Sluggish Refinancings Hit Washington Mutual

The company's earnings fall by nearly one-third.
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Washington Mutual's (WM) - Get Report third-quarter earnings fell by nearly one-third as a result of lower mortgage refinancing activity and fewer gains from securities sales.

The bank holding company said late Wednesday that net income fell to $674 million, or 76 cents a share, from continuing operations of $999 million, or $1.09 a share, a year earlier.

However, the results beat by 5 cents the average EPS expectation of analysts polled by Thomson First Call.

Total loan volume was $61.8 billion, down from $131.9 billion a year earlier and below the $79.5 billion in this year's second quarter.

Home loan volume of $47.8 billion was down $69.3 billion from a year earlier due to the "significant" industrywide reduction in mortgage volume, the company reported.

WaMu said adjustable-rate mortgages represented 67% of the company's home loan volume, compared with 55% in the second quarter and 27% a year earlier. In addition, the company experienced record short-term ARM home loan volume of $19.1 billion this quarter, which represented 40% of total home loan volume.

WaMu also announced plans to raise its quarterly dividend a penny to 45 cents.

Shares of WaMu closed down $1.11, or 2.9%, to $37.85.