Net.B@NK Common Stock (MM) (NASDAQ:NTBK)
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NetBank, Inc. (Nasdaq: NTBK), a diversified financial
services provider and parent company of NetBank(R) (www.netbank.com),
today reported financial results for the first quarter of 2005. The
company recorded a net loss of $2.0 million or $.04 per share,
compared with net income of $9.4 million or $.20 per share during the
same period a year ago.
On a sequential quarter basis, key trends include:
-- Net interest margin expansion. The bank's net interest margin,
after provision, widened to 188 basis points (bps) from a
normalized net interest margin of 182 bps. (Actual fourth
quarter results included a provision expense of $29 million
related to the company's Commercial Money Center (CMC) lease
receivable. Inclusive of this charge, the net interest margin
was -80 bps.)
-- Record business finance profitability. Pre-tax profitability
from the company's business finance operation grew by 13% to
$3.6 million.
-- Seasonally low mortgage production and sales. Conforming
production and sales totaled $2.1 billion and $2.1 billion
respectively, representing declines of 8.6% and 14.7%.
Non-conforming production and sales were $630 million and $702
million respectively, representing declines of 18.4% and 6.6%.
-- Significant conforming margin improvement. The conforming
pre-tax income margin improved to breakeven from -29 bps.
-- Significant non-conforming margin pressure. The non-conforming
pre-tax income margin fell to -92 bps from 6 bps.
As previously reported, the company's board of directors approved
a dividend of $.02 per share. The dividend is payable to shareholders
of record on May 15, and it will be disbursed on June 15.
During the quarter, the company bought 423,726 shares of its stock
at an average price of $9.29 per share. The board recently authorized
management to purchase up to one million additional shares. Along with
shares remaining under the previous authorization, management now has
approval to repurchase up to 1,240,238 shares.
Management Commentary
"The current period loss is largely centered in our non-conforming
mortgage operation," said Douglas K. Freeman, Chairman and Chief
Executive Officer. "As we communicated in our monthly statistical
reports, the non-conforming channel came under extreme pressure during
the quarter. More aggressive pricing industry-wide and
higher-than-normal provision expenses pushed results well below the
level our other developing lines of business can offset today. We
consider the prevailing non-conforming business conditions atypical.
We are fully committed to the non-conforming operation and believe in
its ability to contribute significant profitability to our bottom line
in normal conditions.
"Our other lines of business reported solid results," Freeman
continued. "Our conforming mortgage operation showed marked
improvement from last quarter's low. The channel neared breakeven
performance, and we currently believe its earnings trend will gain
momentum over the course of the year. Our banking segment continues to
show impressive growth. We have been able to widen the bank's net
interest margin through the steady retention of high-quality,
internally originated assets.
"Our strategy to diversify the company's income is working. Many
of our start-up and emerging lines of business provided meaningful
offset this period. Their impact and ability to contribute stable
earnings should grow more pronounced with each passing quarter."
Banking Segment Performance
Table 1 below details results in the company's banking segment.
The segment reported pre-tax income of $6.2 million before net
servicing results. This compares to pre-tax income of $5.4 million in
the previous quarter, exclusive of the $29.0 million provision expense
against the company's CMC lease receivable. The improvement was driven
by expansion of the net interest margin to 188 bps from a normalized
margin of 182 bps earlier.
The segment also recorded a net servicing loss of $3.6 million
this quarter, compared with income of $957,000 a quarter ago. Last
quarter's results included the recovery of previous impairment
expenses. The current period loss is due primarily to the impact of
stubbornly high pre-payment speeds on amortization expenses and a lack
of significant leverage over operating costs. Management believes net
servicing results will moderate over time as pre-payment activity
slows and the company builds scale in the portfolio. As part of its
strategy to grow the servicing asset, management acquired a portfolio
of $2.5 billion in conventional, fixed-rate servicing rights on March
31. At quarter-end, the core servicing portfolio stood at $15.0
billion, versus $12.9 billion a quarter earlier.
