Columbia Bancorp (CBBO)
, the holding company of Columbia River Bank, said Friday it will exit the mortgage business and eliminate nearly 75 jobs. The Oregon-based company said in a press statement
that it was looking to "streamline its overall business operations in response to the current banking environment."
"Columbia's decision to no longer operate an in-house mortgage lending service was necessary because of the uncertainty in the mortgage markets and the risk associated with the industry," said Roger Christensen, Columbia's CEO. "This will allow us to focus on our core business services, a central point of our management team's vision for the future."
It's telling that mortgage banking is now being seen as a "risky" venture; it wasn't too long ago that more than a few regional banks viewed mortgages as a key component of revenue expansion.
Columbia operates 22 branches in Oregon and Washington, and said it asked each division of the bank to make additional strategic cost-saving contributions.
"We recognize the impact these actions will have on the employees and their families," said board chairman Richard Betz. "Management and the board carefully evaluated the reduction in order to minimize the impact on the communities we serve and to preserve shareholder value."
For his part, Christensen will see a 23 percent pay cut as his contribution to cost-cutting; the CEO's base salary in 2006, the most recent period information on his employment contract is available via the Securities and Exchange Commission
, was set at $250,000 per year.
Columbia will incur a third-quarter severance-related expense of approximately $139 thousand, with overall salary and benefit cost savings estimated at $4.2 million annually. "While a reduction in force is a challenging event for any organization, we are doing everything possible to ease the situation by providing severance pay and other separation benefits," Christensen said.
For more information, visit http://www.columbiabancorp.com
Disclosure: The author held no positions in CBBO when this story was published; indirect holdings may exist via mutual fund investments. HW reporters and writers follow a strict disclosure policy, the first in the mortgage trade.