Union Bankshares in Richmond, Va., will shut down its mortgage unit after reaching a deal to outsource originations through a Chicago bank.
Federal Savings Bank said in a press release Wednesday that it had reached an agreement with the $13 billion-asset Union to offer residential products and services at Union branches. Federal Savings and Union will work together to wind down Union Mortgage Group.
The deal gives the $364 million-asset Federal Savings more reach along the East Coast. Robert Jones, the bank's regional senior vice president, will lead the mortgage initiative.
The arrangement "was particularly attractive given Union Bank & Trust’s solid reputation, commitment to excellence and geographic footprint on the East Coast,” Steve Calk, Federal Savings' chairman and CEO, said in the release. “We look forward to leveraging our home lending experience to help more customers achieve the American Dream of home ownership.”
Federal Savings, which originates loans in all 50 states, said it plans to hire “the vast majority” of Union’s mortgage employees. The Chicago lender also plans to hire more mortgage originators to expand the business.
Union conducted a careful review before deciding to shutter its mortgage operations and enter into the partnership, John Asbury, the company's president and CEO, said in the release.
The arrangement should allow First Savings "to offer outstanding mortgage solutions to our customers and provide a smooth transition to the new approach,” Asbury said.