Independent mortgage banks had a comeback year in 2024.

Last year, independent mortgage banks (IMBs) and mortgage subsidiaries of chartered banks reported an average profit of $443 per loan originated. That is up from an average $1,056 loss per loan in 2023, according to a report released Thursday by the Mortgage Bankers Association (MBA).

“After two preceding years of net losses, net production income was back in the black in 2024,” Marina Walsh, the MBA’s vice president of industry analysis, wrote in a press release. “Production revenues improved, and per-loan costs decreased as volume picked up, particularly in the second half of the year.”

Driven by strong profits from servicing business lines, 68% of companies had pretax net profits in 2024, up from 36% in 2023 and 53% in 2022, the MBA reported.

Average production volume was also up last year, rising to $2.1 billion in 2024 from $1.9 billion in 2023. And there was an average of 6,259 loans per company last year, up from the average volume of 6,021 loans in 2023.

Refinancing for IMBs and mortgage subsidiaries of chartered banks increased to 16% of total originations in 2024 from 11% the previous year, according to the MBA. By comparison, the association estimated that for the entire mortgage industry, refinancing increased to 27% in 2024 from 16% the prior year.

While the overall lending climate was favorable for IMBs last year, Walsh noted that some smaller lenders felt the pinch of fixed costs that cut into profits.

“While overall production profits were positive, some lenders are still struggling in this tough market environment,” Walsh stated. “For example, for the sub-group of lenders with an annual production volume of less than $500 million in 2024, average net production losses continued for the third consecutive year.”

Walsh added that “it has been difficult to spread the fixed costs of originating loans over lower volume.”