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Wells Fargo and Citigroup are laying off hundreds of employees in their mortgage units as rising interest rates cause home loan refinances to plummet. More layoffs by banks with heavy exposure to mortgages are expected this year.
July 19
EverBank Financial (EVER) in Jacksonville, Fla., reported higher second-quarter earnings and said it would shut its wholesale-mortgage business.
The $18.4 billion-asset company will cut roughly 150 positions in closing wholesale-mortgage centers in Dallas, Sacramento, Calif., and Jacksonville, EverBank said. Its wholesale-mortgage business provided credit to mortgage brokers nationwide who make conventional, FHA, VA and jumbo loans.
EverBank decided to make the change "as the housing market recovers and the competitive and regulatory landscape of the residential mortgage industry evolves," Chairman and Chief Executive Robert Clements said in a news release Monday.
Wells Fargo (WFC) and Citigroup (NYSE:C) also are
EverBank's wholesale-mortgage business funded about $500 million of loans in the second quarter and $1.2 billion so far in 2013. The company expects to take a charge of between $2 million and $4 million in the third quarter as a result of the closure, it said.
EverBank will focus on its retail banking and correspondent-lending operations, and it will continue to offer mortgage products to EverBank to consumers through its other home-lending operations, the company said.
Meanwhile, on Tuesday, EverBank said that its second-quarter net income more than quadrupled from a year earlier, to $43.5 million.
Revenue increased 45%, to $288 million, year over year as noninterest income rose 98%, to $146.8 million. Net loan-servicing income of $43.8 million provided a big boost to revenue; EverBank reported a $21.8 million servicing loss a year earlier.
Net interest income climbed almost 13%, to $141.2 million, from a year earlier. Organic asset generation rose 39%, to $3.8 billion, and total portfolio loans held for investment were $12.9 billion, up 65% from a year earlier.
Noninterest expense totaled $213.5 million, up about 21% from a year earlier. Salaries, commissions and other employee benefits increased 55%, to $118.5 million, year over year.
"EverBank's results for the second quarter highlight the power of our banking franchise as we achieved quarterly portfolio loan growth of 5% and a return on equity of 12.7%," Clements said. "The second quarter saw a meaningful rise in interest rates and we look forward to benefiting from this transition given the composition of our balance sheet and flexibility of our business model.
EverBank
It announced earlier this month that it
