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SunTrust Mortgage Originations Down, Heading Lower

There was a quarterly nosedive in mortgage production at SunTrust Banks Inc., and upcoming business is likely to descend even further.

In the three months that ended on Dec. 31 last year, SunTrust closed new home loans at $4.956 billion.

The details were described in the Atlanta-based financial institution’s fourth-quarter earnings data report that was released on Friday.

Residential mortgage originations fell way behind third quarter volume amounting to $6.175 billion.

Yet, the Atlanta-based lender’s latest activity did bump up from $4.724 billion in home loans closings during the fourth-quarter 2014.

As well, full-year 2015 residential lending jumped to $22.732 billion from the $16.442 billion originated in 2014.

Refinance share in the fourth-quarter 2015 grew to 48 percent from 38 percent in the preceding financial period.

By lending channel, retail originations contributed 47 percent to the most-recent activity while correspondent acquisitions accounted for the remaining 53 percent.

With fourth-quarter 2015 applications dropping to $6.7 billion from $7.7 in the prior three-month period, new mortgage business may recede in the first-quarter 2016.

The financial firm’s total residential loan servicing portfolio was trimmed to $148.232 billion as of Dec. 31, 2015 from $149.221 billion as of Sept. 30. The latest balance grew, however, from $142.116 billion as of Dec. 31 a year earlier.

Included in the most-recent servicing portfolio was $120.963 billion in loans serviced for others.

At the end of last month, the residential investment portfolio was at $38.544 billion — a slight increase from $38.394 billion at the end of September and $38.339 billion as of Dec. 31, 2014.

The latest balance included residential government-guaranteed loans at $0.629 billion, non-guaranteed loans at $24.744 billion and home-equity loans at $13.171 billion.

SunTrust also accounted for an additional $ 0.384 billion in residential construction assets.

Delinquency of between 30 to 89 days on non-guaranteed mortgage investment loans fell one basis point from the third-quarter 2015 to 0.42 percent. The delinquency rate made a four-basis-point improvement over the rate compiled at the end of the fourth-quarter 2015.

On home-equity investments, the 30- to 89-day delinquency rate rose five BPS from Sept. 30, 2015, to 0.66 percent. Still, this rate was five BPS better than at the end of 2014.

Commercial real estate assets on the balance sheet as of Dec. 31, 2015, grew to $8.190 billion from $7.931 billion at the end of September and $7.952 billion at the end of 2014.

Included in the most-current CRE asset total total were commercial mortgages at $6.236 billion and commercial construction loans at $1.954 billion.

At 0.05 percent as of Dec. 31, 2015, the 30-to-89-day delinquency rate on commercial mortgages was two BPS higher than the prior period but unchanged from the year-earlier period.

SunTrust’s fourth-quarter 2015 mortgage banking income amounted to $109 million or $11 million more than earned the third quarter. The latest total was $5 million short of earnings produced at the same point a year ago.

The most-recent mortgage banking income total included $56 million from mortgage servicing and $53 million from mortgage production.

At the holding-company level, income before provision for income taxes slipped to $672 million from $726 million earned in the third quarter. On a year-over-year basis, company earnings were better than the $522 million brought in during the fourth-quarter 2014.

SunTrust’s staff numbers were down to 24,103 at the end of December from 24,124 at the end of the third-quarter 2015. The latest headcount was also short of the 24,638 employees accounted for as of Dec. 31, 2014.

At the end of the fourth-quarter 2015, SunTrust claimed 1,401 full-service banking offices or five fewer than reported as of Sept. 30.

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