Independent mortgage banks and mortgage subsidiaries of chartered banks made an average profit of $1,772 on each loan they originated in the first quarter of 2013, down from $2,256 per loan in the fourth quarter of 2012, as production volume declined, the Mortgage Bankers Association (MBA). “The average firm’s production volume dropped about 10 percent in the first quarter. On a per-loan basis, the combination of lower revenues and rising costs resulted in lower profits compared to the previous three quarters,” said MBA Associate Vice President of Industry Analysis Marina Walsh. “Nonetheless, the margins remain strong in comparison to other quarters since 2008.” Among the other key findings of MBA’s Quarterly Mortgage Bankers Performance Report are: ►In basis points, the average production profit (net production income) was 86 basis points in the first quarter of 2013, compared to 107 basis points in the fourth quarter of 2012. ►Average production volume was $442 million per company in the first quarter of 2013, down from $488 million per company in the fourth quarter of 2012. The average volume by count per company declined to 1,954 loans in the first quarter, from 2,132 in the fourth quarter. ►The refinancing share of total originations, by dollar volume, was relatively unchanged at 60 percent in the first quarter, down from 61 percent in the fourth quarter. For the mortgage industry as whole, MBA estimates the refinancing share at 74 percent in the first quarter of 2013, down from 75 percent in the fourth quarter. ►Secondary marketing income declined to 274 basis points in the first quarter, compared to 279 basis points in the fourth quarter. ►Total loan production expenses, including commissions, compensation, occupancy and equipment, and other production expenses and corporate allocations, increased to $5,779 per loan in the first quarter, from $5,603 in the fourth quarter. ►Personnel expenses averaged $3,785 per loan in the first quarter, up from $3,570 per loan in the fourth quarter. ►The "net cost to originate" was $4,182 in the first quarter, up from $3,813 per loan in the fourth quarter. The "net cost to originate" includes all production operating expenses and commissions minus all fee income, but excludes secondary marketing gains, capitalized servicing, servicing released premiums and warehouse interest spread. ►Productivity was 3.1 loans originated per production employee per month in the first quarter, down from 3.8 in the fourth quarter.Fulfillment productivity was 8.6 loans originated per fulfillment employee per month in the first quarter, down from 10.2 in the fourth quarter. ►Ninety-four percent of the firms in the study posted pre-tax net financial profits in the first quarter of 2013, which was unchanged from the fourth quarter. MBA's Mortgage Bankers Performance Report series offers a variety of performance measures on the mortgage banking industry and is intended as a financial and operational benchmark for independent mortgage companies, bank subsidiaries and other non-depository institutions. Seventy-three percent of the 316 companies that reported production data for the first quarter report were independent mortgage companies.