Mortgage business blossomed for The PNC Financial Services Group Inc. Loan production increased, the servicing portfolio grew and delinquency declined. While mortgage earnings swung to a profit, residential assets retreated.
From Jan. 1 to March 31, PNC’s first-quarter earnings statement indicated that $2.6 billion in residential loans were originated.
New business stepped ahead of the $2.4 billion in mortgages produced in the quarter ended Dec. 31, 2014.
Loan volume also grew over the $1.9 billion listed for last year in the first quarter.
Refinances made up 69 percent of current quarter originations — an increase over the 58 percent volume share for the final quarter in 2014.
PNC serviced $113 billion in residential loans for third parties, pushing ahead of the $108 billion serviced at the end of December. Still, the servicing portfolio fell short of the $114 billion from the year-earlier time frame.
Residential assets on the balance sheet amounted to $48.047 billion. At $48.562 billion at the end of the fourth-quarter last year and $50.051 billion at the same time last year, current assets were leaner.
The latest residential loan portfolio included $13.982 billion in mortgages, $19.918 billion in home-equity lines of credit and $14.147 billion in home-equity loans.
Mortgages not guaranteed by the government had an 0.80 percent delinquency at the close of the first quarter, better than the 0.99 percent delinquency as of the prior period and markedly improved over the 1.06 percent calculated at the culmination of March in the previous year.
Delinquency on government-guaranteed loans fell 66 basis points from the prior reporting period to 5.10 percent. At the close of the first quarter a year earlier, government loan delinquency was at 7.08 percent.
At 0.27 percent, home-equity delinquency shrank 2 BPS from Dec. 31. The rate was down 3 BPS from one year previous.
As of the end of March, the balance sheet showed residential construction loans at $0.507 billion.
The servicing portfolio for commercial loans, including commercial mortgages,
jumped $13 billion to $390 billion as of March 31, 2015. The portfolio was at $351 billion as of March 31, 2014.
PNC’s commercial real estate assets were at $35.299 billion at the end of last month. These investments were ahead of the $34.074 billion figured at the end of last year and the $33.007 billion that ended the prior year’s first quarter.
The recent CRE loan portfolio consisted of $9.498 billion in commercial mortgages, $15.057 billion in real estate projects and $10.744 billion in real estate related assets.
With an eight-basis-point increase from the prior period, the 30-day delinquency rate on PNC’s CRE portfolio was 0.19 percent as of the close of March. The rate was down from 0.27 percent as of March 31, 2014.
Earnings on the residential mortgage banking side of PNC came to a $28 million profit — a big upswing from the $9 million loss reported just three months prior. In the same quarter last year, a $4 million loss was recorded.
Despite these gains, company-wide income before income taxes and non-controlling interests dipped to $1.3 billion from $1.4 billion in the fourth and first quarters of last year.
Headcount was also scaled back — to 53,472 employees from 53,587 in the preceding three-month time frame and 54,115 as of March 31 a year ago.
