HomeStreet Inc.’s quarter-over-quarter decline in residential lending was at the high end of the industry. Mortgage servicing, however, grew.
The Seattle-based financial institution earned $13 million before income taxes during the first-three months of this year, better than $10 million a year earlier.
Those metrics, as well as other operational and financial data, were revealed in HomeStreet’s earnings report for the first-quarter 2017.
Earnings soared from just $3 million in the final-three months of last year.
Mortgage banking had an $0.6 million loss before taxes, down from a $15 million loss in the fourth-quarter 2016 and swinging from a $7 million profit in the first-quarter 2016.
“The mortgage banking segment recovered from the sharp rise in interest rates and market dislocation experienced in the fourth quarter of 2016,” HomeStreet Chairman, President, and Chief Executive Officer Mark K. Mason said in the report.
Mortgage originations sank to $1.621 billion from $2.515 billion in the last three months of last year. The 36 percent decline was among the highest reported by its peers so far this earnings season. But a slight gain was made in closings compared to the $1.573 billion funded in the first-three months of last year.
“While the first quarter is typically a seasonally slow origination quarter, our origination business was also negatively impacted by the multi-year low levels of housing inventory in our markets,” Mason explained in the report.
Based on single-family interest rate lock commitments, which fell to $1.6 billion in the first quarter of this year from $1.8 billion in the final quarter of last year, second-quarter 2017 business might be a little weaker.
Another $0.058 billion in multifamily DUS loans were originated in the first-quarter 2017, less than $0.095 billion the prior month but more than $0.039 billion a year prior.
HomeStreet serviced $20.303 billion in single-family loans. The servicing portfolio expanded from $19.488 billion the prior period and $15.981 billion one year prior.
The ratio of the carrying value of mortgage servicing rights to the loan balances was unchanged at 116 basis points. The MSR servicing fee multiple was 4.11 percent, and the weighted-average servicing fee was 28 BPS.
The bank owned $1.481 billion in residential assets. The portfolio grew from $1.444 billion at the close of the fourth-quarter 2016. But the investments were reduced from $1.507 billion at the end of the first-quarter 2016. Most recently, single-family loans made up $1.100 billion of the holdings, and home-equity and other loans made up the other $0.381 billion.
HomeStreet serviced $1.140 billion in multifamily DUS loans as of March 31, 2017, more than $1.108 billion at the end of last year and $0.946 billion at the same point last year.
Commercial real estate loan holdings expanded to $2.282 billion at the end of March 2017
from $2.182 billion at the close of 2016 and $1.836 billion as of the same date in 2016. Last month’s total consisted of $0.923 billion in commercial mortgages, $0.748 billion in multifamily holdings and $0.611 billion in construction-and-land-development loans.
At the end of last month, there were 2,581 people on the payroll. Staffing was up from 2,552 as of year-end 2016 and 2,264 as of the the same point in 2016.