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Table 1
RETAIL BANKING SEGMENT
($ in 000s, Unaudited)
2005 2004
1st Qtr 4th Qtr Change
------------ ------------ ----------
Net interest income $ 22,542 $ 21,938 $ 604
Provision for credit losses 2,336 30,807 (28,471)
------------ ------------ ----------
Net interest income after
provision 20,206 (8,869) 29,075
Gains on sales of loans 501 88 413
Fees, charges and other income 3,327 3,256 71
------------ ------------ ----------
Total revenues 24,034 (5,525) 29,559
Total expenses 17,845 18,044 (199)
------------ ------------ ----------
Pre-tax income (loss) before
net servicing results 6,189 (23,569) 29,758
Net servicing results (3,572) 957 (4,529)
------------ ------------ ----------
Pre-tax income (loss) $ 2,617 $ (22,612) $ 25,229
============ ============ ==========
Average earning assets $ 4,305,234 $ 4,417,153 $(111,919)
Average UPB underlying MSRs $13,175,247 $12,766,699 $ 408,548
Operations to earning assets
Net interest income after
provision 1.88% (0.80%) 2.68%
Gain on sale, fees, charges
and other income 0.36% 0.30% 0.06%
------------ ------------ ----------
Banking revenues 2.24% (0.50%) 2.74%
Total expenses 1.66% 1.63% 0.03%
------------ ------------ ----------
Pre-tax income (loss) before
net servicing results 0.58% (2.13%) 2.71%
============ ============ ==========
Net servicing results to UPB
underlying MSRs (0.11%) 0.03% (0.14%)
*T
On a sequential quarter basis, other key banking segment
comparisons include:
-- Total deposits decreased by 2% to $2.6 billion. The decline
was comprised mainly of single-service certificate of deposit
relationships.
-- The business finance operation's production was off by 2% to
$45.9 million. As mentioned above, the operation posted record
profitability this quarter due to its continued strong
production levels and tight control over expenses.
-- The auto lending business saw an 11% increase in production to
$87.4 million. However, profitability within this channel was
adversely impacted by additional provision and operating
expenses.
Financial Intermediary Segment Performance
Table 2 below details results in the company's financial
intermediary segment. The segment reported a pre-tax loss of $5.5
million, compared with a similar loss in the previous quarter. The
pre-tax margin was -20 bps, compared with -19 bps last quarter. On the
surface, results for this channel appear little changed. However, the
current period loss was centered primarily in the non-conforming
channel, not the conforming channel. Based on significant pricing
pressures and heightened provision expense, the non-conforming margin
fell to -92 bps from 6 bps a quarter ago.
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Table 2
FINANCIAL INTERMEDIARY
($ in 000s, Unaudited)
2005 2004
1st Qtr 4th Qtr Change
----------- ----------- ----------
Net interest income $ 8,185 $ 10,970 $ (2,785)
Gain on sales of loans 22,885 20,733 2,152
Other income 887 441 446
Net Beacon Credit Services
results (663) 30 (693)
Net MG Reinsurance results 864 702 162
----------- ----------- ----------
Total revenues 32,158 32,876 (718)
Salary and employee benefits 22,534 21,480 1,054
Occupancy & Depreciation expense 7,056 7,257 (201)
Other expenses 8,046 9,606 (1,560)
----------- ----------- ----------
Total expenses 37,636 38,343 (707)
----------- ----------- ----------
Pre-tax loss $ (5,478) $ (5,467) $ (11)
=========== =========== ==========
Production $2,776,609 $3,121,865 $(345,256)
Sales (includes intercompany
sales) $2,760,463 $3,163,874 $(403,411)
Total revenues to sales 1.16% 1.04% 0.12%
Total expenses to production 1.36% 1.23% 0.13%
----------- ----------- ----------
Pre-tax margin (0.20%) (0.19%) (0.01%)
=========== =========== ==========
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On a sequential quarter basis, other key financial intermediary
segment comparisons include:
-- Seasonal weakness affected both conforming and non-conforming
loan activity. Conforming production decreased by 8.6% to $2.1
billion, while sales were down 14.7% to $2.1 billion.
