Mortgage banking revenue fell 16% in the first quarter at U.S. Bancorp, compared to the prior quarter, but bank executives expect mortgage applications and revenue will improve in the second quarter.
The Minneapolis-based company reported Tuesday morning that mortgage banking revenue totaled $401 million in the first quarter, down from $476 million in the prior quarter and $452 million a year ago.
U.S. Bancorp executives noted that mortgage applications were down 20% quarter-over quarter and gain-on-sale margins were down 10 to 15 basis points.
“We think the first quarter was a little bit seasonal—and impacted by the blip in rates in late February,” one executive said on a conference call.
However, application volume is starting to strengthen and “we expect an increase in mortgage revenue in 2Q,” an executive said.
The company reported that 1Q single-family originations totaled $21.7 billion, compared to $22.2 billion in 4Q.
First-quarter originations had a weighted average FICO score of 765 and a weighted average LTV ratio of 64%.
