While quarterly earnings were solidly higher at Regions Financial Corp., mortgage income receded. Servicing grew with the acquisition of mortgage servicing rights during the quarter.
Prior to income taxes, earnings from continuing operations climbed to $450 million
during the three months ended June 30 from just $387 million the same quarter in 2016.
The Birmingham, Alabama-based bank-holding company revealed its latest earnings, as well as other operational and financial results, in its second-quarter 2017 earnings report.
Income was also improved from the first-three months of this year, when the net was $422 million.
The financial institution reported mortgage income of $40 million, off by $1 million from the preceding three-month period and $6 million worse than in the second-quarter 2016.
Most recently, production and sales made up $27 million of income, and loan servicing accounted for $24 million. Offsetting the income was an $11 million loss tied to MSR valuations and related hedging losses.
Regions reported $1.447 billion in single-family loan production for the three months ended June 30, 2017. Although originations improved from $1.154 billion the prior quarter, business backpedaled from $1.656 billion a year prior. Much of the industry experienced
a year-over-year drop.
For the entire first half of this year, mortgage production came to $2.601 billion.
Refinance share
fell to 20.2 percent in the second quarter from 29.0 percent during the first-three months of this year.
Regions noted that it acquired mortgage servicing rights on $2.7 billion in loans during the quarter.
That left the unpaid principal balance of the loans in the servicing portfolio at $33.055 billion as of mid-2017, more than $30.960 billion at the end of the previous period and $27.360 billion a year prior.
The company’s weighted-average servicing fee was 27 basis points.
Residential loans on the bank’s balance sheet expanded to $24.184 billion from $24.098 billion at the conclusion of March and $23.996 billion at the end of the first-half 2016. The latest figure was comprised of $13.765 billion in first lien mortgages, $6.744 billion in first-lien home-equity loans and $3.675 billion in second-lien HELs.
Single-family first-lien assets had a 30-day delinquency rate of 1.38 on the non-guaranteed portion of the portfolio.
The rate tumbled 16 BPS from three months earlier and sank 38 BPS from one year earlier.
On HELs, delinquency crept up 3 BPS past 1 percent to 1.01 percent and was a basis point worse than at the same point in 2016.
Regions additionally owned
$13.122 billion in commercial real estate assets. The CRE portfolio was reduced, though, from $13.497 billion as of March 31, 2017, and $14.499 billion as of June 30, 2016. The most-recent total was made up of $6.445 billion in owner-occupied commercial mortgages, $4.126 billion in investor CRE loans and $2.551 billion in construction loan holdings.
Owner-occupied-commercial mortgages had a delinquency rate of 0.50 percent, rising 6 BPS from the prior quarter and 7 BPS worse than the same quarter last year.
Investor CRE loan delinquency
jumped to 0.42 percent from 0.25 percent but was still lower than 0.71 percent at the midpoint of 2016.
Full-time equivalent staffing at Regions was trimmed by
24 people during the second-quarter 2017 to 22,126. Compared to mid-2016, headcount has been cut by 321 positions.
Total branch outlets were reduced to 1,492 at the midpoint of this year from 1,523 as of March 31, 2017.
