Financial firm refocuses on core operations
Blue Ridge Bankshares, Inc., the holding company of Blue Ridge Bank and BRB Financial Group, Inc., has announced plans to exit its mortgage banking division. The company has entered into a definitive agreement to sell certain assets of its mortgage division, Monarch Mortgage, to an unrelated third-party mortgage company.
Monarch Mortgage provides mortgage banking services, including originating and processing residential mortgage loans, primarily for sale in the secondary market. According to a news release, the transaction is expected to be completed by the end of the first quarter, pending customary closing conditions.
As part of the agreement, Blue Ridge Bank, operating as Monarch Mortgage, will continue to process and fulfill obligations for loans currently in progress, ensuring they are closed and funded as expected.
G. William Beale, president and CEO of Blue Ridge Bankshares, Inc., stated that the decision aligns with the company’s strategy to concentrate on community banking within its primary market. He cited the current interest rate environment and the significant investment required to scale mortgage banking operations as key factors in the move.
“The decision to exit our mortgage banking division was an additional step in our strategy to refocus our efforts on community banking in our primary geographical footprint,” Beale said. “I am pleased that the Monarch Mortgage team has a wonderful opportunity with the acquiring company. I wish them a smooth transition and much success.”
The announcement comes amid a challenging economic climate, with persistently high interest rates. Despite a slowdown in loan originations, commercial and multifamily mortgage debt continued to rise in the second quarter of 2024. The total debt outstanding increased by $31.4 billion (0.7%) to reach $4.69 trillion.
According to Jamie Woodwell, head of commercial real estate research at the Mortgage Bankers Association (MBA), the rise in outstanding debt is due in part to fewer loans being paid off, despite declining new loan originations. Banks remain the largest holders of commercial and multifamily mortgage debt, accounting for $1.8 trillion or 38% of the total. Life insurance companies experienced the largest growth in holdings at 1.8%, while Real Estate Investment Trusts (REITs) saw a 7.8% increase in multifamily mortgage debt holdings.
Blue Ridge Bankshares, Inc. provides financial services through its subsidiaries, including retail and commercial banking, investment and wealth management, and trust administration.
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