Bank 34 in Alamogordo, N.M., is getting out of mortgage banking.
The $374 million-asset unit of Bancorp 34 disclosed in a regulatory filing Tuesday that it will no longer originate mortgages to sell in the secondary market. Bank 34 plans to sell or close its nine loan production offices.
The offices are in Arizona, Oregon, New Mexico, Texas and Washington.
Bank 34’s mortgage originations to sell in the secondary market fell by 15% from a year earlier, to $61.1 million. At March 31 the bank had $14.6 million in mortgages held for sale and $35.4 million in commitments to originate and sell mortgages.
The company, which plans to exit the business by the end of this quarter, said in the filing that it had decided to reduce its reliance on “cyclical and volatile” earnings streams.
The company said a financial institution it did not name had offered to employ most of its mortgage banking employees.
Bank 34 said it expects to record a pretax charge of $600,000 to $1.2 million in the second quarter to cover severance costs, asset and technology-related charges and the termination of leases.
