Independent mortgage banks (IMBs) and chartered banks’ mortgage subsidiaries improved their profitability in the third quarter, as low production continues to define the market.

Pretax net production profits rose from $950 (25 basis points) per loan in the second quarter to $1,201 (33 basis points) in the third quarter, according to a report published Tuesday by the Mortgage Bankers Association (MBA).

Marina Walsh, vice president of industry analysis at the MBA, noted in a press release that “the increase in recorded production revenue drove profits higher,” despite closed loan volumes remaining mostly flat and production expenses rising slightly in the third quarter.

The quarterly report from the MBA provides a snapshot of industry performance using a sample of approximately 325 companies.

The MBA estimates that the purchase share among total third-quarter mortgage production was 67%, though it was 82% by dollar volume.

Total production revenue rose to 359 basis points in the third quarter from 346 basis points in the second quarter, while total loan production expenses increased to 326 basis points from 321 basis points the prior quarter.

Per-loan costs remained historically elevated at $11,109 per loan in the third quarter, up from $10,965 per loan in the second quarter. Loan production expenses have averaged $7,799 per loan from the first quarter of 2008 to last quarter.

Average mortgage company production volume was $634 million in the third quarter, down from $636 million in the second quarter. Unit volumes per company increased slightly, to 1,866 loans in the third quarter from 1,862 loans the previous quarter.

Servicing net financial income was $29 per loan serviced in the third quarter, essentially flat from the $30 per loan serviced in the second quarter.

Combining production and servicing channels, 85% of the 325 companies sampled by the MBA reported a profitable quarter, up from 80% in the second quarter.