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Regions Bank’s Home Lending, Delinquency Improve

In Regions Financial Corp.’s mortgage business, earnings were lower and the servicing portfolio diminished. New originations and delinquency improved, however.

Its second-quarter earnings report revealed income from continuing operations before income taxes of $467 million during the three months ended mid-year.

Earnings at the Birmingham, Alabama-based bank-holding company rose from $449 million one year prior. But results came up short versus $542 million in the first three months of 2018.

The latest period’s mortgage income was $37 million — including $23 million from production and sales, $23 million from servicing and $9 million in losses on MSRs. The total retreated from $40 million in the second-quarter 2017 and was also down from $38 million in the first quarter of this year.

During the three months ended mid-year, Regions originated $1.428 billion. Business ascended from $1.096 billion the preceding quarter and was about even with the $1.447 billion in production during the same quarter in 2017.

So far this year,
$2.524 billion in mortgages have been closed.

Second-quarter 2018 refinance share was 17.4 percent, decreasing from 25.5 percent three months earlier.

Regions serviced $31.140 billion in residential loans for third parties. The servicing portfolio was trimmed from $31.641 billion the prior period and $33.055 billion a year prior.

The weighted-average servicing fee was 27.5 basis points.

On July 31, after the second quarter closed out, Regions says it acquired mortgage-servicing rights on $3.4 billion in home loans.

Residential assets ended the first half at $23.790 billion — including $14.111 billion in first liens, $6.165 billion in home-equity lines of credit and $3.514 billion in home-equity loans. Residential holdings were $23.808 billion at the end of March and $24.184 billion at the same point last year.

Mortgage delinquency of at least 30 days improved to 1.06 percent from 1.18 percent and was much lower than 1.38 percent on the same date in 2017.

Home-equity delinquency also declined, to 1.11 percent from 1.18 percent but worsened from 1.01 percent on June 30, 2017.

Regions additionally serviced $3.0 billion in DUS commercial mortgages.

Commercial real estate assets totaled $12.071 billion and were comprised of $9.888 billion in commercial mortgages and $2.183 billion in construction loans.

CRE holdings were $11.937 billion the previous quarter and $13.122 billion a year previous.

Owner-occupied commercial mortgage delinquency
plunged to 0.29 percent from 0.47 percent and was 21 basis points better than 12 months earlier.

On investor commercial mortgages, delinquency jumped to 0.14 percent from 0.02 percent but was lower than 0.42 percent in the year-earlier period.

Company-wide staffing ended the first half at 20,326 people. The bank reduced its headcount from 20,666 full-time equivalent employees at the end of the first quarter and 21,412 people
on the same date last year.

June ended with 1,476 branches, three more than in the preceding period.

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