Non-conforming production declined by 18.4% to $630 million,
while sales eased by 6.6% to $702 million.
-- The conforming pre-tax margin improved to breakeven from -29
bps.
Transaction Processing Segment Performance
Table 3 below details results in the company's transaction
processing segment. The segment reported pre-tax income of $1.0
million, compared with income of $1.6 million in the previous quarter.
Revenues remained consistent. The decline in profitability was
centered in the expense line. Last quarter the servicing factory
benefited from a recovery of previous charge-offs that went against
expenses. This quarter the servicing factory's expenses returned to a
more normal level.
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Table 3
TRANSACTION PROCESSING
($ in 000s, Unaudited)
2005 2004
1st Qtr 4th Qtr Change
---------- ---------- ---------
Total revenue $ 6,742 $ 6,780 $ (38)
Total expenses 5,728 5,220 508
--------- ---------- ---------
Pre-tax income $ 1,014 $ 1,560 $ (546)
========= ========== =========
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On a sequential quarter basis, other key transaction processing
segment comparisons include:
-- The number of ATM transactions processed by our ATM and
merchant processing business increased by 1% to 6.3 million.
The value of items cleared through our point-of-sale terminals
grew by 2% to $66.7 million.
-- The company acquired a portfolio of conventional, fixed-rate
mortgage servicing rights at quarter-end. Servicing for the
more than 14,000 loans in the portfolio should be transferred
to the company's servicing operation in July.
Trust Preferred Securities
During the quarter, the company completed a private offering of
$20.6 million in trust preferred securities. The securities were
issued through a newly formed trust, NBI Trust IV, and placed in a
pooled transaction. They carry a variable rate and were initially
priced at LIBOR plus a spread. The securities mature in 30 years and
cannot be redeemed by NBI Trust IV for a minimum of five years.
The securities have not been registered under the Securities Act
of 1933, as amended, and may not be sold in the United States under
the Securities Act of 1933, as amended, absent registration or an
applicable exemption from the registration requirements.
Next Quarter Earnings Outlook
Current analyst estimates for the company's second quarter results
range from $.02 to $.08. Management considers the range reasonable at
this time. Mortgage profitability is likely to improve if
non-conforming pricing pressures ease from first quarter levels.
However, the return of more aggressive pricing and the potential for
negative net servicing results represent downside risks.
Supplemental Financial Data
Management has updated the quarterly financial data available on
its Web site. This data provides further detail on the performance of
the company's different business channels over the past five quarters.
It is intended to supplement the information in this announcement and
give interested parties a better understanding of the company's
operations and financial trends.
Interested parties can find this quarterly supplement on the
company's Web site at www.netbankinc.com. The material is accessible
through the link titled "Financial Data" under "Investor Relations."
Within this same area, the company posts a monthly statistical
report, which is intended to give individuals a means of tracking the
company's performance during a quarter. The monthly report is
published directly to the Web site around the 20th of each month.
Conference Call Information
Management has scheduled a conference call to discuss the
quarterly results with financial analysts, media and other interested
parties. The call will be held today at 10 a.m. EDT.
Call Title: NetBank, Inc. Earnings Announcement
Call Leader: Douglas K. Freeman
Passcode: NetBank
Toll-Free: 888-982-4613
International: +1-212-287-1615
One-Week Replay: 866-463-4176
The company will audiocast the call on the NetBank, Inc. Web site
within the "Investor Relations" area. Individuals who cannot
participate in the live call may e-mail their questions to
mshepherd@netbank.com. Questions must be received before 8:30 a.m. EDT
for inclusion in the discussion.
