Knight Capital Group, Inc., a global financial services firm based in Jersey City, New Jersey, announced Tuesday that it has agreed to acquire Urban Financial Group, Inc., a privately-held, independent mortgage company based in Tulsa, Oklahoma.

An originator of direct and brokered residential mortgage loans, Urban Financial is a major provider of home equity conversion mortgages (HECM) in the United States. The company was founded by CEO Bryan W. Hendershot in 2003 and currently offers or purchases residential mortgage loans in more than two dozen states.

“Urban Financial is a growing company with a solid product offering that originates loans nationwide through branch offices and independent brokers,” said Thomas M.

Joyce, chairman and CEO of Knight Capital Group. “We’re excited by the potential to establish a steady new issue pipeline that generates healthy revenues end-to-end.”

The acquisition will provide Knight’s fixed income team with a captive new issue of HECM mortgage-backed securities (HMBS) for institutional clients. In addition, it will allow Knight to realize a greater percentage of revenues from origination to distribution.

Knight’s fixed income team provides institutional clients with research, sales, and trading across a broad range of securities that include high yield/distresses, investment grade/crossover, bank loans, hybrid securities, asset-backed securities/mortgage-backed securities, convertible bonds, municipals, taxable municipals, and corporate/sovereign emerging markets debt.

“We’re extremely pleased to join Knight as the enhanced capital will allow Urban Financial to increase origination activities and expand the product offering,” Hendershot said. “We look forward to working with Knight’s fixed income team to build HMBS issuance.”

The closing of the acquisition is subject to customary closing conditions and regulatory approvals. While terms were not disclosed, it is expected to be cash flow positive immediately following the close and accretive to earnings per share in 2010. Upon the close, Urban Financial will operate as a wholly-owned indirect operating subsidiary of Knight Capital Group.