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PBCO Financial Corporation has announced its decision to exit the residential mortgage lending market due to industry trends and the current interest rate environment. The company cites increased accessibility of residential mortgages online and the outlook for mortgage loan demand as factors in its decision. PBCO anticipates one-time termination expenses of $350 thousand.
Positive
PBCO Financial Corporation is strategically exiting the residential mortgage lending market, which could improve its profitability and focus on other areas of business.
Negative
There may be potential negative impacts on PBCO's financial performance due to the one-time termination expenses of $350 thousand associated with severance and contract termination fees.
MEDFORD, Ore.--(BUSINESS WIRE)--
PBCO Financial Corporation (OTCPK: “PBCO”), the holding company (Company) for People’s Bank of Commerce (Bank), announced today that it has made the strategic business decision to exit the residential mortgage lending market, effective November 1st. “Industry trends and the current interest rate environment have made it challenging for this division to remain profitable in recent years,” commented Julia Beattie, President & CEO. “Residential mortgages are widely accessible to consumers due to increased availability online, with more than 70% of mortgages provided by non-depository lenders in 2022, according to the CFPB. The outlook for mortgage loan demand in 2024 and possibly into 2025 also factored into our decision. This departure also reflects the realignment of our strategic goals and focus for the future,” added Beattie. PBCO anticipates one-time termination expenses of $350 thousand during the fourth quarter of 2023 associated with severance and contract termination fees.
Why is PBCO Financial Corporation exiting the residential mortgage lending market?
PBCO is exiting the market due to industry trends and the current interest rate environment, as well as the increased accessibility of residential mortgages online.
What are the potential financial impacts of this decision?
PBCO anticipates one-time termination expenses of $350 thousand associated with severance and contract termination fees.
How will this decision affect PBCO's profitability?
Exiting the residential mortgage lending market could potentially improve PBCO's profitability as it focuses on other areas of business.
