Mortgage originations ascended to an all-time high, delinquency was down more than 50 basis points and company-wide earnings reached a record level at U.S. Bancorp. The financial institution, which was established in the midst of the civil war, is making progress on its repurchases.
Fourth-quarter residential originations totaled $22.111 billion, the company reported in its quarterly earnings report Wednesday. More home loans were funded in the quarter than during any other quarter in the bank’s history.
Business improved from $21.529 billion in the prior three-month period. During the fourth-quarter 2011, mortgage production worked out to $17.415 billion.
Fourth-quarter fundings brought full-year volume to $84.475 billion — the highest on record based on data back to 2006. Annual originations were $49.1 billion in 2011 .
U.S. Bank additionally originated $0.004 billion in subprime mortgages, off from $0.005 billion in the third quarter. There was no change from the same period a year earlier.
The third-party mortgage servicing portfolio closed out 2012 at $215.637 billion, growing from $211.263 billion three months earlier and $191.082 billion a year earlier.
U.S. Bank said it owned $44.018 billion in residential loans, expanding the portfolio from $41.902 billion at the end of September. Home mortgage holdings were also up from $37.082 at the end of 2011. First-lien home-equity loans accounted for $11.370 billion of the Dec. 31 total, growing from $10.398 billion as of Sept. 30.
A nice improvement was reported for delinquency of at least 30 days, including non-performing loans. The rate fell to 2.93 percent from 3.46 percent at the end of the third quarter. Residential delinquency finished 2011 at 3.82 percent. The latest figure reflected a 30-to-89-day rate of 0.79 percent, a 90-day rate of 0.64 percent and a non-performing rate of 1.50 percent.
An additional $16.726 billion in junior lien HELs and second mortgages were owned as of the end of last year, contracting from $17.119 billion at the end of the third quarter and $18.131 billion at the end of 2011.
HELÂ delinquency worsened to 2.19 percent from the prior quarter’s 2.18 percent and was also worse than 1.85 percent a year earlier.
Commercial real estate loans on the balance sheet increased to $36.953 billion from $36.813 billion and were $35.851 billion at the same point the prior year. The year-end 2012 figure reflected $31.005 billion in commercial mortgages and $5.948 billion in construction-and-development loans.
CRE loans had a 1.93 percent delinquency rate, drifting higher from 1.92 percent in the prior period but sinking from 2.93 percent at the close of the previous year. The Dec. 31, 2012, rate reflected a rate of 0.43 percent for loans at least 30 days past due but less than 90 days’ delinquent, a 90-day rate of 0.02 percent and a non-performing rate of 1.48 percent.
The bank finished last year with $240 million in repurchase reserves, climbing from the third quarter’s $220 million and the fourth-quarter 2011’s $160 million. The most-recent total reflected $32 million in net realized losses, $52 million in additions to the reserve and $57 million in repurchases and make-whole payments. The report noted that repurchase requests are expected to remain stable over the next few quarter.
Income before taxes from mortgage banking was $291 million, down from $385 million earned in the third quarter. But the mortgage business earned more than the $225 million in the year-earlier period.
Full-year 2012 mortgage banking income was $1.4 billion, 29 percent better than in 2011.
The Minneapolis-based bank said company-wide income before taxes slipped to $2.0 billion from $2.1billion but beat the $1.9 billion earned in the fourth-quarter 2011 After-tax annual earnings were a record $5.6 billion..
There were 3,084 U.S. Bank branches in operation as of Dec. 31, two less than as of Sept. 30.
On July 13, U.S. Bank will be 150 years old. It was chartered in 1863 originally as First National Bank of Cincinnati.
