003 and be accretive to RBC’s earnings in 2004.

Sterling Capital Mortgage (SCMC) has 110 branch locations in 16 states, and 16 joint ventures, which SCMC co-owns with residential home builders.

SCMC currently employs approximately 1,400 people who generated US$4.5 billion of mortgages in 2002 and are expected to originate over US$7 billion in mortgages in 2003. The SCMC branches will convert to the RBC Mortgage brand name upon completion of the transaction.

“Acquiring SCMC aligns with our strategy of leveraging our competencies in the U.S. and Canada to create strong North American lines of business,” said Jim Rager, vice-chairman of RBC Financial Group and global head of the bank’s personal and commercial banking businesses. “SCMC allows RBC Mortgage to enhance its footprint and accelerate its business growth, particularly with first time home buyers in emerging and high-growth locations in California and Texas.”

The acquisition of SCMC will place RBC Mortgage among the Top 10 retail mortgage originators in the U.S. RBC Mortgage will have approximately 3,200 people, including 1,600 mortgage sales professionals operating out of nearly 200 offices in 32 states, with the ability to do business in all 50 states.