Despite an upswing in home loan production, mortgage earnings shrank at The PNC Financial Services Group Inc. in quarter-over-quarter and year-over-year comparisons. On a company-wide basis, however, the corporation realized an increase in pre-tax income.
From April 1 to June 30, PNC’s second-quarter earnings report showed residential home loan originations at $2.9 billion.
New business forged ahead of the $2.6 billion originated in both the first quarter of this year and the second quarter of last year.
While refinances comprised half of second-quarter originations, the share fell from 69 percent listed one quarter earlier.
For the first six months of 2015, the financial institution funded $5.5 billion in home loans.
As of the end of last month $115 billion in residential loans were serviced for third parties, growing from $113 billion serviced as of March 31 and $111 billion serviced as of June 30 a year earlier.
On the balance sheet, residential assets dropped to $47.576 billion from the prior-quarter tally of $48.047 billion and the second-quarter 2014 total of $49.431.
Included in the most current residential loan portfolio were $14.041 billion in mortgages, $19.589 billion in home-equity lines of credit and $13.946 billion in home-equity loans.
As of June 30, the Pittsburgh-based mortgage provider also had $0.491 billion residential construction loans on its balance sheet.
At the end of the second-quarter, PNC revealed 0.81 percent of its non-government insured mortgages carried a 30-day or more delinquency rate. This level of delinquency was one basis point higher than the first-quarter end-cap rate but nine basis points lower than the rate configured at the endpoint of last year’s second quarter.
For government-insured loans, the 30-day or more delinquency rate was 4.73 percent, a marked improvement over the 5.10 percent rate configured for the previous reporting period. Delinquency has improved from the close of the second-quarter 2014, when the rate was 6.83 percent.
At the end of last month, the 30-day home-equity delinquency rate was 0.26 percent — one basis point lower than at the end of the first quarter and unchanged from the documented rate as of last year on June 30.
The servicing portfolio for commercial loans jumped to $436 billion from $390 billion as of March 31 and $353 billion as of June 31, 2014.
The lender’s commercial real estate assets added up to $35.737 billion at the end of last month. CRE investments increased from $35.299 billion accounted for at the end of March and $33.827 billion calculated at the close of the second-quarter 2014.
CRE real estate projects at $15.142 billion, commercial mortgages at $9.664 billion and real estate related assets at $10.931 billion comprised the latest CRE loan portfolio.
The 0.04 percent thirty-day delinquency rate on CRE loans was 15 BPS better than the last reporting period. The rate was 24 BPS lower than when June closed last year.
PNC’s pre-tax earnings from residential lending slimmed to $30 million compared to first-quarter mortgage banking income of $44 million and second-quarter 2014 income of $57 million.
According to PNC’s press statement, the lender attributed its decline in mortgage banking income to “higher net hedging gains on residential mortgage servicing rights offset by lower loan sales revenue and lower servicing revenue” and “higher legal accruals and increased production expense on higher origination volume.”
On the whole, however, corporate-wide earnings before income taxes and non-controlling interests at $1.5 billion moved ahead of the $1.3 billion given for prior quarter and inched above the $1.4 billion listed at the 2014, second-quarter endpoint.
Headcount was bumped up to 53,709 employees from 53,472 in the preceding three-month time frame but down from 54,359 staff members as of June 30 a year previous.
Altogether, PNC’s end-of-June branch count fell to 2,644 locations — 16 fewer than listed for the March-end total.
