Banks That Felt Sting of Rising Rates, Fewer Refis in Q3
November 19, 2013 7:30 AM
Many community banks reported lower earnings or lost money outright in the third quarter. Behind the bad numbers was a spike in long-term rates that dumped ice on refinancing activity . Following is a look at notable instances of banks that suffered from the mortgage shift.
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First Mariner
The Baltimore company had finally returned to profitability before refi activity imploded. First Mariner lost $7.4 million in the third quarter after its mortgage revenue fell 96% from a year earlier, to just $548,000.
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Banc of California
Some analysts have blamed CEO Steven Sugarman's aggressive acquisitions for the Irvine, Calif., company's $9.5 million quarterly loss. But a 20% decline in mortgage revenue from a quarter earlier didn't help.
BOK Financial
The Tulsa, Okla., company's profits fell 13% from a year earlier on a 50% decline in mortgage revenue. Stan Lybarger, BOK Financial's president and CEO, blamed "uncertainty over government policies" for a spike in interest rates.
Heartland Financial
Profit at the Dubuque, Iowa, company fell nearly 48% from the third quarter of 2012 . Mortgage issues played a big role in the decline; gains from the sale of loans fell 85% from a year earlier. The company did add $1 million in servicing income from one year earlier.
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First Horizon
The Memphis, Tenn., company shut down its mortgage operations a few years ago, but it still makes loans to mortgage lenders. First Horizon, which lost $107 million in the third quarter due to mortgage repurchase costs, noted that warehouse lending fell during the period.
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Sterling Financial
"A substantial decline in mortgage banking activity " contributed to a 31% decline in the Spokane, Wash., company's earnings from a year earlier, CEO Greg Siebly said. The company recently agreed to sell itself to Umpqua.
Valley National
The Wayne, N.J., company's net income fell 31% from a year earlier after it reported a large drop in residential mortgage sales. Gerald Lipkin, Valley's president and CEO, said the decline was expected and that other businesses are improving.
Sun Bancorp
The Vineland, N.J., company cut 19 jobs after mortgage banking income fell $3.5 million from the second quarter. Sun lost $4.9 million in the third quarter; noninterest income fell 39% from a year earlier.
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