Slowing mortgage activity contributed to a drop in net income for Envision Bank, which saw second quarter earnings decline nearly 70 percent from last year.

Envision Bank had second quarter net income of $1.6 million, or $0.31 per diluted share, compared $5.2 million, or $1.02 per diluted share, in the second quarter of 2020. First quarter net income was $4.1 million, or $0.78 per diluted share.

For the first six months of 2021, Envision Bank’s net income was $5.7 million, or $1.10 per diluted share, compared to $4.4 million, or $0.86 per diluted share, in the first six months of 2020.

President and CEO William M. Parent said in the second quarter earnings statement that the bank had a positive quarter and was building momentum through strong loan growth, higher net interest margin, net interest income growth and improved credit metrics.

“The earnings decline from prior quarters reflects the normalization of the mortgage market as declining refinancing volume and compressed margins resulted in significantly lower overall originations and related income,” Parent said. “We continue to work diligently to right size our operations to reflect market conditions but there will be a lagging period before our overall operating leverage initiatives are realized. We are pleased with the developments post re-opening of our local market and remain optimistic that we can continue to grow our business and generate recurring operating leverage.”

Envision Bank, which has relocated its corporate headquarters from Stoughton to Quincy, had second quarter noninterest income of $6.8 million, a decrease of $5.6 million, or 45.1 percent, compared to the first quarter. The bank said it had a $5.3 million decrease in the net gain on loan origination and sale activities. Net mortgage servicing fees also declined by $398,000. Last year in the second quarter, Envision had $13.5 million in noninterest income.

Envision sold $342.8 million in mortgages in the second quarter, compared to $503.3 million in the first quarter of 2021. The bank’s mortgage pipeline at the end of the second quarter was $139.7 million, compared to a pipeline of $239.5 million at the end of the first quarter, which the bank said contributed to the decrease in the gain on loan origination and sales activities. Last year the mortgage pipeline at the end of the second quarter was $329.3 million.

Lower mortgage activity did help drive down noninterest expenses. The second quarter noninterest expenses were $10.6 million compared to $12 million in the first quarter. Salaries and employee benefits decreased by $1.1 million, or 13.4 percent, primarily because of lower commissions paid on mortgage originations, the bank said. The bank also saw occupancy and equipment expenses decrease by $123,000 from the prior quarter because of the closing of residential lending offices.

Envision Bank’s total assets were $744.1 million in the second quarter compared to $738.2 million in the first quarter. Total loans increased by $48.6 million, or 9.8 percent, to $546.4 million in the second quarter. The bank said it has increased its commercial real estate loans as it focuses on diversifying the loan portfolio.

Total deposits in the second quarter were $571.98 million, up from $560.2 million at the end of the first quarter and $538.9 million in the second quarter of 2020.