First National Bank Holding Co. in Scottsdale, Ariz., said Tuesday that it would stop servicing mortgages it had bought from brokers nationwide, though it would continue to service wholesale mortgages made by brokers in its local markets.
The $4.5 billion-asset First National has laid off 351 employees at three of its four operations centers, in Virginia, North Carolina, and Las Vegas. A skeleton crew at each of the centers will stay on to honor wholesale mortgage commitments made to its customers as of Tuesday. The centers will close by mid-November, and the remaining 190 positions will be eliminated.
The wholesale mortgage operation center in Tempe, Ariz., will remain open to service wholesale loans made by brokers in its local markets, as well as the retail loans made by First National's three subsidiary banks.
"This was one of the most painful decisions of my 38-year career," Raymond Lamb, the parent company's chairman, said in a press release. "I have never seen a market shift as drastically as has occurred in the mortgage business over the last four months, but even more precipitous in the last few weeks. This very difficult decision was necessary to assure that our core banking business remains strong and can receive our full attention."
In April, First National closed its San Diego mortgage wholesale operations center, laying off more than 200 employees.
First National's flagship bank, the $2.8 billion-asset First National Bank of Arizona, lost $15 million in the second quarter, in large part because of a $18.4 million loss on the sale of mortgages. A year earlier the bank made $15.6 million on mortgage sales, and its net income was $7.9 million.
