A Midwest bank is the latest to shut down part of its mortgage lending operations and shed payroll amid dwindling origination activity.
North American Savings Bank Financial and its thrift subsidiary NASB confirmed Wednesday that it is exiting its consumer direct business to originate mortgages nationwide for sale in the secondary market. The Kansas City, Missouri-based firm is also laying off an unspecified number of employees in March at its headquarters and in remote positions in seven states, according to a Worker Adjustment and Retraining Notification.
"This was a difficult decision, but we believe that it is in the best interest of the company, given the current challenging market conditions highlighted by rapid interest rate increases in 2022, low or shrinking housing inventory, and double-digit median home price increases," NASB Chief Executive Tom Wagers said in a statement.
The lender made the announcement internally last Friday and representatives this week didn't respond to requests for comment and declined to confirm the move ahead of Wednesday evening's press release. The news was
NASB will continue to originate national and local residential mortgages for its portfolio along with residential construction, land development and commercial real estate loans, it said. The depository did not provide an exact date when it would end correspondent operations.
The exit is expected to cost NASB $3.8 million to $4.6 million in pretax charges in the second quarter this year. Of that amount, 40% consists of personnel costs, 40% will be contractual terminations and 20% will consist of other unspecified costs. The firm also clarified that exiting correspondent lending will result in total future cash payments between $3.4 million to $4.2 million.
Ten Arizona workers and one Ohio employee will be laid off while other remote personnel will be terminated in Florida, Illinois, Kansas, Missouri and Texas, according to WARN reports. None of the impacted staff are represented by a union nor have bumping rights, according to a WARN filed in Ohio.
The bank did not provide figures for total originations in a recent 2022 annual financial report, but it noted the difficulty in addressing the "volatile" and "sometimes frustrating" mortgage market.
The bank reported $4.5 million in net income for the third quarter last year, compared with $10.1 million in the three months prior. Year-to-date, NASB counted $32.1 million in net income in the third quarter, compared with $73.7 million for the same metric in the third quarter of 2021, a decline it attributed to a decline in mortgage banking profit.
NASB was founded in 1927 and counts 470 employees on LinkedIn. The depository offers conventional, government-insured, non-conforming, jumbo and bank statement mortgages, among other loan products.
Mortgage lenders have resumed their
