Its consumer direct lending business, which originated secondary residential mortgage loans nationwide, will be shut down by NASB Financial, the unitary thrift holding company for mortgage lender North American Savings Bank.

Market turmoil is cited as the main reason for the move by NASB chief executive Tom Wagers.

Since interest rates are expected to rise rapidly in 2022, housing inventory is shrinking, and median home prices are growing by double digits, Wagers believes this is in the best interests of the company, despite being a difficult decision.

NASB estimates that it will incur pre-tax charges in the second quarter of fiscal 2023 of between $3.8 million and $4.6 million as a result of its exit. Approximately 40% of the total pre-tax charges can be attributed to personnel costs, 40% to contract terminations, and 20% to other costs associated with the business. In addition, the company expects to receive a total of around $3.4 million to $4.2 million in future cash payments.

A major part of the bank’s loan production will continue to be domestic and local residential lending, according to the Kansas City-headquartered company. Further, NASB will continue to focus on lending for residential construction and land development in Kansas City, as well as commercial properties across the country.

Over the last nine decades, NASB has offered residential and commercial mortgages that are government-backed across the country. NASB was founded in 1927 and provides personal banking and lending services in Kansas City.