Mortgage Daily

Published On: April 16, 2014

Residential loan production, mortgage assets and home loan delinquency were all lower at The PNC Financial Services Group Inc. Mortgage earnings, meanwhile, swung to a loss.

Residential mortgage originations in the first quarter of this year were $1.9 billion, the financial institution said in its earnings report.

Business was worse than the prior three-month period’s $2.5 billion in loan volume.

A more than one-half decline was recorded compared to the $4.2 billion funded during the first quarter of last year.

Refinances made up 63 percent of the latest business, up from 59 percent in the previous report.

At $114 billion, PNC’s mortgage servicing portfolio was not changed from the end of the fourth-quarter 2013. It was down $6 billion from 12 months earlier.

As of the close of the first quarter, $14.179 billion in residential loans were owned by PNC, less than the $14.418 billion balance as of the prior report and $14.217 billion total as of the year-earlier report.

On the portion of its residential portfolio that is not government-guaranteed or -insured, the total 30-day delinquency rate was 1.06 percent, falling from 1.17 in the last report and 1.63 percent in the year-earlier report.

The government loan delinquency rate declined to 7.08 percent from 7.88 percent and has tumbled even more compared to 11.06 percent as of March 31, 2013.

Home-equity products accounted for $35.872 billion of the investment portfolio. PNC trimmed its home-equity holdings from $36.447 billion at the end of the prior period and $36.030 billion on the same date in 2013.

The latest home-equity number included $21.277 in home-equity lines of credit and $14.595 billion in home-equity installment loans.

Home-equity delinquency was 0.30 percent, slipping 3 basis points from the end of last year and the same point last year.

Residential construction assets were off at $0.627 billion compared to $0.647 billion as of year-end 2013. Construction loans have been reduced from $0.768 billion at the end of the first-quarter 2013.

Commercial real estate assets ended last month at $22.151 billion, increasing from $21.191 billion at the end of December. The category was just $18.779 billion as of March 31, 2013.

CRE assets as of March 31, 2014 included $14.268 billion in real estate projects and $7.883 billion in commercial mortgages.

CRE delinquency improved 4 BPS to 0.27 percent. A year earlier, the CRE rate was 0.80 percent.

Earnings from residential mortgage banking swung to a $4 million loss from a $55 million fourth-quarter profit. The mortgage business earned $45 million in the first-quarter 2013.

The Pittsburgh-based firm said income before income taxes and non-controlling interests was $1.4 billion at the holding company level, the same as in the third quarter and a year earlier.

Prior period income was minimally revised to reflect the adoption of Accounting Standards Update (ASU) 2014-01, which is related to low income housing tax credits.

Across all PNC businesses, staffing stood at 54,115 as of the end of last month. Headcount, including part- and full-time employees, was down from 54,433 three months earlier and 56,172 twelve months earlier.

PNC closed out the quarter with 2,703 branches, 11 fewer than it started the period at.

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