Home loan originations at SunTrust Banks Inc. climbed to the highest level in three years, while residential delinquency improved, new repurchase demands fell and mortgage production income rose. Servicing income was lower, however, and commercial mortgage delinquency was worse.
From April 1 through June 30, the Atlanta-based company closed $9.090 billion in residential loans, according to second-quarter earnings data. It was the best performance since the third-quarter 2009 — when originations amounted to $11.6 billion.
Business in the first quarter totaled $8.841 billion, while the same period in 2012 came in at $8.250 billion.
During the first six months of 2013, mortgage originations totaled $17.931 billion.
SunTrust retail originators generated $4.900 billion of the latest production, while the wholesale channel was responsible for $1.112 billion and correspondent volume was $3.078 billion.
Refinance share was two-thirds, dropping from the prior period’s 80 percent.
With $12.899 billion in new applications received during the second quarter versus first-quarter applications of $12.212 billion, business isn’t likely to be much different during the third quarter.
The total mortgage servicing portfolio declined to $140.437 billion from $142.320 billion at the end of the first quarter and $153.442 billion at the same point last year.
The third-party portion of the servicing portfolio was $109.307 billion, off from $111.973 billion at the end of March. Loans serviced for others were far higher than as of the same date in 2012, when the total was $118.887 billion.
SunTrust said it owned $3.622 billion in residential loans that are guaranteed, less than the $3.930 billion owned three months earlier and the $5.663 billion owned a year earlier.
Non-guaranteed home loan holdings rose to $23.341 billion from $23.051 billion but have retreated from $24.405 billion as of the same date last year. Delinquency of between 30 and 89 days on this portion of the portfolio fell to 0.70 percent from 0.76 percent and tumbled from 1.05 percent a year earlier.
Home-equity loans on the balance sheet were little changed at $14.682 billion versus $14.617 billion in the previous report. HEL holdings, however, have been cut from $15.281 billion as of the end of the second-quarter 2012. HEL delinquency slipped to 0.78 percent from 0.79 percent and has improved from the second quarter of last year, when it stood at 0.99 percent.
Residential construction loan assets were $0.635 billion, less than the $0.683 billion in assets as of March 31 and the $0.853 billion owned as of the same point last year. Construction delinquency worsened, rising to 1.07 percent from 1.04 percent three months earlier and 0.84 percent a year earlier.
Commercial real estate loans owned by SunTrust grew to $4.308 billion from $4.261 billion but have been reduced from $4.825 billion as of June 30, 2012. CRE Delinquency deteriorated, surging to 0.34 percent from 0.18 percent in the previous period and 0.17 percent in the same period during the previous year.
In addition, another $0.667 billion in commercial construction loans were on the books, edging up from the prior period’s $0.634 billion but tumbling from a year earlier, when the total stood at $0.959 billion. Delinquency on commercial construction was almost nonexistent at 0.01 percent. The rate was 0.03 percent in the previous period and 0.15 percent as of June 30, 2012.
Repurchase demands declined to $438 million from $491 million in the first quarter. The latest activity brought pending demands to $419 million.
Mortgage production income was lower, falling to $133 million from the first quarter’s $159 million. Still, SunTrust managed to boost income from $103 million in the same quarter last year as a result of a decline in the mortgage repurchase provision.
Mortgage servicing income sank to $1 million from $38 million three months earlier and $70 million a year earlier. Heavy refinance volume and portfolio loan sales drove the deterioration.
SunTrust Bancorp’s income before the provision for income taxes was $526 million, inching up from $509 million in the prior period. The company had a nice improvement in earnings compared to the second-quarter 2012, when income was just $368 million.
The bank-holding company closed the second quarter with 26,199 full-time equivalent employees. Staffing declined from 26,238 at the end of the first quarter and was down from 28,324 people at the same point in 2012.
SunTrust operated 1,539 full-service banking offices, trimming its branch-count from 1,574 three months earlier.
