Quarter-over-quarter mortgage home purchase financing surged at The PNCÂ Financial Services Group Inc. Also improving were mortgage earnings.
From April 1 through June 30, total mortgage originations were $2.6 billion, second-quarter earnings data indicate.
Business was propped up from $1.9 billion in the first quarter but has slumped compared to the $4.7 billion in home loans that were closed in the second-quarter 2013.
Full first-half 2014 production amounted to $4.5 billion.
Second-quarter 2014 originations were evenly split between purchase financing and refinancing — indicating that purchase originations soared by 84 percent between the first and second quarters.
“A strategic focus of residential mortgage banking is origination through retail channels only, with an emphasis on home purchase transactions,” PNC stated in the report.
The third-party residential mortgage servicing portfolio was $111 billion as of June 30. The portfolio was trimmed from $114 billion three months earlier and $116 billion a year earlier.
PNC owned $14.560 billion in residential real estate loans — including $13.965 billion in residential mortgages and $0.595 billion in residential construction loans. The total was trimmed from $14.806 billion three months earlier and $14.777 billion a year earlier.
Delinquency of at least 30 days on the non-government insured portion of the portfolio fell to 0.90 percent from 1.06 percent and was 1.35 percent at the same point last year.
On the government-insured portion, the 30-day rate improved to 6.83 percent from 7.08 percent and has plunged from 10.24 percent as of June 30, 2013.
Another $35.466 billion in home-equity assets were on the balance sheet, dipping from $35.872 billion at the end of the first quarter and $36.416 billion at the end of the second-quarter 2013. The June 30, 2014, total was comprised of $20.959 billion in home-equity lines of credit and $14.507 billion in installment home-equity loans.
Home-equity delinquency was down 4 basis points to 0.26 percent and was 3 BPS better than in the second-quarter 2013.
The Pittsburgh-based company serviced $316 billion in commercial mortgages for third parties. That portfolio was up $3 billion from the first quarter and $22 billion higher than the second-quarter 2013.
The investment portfolio included $22.919 billion in commercial real estate loans, slightly more than the $22.151 billion owned at the end of March and growing from the $18.991 billion owned as of mid-year 2013. The mid-year 2014 amount included $8.384 billion in commercial mortgages and $14.535 billion in real estate projects.
CRE loan delinquency crept up 1 basis point to 0.28 percent but has fallen 19 BPS from the same point in 2013.
Income from residential mortgage banking swung to a $36 million profit from a $4 million first-quarter loss. Income also improved from $20 million in the second-quarter 2013.
“Residential mortgage banking non-interest income increased $21 million due to higher loan sales revenue primarily related to gains on sales of previously underperforming portfolio loans as well as higher production income from increased origination volume,” the report said. “This increase was partially offset by the impact of a $2 million provision for residential mortgage repurchase obligations in the second quarter compared with a benefit of $19 million in the first quarter.”
At the parent company level, earnings before income taxes and non-controlling interests settled at $1.4 billion, the same as the previous period but off from $1.5 billion in the year-earlier period.
Company-wide staffing grew to 54,359 full- and part-time employees from 54,115 as of March 31 but has been trimmed from 55,780 as of June 30, 2013.
PNC ended the latest period with 2,695 retail banking branches, eight fewer than at the end of March.
