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Delinquency Better as US Bank Originations Worse

U.S. Bancorp managed to bring down residential delinquency levels but was unable to overcome an industry-wide slump in mortgage production.

Home loan production was $9.251 billion during the three months ended March 31, first-quarter earnings data indicate.

Business slowed from $12.658 billion in the prior period and $26.853 billion in the year-earlier period.

Mortgage production was last this low in the first-quarter 2010, when just $9.0 billion was originated.

The originated-for-sale portion of the most-recent production was $6.245 billion.

Another $2.167 billion in residential loans were originated for investment through branches, and an additional $0.839 billion in home-equity loans were closed through branches.

Second-quarter mortgage originations are likely to hold based on first-quarter mortgage application volume of $10.1 billion versus $10.6 billion in the fourth quarter.

The Minneapolis-based bank said it serviced $227.186 billion in mortgages for others. Its third-party servicing portfolio grew from $226.842 billion at the end of 2013 and $220.321 billion at the same point in 2013.

Among the assets on its balance sheet were $51.708 billion in residential mortgages. This asset class increased from $51.156 billion at the end of the previous quarter and $45.984 billion at the end of the same quarter last year.

Residential mortgages as of last month included $38.316 billion in residential loans and $13.392 billion in first-lien home-equity loans.

Delinquency on its residential loans of at least 30 days, including nonperforming loans, was 2.73 percent, improving from the prior quarter’s 2.86 percent. At the same point last year, delinquency was 2.71 percent.

Another $15.261 billion in home-equity loans and second mortgages were owned by U.S. Bank, off from $15.442 billion in December and down from $16.131 billion in March 2013.

HEL delinquency fell to 1.99 percent from 2.06 percent and was 2.22 percent one year prior.

Commercial real estate loans owned by U.S. Bank expanded to $40.131 billion from $39.885 billion and were $37.400 billion as of March 31, 2013.

The latest CRE loan total reflected $31.878 billion in commercial mortgages and $8.253 billion in construction-and-development loans.

CRE delinquency retreated to 0.87 percent from 1.07 percent in the previous report and 1.60 percent in the same three-month period in 2013.

After making $36 million in repurchase payments in the first quarter, there were $44 million in outstanding repurchase and make-whole requests as of March 31, 2014, sinking from $89 million three months prior.

U.S. Bancorp earned $2.0 billion before taxes, edging up from the fourth quarter’s $1.9 billion and mostly unchanged from the first-quarter 2013.

Staffing across all of U.S. Bancorp closed out the first quarter at 67,000 employees.

The total number of branches — including traditional branches, in-store branches, onsite branches and retirement centers – increased by two from the end of last year to 3,083.

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