Quarterly company earnings fell from a year earlier at Wells Fargo & Co., as did mortgage earnings. As home lending volume sank, the mortgage servicing portfolio was reduced.
During the first-three months of this year, the San Francisco-based bank-holding company earned $7.5 billion before income-tax expense, according to its first-quarter earnings report.
Income came up short versus the upwardly revised $7.9 billion earned in the same-three months last year. But earnings soared from $4.6 billion the previous three months.
Wells Fargo noted that the results are preliminary and subject to ongoing discussions with the Consumer Financial Protection Bureau and the Office of the Comptroller of the Currency to resolve matters including improper rate-lock extension fees. The CFPB and OCC have collectively offered to resolve the matters for a total of $1 billion in civil money penalties.
Mortgage banking income was $0.934 billion, inching up from $0.928 billion in the fourth-quarter 2017 but down from $1.228 billion in the first-quarter 2017. Most recently, servicing income accounted for $0.468 billion of the total, and the other $0.466 billion was from net gains on mortgage loan originations and sales.
First-quarter 2018 mortgage fundings fell to $43 billion from $53 billion three months earlier and dipped from $44 billion one year earlier.
Refinance share was reduced to 35 percent from 36 percent in the fourth-quarter 2017.
With new applications during the first quarter of this year declining to $58 billion from
$63 billion in the final quarter of last year, second-quarter production is likely to see a further decrease. But the application pipeline inched up to $24 billion from $23 billion — contradicting the applications data and making it unclear about the current-quarter volume.
Wells Fargo serviced $1.538 trillion in residential loans at the end of last month, less than $1.551 trillion at the end of last year and off from $1.539 trillion as of the same date last year.
Third-party servicing accounted for $1.201 trillion of the the March 31, 2018, total. The ratio of mortgage-servicing rights to related loans was 0.96 percent.
An additional $0.005 trillion was subserviced by Wells Fargo.
Single-family assets were trimmed to $320.578 billion from $323.767 billion at the end of last year but grew from $318.966 billion at the same point last year. Last month’s total was comprised of $282.658 billion in first mortgages and $37.920 billion in junior liens.
Commercial mortgages serviced came to $635 billion, growing from $622 billion at the end of the fourth-quarter and $606 billion at the end of the first-quarter 2017. Third-party servicing made up $510 billion.
The CRE subservicing portfolio was another $10 billion.
Commercial real estate assets were reduced to $149.425 billion from $150.878 billion the prior quarter and $156.596 billion a year prior. The latest total consisted of $125.543 billion in commercial mortgages and $23.882 billion in construction loans.
Company-wide staffing grew to 265,700 from 262,700 as of Dec. 31, 2017. But headcount was reduced from 272,800 as of March 31, 2017.
Branch count concluded last year at 8,200, down 100 from year-end 2017.
