The bank has recorded a $1.8 million pre-tax loss in its mortgage division
Like many mortgage lenders, market competition and increasing interest rates have taken a toll on Nashville-based FirstBank.
FirstBank has announced that it would sell its third-party origination channel as well as its correspondent mortgage business.
The bank said it would sell its third-party origination unit, which is an outsourced team of brokers that drive new customers, to Renasant Bank. FirstBank said it also intended to sell its correspondent banking division to a separate unnamed third party, according to a press release.
Although FirstBank still hasn’t disclosed the terms of both deals, Chief Financial Officer James Gordon said neither represent significant gains or losses for the home lender, which has $5.1 billion in assets. The two divisions account for approximately half of the bank’s annual mortgage-production volume, according to filings.
FirstBank’s mortgage business has sagged over the past year. In the fourth quarter of 2018, it booked a $1.8 million pre-tax loss in its mortgage unit, according to company filings. Executives have also been hinting about a potential restructuring.
"We have reviewed our mortgage operations and concluded that the exit of these wholesale channels better aligns mortgage with our strategic plan and long-term vision for the company," said FirstBank CEO Chris Holmes. “The exit also allows additional focus on our retail and consumer direct (online) origination channels.”
"We believe the outlook on that is fairly positive, even with the backdrop of the whole industry. It's much more of a predictable business for us," said Gordon.
