Every bank and credit union with a mortgage operation has at least one branch that makes the room go quiet. Maybe the lease is up. Maybe the production never matched the build-out. Maybe the market moved and the office stayed put.
Branch decisions tend to get made on instinct or whoever argues loudest. This guide offers a more repeatable approach: how to spot an underperforming branch, read the signs that an office belongs somewhere else, and rank your moves.
Because the ground has shifted. The National Community Reinvestment Coalition, working from FDIC records, counted 267 bank branch openings and 217 closings in the first quarter of 2026. That is a net gain of 50, and the second straight quarter of growth, the first back-to-back expansion since 2010.
Those figures cover retail bank branches, not mortgage offices, so read them as a signal of where institutions are placing bets rather than a mortgage benchmark. The same analysis found openings clustered in the Sun Belt, especially Texas and Florida, while closures were more scattered across the Northeast and California. It also logged 82 relocations in the quarter, and most moved less than a quarter mile.
Cost is the other pressure. The Mortgage Bankers Association reported that per-loan production costs at independent mortgage banks and bank mortgage subsidiaries were $10,936 in the second quarter of 2026, against an average of $7,945 per loan since 2008. That sample does not cover every bank or credit union mortgage department, but it shows what an office now has to clear to earn its keep.
Raw volume will mislead you. A branch in a small market can look weak next to a metro office and still be the best-run location you have. Compare like with like:
Production per loan officer, measured against the same county. Compare each branch and LO to the competitors working that county, not to your company average. County-level deed of trust data makes that possible.
The 12 to 24 month trend, not last month. The most recent month almost always looks light because counties report on different schedules. Modex data typically runs 4 to 6 weeks behind, so judge branches on the trend line.
Dependence on one or two producers. If a single LO writes most of the branch volume, you may not have a branch. You may have a person with an address.
Where the loans actually land. If a branch's production keeps showing up in counties far from its door, the office is not where its customers are.
Cost per loan against volume. Pair occupancy and compensation from your own books with production data.
One caution before you act on any of it. Loans closed under a manager's NMLS number, which is common when an LO works on a team, can make a branch look weaker than it is. Check for that first.
A weak branch and a misplaced one can look the same on a report. The signals behind them are not the same.
Underperforming and misplaced are different problems. One needs a leader. The other needs an address.
Production is drifting. When most of a branch's loans are closing in a neighboring county or submarket, follow them. The relocation data above suggests short moves are common.
Talent is leaving, and where it goes matters. Monthly NMLS workforce data shows departures and arrivals. Loan officers tend to move after about two years, so a branch with several LOs approaching that mark deserves a closer look. If departing LOs keep landing in the same area, that area is telling you something.
Competitors are filling a corridor you are not in. Compare your branch locations with where active producers are working, county by county. Growth markets with thin coverage from you are the easiest gaps to spot.
A lease event is coming. Lease end is the cheapest moment to move. If you still run in-store locations, note that NCRC found those closing at roughly three times the rate of standalone branches, relative to their baseline.
Before you spend a dollar, sort every branch into one of four buckets:
Fix. Right market, soft results. Think leadership, lead flow, or recruiting.
Move. Right team, wrong location. Production and talent data point somewhere else.
Merge or close. Overlapping markets, thin production, rising costs. Fold the office into a stronger one and keep the producers.
Grow. Strong production in a market you cover lightly. Add LOs or a second office.
Our suggestion, and this part is opinion rather than data: start with the moves and the grows, because that is where the upside sits, and treat closures as the last resort. A closure that sends your best producers to a competitor can cost more than the lease you saved.
Modex tracks mortgage production across 2,370 counties, covering 95% of U.S. residential home loans, sourced from county deeds of trust. NMLS workforce data is refreshed monthly. Together they let you see branch and LO production by county, plus arrivals and departures at your offices and your competitors'.
The limits are real. Data usually lags 4 to 6 weeks, counties we do not cover will under-report, and team production under a manager's NMLS can hide volume. Use the data to find the questions worth asking, then confirm the answers against your own numbers.
Branch strategy in 2026 is less about whether to shrink or grow and more about whether each office sits in the right place with the right people. Banks and credit unions that back those calls with county-level evidence should make fewer expensive mistakes.
Get key mortgage, real estate, and consumer insights on every loan officer, branch, and company nationwide. Try a free demo to see what Modex can do for your business.
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Here's the thing: ghosting is rarely about rudeness. In a high-stakes industry where top producers are perpetually being courted and professionally exposed, going silent is often a defense mechanism. To break through it, you have to understand why it happens in the first place, and then do something different.
The mortgage industry is notorious for its cyclical nature, which can shift rapidly from a downturn to an upswing. So, the question isn't whether you'll face increased demand – it's when. In a competitive job market, finding qualified loan officers becomes a huge challenge. This is why building a talent pipeline during slower periods is your secret weapon.
