U.S. Bancorp increased home lending activity and expanded the size of its residential investment portfolio. But mortgage earnings deteriorated, while servicing was reduced.
Income before income taxes during the three months ended Sept. 30 at the Minneapolis-based bank-holding company was $2.3 billion, according to its third-quarter earnings report.
Results at the parent of U.S. Bank, N.A., inched up from $2.2 billion earned in the same quarter last year and also in the preceding three-month period.
Mortgage banking revenue fell to $174 million from $213 million in the third-quarter 2017 and was also worse than $191 million in the second quarter of this year. Revenues were made up of $84 million in origination and sales, $182 million in servicing and $92 million in charges tied to the fair value of mortgage-servicing rights.
The bank-holding company reported $17.334 billion in company-wide residential loan originations during the third quarter. The total was comprised of $11.272 billion in bank-originated mortgages, $4.326 billion in branch-originated mortgages for investment, and $1.736 billion in branch-originated home-equity loans for the portfolio.
Mortgage production was elevated versus $16.730 billion in the previous quarter and $17.169 billion a year previous.
Originations for the first three quarters of this year came to $48.593 billion.
Fourth-quarter production will likely come in around the same level as the latest period based on application volume, which decreased to $15.3 billion in the third quarter from $16.1 billion in the second quarter.
U.S. Bank serviced $232.645 billion in mortgages for third parties, less than $234.750 billion as of mid-2018 and $233.128 billion as of Sept. 30, 2017.
The residential investment portfolio expanded to $78.870 billion from $77.392 billion and has also grown from $75.625 billion on the same date last year.
Residential holdings consisted of $50.614 billion in mortgages, $12.290 billion in home-equity first liens and $15.966 billion in home-equity and second-lien loans.
Mortgage delinquency of at least 30 days, including non-performing loans, concluded last month at 0.96 percent. The rate tumbled 14 basis points from three months earlier and 28 BPS from one year earlier.
HEL delinquency climbed, however, 6 BPS to 1.55 percent and has deteriorated 18 BPS versus the same period last year.
Commercial real estate holdings grew to $39.966 billion from $39.399 billion but have been reduced from $41.430 billion as of Sept. 30 of last year. CRE assets were comprised of $28.633 billion in commercial mortgages and $11.333 billion in construction-and-development loans.
Branch count was cut to 3,029 from 3,045 as of mid-year 2018.
