SunTrust Banks Inc.’s mortgage production and income took a hit — declining from the prior quarter. But the servicing portfolio grew.
SunTrust originated $6.175 billion in new residential loans from July 1 to Sept. 30, according to the company’s third-quarter earnings data.
Mortgage lending fell short of the $6.491 billion funded in the second quarter.
The most-recent activity managed, however, to increase over the same three-month period the prior year, when $4.528 billion in home loans were closed.
Altogether, production in the first nine months of this year came to $17.776 billion.
Third-quarter 2015 refinance share slimmed to 38 percent from 47 percent in the prior three-month period.
Correspondent acquisitions comprised 59 percent of third-quarter 2015 activity, while retail originations made up the remaining 41 percent.
New mortgage business could slip in the fourth quarter based on applications. The third-quarter total came to $7.7 billion compared to $8.8 billion in the second quarter.
The Sept. 30, 2015, residential loan servicing portfolio expanded to $149.221 billion from $145.491 billion as of June 30 and $135.804 billion at the same point last year.
The most-recent servicing portfolio included $122.012 billion in loans serviced for third-parties.
At $38.394 billion as of the end of last month, the residential investment portfolio was a little thicker than the $38.335 billion in assets as of three months prior. Residential loan holdings were a little thinner, however, than the $38.758 billion as of Sept. 30, 2014.
Residential assets on the latest balance sheet included $24.351 billion in non-guaranteed home loans, $13.416 billion in home-equity loans and $0.627 billion in government-guaranteed loans.
Delinquency of between 30 and 89 days on non-guaranteed mortgage investment loans increased five basis points from the previous financial period to 0.43 percent at the end of the third-quarter 2015. The rate was two BPS better, though, in a year-over-year comparison.
Delinquency on home-equity products also grew by 5 BPS to 0.61 percent as of Sept. 30, 2105. HEL delinquency was still 9 BPS better than the Sept 30, 2014, calculation.
At the end of September, the Atlanta-based lender accounted for $0.394 billion in residential construction assets.
The financial institution’s balance sheet also claimed $7.931 billion in commercial real estate assets, an increase over $7.588 as of June 30, 2015, but down from $7.954 billion as of the same point last year.
The current CRE balance accounted for $6.168 in commercial mortgages and $1.763 billion in commercial construction loans.
At the end of September 2015, delinquency on commercial mortgages was lowered one basis point from the prior period to 0.03 percent. Compared to Sept. 30, 2014, delinquency on these loans was five BPS lower.
In total, SunTrust’s mortgage banking earnings dropped to $98 million from $106 million in the second quarter. On a year-over-year basis, however, income was $9 million higher.
“The sequential quarter decrease was primarily due to a decline in closed loan production volume and lower gain-on-sale margins,” the lender’s earnings announcement said.
Third-quarter 2015 mortgage banking income included servicing income at $40 million and mortgage production earnings at $58 million.
Despite lower mortgage banking income, the company managed to increase its holding-company level income. Before provision for income taxes, earnings climbed past $0.7 billion from less than $0.7 billion earned in the second quarter and $0.6 billion earned in the third-quarter of last year.
SunTrust accounted for 24,124 full-time equivalent employees as of the last day of last month. Headcount was down from 24,237 at the end of June and 25,074 at the same point in September 2014.
The number of full-service banking offices dipped from 1,430 at the June-end count to 1,406.
