Fifth Third earnings reflect stagnant mortgage growth
1Q net income falls to $309 million
Fifth Third Bancorp’s (FITB) first-quarter earnings reflect a flat period for mortgage originations and less money coming in from mortgage banking revenue.
Fifth Third recorded a net income available to common shareholders of $309 million, a drop from $402 million in the previous quarter and $413 million a year ago.
According to the bank’s earnings, $51 million in litigation reserve charges and $4 million in severance expense, which counts $3 million in mortgage repurchase litigation, impacted earnings.
Mortgage banking net revenue slumped to $109 million, down 13% from $126 million in December 2013 and down 50% from $220 million a year ago.
In addition, first quarter originations were $1.7 billion, significantly down compared to $2.6 billion in the previous quarter and $7.4 billion in the first quarter of 2013.
“The decrease from the prior quarter and the prior year reflected lower production and lower gain on sale margins,” the earnings stated.
First quarter mortgage servicing fees came in at $62 million, down compared to $64 million in the previous quarter, but up from $61 million in the first quarter of 2013.
Average residential mortgage loans were flat sequentially and increased $563 million from a year ago, while average home equity declined 1%.
“Compared with the first quarter of 2013, growth in most consumer loan categories was offset by lower home equity balances as paydowns continue to outpace new production,” the earnings said.