Quarter-over-quarter growth was reported in originations and servicing at BB&T Corp. But income took a hit thanks to potential exposure recognized on Federal Housing Administration lending. Residential delinquency, meanwhile, deteriorated.
In its second-quarter earnings report, BB&T said it originated $4.710 billion in residential mortgages.
Activity jumped from the prior three-month period, when $3.804 billion in production was generated.
But business plunged from the second-quarter 2013, when BB&T closed $9.260 billion in home loans.
From Jan. 1 through June 30, home lending amounted to $8.514 billion.
Second-quarter 2014 production included $1.9 billion in retail originations and $2.8 billion in correspondent purchases.
Refinance share was reduced to 29 percent from just over a third in the first quarter.
The total mortgage servicing portfolio increased to $122.749 billion from $121.942 billion and expanded even more compared to $115.771 billion as of June 30, 2013.
The June 30, 2014, total included $88.595 billion in loans serviced for others.
Residential mortgage holdings were trimmed to $32.800 billion from $32.897 billion but have grown from $23.795 billion as of mid-year 2013.
Thirty-day delinquency on its residential portfolio shot up to 3.84 percent from 2.77 percent as of the end of the first quarter and 3.13 percent as of June 30, 2013.
The Winston-Salem, N.C.-based company said it owned $13.072 billion in commercial real estate assets, growing from $12.889 billion as of March 31 and $12.498 billion as of June 30, 2013. CRE loans secured by income-producing properties accounted for $10.438 billion of last month’s total, while construction-and-development loans made up $2.634 billion.
Prior-year asset totals have been revised to reflect transfers between divisions.
Income at the residential mortgage banking unit prior to income taxes swung to a $33 million loss from a $101 million first-quarter profit and a an upwardly revised $156 million year-earlier profit.
“Late in the second quarter, BB&T was notified that its FHA-insured loan origination process would be the subject of an audit survey by the Department of Housing and Urban Development,” BB&T Chairman and Chief Executive Officer Kelly S. King stated in the report. “While there are no findings from HUD at this time, in light of announcements made by other financial institutions related to the outcomes of similar audits and related matters and after further review of our exposure, we believe it is prudent to establish reserves in accordance with GAAP.”
Potential exposure to FHAÂ losses ranges from $25 million to $105 million, prompting BB&T to set aside $85 million in reserves during the second quarter.
BB&T said that its company-wide earnings prior to income taxes fell to $651 million from $795 million three months earlier and $797 million 12 months earlier.
Staffing was reduced to 33,411 full-time employees from 33,765 at the end of March and 33,869 at the same point last year.
But despite the decline in headcount, the number of banking offices rose to 1,844 from 1,824 at the end of the first quarter. The growth reflected the acquisition of 21 Texas retail branches.
