Wells Fargo’s mortgage business in the first quarter of 2017 fells across the majority of its divisions. However, the mega bank noted the drop was not a surprise.
The bank’s first–quarter earnings stated, as expected, residential mortgage loan originations declined in the first quarter, down to $44 billion, from $72 billion in the fourth quarter.
Mortgage-banking noninterest income decreased to $1.2 billion, compared with $1.4 billion in fourth quarter 2016.
Additionally, mortgage servicing income increased to $456 million in the first quarter from $196 million in the fourth quarter, primarily due to lower unreimbursed servicing costs and lower prepayments.
For the bank's community banking side, originations declined to $44 billion, down from $72 billion in prior quarter.
First quarter mortgage applications dropped, coming in at $59 billion, down from $75 billion in prior quarter, while the application pipeline fell to $28 billion at quarter end, down from $30 billion at Dec. 31, 2016.
"Wells Fargo continued to make meaningful progress in the first quarter in rebuilding trust with customers and other important stakeholders, while producing solid financial results,” said CEO Tim Sloan.
Wells Fargo, as a whole, beats earnings per share expectations by $0.04 but missed on revenue.
First quarter 2017 net income came in at $5.5 billion, which is in line with first quarter 2016.
Diluted earnings per share slightly increased to $1.00, compared with $0.99 last year, while revenue came in at $22.0 billion, slightly down from $22.2 billion a year ago.
“While we have more work to do, I am pleased with all we have accomplished thus far. Our 273,000 team members have remained committed to helping our customers succeed financially, as reflected in improved retail customer service scores, record levels of deposits, more primary consumer checking customers, record client assets in Wealth and Investment Management, and industry-leading mortgage originations,” Sloan said.