Mortgage Earnings Sink, Originations Off at BofA

April 18–Pre-tax earnings were up on a quarter-over-quarter and year-over-year basis at Bank of America Corp., though not at its mortgage business.

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During the first-three months of this year, income before income taxes came to $6.6 billion, better than $5.0 billion in the same period last year.

The details were included in the Charlotte, North Carolina-based financial institution's first-quarter 2017 earnings report released Tuesday.

Earnings also improved from the final-three months of last year, when the total was $6.1 billion.

“The U.S. economy continues to show consumer and business optimism, and our results reflect that,” Bank of America Chief Executive Officer Brian Moynihan explained in the report.

But mortgage banking income plunged to $122 million from $519 million three months earlier and $433 million one year earlier.

Within just the consumer banking unit, the $119 million in mortgage banking income included $54 million in production income, sinking from $131 million in the last quarter of last year. Another $65 million was generated from net servicing income, off less severely from $76 million.

Residential loan originations totaled $15.495 billion in the first quarter of this year. Business slid from $21.916 billion during the previous period and was off from $16.428 in the same-three months last year.

Last month's production consisted of $11.442 billion in first mortgages and $4.053 billion in home-equity loans. BofA claims to be the largest home-equity lender and the second-biggest bank retail originator.

BofA serviced $296 billion for third parties as of March 31, 2017. The portfolio was reduced from $307 billion at year-end 2016 and cut from $368 billion at the same point in 2016.

Capitalized mortgage servicing rights were 72 basis points, not as high as 74 BPS in the last operating period. But the rate was better than 58 BPS in the first-quarter 2016.

The bank's $2.248 trillion in assets included a $257.758 billion residential investment portfolio, off from $258.240 billion at the end of last year and $258.211 billion at the same point last year. Mortgage accounted for $193.843 billion of the latest total and HELs made up $63.915 billion.

Another $57.849 billion in commercial real estate loans were owned. The CRE portfolio grew from $57.335 billion the prior period but off slightly from $58.060 billion as of the same date in 2016.

Last month concluded with 208,573 full-time equivalent employees. BofA expanded its staff from 208,024 people at the conclusion of last year. But headcount has been reduced from 213,183 at the same point last year.

March 2017 finished with 4,559 financial centers in operation, 20 fewer than as of Dec. 31, 2016.

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