The $929million-asset company said late Wednesday that its bank will stop originating consumer mortgages and that it will terminate operations of its mortgage banking division. The bank expects to sell or terminate “substantially all business activities” tied to its mortgage origination unit.
“We made the strategic decision to exit the consumer mortgage origination business due to the operating performance of the unit and the bank’s desire to focus on continuing to develop the commercial banking opportunity in its marketplace,” Steven Buster, Pacific Mercantile’s president and chief executive, said in a press release. “We believe that this change will support our mission of becoming a prominent Southern California business banking franchise.”
The company said it expects to stop accepting new mortgage applications around Dec. 20 and shut down all operations around April 30. The bank will continue to serve the needs of existing mortgage customers.
Pacific Mercantile said it expects to incur $3.3 million to $3.8 million in after-tax costs tied to the planned exit.