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SunTrust Performance Improves

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SunTrust Banks Inc. saw originations rise, delinquency decline and earnings improve. Repurchases, however, are a growing problem.

Second-quarter home-loan originations were $7.0 billion, according to earnings data reported today. Business improved from $5.6 billion in the previous quarter but was down substantially from $16.7 billion in the second-quarter 2009.

The most recent quarter included $3.2 billion in refinances and $3.8 billion in purchase transactions. The year-over-year decline was the result of lower refinance activity — which was down nearly three-quarters.

Retail originations accounted for $3.8 billion of second-quarter volume, wholesale represented $1.6 billion and the correspondent share was also $1.6 billion.

SunTrust is looking at improved third-quarter production based on applications, which shot up to $12.9 billion from the first quarter’s $9.9 billion.

The Atlanta-based lender’s servicing portfolio ended June at $177.8 billion, edging down from $178.0 billion at the end of March. Last month’s total included $145.8 billion in loans serviced for others.

Residential mortgage assets closed out the second quarter at $31.1 billion, rising from $30.8 billion at the end of the first quarter and declining from $32.0 billion a year prior. Home-equity line-of-credit holdings fell to $15.4 billion from $15.7 billion at the end of March and $16.3 billion 12 months before.

Residential loan delinquency of at least 30 days on improved to 3.37 percent from 3.58 percent on March 31. HELOC lates rose, however, to 3.13 percent from 3.05 percent.

In addition, SunTrust owned $5.0 billion in construction loans, less than the $5.8 billion it owned on March 31 and $8.2 billion owned on June 30, 2009. The construction loan delinquency rate fell to 2.74 percent from 3.18 percent at the end of the first quarter.

Commercial mortgage assets finished the latest period at $15.1 billion, lower than $15.3 billion at the end of the first quarter and $15.9 billion a year ago.

Delinquency of between 30 and 89 days on commercial real estate loans rose to 0.81 percent from 0.73 percent on March 31.

Mortgage production-related income improved to a $16 million loss from a $31 million first-quarter loss — though it was far worse than the $165 million profit in the second-quarter 2009. Mortgage repurchase losses were $148 million, worse than the previous quarter’s $128 million and the second-quarter 2009’s $62 million. Repurchase reserves, meanwhile, rose to $256 million from $210 million in the first quarter and $92 million a year ago.

Mortgage servicing income increased to $88 million from $71 million three months earlier. But servicing income tumbled from $140 million a year earlier.

SunTrust Banks Inc. earnings improved to $12 million from a $161 million first-quarter loss and a loss of $183 million in the fourth-quarter 2009.

Company headcount was 28,250 as of June 30, a few less people than the 28,263 employees as on March 31.

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