First Internet Bank (FIB) announced in its fourth quarter 2022 earnings report it will exit its consumer mortgage business during the first quarter of 2023.
“While other lending lines have strong demand, the combination of housing prices, housing supply, economic uncertainty and interest rates have caused mortgage applications nationally to plunge to their lowest level in 26 years,” the earnings report stated. “Due to the steep decline in mortgage volumes and the negative outlook for mortgage lending over the next several years, the company decided to exit its consumer mortgage business during the first quarter of 2023.”
The bank said closing the business is expected to reduce total annual noninterest expenses by about $6.8 million, while increasing annualized pre-tax income by about $2.7 million, with 80 percent of the benefit realized in 2023 and 100 percent thereafter.
FIB estimated it would incur total pre-tax expenses associated with exiting this line of business of about $3.3 million in the first and second quarters of 2023.
No statement was offered as to how many employees would be affected by the decision to exit the consumer mortgage business.
FIB’s commercial construction and land development business will not be affected by this decision.