COLUMBIA, S.C. Fleet Mortgage Group will cut 550 jobs over the next 18 months, the company announced Wednesday.
The Columbia-based mortgage lender will take a $10 million charge in the third quarter to fund the cuts.
The cuts are the outcome of a four-month reengineering program, an effort which the company said identified "$40 million of pretax sustainable annual profits."
Fleet Mortgage is a publicly traded mortgage bank affiliated with Heet Financial. The company has around 4,100 employees.
The Cleveland-based bank is projecting steady growth in net interest income even as credit losses remain manageable. But Chairman and CEO Chris Gorman also said that he thinks a recession is likely.
The first-quarter increase involved commercial real estate loans, including some problematic multifamily loans and an office credit, but none of the criticized loans were to consumers, officials at the Dallas company say. Further CRE deterioration is anticipated.
The Detroit-based company is exploring ways to make more consumer auto loans without running afoul of stricter capital standards that are expected from the Federal Reserve. Possible approaches include more securitizations and the use of credit risk transfers.
The House Financial Services Committee also sent to the full House two bipartisan bills, including one that would prevent large banks from opting out of having to recognize Accumulated Other Comprehensive Income in regulatory capital.
Charge-offs and nonperforming loans rose at the Georgia bank in the first quarter. But it blamed the problem on one large client and said the matter has been resolved.
Amid healthy first-quarter loan growth and improving credit quality, Discover Financial Services slashed its profits by $800 million to offset remediation costs from a 16-year period when it overcharged certain merchants.
