Home lending strengthened on a quarter-over-quarter basis at Flagstar Bancorp Inc., though the company reduced its mortgage assets, servicing and staffing.
The Troy, Mich.-based firm said in its second-quarter earnings report that mortgage originations totaled $5.951 billion.
Business picked up from the first quarter, when home loan production was $4.867 billion.
First-half originations amounted to $10.817 billion.
But residential lending activity tumbled versus the same three-month period last year, when Flagstar closed $10.882 billion. Year-over-year declines have been an overall industry trend.
Flagstar said its total residential servicing portfolio was 154,023 loans for $29.411 billion as of the end of June. The portfolio was reduced from 174,411 units for $33.480 billion at the close of the first quarter and slashed from 375,476 mortgages for $73.710 billion as of June 30, 2013.
The third-party portion of the servicing portfolio was reduced to 127,409 loans for $25.342 billion from 146,339 mortgages for $28.999 billion as of March 31. The portfolio has been slashed compared to 342,971 units totaling $68.321 billion as of June 30, 2013.
Flagstar also maintained a $43.103 billion subservicing portfolio as of the end of last month.
The financial institution’s investment portfolio included $2.779 billion in residential assets, slipping from $2.787 billion as of the end of March and falling from $3.130 billion as of mid-year 2013.
The June 30, 2014, total included $2.353 billion in first mortgages, $0.158 billion in second mortgages and $0.269 billion in home-equity lines of credit.
Warehouse lending assets jumped to $0.683 billion from $0.409 billion and were even up from $0.676 billion a year earlier.
Commercial real estate loans grew to $0.523 billion from $0.513 billion three months earlier and $0.477 billion 12 months earlier.
At Flagstar Bancorp, income before income taxes swung to a $37 million profit from a $118 million loss but fell short of the $61 million earned in the second-quarter 2014.
“We continue to focus on controlling our non-interest expense in the current mortgage environment and are managing expenses in order to be profitable in any origination environment,” Flagstar President and Chief Executive Officer Sandro DiNello said in the report. “While we are pleased with these results, this quarter brought two changes that impacted pretax income by approximately $20 million, albeit favorably.”
As of the end of last month, 260 loan officers and account executives were employed by Flagstar, 55 fewer than at the end of March and 81 less than as of a year earlier.
Total headcount across all businesses was 2,741 full-time employees. Staffing subsided from 2,798 people in the first quarter and has plunged from 3,759 in the second-quarter 2013.
The number of loan origination centers was 32, one less than in the prior period and eight fewer than in the year-earlier period.
Bank branch count was unchanged from the first quarter at 106.
Stephen Figliuolo joined Flagstar Bank as chief risk officer.