About NetBank, Inc.
NetBank, Inc. (Nasdaq: NTBK) operates with a revolutionary
business model through a diverse group of complementary financial
services businesses that leverage technology for more efficient and
cost-effective delivery of services. Its primary areas of operation
include personal and small business banking, retail and wholesale
mortgage lending, and transaction processing. For more information,
please visit www.netbankinc.com.
"Safe Harbor" Statement under the Private Securities Litigation
Reform Act of 1995: Information in this press release about 1) the
expansion of net interest margin within the banking segment; 2)
increasing profitability within the business finance operation; 3) the
payment of quarterly dividends; 4) the repurchase of shares of the
company's outstanding stock; 5) achievement of a balanced business
model with a more stable earnings profile; 6) the company's intention
to remain in the non-conforming mortgage business; 7) further
improvement in conforming mortgage profitability; and 8) mitigation of
net servicing losses through a larger portfolio of servicing rights
are "forward-looking statements" involving risks and uncertainties
that could cause actual results to differ materially. Potential risks
include but are not limited to 1) higher than expected interest or
provision expenses; 2) unforeseen economic or operating conditions
that adversely affect business finance profitability; 3) a decision by
the board to discontinue the payment of quarterly dividends; 4) a
decision by management or the board to discontinue share repurchases;
5) failure to achieve key goals or objectives in the execution of the
company's business plan; 6) a decision by management to exit the
non-conforming mortgage business; 7) unforeseen economic or operating
conditions that adversely affect conforming mortgage profitability;
and 8) unforeseen economic or operating conditions that adversely
affect servicing asset results. The company has no obligation to
update any forward-looking statements. For a discussion of additional
risks and uncertainties facing NetBank, Inc., see "Risk Factors" in
the company's SEC filings.
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NetBank, Inc.
Consolidated Statements of Operations
For the Three Months Ended March 31,
(Unaudited and in 000's except per share data)
2005
------------------------------------
Retail Financial Transaction
Banking Intermediary Processing
----------------------------------------------------------------------
Interest income:
Loans and leases $ 26,727 $ 20,986 $ 10
Investment securities 8,787 1 -
Short-term investments 309 70 -
Inter-segment 13,066 2,278 7
------------------------------------
Total interest income 48,889 23,335 17
Interest expense:
Deposits 13,216 - -
Other borrowed funds 11,224 1,480 20
Inter-segment 1,974 13,606 -
------------------------------------
Total interest expense 26,414 15,086 20
------------------------------------
Net interest income 22,475 8,249 (3)
Provision for credit losses 2,336 15 -
------------------------------------
Net interest income after
provision for credit losses 20,139 8,234 (3)
Non-interest income:
Service charges and fees 12,606 736 3,671
Gain on sales of loans and MSRs 501 23,717 -
Other income 5,228 1,022 1,149
Gain on sales of investment
securities 2,477 - -
Loss on derivatives (7,121) - -
Inter-segment
servicing/processing fees - - 3,456
------------------------------------
Total non-interest income 13,691 25,475 8,276
Non-interest expense:
Salaries and benefits 5,249 23,287 2,424
Customer service 2,670 - 449
Marketing costs 1,141 1,607 47
Data processing 2,653 1,156 558
Depreciation and amortization 2,065 2,520 906
Impairment and amortization of
MSRs 9,849 99 -
Office expenses 521 1,596 618
Occupancy 888 4,582 390
Travel and entertainment 142 913 146
Professional fees 891 2,069 416
Prepaid lost interest from
curtailments 1,010 14 -
Other 1,568 454 1,305
Inter-segment
servicing/processing fees 2,566 890 -
------------------------------------
Total non-interest expense 31,213 39,187 7,259
------------------------------------
Income (loss) before income
taxes 2,617 (5,478) 1,014
Income tax (expense) benefit (919) 1,923 (356)
------------------------------------
Net income (loss) $ 1,698 $ (3,555) $ 658
====================================
Net income (loss) per common
and potential common shares
outstanding:
Basic
Diluted
Weighted average common and
potential common shares
outstanding:
Basic
Diluted
NetBank, Inc.
