First Savings Financial : Costs Associated with Exit/Disposal - Form 8-K
October 05, 2023 at 02:51 am IST
Share
Item 2.05.
Costs Associated with Exit or Disposal Activities
On September 28, 2023, the Board of Directors of First Savings Bank (the "Bank"), the wholly-owned subsidiary of First Savings Financial Group, Inc. (the "Company"), committed to exiting the Bank's residential mortgage banking operations during the first fiscal quarter ending December 31, 2023. The combination of increased mortgage rates and housing prices, decreased 1-4 family housing inventory, and continued economic uncertainty has caused residential mortgage loan applications during 2023 to decline to their lowest level in over two decades and are forecasted to continue declining in 2024 and potentially thereafter. As a result, the Bank has determined to cease its national, originate-to-sell mortgage banking operations, which includes its third-party origination and retail loan production office channels.
The Company estimates that it will incur total pre-tax expense of approximately $2.5 million in the first fiscal quarter ending December 2023 associated with exiting the Bank's residential mortgage banking operations. These expenses, all of which are expected to result in cash expenditures, consist of approximately $1.8 million in compensation and other employee-related costs, $600,000 in contract termination costs, and $50,000 in lease termination costs.
The Bank will continue to originate 1-4 family residential mortgage loans from its retail banking centers located in its local market and 1st Lien HELOCs from its loan production office located in Franklin, Tennessee. Both of these loan types are generally originated as held for investment in the Bank's loan portfolio.
First Savings Financial Group Inc. published this content on 04 October 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 04 October 2023 21:20:04 UTC.
First Savings Financial Group, Inc. is a holding company for First Savings Bank (the Bank). The Companyâs principal business activity is the ownership of the outstanding common stock of First Savings Bank. Its segments include core banking, Small Business Administration (SBA) lending, and mortgage banking. The core banking segment originates residential, commercial and consumer loans and attracts deposits from its customer base. The SBA lending segment originates loans guaranteed by the SBA, subsequently selling the guaranteed portion to outside investors. The mortgage banking segment originates residential mortgage loans and sells them in the secondary market. The Bank operates as a community-oriented financial institution, which offers traditional financial services to consumers and businesses in its primary market area. The Company provides a variety of banking services to individual and business customers through approximately 16 locations in southern Indiana.
FIRST SAVINGS FINANCIAL GROUP, INC. 
