BB&T Corp. maintained stable mortgage originations in the third quarter but took a hit on production income due to lower margins and reduced refinancing volumes.
The Winston-Salem, N.C.-based banking company reported that third-quarter residential loan production totaled $8.3 billion, compared to $8.2 billion in the second quarter. Retail originations fell 20% to $2.7 billion in 3Q while correspondent purchases rose 16% to $5.6 billion.
Most banking companies have reported double-digit loan production declines.
Mortgage originations flipped to 59% purchase transactions in 3Q from 44% purchase transactions in 2Q, according to BB&T chief financial officer Daryl Bible. And he noted that noninterest income on its loan production fell to $95 million in 3Q as gain-on-sale margins dropped 66% from the prior quarter.
“Noninterest income declined $56 million driven by lower gains on residential mortgage production and sales,” Bible said Thursday during a conference call. “Pricing also tightened due to increased competition.”
Overall, the Southeastern regional bank posted net income of $77 million from its mortgage banking business, compared to $78 million in 2Q.