Consolidated Statements of Operations
For the Three Months Ended March 31,
(Unaudited and in 000's except per share data)
2005 2004
-------------------------- -------------
Other / Consolidated Consolidated
Eliminations NetBank, Inc. NetBank, Inc.
----------------------------------------------------------------------
Interest income:
Loans and leases $ 130 $ 47,853 $ 48,039
Investment securities - 8,788 3,966
Short-term investments - 379 180
Inter-segment (15,351) - -
-------------------------- -----------
Total interest income (15,221) 57,020 52,185
Interest expense:
Deposits - 13,216 11,818
Other borrowed funds 303 13,027 8,618
Inter-segment (15,580) - -
-------------------------- -----------
Total interest expense (15,277) 26,243 20,436
-------------------------- -----------
Net interest income 56 30,777 31,749
Provision for credit losses - 2,351 1,847
-------------------------- -----------
Net interest income after
provision for credit losses 56 28,426 29,902
Non-interest income:
Service charges and fees - 17,013 17,032
Gain on sales of loans and
MSRs 602 24,820 32,314
Other income (179) 7,220 4,176
Gain on sales of investment
securities - 2,477 3,169
Loss on derivatives - (7,121) -
Inter-segment
servicing/processing fees (3,456) - -
-------------------------- -----------
Total non-interest income (3,033) 44,409 56,691
Non-interest expense:
Salaries and benefits 763 31,723 30,927
Customer service 5 3,124 2,913
Marketing costs 60 2,855 2,259
Data processing 8 4,375 4,491
Depreciation and amortization 112 5,603 4,783
Impairment and amortization
of MSRs - 9,948 10,246
Office expenses 85 2,820 2,680
Occupancy 41 5,901 5,134
Travel and entertainment 49 1,250 1,176
Professional fees 614 3,990 2,910
Prepaid lost interest from
curtailments - 1,024 1,372
Other 22 3,349 2,670
Inter-segment
servicing/processing fees (3,456) - -
-------------------------- -----------
Total non-interest expense (1,697) 75,962 71,561
-------------------------- -----------
Income (loss) before income
taxes (1,280) (3,127) 15,032
Income tax (expense) benefit 450 1,098 (5,638)
-------------------------- -----------
Net income (loss) $ (830) $ (2,029) $ 9,394
========================== ===========
Net income (loss) per common
and potential common shares
outstanding:
Basic $ (0.04) $ 0.20
Diluted $ (0.04) $ 0.20
Weighted average common and
potential common shares
outstanding:
Basic 46,366 47,250
Diluted 46,366 47,968
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NetBank, Inc.
