Setting The Stage

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ORIGINATION LocaL Edition 36 | Th e M Rep o RT o r i g i nat i o n s e r v i c i n g a na ly t i c s s e c o n da r y M a r k e t Ishbia said. "It's really hard to be great at something when it's a small part of your business." While he expects to see more lenders drop out of wholesale, Ishbia adds that a company exit- ing here or there shouldn't create a major impact in the industry, noting that he was more con- cerned about seeing companies leave that line shortly before January's regulatory deadlines hit. "There are still 100-plus whole- sale lenders. It's not a substantial amount of business at all. From a brokers' perspective . . . there's no impact," he said. Banks Fight for growth Despite revenue challenges, banks continue to finD their way to stability. WASHINGTON, D.C. // Earnings at banks insured by the FDIC rose nearly 17 percent over the year in the fourth quarter, although the increase is largely due to a drop in loan-loss provisions, which de- clined 53.7 percent across all FDIC- insured institutions, according to the agency's Quarterly Banking Profile for the fourth quarter. FDIC-insured institutions earned a net income of $154.7 billion over the year in 2013, a 9.6 percent increase over the previous year, according to the report. "[T]he industry continues to experience difficulty growing revenue," said FDIC chairman Martin J. Gruenberg. He listed "[n]arrow margins, modest loan growth, and a decline in mort- gage refinancing activity" as hindrances to revenue growth. Compared to a year ago, one- to four-family residential mortgage loans originated and intended for sale were down 62 percent in the fourth quarter. At the same time, noninterest income from mort- gage servicing and securitization declined 34 percent. Regardless, "[t]he trend of slow but steady improvement that has been underway in the banking industry since 2009 continued to gain ground," Gruenberg said. "Asset quality improved, loan balances were up, and there were fewer troubled institutions." The amount of charge-offs in the fourth quarter was down 37 percent over the year at FDIC- insured banks, and noncurrent loans are on the decline. In fact, the delinquency rate at FDIC- insured institutions is at its lowest level since the third quarter of 2008: 2.62 percent. Overall, loan balances rose 1.2 percent over the fourth quarter as nonfarm residential prop- erty loan balances increased 1.6 percent and home equity loan balances declined 1.3 percent. Home equity loans have been on the decline for 19 straight quar- ters, according to the FDIC. Noninterest income at FDIC- insured institutions declined $4.2 billion, while net interest income rose $1.4 billion, according to the FDIC. Return on assets and return on equity both improved over the fourth quarter. Return on assets increased from 0.96 percent to 1.1 percent over the year, while return on equity ticked up from 8.53 percent to 9.87 percent. The number of "problem banks" fell to 467 in the fourth quarter, down from 515 the previous quarter, and is close to half its peak reached in early 2011. Just two banks failed in the fourth quarter, making 24 bank closures for the year, down from 51 a year earlier. As of the end of the year, the Deposit Insurance Fund held $47.2 billion, according to the fourth-quarter report.

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