A Southern California bank is shutting the doors of its residential wholesale mortgage lending operation so it can focus on another business.
Pacific Mercantile Bancorp announced this week its banking subsidiary, Pacific Mercantile Bank, will close the wholesale unit later this year.
The move will allow the bank to concentrate its capital and other resources on expanding its commercial banking business, according to the announcement.
Among the reasons the operation was closed were increased costs, inconsistent results and excessive capital required to improve the unit, the Costa Mesa, Calif.-based company said.
“The wholesale mortgage division was good for us in the early years of the bank when there was a decline in the commercial interest rates and a slowing in the economy that led to declines in commercial loan demand,” said company chief executive Raymond Dellerba in the statement.
But steady growth in commercial lending has the company now moving its capital into that business, Dellerba added.
While the process of closing the wholesale division has begun, the official closure date is slated for the end of September — with only a small group of employees staying on board to wind down the operations.
The company did not respond to MortgageDaily.com’s request for information about the number of layoffs.
