Despite a drop in new mortgage business at SunTrust Banks Inc., mortgage earnings and delinquency improved from the previous quarter. The company reduced its mortgage servicing portfolio, while its mortgage investments grew.
Residential loan originations during the three months ended Dec. 31 were $3.935 billion, fourth-quarter earnings data indicated.
Business sank compared to $7.995 billion both in the third quarter and the fourth-quarter 2012.
Full-year production fell to $29.861 billion from the previous year’s $32.050 billion.
The latest quarter included $2.364 billion in retail originations, $0.344 billion in wholesale production and $1.227 billion in correspondent acquisitions.
Refinance share fell to 46 percent from the third-quarter’s 54 percent.
First-quarter 2014 business is poised for a further decline based on applications, which tumbled to $5.304 billion from $7.116 billion in the third quarter.
The total mortgage servicing portfolio finished last year at $136.704 billion, down from $139.710 billion at the end of September.
At the end of 2012, SunTrust serviced $144.878 billion in home loans.
The Dec. 31, 2013, servicing portfolio included $106.832 billion in loans serviced for others.
Residential loan assets were $42.637 billion, inching up from $42.459 billion as of Sept. 30. Residential holdings were also up slightly from $42.446 as of Dec. 31, 2012.
Last month’s residential loan total included $3.416 billion in guaranteed mortgages, $24.412 billion in non-guaranteed loans and $14.809 billion in home-equity products.
SunTrust owned $0.553 billion in residential construction loans, off from $0.582 billion the prior quarter and down from $0.753 billion in the year-earlier period.
Delinquency of between 30 and 89 days on the non-guaranteed residential portion of the investment portfolio fell to 0.69 percent from 0.71 percent and dropped from 0.91 percent a year earlier.
Last month’s past-due rate on non-guaranteed residential loans was 0.61 percent, while it was 0.80 percent on home-equity products and 0.67 percent on residential construction loans.
Commercial real estate assets climbed to $5.481 billion from $4.755 billion and have also grown from $4.127 billion a year earlier.
CRE loan delinquency slipped to 0.09 percent from 0.10 percent and was 0.26 percent at the end of 2012.
SunTrust also owned $0.855 billion in commercial construction loans, expanding from the $0.737 billion at the end of the previous quarter and $0.713 billion at the end of the previous year.
Delinquency on commercial construction loans was 0.14 percent, jumping from 0.01 percent three months prior and 0.07 percent 12 months prior.
Mortgage production related income was $31 million, swinging from a $10 million loss in the prior period but worse than the $241 profit in the fourth-quarter 2012.
The Atlanta-based firm earned $38 million in mortgage servicing related income, more than the third quarter’s $11 million but not as much as the $45 million earned in the final three months of 2012.
Results reflected $323 million in operating losses tied to legacy mortgages and other legal related matters and a $96 million increase in mortgage servicing advance reserves.
Prior to income taxes, the holding company earned $549 million, soaring from just $50 million three months earlier and better than $423 million a year earlier.
SunTrust closed out last year with 26,281 full-time equivalent employees.
Staffing expanded from 26,409 as of Oct. 31 but subsided from 26,778 as of Dec. 31, 2012.
There were 1,497 full-service bank offices in operation as of the latest period, down from 1,508 three months earlier.
