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| A 40 percent surge in retail originations pushed quarterly activity at Wells Fargo & Co. to the third-highest on record, though volume might be headed lower. The period included the sale of two portfolios for $800 million. Meanwhile, income at the West Coast giant climbed to the highest level on record.
Second-quarter residential production was $129 billion — the third best month ever — the bank reported today. Fundings climbed from the first quarter’s $101 billion and $63 billion in the second-quarter 2008. Business was higher than any quarter since the third-quarter 2003 — when Wells reported $161 billion in volume. Factoring in Wachovia production, volume hasn’t been this high since the second-quarter 2006 — when Wells funded $116 billion and Wachovia closed $16 billion. The latest quarter included $71 billion in retail fundings, soaring from $51 billion. Correspondent and wholesale business jumped to $57 billion from the first quarter’s $49 billion, while home-equity originations were unchanged at $1 billion. The San Francisco-based institution reported a near-record $194 billion in second-quarter mortgage applications, up from $190 billion in the prior quarter. But the application pipeline declined to $90 billion at the end of the period from $100 billion — suggesting third-quarter originations could be less. The owned residential servicing portfolio was $1.664 trillion, increasing from $1.646 trillion on March 31. Loans serviced for others represented $1.394 trillion, climbing from $1.379 trillion. First-mortgage residential holdings were $237.3 billion at the end of the second quarter, down from $242.9 billion three months earlier. Pick-a-Payment loans originated by Wachovia accounted for $51.6 billion of the total, while Wells Fargo Financial debt consolidation mortgages represented for $24.3 billion and home-equity loans were $126.8 billion. Junior lien assets were $107.0 billion on June 30, easing from $109.7 billion. Wells said it sold $0.6 billion in Wachovia nonperforming Alt-A loans that were originated by third parties and $0.2 billion in nonconforming loans from the warehouse. Excluding impaired and run-off first mortgages, delinquency of at least 90 days was 0.66 percent, falling from the first quarter’s 0.87 percent. Residential first-mortgage nonperforming assets climbed to $6.0 billion from the first quarter’s $4.2 billion. Nonperforming junior liens rose to $1.7 billion from $1.4 billion. The portfolio of commercial mortgages serviced for others was $0.470 trillion, slightly lower than $0.474 trillion at the end of March. Commercial mortgage holdings were $103.7 billion on June 30, edging down from $104.9 billion on March 31. Real estate construction loans were $33.2 billion, off from $33.9 billion. Mortgage banking noninterest income was $3.0 billion. Company-wide net income was a record $3.2 billion during the second quarter, climbing from $3.0 billion in the prior quarter and $1.8 billion a year earlier. Full-time headcount ended June at 269,900, easing from 272,800 three months prior. |
