Mortgage originations declined at HomeStreet Inc. and are likely to fall further. Although mortgage losses continued, residential servicing and assets expanded.
In its fourth-quarter 2017 earnings report, the Seattle-based financial institution disclosed $17 million in income before income taxes during the final-three months of last year.
Earnings soared from the same-three months in 2016, when income was $3 million. But results waned compared to the previous quarter, when income was $20 million.
The Tax Cuts and Jobs Act resulted in the recognition of a one-time, non-cash tax benefit of $23.3 million for 2017.
Pre-tax mortgage banking income was a $3 million loss, worsening from a less than $1 million loss in the third quarter. But losses were slashed from a $14 million in the fourth-quarter 2016.
At $1.887 billion, single-family loan originations declined from $2.035 billion in the preceding three months and $2.515 billion in the year-earlier quarter. Annual volume fell to $7.554 billion in 2017 from $8.997 billion in 2016.
HomeStreet said new business slowed as a result of a decreased supply of homes for sale in many of its markets. The quarter-over-quarter drop was additionally impacted by seasonal factors, while the year-over-year drop reflected slowing refinances.
Single-family loan rate lock commitments fell to $1.5 billion in the fourth quarter from $1.9 billion the prior period. The drop is an indication that first-quarter 2018 volume will likely fall further.
The bank-holding company reported a third-party mortgage servicing portfolio of $22.631 billion, including $22.124 billion in agency loans and $0.507 billion in other loans. The portfolio grew from $21.892 billion as of Sept. 30 and $19.488 billion as of Dec. 31, 2016.
The ratio of mortgage servicing rights carrying value to loans serviced was 1.14 percent, while the weighted-average servicing fee was 0.28 percent.
Residential assets ended 2017 at $1.835 billion, including $1.381 billion in mortgages and $0.453 billion in
home-equity and other consumer assets. Residential holdings were $1.706 billion three months prior and $1.444 billion one year prior.
Multifamily loan originations rose to $0.115 billion from $0.110 billion in the previous three-month period and $0.095 billion in the same three months during 2016. Full-year multifamily originations inched up to $0.341 billion from $0.326 billion in 2016.
HomeStreet said it serviced $1.311 billion in multifamily loans for third parties. The portfolio increased from $1.213 billion as of Sept. 30 and $1.108 billion
as of year-end 2016.
Commercial real estate assets dipped to $2.038 billion from $2.051 billion but have expanded from $1.899 billion as of the end of the previous year. Last month’s total was comprised of $0.623 billion in non-owner occupied CRE loans, $0.728 billion in multifamily loans and $0.688 billion in construction-and-land-development loans.
Mortgage employees numbered 1,351 at the end of last year, 41 fewer people than in the last report. Staffing sank from 1,554 at the end of 2016.
Company-wide headcount closed out 2017 at 2,419 full-time equivalent employees, fewer than 2,463 three months earlier and 2,552 one year earlier.
“The decrease in employees compared to the prior year was primarily due to the third-quarter 2017 reduction in our workforce related to our restructuring in our mortgage banking segment,” the report stated.
