Alliance Bankshares Corp. says it is closing its mortgage banking subsidiary, Alliance Home Funding LLC, which employed 43.
Chantilly, Va.-based Alliance Bankshares will bring 10 Alliance Home Funding employees into an in-house mortgage banking division, which will offer home loans in the Washington, D.C., metro area, the company said.
Closing Alliance Home Funding will put an after-tax dent in the bank’s fourth-quarter earnings of between $350,000 and $450,000, including employee severance pay, systems charges and subleasing costs.
Alliance Bankshares President and Chief Executive Officer Thomas A. Young Jr. said the mortgage-lending subsidiary, created in 2001, has not met profit expectations in recent years.
A series of steps taken this year to improve results “have not yielded the desired outcome,” Young said in a statement. With “a continued modest outlook in the housing sector, we felt a radical change was necessary.”
The new in-house mortgage lending division will have a “focused approach” that “should lead to better performance metrics,” Young said.