JP Morgan Chase & Co
JPM
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JP Morgan Chase mpany : Chase Ascends to Biggest Bank as Branches Cut

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10/12/2017 | 09:54 pm

Oct. 12--Third-party mortgage servicing has been reduced 19 quarters in a row at JPMorgan Chase & Co., which now claims to be the biggest bank in spite of cutting branch count 13 consecutive quarters. Employee count has increased each of the past seven quarters, as earnings and residential loan originations were strong.

Chase revealed $9.6 billion in company-wide income before income-tax expense in its third-quarter earnings report, not much different than $9.7 billion the preceding quarter. There was, however, a year-over-year bump, with earnings improving from $8.9 billion in the same-three months last year.

While mortgage fees and related income at the New York-based firm rose to $428 million from $401 million in the three months ended June 30, they were way off from $624 million earned in the third-quarter 2016. Production revenue made up $158 million of first-quarter mortgage income, and servicing revenue accounted for the other $270 million.

Mortgage originations came in at $29.2 billion during the three months ended Sept. 30, 2017. Total home-lending volume improved from the second quarter, when Chase closed $26.2 billion. But business was just shy of $30.9 billion in the same quarter during 2016.

Third-quarter 2017 production from just the consumer and community banking business included $10.6 billion in retail lending and $16.3 billion in correspondent acquisitions.

For all nine months of 2017, firm-wide mortgage originations came to $81.0. billion.

Chase closed out last month with a total mortgage servicing portfolio of $821.6 billion. The servicing portfolio was reduced from $827.8 billion the prior three-month period and $863.3 billion a year prior.

Included in the latest servicing portfolio was $556.9 billion in third-party servicing. The financial institution has cut its third-party portfolio each quarter since the fourth-quarter 2012, when it was $859.4 billion. The third-party servicing portfolio had been as high as $1.0821 trillion back at year-end 2009. The ratio of the carrying value of mortgage servicing rights to third-party servicing was 1.02 percent, which represented a 2.90X MSR revenue multiple.

Residential assets were beefed up, with the portfolio increasing to $239.676 billion from $235.991 billion three months earlier and $234.009 billion twelve months earlier. Last month's total included $195.134 billion in residential mortgages and $44.542 billion in home-equity loans.

Single-family delinquency inched up to 1.03 percent from 1.02 percent but stood well below 1.27 percent as of the same date a year ago.

Employee count within community banking concluded the quarter at 134,553. The unit reduced staffing from 135,453 as of mid-2017. But the total has increased from 132,092 as of Sept. 30, 2016.

At the conclusion of September 2017, Chase had 251,503 people on its company-wide payroll. Staffing grew from 249,257 in the second quarter and has expanded each quarter since the fourth-quarter 2015, when headcount stood at 234,598.

September 2017 finished with 5,174 branches, 43 fewer than as of June 30, 2017. Chase has cut branch count each quarter since the second-quarter 2014, when the number was 5,636.

Chase Chairman and Chief Executive Officer Jamie Dimon noted in the report, "for the first time, the firm led the nation in total U.S. deposits, as consumers and businesses continue to view us as their partner of choice."

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