Bradford Bank said Tuesday it plans to reduce its mortgage lending staff to cope with a drop in real estate transactions. It’s not alone, as other community banks face the loss of a chunk of their business.

Bradford Bancorp President Dallas Arthur said the bank would reduce staff in its mortgage division to “meet the current demand in the mortgage market.” Arthur would not specify how many people would be cut, and declined to discuss the state of the bank until second-quarter results are available at the end of the month.

But experts said fewer real estate sales mean fewer mortgage loans for small banks that don’t write many to begin with. Across the Baltimore area, real estate sales have been down about 30 percent since last fall, according to Realtor data.

“The actual slowdown of real estate transactions does hurt them,” said Ken Stanton, a banking expert and professor of finance at the University of Baltimore. “There’s not as much business for them to get.”

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Several area banks, such as Slavie Federal Savings Bank in Bel Air and The Columbia Bank, headquartered in Columbia, now seek small commercial borrowers, who are more plentiful than homebuyers.

Slavie reported a $3 million increase in assets in its first-quarter reports. The bank said the gain comes from an effort to increase commercial loans rather than residential loans.

Columbia Bank is also concentrating on the commercial market, seeing vastly greater opportunities in that sector, bank Executive Vice President Mike Galeone said.

“The commercial arena has not been impacted by the [real estate slowdown],” Galeone said. “There is always an overcorrection or a tendency for banks to really curtail something until they find out whether or not they are on the right page.”

Stanton said he believes competition among the banks for those commercial loans has become fierce, but that the banks’ close ties with their communities give them an advantage that nationally chartered banks don’t have.

“People are learning to hate the large banks, they really have a grudge,” he said. “When times are good, they can’t get money out of them; when times are bad, [the banks] are pushing wheelbarrows of cash around to try to get people to borrow more.”

acahall@baltimoreexaminer.com

daniel.murphy@baltimoreexaminer.com