At the Bank of America Merrill Lynch Banking and Financial Services Conference, Fifth Third Bancorp (FITB) reported record mortgage origination fees and gain on sales in their 2012 third quarter results.

The bank’s loan production continues to be strong, with rates on loan originations lower but loan interest income remaining stable. Another factor in the bank’s success lies in manageable mortgage risks. Fifth Third’s typical quarterly mortgage repurchase cost is now around $20 million. 

Fifth Third also stated in an investor presentation it is compliant with Basel III standards as of today, in spite of the requirements being delayed

Due to strong demand, industry capacity constraints and strong mortgage-backed securities, Fifth Third continues to gain on sale margins. However, their bread and butter developed in their increased loan interest income.

Looking forward, Fifth Third is predicting stronger originations, with rates remaining low. Harp 2.0 originations are expected to remain similar to the percentage of total originations year-over-year in 4Q12.

As most banks were forced to cut jobs at a rapid rate during the peak of the financial crisis, was able to avoid mass layoffs. Left with a more robust staff than their rivals, Fifth Third was put in the spotlight during the financial recovery.

Earlier this year, Fifth Third Bank received a three star designation, the highest among its peers, in the Fannie Mae 2011 Servicer Total Achievement and Rewards program. Based on the first half of 2012, Fifth Third continues to maintain the status of rating at or above median levels according to the STAR program.