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Mixed Performance at SunTrust

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SunTrust Banks Inc. managed a quarterly gain in residential originations, but annual activity dropped 42 percent. Earnings from the mortgage unit were better, and delinquency was mixed.

With $8.7 billion in fourth-quarter production, business was a little better than $8.0 billion reported for the prior three months. The 9-percent improvement pales in comparison, however, to the roughly one-quarter increases reported by JPMorgan Chase & Co. and Wells Fargo & Co. Even Bank of America Corp., Citigroup Inc. and US Bancorp have each reported at least 17-percent gains.

A year earlier, Atlanta-based SunTrust reportedly closed $8.4 billion.

Retail loan officers pushed originations to $4.8 billion from the third quarter’s $4.0 billion, while correspondent closings were unchanged at $2.1 billion and wholesale activity retreated $0.1 billion to $1.8 billion.

Refinance share was 78 percent in the fourth quarter and 64 percent for all of 2010.

The lender will likely see lower originations during the first three months of 2011 based on applications — which fell to $10.8 billion from the third quarter’s $16.4 billion.

Full-year production tumbled to $29.3 billion from 2009 originations of $50.1 billion.

The mortgage servicing portfolio shrank to $167.2 billion from $176.6 billion and was additionally down from $178.9 billion at the end of 2009. Included in last month’s total were $134.1 billion in mortgages serviced for third parties, down from $146.7 billion a year earlier.

On SunTrust’s balance sheet were $31.6 billion in home loans, reduced from $32.0 billion as of Sept. 30 but more than $30.8 billion a year earlier. Delinquency of between 30 and 89 days on those loans was 1.80 percent, higher than 1.74 percent as of Sept. 30.

Home-equity line-of-credit holdings eased to $15.0 billion from $15.3 billion and were also less than $16.0 billion at the end of 2009. HELOC delinquency fell to 1.23 percent from 1.36 percent at the end of the third quarter.

Construction holdings were $3.8 billion, sinking from $6.6 billion on Dec. 31, 2009. Compared to the third-quarter’s rate, construction delinquency was down 24 basis points to 0.68 percent.

Commercial mortgage assets fell to $14.5 billion from the third quarter’s $14.8 billion and from the fourth-quarter 2009’s $15.1 billion. Commercial real estate delinquency declined from 0.62 percent on Sept. 30 to 0.39 percent on Dec. 31.

Mortgage repurchase reserves totaled $265 million as of year-end 2010 compared to $200 million at the end of the previous year.

Mortgage earnings were $109 million in the fourth quarter, swinging from a $170 million loss during the prior three-month period. The segment also did better than a year earlier, when the total was a $21 million loss.

Mortgage production income fell to $41 million from the third quarter’s $133 million, and mortgage servicing income was $68 million, worse than $132 million.

Net income at the holding company climbed to $185 million from the third quarter’s $153 million and swung from a $248 million loss in the last quarter of 2009.

At the close of 2010, the company-wide staff size climbed to 29,056 from 28,599 at the close of the third quarter. Headcount closed out the prior year at 28,001.

SunTrust operated 1,668 full-service banking offices, fewer than 1,683 at the end of 2009.

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