Arlington-based Leader Bank has scooped up eight former members of the East-West staff, the bank announced this morning.
Worcester-based Commerce Bank plans to shut down its 1-800-East-West Mortgage subsidiary, the Worcester Telegram and Gazette reported yesterday.
Jay Tuli, Leader Bank’s director of business development, say the eight hires include three senior loan officers as well as operations and IT staff. Leader currently has approximately 120 people on its mortgage staff.
"We’re excited," said Tuli. The East-West hires "have a unique skill set which we think will enable us to enhance our brand name," he said, explaining that the East-West officers have a great deal of experience with call-centers and Internet marketing that will be a valuable addition to Leader Bank.
Tuli said that Leader had been aware of the imminent closure of East-West and was able to plan the acquisitions ahead of time. "We have a great relationship with Commerce Bank and were able to be in discussions a little bit prior to make these hires," he said.
According to mortgage market share statistics provided by The Warren Group, publisher of Banker & Tradesman, East-West had increased its sales volume from $98 million for the first half of 2012 to $117 million for the first half of 2013, rising from the 82nd-largest mortgage issuer in Massachusetts last year to 63rd this year, an increase of 18.8 percent. Loan volume was up 7.8 percent for all lenders statewide in the same period.
Brian W. Thompson, president and CEO of Commerce Bank, said that the end of the era of record-low rates led to the decision to close the refinance-centria East-West.
"Rates were so low for so long….there was all this activity that happenned in 2012 and the early part of 2013, the people who were eligible to refinance did so," said Thompson. "I don’t see rates ever going back to where they were. Now it’s a purchase business, and East-West over the years had really done very little in the purchase side…We just felt it had run its course."
Thompson said that the bank is helping the remaining former East-West employees to find positions, and has hired some into Commerce.
David Bernotas, the former CEO of East-West, left the company last June. Bernotas had been responsible for the rehabilitation of East-West, which had been sanctioned by the FDIC and the Massachusetts Division of Banks in the mid-2000s. Bernotas had launched a bid to buy the company in 2010, but the deal was never completed.
