Despite a quarter-over-quarter drop in mortgage originations, Flagstar Bancorp Inc. lifted lending and servicing on a year-over-year basis.
In its fourth-quarter 2016 earnings report, Flagstar revealed income before taxes of $42 million in the three months ended Dec. 31, 2016.
Earnings at the Troy, Michigan-based financial institution sank from $87 million the prior quarter and fell from $45 million in the year-prior period.
From Oct. 1, 2016, through Dec. 31, there were $8.573 billion in first and second mortgages originated. Business fell from $9.198 billion in the third quarter but was far stronger than $5.824 billion in the final quarter of 2015.
The latest three-month period’s production consisted of $4.5 billion in conventional loans, $1.9 billion in government mortgages and $2.1 billion in jumbo loans.
The retail channel was responsible for $0.6 billion of fourth-quarter 2016
volume, while wholesale lending generated $1.4 billion and correspondent acquisitions made up the other $6.5 billion.
Refinance share
climbed to 61.6 percent from 57.6 percent in the third quarter.
Full-year 2016 mortgage production amounted to $32.453 billion, increasing from $29.402 billion in 2015.
Production is poised to drop in the first-quarter 2017 based on mortgage rate-lock commitments, which fell to $6.1 billion in the final-three months of last year from $8.3 billion in the third quarter.
Flagstar reported 1,350 third-party originator relationships as of the end of last year, including more than 700 correspondent partners and more than 600 mortgage brokers.
The financial institution said it serviced 162,514 loans for $37.023 billion. The servicing portfolio was little changed from 167,763 loans for $37.017 billion three months earlier but grew from 149,345 loans for $32.233 billion as of year-end 2015.
The Dec. 31, 2016, total consisted of
133,270 loans for $31.207 billion in third-party servicing and 29,244 loan for $5.816 billion in loans it owns.
Another 220,075 loans for $43.127 billion were subserviced as of the most-recent date.
Flagstar reported that the capitalized value of mortgage servicing rights was 1.07 percent, while the weighted-average service fee was 27 basis points.
The balance sheet contained
$2.770 billion in residential assets, more than $2.589 billion as of Sept. 30 but less than $3.619 billion as of Dec. 31, 2015. The year-end 2016 total was comprised of $2.327 billion in first mortgages, $0.126 billion in second mortgages and $0.317 billion in home-equity lines of credit.
Commercial real estate holdings grew to $1.261 billion from $1.168 billion and were substantially higher than $0.814 billion at the end of 2015.
Warehouse lending assets finished last month at $1.237 billion. The total tumbled from $1.795 billion as of the previous quarter and slipped from $1.336 billion as of a year previous.
There were $6 million in loans in the repurchase pipeline at the close of the latest period.
Full-time employees on staff as of year-end 2016 were 2,886, five more than at the end of the previous period and also higher than 2,713 at the end of the previous year.
Flagstar operated 41 retail mortgage lending locations, 10 more than at the end of September. There were also 99 bank branches, the same as of Sept. 30, 2016.
