U.S. Bancorp closed more residential loans than during any other quarter in its history. In addition, residential and commercial real estate delinquency was lower.
The second-quarter earnings report released Wednesday indicated that mortgage production was $21.667 billion.
Business improved from $19.168 billion in the first quarter. Volume skyrocketed compared to the second-quarter 2011 — when originations amounted to only $8.070 billion.
“Our investment in mortgage banking over the past few years was very well-timed, as we posted both record origination volume and revenue in the second quarter,” U.S. Bancorp Chairman, President and Chief Executive Officer Richard K. Davis said in the report.
Second-quarter subprime mortgage originations through the consumer finance division were $3 million, the same as the previous period and up from $2 million in the second quarter of last year.
The third-party mortgage servicing portfolio finished June at $207.427 billion, growing from $201.171 billion three months earlier and $184.858 billion a year earlier.
Company-owned residential mortgages grew to $39.920 billion from $38.441 billion as of the end of March. Mortgage holdings were $33.110 billion as of June 30, 2011. Last month’s total reflected $30.463 billion in home loans and $9,457 billion in first-lien home-equity loans.
Residential loan delinquency of at least 30 days, including nonperforming loans, declined to 3.31 percent from the first-quarter rate of 3.52 percent. The home-loan late payment rate was 4.27 percent a year previous.
Another $17.476 billion in second-mortgages and HELs were owned, less than junior lien holdings of $17.697 billion at the end of March and $18.597 billion a year prior.
HELÂ delinquency worsened to 1.92 percent from 1.73 percent in the prior period and 1.65 percent a year prior. All of the deterioration was with the rate of nonperforming loans — which shot up to 0.91 percent from just 0.23 percent at the end of March.
But U.S. Bancorp explained that it began including “junior lien loans and lines greater than 120 days past due, as well as junior lien loans and lines behind a first lien greater than 180 days past due or in non-accrual status, as nonperforming loans” beginning in the second quarter.
Commercial real estate loans on the balance sheet inched up to $36.557 billion from $36.102 billion at the end of the first quarter. A year earlier, CRE assets stood at $35.490 billion. Construction-and-development loans accounted for $5.827 billion of the most-recent total.
Commercial mortgage delinquency of at least 30 days, including nonperforming loans, fell to 2.16 percent from 2.59 percent and was much better than 4.30 percent at the same point in 2011.
U.S. Bancorp repurchased $58 million in mortgages during the latest three-month period, more than the $55 million repurchased in the prior quarter but less than $72 million a year prior.
The company realized $31 million in losses on repurchases, leaving its representation and warranties reserve at $216 million.
Income for all of U.S. Bancorp before taxes was $2.0 billion, up from $1.9 billion in the first quarter. The Minneapolis-based firm earned $1.7 billion in the second-quarter 2011.
The company operated 3,080 branches as of June 30, the same number as the prior quarter.
