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Regions Production Slows

Regions Financial Corp. finished the year with a drop in quarterly mortgage originations, though annual activity was stronger. Residential and home-equity delinquency were both higher, as were late payments on commercial mortgages.

The Birmingham, Ala.-based financial institution reported that residential loan originations were $2.1 billion during the three months ended Dec. 31, 2012.

Business slipped from the third quarter, when mortgage production was $2.2 billion. But volume was stronger than in the final quarter of 2011, when mortgage fundings amounted to $1.8 billion.

During the 12 months ended Dec. 31, 2012, Regions originated $8.0 billion, better than the $6.3 billion closed during all of 2011.

Loans originated through the expanded Home Affordable Refinance Program accounted for $1.6 billion of annual volume.

“As of the end of the quarter, analysis indicated that less than approximately 20 percent of HARP-eligible loans have refinanced,” the report stated. “Throughout 2012 approximately 50 percent of HARP II applications were for homeowners whose mortgage was not originally serviced by Regions.”

While Regions didn’t report its fourth-quarter mortgage servicing portfolio, it serviced $26.005 billion as of Sept. 30, 2012, according to a previous filing with the Securities and Exchange Commission.

Residential first mortgages owned by Regions were trimmed to $12.963 billion from $13.225 billion at the end of the third quarter. A year prior, residential assets were $13.784 billion. Delinquency of at least 30 days on this asset category was unchanged from the third quarter at 4.17 percent but has risen from 4.14 percent at the end of 2011.

First-lien home-equity holdings inched up to $5.622 billion from $5.605 billion but were down from $5.884 billion at the end of 2011. Second-lien HELs fell to $6.178 billion from $6.420 billion and were $7.137 billion as of Dec. 31, 2011. HEL delinquency climbed to 2.04 percent from the third-quarter rate of 1.87 percent but has fallen from 2.23 percent at the end of the previous year.

Commercial real estate loans on the balance sheet fell to $16.903 billion from $18.191 billion as of Sept. 30. A year earlier, CRE holdings were $20.868 billion. The most recent number included $10.095 billion in owner-occupied loans, and $6.808 billion in non-owner occupied.

Delinquency on just the owner-occupied portion of the CRE assets jumped to 0.82 percent from 0.74 percent but was lower than 0.71 percent a year prior. On the investor portfolio, delinquency rose to 1.34 percent from 1.11 percent and also from 0.91 percent a year earlier.

Another $1.216 billion in CRE construction loans were owned, a little more than $1.139 billion owned as of three months earlier and a little less than $1.362 owned at the same point in 2011. Investor loans accounted for $0.914 billion of the year-end 2012 total.

Mortgage income fell to $90 million from $106 million. In the final three months of 2011, mortgage income was $57 million.

The parent company earned $415 million before income taxes, not as much as the $448 million earned in the third quarter but far better than the $63 million loss in the fourth-quarter 2011.

As of the end of last month, 23,427 people were employed by Regions Financial, a bigger staff than the 23,361 employees as of Sept. 30 and revised headcount of 23,707 at the end of 2011.

Regions operated 1,711 branch outlets, five fewer than at the end of September.

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