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5th 3rd Mortgage Revenues Sink, Originations Drop

As quarterly home-lending volume declined at Fifth Third Bancorp, so did mortgage revenues and company-wide headcount. However, residential servicing and commercial real estate assets grew.

Cincinnati-based Fifth Third disclosed in its third-quarter earnings report that it generated income before income taxes totaling $0.512 billion during the period.

Earnings at the bank-holding company plummeted from $1.489 billion
during the same three months last year. Income also receded from the preceding three-month period, when it was $0.693 billion.

Mortgage banking net revenues tumbled to $49 million from $63 million in the third quarter of last year. Revenues eased from $53 million in the second quarter of this year. Most recently, origination fees and gains on loan sales accounted for $25 million, gross servicing fees made up $56 million, and net mortgage-servicing rights valuation was a $32 million loss.

With $1.85 billion in residential loan originations, business at the financial institution was down from $2.11 billion both in the previous quarter and in the same quarter during 2017. Year-to-date production amounted to $5.52 billion.

Fifth Third serviced $63.996 billion in residential loans for third parties as of the end of last month, more than $62.247 billion as of June 30 and $60.783 billion as of Sept. 30, 2017.

The report indicated a $3 billion mortgage servicing portfolio was acquired in the third quarter that will be on-boarded in the fourth quarter. Since the second-quarter 2017, Fifth Third said it has added $17 billion in servicing.

Residential assets were trimmed to $22.070 billion from $22.239 billion as of mid-year 2018 and $22.731 billion as of the same date last year. Last month’s balance consisted of $15.585 billion in mortgages and $6.485 billion in home-equity loans.

Commercial real estate assets grew to $11.587 billion from $11.312 billion the prior quarter and $11.515 billion a year prior.
The latest CRE holdings were comprised of $6.695 billion in commercial mortgages and $4.892 billion in CRE construction loans.

As of Sept. 30, there were 17,512 full-time equivalent employees on the payroll of Fifth Third. Staffing was reduced by 651 positions from three months earlier and was off 285 employees from a year earlier.

Branch count concluded last month at 1,152 full-service banking centers, six fewer than at the end of the first half.

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