$16.4 billion 3rd quarter production
By MortgageDaily.com staff
1/17/2006

Led by a contraction in conforming originations, quarterly and annual fundings fell at National City Corp. -- which indicated it may be prospecting for possible acquisitions.

The Ohio-based lender reported fourth quarter originations for sale totaled $16.4 billion, plunging 25% from the third quarter and 15% from the same period a year prior.

Volume of $74.7 billion in 2005 nudged down 7% from the prior year, according to the mortgage banker's supplemental data report today.

For the fourth quarter, National City Mortgage reportedly contributed $10.8 billion, of which $7.4 billion were retail and $4.6 billion wholesale. Refinances represented 51% of the prime-lending unit's fourth quarter volume and adjustable-rate loans 32%.

The conforming unit's annual fundings continued to slide, falling 12% to comprise $53.3 billion of the 2005 total, the Cleveland-based parent company reported.

First Franklin accounted for the remaining $5.7 billion fourth quarter fundings, with ARMs comprising 77% of its volume and refinance loans one-third. While the subprime unit's volume fell 19% from the third quarter, its full-year fundings continued increasing, by 9% from 2004, the report said.

National City said the $159.6 billion servicing portfolio as of Dec. 31, 2005, carried a 5.78% weighted-average note rate and 3.81% default rate. Just over a million loans comprise the portfolio.

The company reported fourth quarter 2005 net income of $398 million.

Chairman and CEO David A. Daberko indicated part of a decline in annual earnings was related to mortgage banking, which "fell sharply in 2005 due to cyclically lower volumes and gains on sale of mortgages, as well as lower hedging gains. We believe that we are now at the low point of the mortgage cycle."

For 2006, Daberko expects continued growth in revenue and lower expenses, and said National City will be open for "targeted acquisitions to enhance our presence in certain markets, such as our recently announced plans to acquire Forbes First Financial Corporation, an eight branch bank in St. Louis."

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