Delinquency and originations improved from the third quarter at SunTrust Banks Inc., but repurchases and HARP 2.0 put a dent in earnings.
SunTrust Mortgage Inc. and its affiliated siblings originated $6.826 billion in the fourth quarter, according to earnings data released Friday.
SunTrust’s own retail originators generated 55 percent of fourth-quarter business, while the wholesale channel funded 21 percent and correspondents were responsible for 24 percent.
Nearly three quarters of the latest volume was refinance activity.
During all of 2011, residential originations were $23.067 billion, falling from the prior year’s $29.257 billion.
The mortgage servicing portfolio was $157.800 billion as of the end of last month, falling from $161.0 billion three months earlier and $167.236 billion a year earlier.
The Dec. 31, 2011, total included $124.050 in mortgages serviced for others.
The Atlanta-based bank owned $46.7 billion in residential assets, more than $45.0 billion owned as of Sept. 30 and $46.5 billion owned at the end of 2010. Last month’s total included $6.7 billion in guaranteed loans, $23.2 billion in non-guaranteed loans, $15.8 billion in home-equity loans and $1.0 billion in residential construction loans.
Residential delinquency of between 30 and 89 days fell to 1.38 percent from the third quarter’s 1.45 percent and was much improved from 1.74 percent in the last three months of 2010.
Commercial real estate assets were reduced to $6.3 billion from $6.7 billion in the previous quarter and $8.7 billion in the same quarter during the previous year. “Commercial real estate” accounted for $5.1 billion, and commercial construction represented $1.2 billion.
Commercial real estate delinquency was unchanged from the third quarter at 0.17 percent but has fallen significantly from 0.43 percent in the fourth-quarter 2010. Commercial construction delinquency, however, surged to 0.60 percent from the prior quarter’s 0.11 percent and 0.42 percent in the same quarter during the prior year.
Mortgage operations had a $40 million loss. Earnings for the business swung from a $112 million third-quarter profit. In the final quarter of 2010, the mortgage unit contributed profits of $109 million.
Fourth-quarter 2011 mortgage earnings included a $62 million loss from mortgage production, swinging from a $54 million third-quarter profit.
“The $116 million sequential quarter decrease was predominantly driven by a $98 million increase in the mortgage repurchase provision, due to higher agency-related repurchase requests and an increase in the mortgage repurchase reserve,” the report stated. “As of Dec. 31, 2011, reserves for mortgage repurchases totaled $320 million, an increase of $38 million from the prior quarter.”
Servicing income fell to $22 million from $58 million. SunTrust attributed the decline in this category to an increase in prepayment assumptions now expected as a result of the Home Affordable Refinance Program updates.
Earnings at the parent company fell to $155 million from the third quarter’s $215 million and the fourth-quarter 2010’s $185 million.
As of the end of 2011, SunTrust had 29,182 full-time-equivalent employees, trimming its staff from 29,483 three months earlier. But headcount has grown since the end of 2010, when the staff size was 29,056.
SunTrust operated 1,659 banking offices as of Dec. 31, 2011, a few less than 1,668 at the end of the previous year.