One of the largest community banks in the Northwest is shutting down its mortgage lending division.
Columbia River Bank is closing its mortgage unit, parent Columbia Bancorp announced today.
Columbia, based in The Dalles, Ore., said it will wind down the division over the next 60 days.
In addition to a bank-wide reduction of 20 employees yesterday, Columbia said around 39 mortgage banking employees will be laid off in connection with the closing during the next two months.
The strategic initiative is intended to streamline overall business operations in response to the current banking environment, the statement said.
"Columbia's decision to no longer operate an in-house mortgage lending service was necessary because of the uncertainty in the mortgage markets and the risk associated with the industry," Columbia President and Chief Executive Officer Roger Christensen said in the announcement. "This will allow us to focus on our core business services, a central point of our management team's vision for the future."
The bank is cutting expenses in each division. It has also eliminated director compensation and reduced Christensen's compensation by 23 percent. It expects to incur third-quarter severance charges of $0.1 million, though annual savings will be in the neighborhood of $4.2 million.
The bank was founded in 1977 by several local businessmen who were dissatisfied with available banking services in The Dalles, the firm says on its Web site. Now, the bank "stands as one of the largest community banks in the Northwest."