Wednesday, September 18, 2013

BB&T says mortgage 'right-size' coming in 2014

BB&T has so far largely been immune from the wave of mortgage-related layoffs that's affected banks across the industry -- but that's set to change in first part of next year, Chief Financial Officer Daryl Bible told investors Wednesday.

As rising interest rates have dramatically slowed home mortgage refinancing activity, big banks like Wells Fargo and Bank of America have laid off thousands of workers. Wells Fargo announced another 150 layoffs in Charlotte on Wednesday, part of nearly 1,900 mortgage job cuts across the country. Those came after 284 layoffs in Charlotte and 2,300 nationwide. At nearly the same time, Bank of America laid off more than 2,000 workers across the country in its mortgage unit.

BB&T's mortgage business has slowed at a pace comparable to its peers. Where two-thirds of the Winston-Salem bank's mortgage activity had come from refinances, it's now projected to make up only 30 percent this quarter, Bible said. Total mortgage volume is set to fall between 10 and 15 percent, and applications are down 30 percent.

But that decline hasn't translated into layoffs, as it has at Wells Fargo and Bank of America. That's because BB&T is in the middle of a large-scale restructuring of its mortgage operations. Before, a huge chunk of its mortgages were originated out of its retail branches. The bank now wants to move all the loan origination into its mortgage banking unit, to make it easier to comply with new regulations from the Consumer Financial Protection Bureau, Bible said.

"We are going to get through this transition first, and probably be a quarter or two behind from some of our peers," Bible told investors at the conference in Boston. "So I would say, first half of 2014 is before we start to right-size our business."

BB&T is the No. 3 bank in the Charlotte market, behind Bank of America and Wells Fargo.