Despite a steep drop in residential loans originations at HomeStreet Inc., the mortgage servicing portfolio and residential investments both expanded.
Single-family loan production was $0.773 billion during the three months ended Dec. 31, according to earnings data released Tuesday by the parent of HomeStreet Bank.
Business slid from the third quarter, when $1.187 billion in residential loans were closed.
Business plummeted by nearly half compared to the fourth-quarter 2012, when $1.519 billion was originated.
For all of last year, HomeStreet originated $4.460 billion, off from $4.668 billion in 2012.
“HomeStreet regained its overall ranking as the number two originator by volume of refinance and purchase mortgages in the Pacific Northwest (Washington, Oregon and Idaho), based on the combined results of HomeStreet originations and loans originated through an affiliated business arrangement known as WMS Series LLC,” the report stated.
First-quarter originations are set for a further decline based on single-family mortgage interest rate lock commitments, which fell to $0.662 billion from $0.786 billion in the prior period.
Another $0.016 billion in multifamily loans were originated in the fourth quarter, surging from $0.011 billion three months earlier but sinking from $0.040 billion a year earlier.
Full-year 2013 multifamily volume was $0.091 billion, less than the $0.112 billion funded in 2012.
HomeStreet serviced $11.796 billion in home loans for third parties as of the end of last month. The mortgage servicing portfolio increased from $11.286 billion at the end of September and $8.871 billion at the end of 2012.
The investment portfolio included $1.041 billion in residential assets, up from $0.949 billion at the end of the prior period and $0.811 billion at the end of the prior year.
The latest mortgage investment total included $0.905 billion in single-family loans and $0.136 billion in home-equity loans.
The third-party multifamily servicing portfolio was trimmed to $0.720 billion from $0.723 billion as of Sept. 30 and $0.727 billion as of Dec. 31, 2012.
Also on the balance sheet were $0.688 billion in commercial real estate assets. This assets class grew from $0.522 billion three months earlier and $0.450 billion 12 months earlier.
CRE loans included $0.478 billion in commercial mortgages, $0.079 billion in multifamily loans and $0.130 billion in construction-and-land-development loans.
A net loss of $1 million was reported for the mortgage banking segment, though that was less than the $2 million second-quarter loss. Mortgage earnings, however, swung from a $26 million profit a year earlier.
Net income before income tax expense at the parent company swung to a $1 million loss from a $2 million third-quarter profit and a fourth-quarter 2012 profit of $29 million.
The Seattle-based company eliminated 111 positions during the fourth quarter.
“In response to lower than anticipated loan volume in the commercial lending units and falling loan volume in existing mortgage markets, the company reduced under-performing production personnel and mortgage operations and fulfillment personnel in existing markets,” HomeStreet explained.
But staffing reductions were more than offset by the addition of 216 employees inherited from the acquisition of Fortune Bank and Yakima National Bank as well as two branches from AmericanWest Bank.
Mortgage staffing closed out last year at 925 full-time equivalent employees, three more than at the end of the third quarter. Headcount in the mortgage division was 686 as of the end of 2012.
