A 19% decline in mortgage banking revenue on a year-over-year basis is the main reason for a 3% decline in total noninterest income at U.S. Bancorp in 2Q13.
For the most recent period, the company reported $396 million in mortgage banking revenue, compared with $401 million in 1Q13 and $490 million in 2Q12. U.S. Bancorp said it had lower origination and sales revenue when compared with 2Q12.
The decline between 1Q13 and 2Q13 was a result of an unfavorable change in the value of its mortgage servicing rights, as there was higher origination and sales revenue during the period.
Net income from mortgage banking for the period was $182 million; the company as a whole had net income of $1.5 billion.
Originations in the quarter totaled $17.8 billion, down from approximately $21.7 billion in both 1Q13 and 2Q12.
Residential mortgage net charge-offs during the quarter totaled $74 million, down from $92 million in 1Q13 and $96 million in 2Q12. However, residential mortgage nonperforming assets increased to $685 million from $673 million in 1Q13 and $661 million in 4Q12.
During the quarter U.S. Bancorp repurchased $41 million loans down from $79 million in the first quarter.
It serviced $224 billion for other investors, up from $220 billion at the end of the previous quarter.
At the end of the quarter, Dan Arrigoni retired as president and was replaced by Rick Aneshansel.
Meanwhile, the residential mortgage banking segment at PNC Financial Services Group Inc. had earnings of $20 million for the quarter, down from $45 billion in 1Q13, but much improved over the $213 million loss for 2Q12.
For 2Q13, PNC earned $1.1 billion, compared with $1 billion in 1Q13 and $546 million in 2Q12. During the quarter, the mortgage banking unitís CEO Sy Naqvi retired.
PNC originated $4.7 billion, up from $4.2 billion in the first quarter and $3.6 billion for the same period in 2012. Approximately 28% of the volume was for purchases the company said.
But its servicing portfolio shrunk the quarter to $116 billion from $120 billion on Dec. 31, 2012.