As overall mortgage originations strengthened, home equity lending at banks and thrifts insured by the Federal Deposit Insurance Corp. grew at the slowest pace in years.
Commercial banks and savings institutions originated $2.0 billion in one-to-four family mortgage loans in the third quarter, up 3% on a quarterly basis, according to the FDICs latest Quarterly Banking Profile. The numbers are 13% better than the same quarter last year.
Home equity lines of credit outstanding came in at $538.1 billion -- rising from the second quarter by $4.3 billion -- the smallest quarterly increase in more than four years. A year ago, HELOCs were proceeding at an annual rate of 46 percent, FDIC said.
Reported earnings of $34.6 billion rose 4.2% during the third quarter to surpass the record previously set in the year's first quarter.
"Higher income from trading activities at a few large banks, combined with increased servicing income at mortgage and credit-card lenders provided a boost to industry earnings," offsetting the increases that occurred for the first time in three years in provisions for loan losses and net loan charge-offs, FDIC said.