HomeStreet Inc.’s residential servicing portfolio and mortgage staffing expanded. But quarterly home lending activity slipped and is likely to fall further.
HomeStreet earned $3 million before taxes during the final-three months of last year, plummeting from $43 million in the previous three-month period.
The Seattle-based organization
revealed the numbers, in addition to other operational and financial metrics, in its fourth-quarter 2016 earnings report.
Earnings also deteriorated versus the final-three months of 2015, when income was $11 million.
Mortgage banking income before taxes
swung to a $14 million loss from a $27 million third-quarter profit and a less than $1 million profit in the fourth-quarter 2015.
“While the most recent quarterly results were challenged by the mortgage banking segment, both from the seasonal low point in origination volumes and the added financial market disruption stemming from the unexpected and sustained increase in interest rates, 2016 was a year of significant progress toward our goal of becoming a significant west coast regional bank,” HomeStreet Chairman, President and Chief Executive Officer Mark K. Mason said in the report.
Residential loan originations totaled $2.515 billion in the three months ended Dec. 31, 2016.
Mortgage production was little changed from $2.648 billion three months earlier but was solidly higher than $1.649 billion during the final-three months of 2015.
“For the fourth quarter of 2016, HomeStreet was the number one originator by volume of purchase mortgages in the three state Pacific Northwest region and Puget Sound region, based on the combined originations of HomeStreet and loans originated through an affiliated business arrangement with WMS Series LLC,” the report stated.
Full-year originations came to $8.997 billion,
more than the $7.212 billion closed during all of 2015.
Rate-lock commitments tumbled to $1.8 billion from $2.7 billion, pointing to a decline in first-quarter 2017 originations.
HomeStreet serviced $19.488 billion for others as of the most-recent date. The servicing portfolio
expanded from $18.199 billion as of Sept. 30, 2016, and $15.348 billion as of Dec. 31, 2015. The latest number included $18.932 billion in U.S. government and agency loans.
The fourth-quarter 2016 ratio of mortgage servicing rights carrying value to related loans was 1.16 percent. The weighted-average servicing fee was 0.28 percent.
Residential assets on HomeStreet’s balance sheet were trimmed to $1.444 billion from $1.525 billion and not much different than $1.460 billion as of year-end 2015. The latest total was comprised of $1.084 billion in single-family loans and $0.360 billion in home-equity loans and other.
In its commercial real estate business, HomeStreet originated $0.095 billion in multifamily loans, more than doubling the $0.045 billion closed in the third quarter and well above the $0.053 billion closed in the fourth-quarter 2015. Full-year multifamily lending came to $0.326 billion, more than $0.205 billion in 2015.
As of the end of last year, there were $1.108 billion in multifamily loans being serviced. The total rose from $1.055 billion at the end of the prior period and $0.924 billion at the end of the prior year.
Commercial real estate loans owned by HomeStreet totaled
$2.182 billion, more than $2.034 billion three months previous and $$1.610 billion one year previous. The most-recent balance consisted of $0.872 billion in commercial mortgages, $0.674 billion in multifamily loans and $0.636 billion in construction-and-development loans.
Mortgage staffing concluded last year at 1,554 full-time equivalent employees. Headcount climbed from 1,483 people at the end of September and 1,311 at the close of 2015.
Across then entire organization, staffing was 2,552 full-time equivalent employees, more than 2,431 three months earlier and 2,139 twelve months earlier.
The report said the bank opened 13 home-loan centers, three commercial lending centers and six retail deposit branches.
HomeStreet completed the acquisition of Orange County Business Bank.
