SunTrust Banks, Atlanta, had mortgage production and servicing income of $71 million for the first quarter, down 35% from the fourth quarter 2010 due to lower mortgage production volume and reduced gain on sales margins.
However, when compared with the first quarter 2010, SunTrust saw its income in this area improve by $32 million, as there was a $48 million decline in mortgage repurchase costs. For the current period, it had mortgage repurchase costs of $80 million.
The reserves for mortgage repurchase losses increased by $5 million during the first quarter to $270 million, as a result of increases in agency-related repurchase requests.
Meanwhile, regional competitor BB&T Corp., Winston-Salem, N.C., had mortgage banking income of $95 million in the first quarter, down 126% from $138 million in the fourth quarter 2010 but up 7% from $89 million for 2010's first quarter.
The change between the fourth quarter 2010 and first quarter was driven by a $40 million decline in residential mortgage banking income; this included a $13 million drop in the valuation of BB&T's mortgage servicing rights and related hedging activities. There was also a $31 million decline in income from loans originated for sale.
The increase in mortgage banking income when compared with the first quarter 2010 was due to a $13 million increase in commercial mortgage banking income.
