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PNC Performance Better, Employees Added

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Mortgage Daily

                                                 January 20, 2011

Quarterly loan production improved at The PNC Financial Services Group Inc., though annual originations sank by nearly half. As the company cut its servicing portfolio and mortgage holdings, residential delinquency has improved. Late payments on commercial mortgages have tumbled over the past year. The mortgage staff grew by 200.

Mortgage originations climbed to $3.5 billion in the fourth-quarter earnings report. Business improved from the third quarter’s $2.7 billion and $2.3 billion funded in the final quarter of 2009.

Refinance share shot up to 83 percent of fourth-quarter volume from 76 percent three months prior. The share was just 59 percent at the end of 2009.

Full-year production sank to $10.5 billion from the $19.1 billion originated during 2009.

The company serviced $125 billion for investors in the latest period. The third-party servicing portfolio fell from $131 billion in the prior quarter and $145 billion in the same quarter of the prior year.

Residential loan holdings were $15.3 billion on Dec. 31, lower than $15.7 billion on Sept. 30 and $18.2 billion on Dec. 31, 2009.

Home-equity lines-of-credit outstanding amounted to $23.5 billion. HELOC assets edged down from $23.8 billion three months earlier but rose from $24.2 billion a year earlier.

Home-equity loans totaled $10.8 billion at the end of last year, a hair short of the balance at the end of the third quarter. HEL holdings were higher at the end of 2009 at $11.7 billion.

The Pittsburgh-based company reported that 30-day delinquency on its residential real estate loans was 4.18 percent at the close of last month, improving from 4.30 percent at the end of the third quarter. Delinquency was also better than the fourth-quarter 2009’s 5.19 percent.

Residential construction loans finished 2010 at $0.7 billion. Construction assets dropped from the prior quarter’s $0.8 billion and were less than half of the $1.6 billion owned on Dec. 31, 2009.

Commercial real estate assets closed out 2010 at $17.9 billion. PNC trimmed its CRE holdings from $19.1 billion at the end of September. Commercial mortgages were down significantly from $23.1 billion at the end of the previous year.

Delinquency on CRE loans sank — falling to 1.39 percent from the third quarter’s 2.29 percent. Commercial mortgage delinquency was 241 BPS better than at the same point in 2009.

Residential lending earnings tumbled to just $3 million from the third quarter’s $98 million and from the final quarter of 2009, when mortgage banking earnings were $25 million.

The parent company earned $1.1 billion before taxes during the last quarter of 2010, more than the $1.0 billion reported for the prior quarter. Income, however, was lower than $1.6 billion in the final quarter of 2009.

The number of people working in residential mortgage banking was 3,539 at the end of last month, 200 more than at the end of September. Employee count at the end of the previous year was 3,267.

PNC closed out last year with 50,769 employees across all businesses, increasing its staff from 50,393 three months earlier. Headcount finished 2009 at 55,820 employees.

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