Both sides of the mortgage banking profit picture improved significantly in early 2005, according to a new Inside Mortgage Profitability analysis of major lender earnings. A group of eight top mortgage banking operations showed combined profits from loan production activity jumped 35.4 percent from the end of 2004 to the first quarter of this year. On a combined basis, the eight firms reported just under $2.00 billion in production income during the first quarter, an…