ALBANY, N.Y. - KeyCorp said its mortgage subsidiary has purchased $3 billion of servicing rights from TransOhio Federal Savings Bank of Cleveland.
Terms of the purchase were not disclosed.
The mortgage servicing portfolio, consisting of about 50,000 loans, will increase KeyCorp Mortgage Inc.'s total servicing portfolio to around $20 billion, which would place it about 19th among mortgage banking companies. TransOhio's loans will be serviced in Williamsville, N.Y.
The Cleveland-based bank is projecting steady growth in net interest income even as credit losses remain manageable. But Chairman and CEO Chris Gorman also said that he thinks a recession is likely.
The first-quarter increase involved commercial real estate loans, including some problematic multifamily loans and an office credit, but none of the criticized loans were to consumers, officials at the Dallas company say. Further CRE deterioration is anticipated.
The Detroit-based company is exploring ways to make more consumer auto loans without running afoul of stricter capital standards that are expected from the Federal Reserve. Possible approaches include more securitizations and the use of credit risk transfers.
The House Financial Services Committee also sent to the full House two bipartisan bills, including one that would prevent large banks from opting out of having to recognize Accumulated Other Comprehensive Income in regulatory capital.
Charge-offs and nonperforming loans rose at the Georgia bank in the first quarter. But it blamed the problem on one large client and said the matter has been resolved.
Amid healthy first-quarter loan growth and improving credit quality, Discover Financial Services slashed its profits by $800 million to offset remediation costs from a 16-year period when it overcharged certain merchants.
