Fundings for First Horizon National Corp. climbed to the highest level in almost two years. But the boost in business won't immediately impact earnings.
The Memphis, Tenn.-based lender reported second quarter loan volume of $9.5 billion soared 25% from the previous quarter and grew 7% from the same period a year ago. Production has not been this high since the third quarter 2003.
First Horizon attributed the increase to its expanded sales force and its strategy to grow the purchase market -- purchase originations accounted for 63% of the latest volume and have grown 28% year over year.
Adjustable-rate mortgages, excluding government ARMs, represented half of second quarter originations, First Horizon said.
The mortgage-servicing portfolio ended the second quarter at $90.8 billion, according to the announcement.
Net income of $102.7 million was impacted by a 22% year-over-year decline in mortgage banking income, which the company reported at $38 million.
"The positive financial impact of the pick-up in mortgage originations due to higher refinance activity in the overall market will be felt in the third quarter while the related increase in impairment expense hit us in second quarter," First Horizon said in the announcement.