The bleeding continued for a second straight quarter at Citigroup Inc. (C), who said Friday morning that it lost $5.11 billion, $1.02/share, during the first quarter of 2008, thanks to a total of $13.9 billion in write-downs spanning mortgages to leveraged loans. The loss was greater than most analysts had forecast, although the write-down total was less than expected and revenues were greater than expected -- meaning that Citi saw shares bounce in early morning trading, as a result. Despite traders' optimism, the first three months were clearly something executives at Citi would like to forget: $6 billion in write-downs on collateralized debt obligations, $3.1 billion on leveraged loans, $1.6 billion on Alt-A mortgages, $1.5 billion on auction-rate securities, another $1.5 billion tied to downgrades of key monoline insurers, and -- lastly -- $212 million linked to off-balance-sheet debt coming back to haunt the bank. In other words, there were alot of write-downs; and many were tied to ongoing weakness in the mortgage industry. "We are taking the necessary steps to make Citi more efficient while fostering a culture of accountability and teamwork," said CEO Vikram Pandit. "As we move into the second quarter and beyond, we will continue to divest non-strategic assets and allocate capital to the products and regions that will drive increased revenues, enhance the value of our franchise, and ultimately, maximize shareholder value." Part of that strategy, as the bank announced in March, include significant changes to mortgage operations, including a shift away from portfolio lending towards an originate-and-sell model focused on conforming loan production. Citi's investment bank posted a $5.67 billion loss tied primarily to mortgage market turmoil, including the write-downs discussed above. Like Merrill before it, who reported a $3 billion write-down on its exposure to monoline bond insurers on Thursday, Citi said it recorded a $1.5 billion write-down tied to bond guarantors as well. Credit costs and mortgage banking activity Beyond write-down activity, credit costs doubled in the first quarter to $6.0 billion: $3.8 billion in net credit losses, and $1.9 billion in net loan loss provisions. Citi cited "higher delinquencies on first and second mortgages, unsecured personal loans, credit cards and auto loans" -- essentially every form of consumer credit -- as the reason for the steep jump in credit costs. Citi's mortgage banking operations saw losses narrow in Q1 to $368 million, compared to $1.2 billion in losses generated during the fourth quarter of 2007. Origination volume rose 16 percent on a linked-quarter basis to $34.3 billion in the first quarter, although volume remained 13 percent below year-ago totals. Citi's third-party mortgage servicing portfolio grew at an annualized 11 percent rate during the first quarter, reaching $645.7 billion, up from $599.6 billion one quarter earlier. Despite the growth in originations, Citi continued to see mortgage asset quality deteriorate, and the volume of mortgages 90 or more days past due -- severe delinquencies -- reached over $5 billion dollars for the first time since the credit crunch began, a jump of 16 percent in just one quarter. Even with the growth in originations and average loans, delinquencies now represent 2.73 percent of mortgages in the company's portfolio, Citi said. Last year, that number stood at 1.13 percent -- meaning that the number of severely delinquent homeowners has more than doubled within one year. Disclosure: The author held no positions in C when this story was originally published. HW reporters and writers follow a strict disclosure policy, the first in the mortgage trade.