Bank of America (BofA) reported another quarterly decline in mortgage and home equity production in the first quarter of 2024.
On Tuesday morning, the top-20 U.S. mortgage lender stated it produced a volume of $3.4 billion in first mortgages from January to March, down 12.5% from the $3.9 billion in the previous quarter and the same quarter of 2023.
Loan production in the home equity arena was $1.8 billion in Q1 2024, a decline of 16% from $2.2 billion in the previous quarter and down 27% compared to $2.5 billion in the same period of 2023.
BofA’s sequential quarterly production decline follows that of Wells Fargo and JPMorgan Chase, which also showed volumes under pressure in the first quarter of 2024. Their combined quarterly origination reached $10 billion – and, if this path is maintained, they will be well below the $60 billion originated in 2023, according to Eric Hagen, analyst at BTIG.
“Expect independent mortgage banks to continue taking share from the large commercial depositaries, which are still shrinking their footprints in lending and servicing,” Hagen said in a report on Tuesday.
Nonbanks Rocket Mortgage, United Wholesale Mortgage, loanDepot, Pennymac, Rithm Capital and Mr. Cooper are expected to report their earnings in the coming weeks.
BofA’s mortgage assets
Bank of America had $227.7 billion in outstanding residential mortgages on its books through March 31, 2024, down from $228.9 billion in Q4 2023 and $229.3 billion in the first quarter of 2023.
The home equity portfolio was $25.5 billion at the end of the first quarter, relatively flat compared to $25.7 billion from the previous quarter — and a decline from $26.5 billion a year prior.
Bank of America’s total mortgage-backed securities reached a $49.8 billion fair value as of March 31, 2024, compared to $51.1 billion as of December 31, 2023.
Overall, the bank posted a net income of $6.7 billion from January to March, down from $8.2 billion in the same period last year. Provisions increased to $1.3 billion in Q1 2024, compared to $1.1 billion the previous quarter and $931 million in the first quarter of 2023.
According to its filing with the Securities and Exchange Commission (SEC), the consumer banking division posted a net income of $2.65 billion in Q1 2024, down from $2.76 billion in the prior quarter.
Chair and CEO Brian Moynihan said in a statement that the bank’s businesses “performed well,” reaching “36.9 million consumer checking accounts, with 21 consecutive quarters of net checking account growth.”