A sharp decline in quarterly retail originations at SunTrust Banks Inc. drove overall home lending lower as mortgage earnings sank. But the size of the financial institution’s mortgage servicing portfolio has increased over the past year.
Atlanta-based SunTrust revealed in its third-quarter earnings report that it generated $849 million in income before the provision for income taxes.
Results improved from the same three-month period in 2017, when pre-tax earnings were $765 million. But the bank-holding company fell short of its prior-quarter income of $895 million.
Income from its mortgage banking business tumbled to $83 million from $107 million in the third quarter 2017. But there was no quarter-over-quarter change in mortgage earnings. Mortgage production income accounted for $40 million, and mortgage servicing income made up $43 million.
Residential loan originations came to $6.141 billion during the three months ended Sept. 30. Business dipped from $6.259 billion three months earlier and $6.153 billion one year earlier.
Production most recently consisted of $1.860 billion in retail lending, plunging from $2.295 billion in the second quarter. But correspondent acquisitions climbed to $4.281 billion from $3.964 billion. Refinance share was a fifth, up from 19 percent in the second quarter.
For the first nine months of this year, SunTrust closed $17.544 billion in home loans.
Home lending in the final three months of this year likely slowed based on new loan applications, which declined to $7.6 billion in the third quarter from $8.3 billion three months previous.
SunTrust serviced $170.480 billion in residential loans, including $139.955 billion in third-party servicing. The portfolio was roughly the same as the prior quarter and has grown from $165.273 billion a year prior.
The ratio of net carrying value of residential mortgage servicing rights to the aggregate unpaid principal balance of the loans that are serviced of third parties was 1.473 percent.
SunTrust’s balance sheet reflected $38.308 billion in residential holdings including $0.452 billion in guaranteed mortgages, $28.187 billion in non-guaranteed mortgages and $9.669 billion in home-equity assets. Total residential assets were not much different than $38.403 billion on the same date last year.
Delinquency of between 30 and 89 days was 0.26 percent on non-guaranteed mortgages. The rate jumped from 0.19 percent the prior period but was a basis point below the same date last year.
Home-equity delinquency jumped 12 basis point to 0.72 percent but was still less than 0.85 percent twelve months prior.
Commercial real estate assets have grown to $9.952 billion from an upwardly revised $9.529 billion as of Sept. 30, 2017, and included $6.618 billion
in commercial mortgages, $3.137 billion in commercial construction loans and $0.197 billion in residential construction loans. Mortgage Daily previously didn’t include residential construction loans in CRE assets.
Commercial mortgage delinquency sank 20 BPS to 0.03 percent but was a basis point higher than as of Sept. 30, 2017.
When last month was over, there were 22,839 people on the payroll of SunTrust, fewer than 23,199 full-time employees as of mid-year 2018. Headcount was 24,215 as of Sept. 30, 2017.
Full-service banking offices numbered 1,217, five fewer than at the close of the second quarter.