Independent mortgage banks (IMBs) and mortgage subsidiaries of chartered banks posted their strongest quarterly net production income since the fourth quarter of 2021, according to a report released Tuesday by the Mortgage Bankers Association (MBA).

IMBs reported an average net profit of $950 per loan on mortgages originated during the second quarter of 2025, a welcome turnaround following the first quarter’s net loss of $28 per loan.

Marina Walsh, MBA’s vice president of industry analysis, attributed the gains to a combination of cost-cutting measures and increasing loan balances.

“The seasonal pickup in purchase volume, and the average number of production employees decreasing from last quarter, led to production costs dropping by more than $1,600 per loan,” Walsh observed in a press release. “At the same time, average loan balances reached a study-high, resulting in an increase in gross production revenue.”

Walsh added that improving net income from mortgage servicing and minimal impairments on mortgage servicing rights contributed to 80% of companies in the report sample posting overall profits, which is the highest percentage since the third quarter of 2021.

The average production volume of $636 million per company in the second quarter soared past the prior quarter’s mark of $488 million. Total loan volume was also up, averaging 1,862 loans per company versus 1,448 in the first quarter.

The average loan balance for first mortgages increased 2.7% during the quarter to $374,151. The average balance for total mortgages — which also includes second mortgages, home equity lines of credit and other second-lien products — rose 2.6% to $355,448.

Meanwhile, loan production expenses fell to $10,965, down from $12,579 in the first quarter. This was partly due to reduced headcounts, with the average number of production employees per company sitting at 315 in the second quarter compared to 322 during the first three months of the year.