Residential refinancing activity in the fourth quarter pushed bank originations to the highest level since the spring of 2009 when the Federal Reserve was still purchasing mortgage-backed securities.
The Federal Deposit Insurance Corp. reported that the 807 commercial and savings banks under its purview funded $191 billion of single-family loans through retail means, a 19% jump from 3Q and a handsome 31% gain from Q4 09.
FDIC said wholesale originations totaled $309.5 billion in the fourth quarter, up 7.6% from the third quarter.
Meanwhile, banks are now holding more residential loans on their books, which will contribute to revenue growth going forward. At yearend FDIC-insured institutions held nearly $1.9 trillion of 1-4 family loans — but 9.44% of these mortgages are 90 days or more past due.
Over the past three quarters, this 'serious delinquency' rate has declined by 47 basis points.
Banks are required to report origination figures to FDIC if they have $1 billion or more in assets, or if a depository originated more than $10 million of one- to four-family loans in the quarter.
According to FDIC, the banking industry posted four straight quarters of positive earnings in 2010. Fourth quarter earnings totaled $21.7 billion, compared to a $1.8 billion loss a year ago. (See related story on this website.)
"Improving credit performance leading to lower loss provisions has been the key to earnings growth," FDIC chairman Sheila Bair said during a press briefing Wednesday.
