Quarterly home-lending volume moved up at U.S. Bancorp and appears to be headed even higher. As corporate income rose, mortgage earnings were lower. The mortgage servicing portfolio contracted.
The Minneapolis-based financial institution’s second-quarter earnings report reflected $2.2 billion in income before taxes.
Earnings were up from $2.1 billion in the second quarter of last year. Results also showed an improvement from the $2.1 billion earned during the first quarter of this year.
Mortgage banking revenues during the most-recent period came to $191 million, diminished from $212 million in the second-quarter 2017 but up from $184 million in the first quarter of this year.
The latest results included $81 million from originations, $185 million from servicing, $24 million from mortgage-servicing rights fair value changes and a $99 million loss on other MSR fair value changes.
Residential loan originations amounted to $16.730 billion during the three months ended June 30, growing from $14.529 billion the prior quarter and $16.525 billion a year prior.
Second-quarter 2018 volume consisted of $10.983 billion originated through the bank, $3.735 billion in residential originations through the branch system, and $2.012 billion in home-equity transactions and second mortgages.
Overall first-half mortgage production came to $31.259 billion.
It appears that mortgage production has continued to strengthen in the current quarter based on application volume, which climbed to $16.1 billion in the second quarter from $14.8 billion in the first quarter.
U.S. Bank serviced $234.750 billion in mortgages for third parties, off slightly from $234.975 billion as of March 31 but up from $232.423 billion as of mid-2017.
The weighted-average servicing fee was 34 basis points, while the MSR multiple was 3.49 times.
The report indicated that single-family investments grew to $77.392 billion from $76.507 billion and was also greater than $75.106 billion at the same point last year. Most recently, the total was made up of $48.682 billion in mortgages, $12.627 billion in first-lien home-equity assets, and $16.083 billion in home-equity assets and second mortgages.
On the mortgages, delinquency of at least 30 days, including non-performing loans, was 1.10 percent at the end of last month. The rate improved 7 basis points from three months earlier and was down 22 BPS from a year earlier.
Delinquency on the home-equity assets improved to 1.49 percent from 1.52 percent but worsened from 1.32 percent at the same point last year.
Commercial real estate holdings finished last month at $39.399 billion including $28.187 billion in commercial mortgages and $11.212 in construction-and-development loans. CRE assets were trimmed from $40.140 billion three months earlier and $41.908 billion one year earlier.
CRE delinquency fell to 0.38 percent from 0.40 percent but was still 2 BPS worse than a year previous.
U.S. Bank finished the first half of this year with 3,045 branches, nine fewer than at the beginning of the period.