Condensed Consolidated Balance Sheet
As of March 31,
(Unaudited and in 000's except per share data)
2005
--------------------------------------
Retail Financial Transaction
Banking Intermediary Processing
--------------------------------------
Assets
Cash and cash equivalents:
Cash and due from banks $ 113,347 $ 32,472 $ (203)
Federal funds sold 18,003 4,120 1,572
--------------------------------------
Total cash and cash
equivalents 131,350 36,592 1,369
Investment securities available
for sale, at fair value 741,104 4 -
Stock of Federal Home Loan Bank
of Atlanta-at cost 71,054 - -
Loans held for sale 4,763 1,115,111 -
Loan and lease receivables-net
of allowance for losses 2,124,596 3,239 -
Mortgage servicing rights 209,006 1,247 -
Accrued interest receivable 9,214 3,045 -
Furniture, equipment and
capitalized software 13,195 31,472 2,242
Goodwill and other intangibles 1,765 49,218 29,269
Due from servicers and investors 21,026 1,657 -
Inter-segment receivables 980,948 132 1,014
Unsettled trades 75,000 - -
Other assets 24,456 52,002 4,239
--------------------------------------
Total assets $4,407,477 $1,293,719 $ 38,133
======================================
Liabilities
Deposits $2,592,358 $ - $ -
Other borrowed funds 1,436,073 70,765 20
Inter-segment payables 263,052 750,469 1,267
Subordinated debt - - -
Accrued interest payable 9,004 652 -
Loans in process - 47,937 -
Representations and warranties - 22,031 -
Accounts payable and accrued
liabilities 23,911 113,669 4,240
--------------------------------------
Total liabilities 4,324,398 1,005,523 5,527
--------------------------------------
Minority interests in affiliates - 519 -
Shareholders' equity
Preferred stock, no par (10,000
shares authorized, none
outstanding) - - -
Common stock, $.01 par (100,000
shares authorized, 52,820 and
52,820 shares issued,
respectively) - - -
Additional paid-in capital - - -
Retained earnings - - -
Accumulated other comprehensive
income (loss), net of tax - - -
Treasury stock, at cost (6,583
and 5,831 shares, respectively) - - -
Unearned compensation - - -
Allocated equity 83,079 287,677 32,606
--------------------------------------
Total shareholders' equity 83,079 287,677 32,606
--------------------------------------
Total liabilities, minority
interests and shareholders'
equity $4,407,477 $1,293,719 $ 38,133
======================================
NetBank, Inc.
Condensed Consolidated Balance Sheet
As of March 31,
(Unaudited and in 000's except per share data)
2005 2004
------------------------ ------------
Other/ NetBank, NetBank,
Eliminations Inc. Inc.
------------------------- ------------
Assets
Cash and cash equivalents:
Cash and due from banks $ (683) $ 144,933 $ 160,919
Federal funds sold - 23,695 27,664
------------------------- -----------
Total cash and cash
equivalents (683) 168,628 188,583
Investment securities
available for sale, at fair
value - 741,108 301,960
Stock of Federal Home Loan
Bank of Atlanta-at cost - 71,054 56,711
Loans held for sale (18) 1,119,856 1,374,553
Loan and lease receivables-net
of allowance for losses (4,837) 2,122,998 2,038,582
Mortgage servicing rights - 210,253 156,624
Accrued interest receivable - 12,259 10,767
Furniture, equipment and
capitalized software 2,206 49,115 53,315
Goodwill and other intangibles 265 80,517 65,330
Due from servicers and
investors - 22,683 32,125
Inter-segment receivables (982,094) - -
Unsettled trades - 75,000 13,740
Other assets 847 81,544 79,662
------------------------- -----------
Total assets $ (984,314) $4,755,015 $4,371,952
========================= ===========
Liabilities
Deposits $ (870) $2,591,488 $2,644,171
Other borrowed funds - 1,506,858 1,071,648
Inter-segment payables (1,014,788) - -
Subordinated debt 32,477 32,477 11,857
Accrued interest payable 197 9,853 9,404
Loans in process - 47,937 53,880
Representations and warranties - 22,031 18,465
Accounts payable and accrued
liabilities (228) 141,592 128,940
------------------------- -----------
Total liabilities (983,212) 4,352,236 3,938,365
