Howard Bancorp in Baltimore is getting out of the mortgage business.
The $2.4 billion-asset company said in a press release Tuesday that it will transfer the business, along with the domain name VAmortgage.com, to a limited liability corporation formed by former managers in its mortgage division.
Howard released the managers from their employment contracts so they could form the LLC. The newly formed group paid Howard $750,000 as part of the arrangement.
After a 45-day transition period, Howard said, it will discontinue its mortgage banking operations. The majority of the bank’s residential first lien mortgage pipeline should be finalized by the end of this quarter.
“As we enter a new decade, Howard Bank remains focused on successfully, sustainably and now singularly building momentum in our core commercial banking business,” Mary Ann Scully, the company’s chairman and CEO, said in the release.
“This focus has been reinforced with the financially attractive exit of our residential mortgage banking business," she added.
Howard reported $2.7 million in mortgage banking income in the fourth quarter, nearly double what it had a year earlier.
Separately, Howard recorded a $700,000 charge in the fourth quarter tied to the settlement of a lawsuit associated with mortgages originated by First Mariner Bank before its 2014 recapitalization.
