A Maryland bank has disclosed that it will close its mortgage unit. The move follows the ouster of the company's chief executive after the company reported losses tied to loan fraud.
AmericasBank Corp. made the disclosure in a filing today with the Securities and Exchange Commission.
The Townson, Md.-based company said the board of directors of subsidiary AmericasBank decided Wednesday to "reposition its mortgage lending operation by integrating the operations of the bank's separate mortgage unit into its existing banking centers and closing the separate mortgage unit."
The move is expected to be completed by the end of this month.
While the company did not reveal how many employees were impacted, a staff directory listed around six executives and three originators.
The bank said $50,000 in severance payments will be made and $200,000 in goodwill will be written down.
"The board made this decision based primarily on recent market conditions, and the bank intends to cease its emphasis on originating mortgage loans for sale that are originated by commissioned salespeople," AmericasBank stated.
AmericasBank originally launched the unit in October 2004 with the acquisition of mortgage broker uvm Mortgage Marketing Inc. That move, along with an expansion of mortgage products, was expected to boost the bank's originations to around $90 million annually.
Following a $2.5 million fourth-quarter 2007 loss, the parent company dismissed President and Chief Executive Officer Mark H. Anders in May, replacing him with Gary Rever. The loss reflected $2.9 million in loss provisions for five loans to a related group of borrowers where possible fraud by outside parties was uncovered.
Today's statement also indicated that AmericasBank intends to delist its common stock from the Nasdaq Capital Market, deregister its common stock under the Securities Exchange Act of 1934 and cease filing SEC reports.