------------------------ -----------
Minority interests in
affiliates - 519 -
Shareholders' equity
Preferred stock, no par
(10,000 shares authorized,
none outstanding) - - -
Common stock, $.01 par
(100,000 shares authorized,
52,820 and 52,820 shares
issued, respectively) 528 528 528
Additional paid-in capital 432,132 432,132 431,920
Retained earnings 40,553 40,553 52,555
Accumulated other
comprehensive income (loss),
net of tax (6,738) (6,738) 4,992
Treasury stock, at cost (6,583
and 5,831 shares,
respectively) (64,020) (64,020) (56,056)
Unearned compensation (195) (195) (352)
Allocated equity (403,362) - -
------------------------- -----------
Total shareholders' equity (1,102) 402,260 433,587
------------------------- -----------
Total liabilities, minority
interests and shareholders'
equity $ (984,314) $4,755,015 $4,371,952
========================= ===========
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NetBank, Inc. Consolidated
Selected Financial and Operating Data
(Unaudited and in 000's except per share data)
Quarter Ended
March 31, December 31, March 31,
------------- ------------- -------------
2005 2004 2004
------------- ------------- -------------
Consolidated:
Net income (loss) $ (2,029) $ (17,656) $ 9,394
Total assets $ 4,755,015 $ 4,622,181 $ 4,371,952
Total equity $ 402,260 $ 414,027 $ 433,587
Shares outstanding 46,237 46,528 46,990
Return on average equity -1.99% -16.59% 8.70%
Return on average assets -0.17% -1.48% 0.84%
Book value per share $ 8.70 $ 8.90 $ 9.23
Tangible book value per
share $ 6.96 $ 7.20 $ 7.84
NetBank, FSB:
Deposits $ 2,592,680 $ 2,642,288 $ 2,644,608
Customers 270,898 270,427 274,018
Estimated Capital Ratios:
Tier 1 (core) capital
ratio 6.42% 6.73% 6.63%
Total risk-based capital
ratio 10.93% 11.30% 12.23%
Asset quality numbers:
CMC lease portfolio $ 31,294 $ 31,527 $ 77,835
Non-performing loan and
lease receivables 5,789 5,518 3,583
------------- ------------- -------------
Total non-performing loan
and lease receivables 37,083 37,045 81,418
Non-performing loans held
for sale (1) 36,443 36,253 21,680
------------- ------------- -------------
Total non-performing
loans and leases 73,526 73,298 103,098
Other real estate owned
(2) 6,330 5,799 3,839
------------- ------------- -------------
Total non-performing
assets $ 79,856 $ 79,097 $ 106,937
Allowance for credit
losses (ALLL) $ 25,075 $ 24,461 $ 44,591
Net (charge-offs) of loan
and lease receivables $ (1,738) $ (51,639) $ (945)
Asset quality ratios:
Total non-performing
assets / average assets 1.72% 1.66% 2.38%
ALLL / total non-
performing loan and
lease receivables 67.62% 66.03% 54.77%
Net annualized charge-
offs / total assets 0.15% 4.47% 0.09%
Mortgage Banking:
Production Activity:
Retail $ 637,522 $ 613,313 $ 563,165
Correspondent 859,109 1,075,388 1,271,034
Wholesale 608,546 627,019 847,762
RMS 41,249 33,694 48,877
------------- ------------- -------------
Total Agency-eligible 2,146,426 2,349,414 2,730,838
Non-conforming 630,183 772,451 527,928
------------- ------------- -------------
Total $ 2,776,609 $ 3,121,865 $ 3,258,766
============= ============= =============
Sales Activity:
Third-party sales $ 2,722,062 $ 3,106,956 $ 3,478,133
Sales to the retail bank 38,401 56,918 293,370
------------- ------------- -------------
Total sales $ 2,760,463 $ 3,163,874 $ 3,771,503
============= ============= =============
Pipeline:
Locked mortgage loan
pipeline $ 917,450 $ 754,876 $ 1,678,698
Mortgage application
pipeline 3,169,196 2,709,891 4,067,125
------------- ------------- -------------
Total pipeline $ 4,086,646 $ 3,464,767 $ 5,745,823
============= ============= =============
UPB of loans serviced: $18,698,781 $16,706,702 $17,581,242
(1) Held for sale assets are carried at the lower of cost or market
(LOCOM). LOCOM adjustments, under GAAP, are direct reductions of the
assets' carrying values and are not considered allowances.
(2) Other real estate owned is carried at net realizable value.
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