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PNC’s Residential Business Deteriorates

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Residential originations tumbled at the PNC Financial Services Group Inc., while mortgage earnings declined and delinquency deteriorated. But overall earnings and commercial mortgage delinquency improved. Headcount at the mortgage unit, meanwhile, fell.

Residential lending was $2.3 billion during the fourth-quarter 2009, according to earnings data reported today. Volume sank from $3.6 billion in the prior period. Refinances represented 59 percent of business in both quarters.

For all of 2009, home loan production at the Pittsburgh-based institution was $19.2 billion.

PNC said it serviced $145 billion in loans for investors as of yearend, less than $158 billion at the end of the prior quarter.

Residential holdings were $18.2 billion as of Dec. 31, 2009, less than $18.5 billion three months earlier. Closed-end home-equity loans on the balance sheet eased to $11.7 billion from $12.1 billion, while home-equity line-of-credit assets inched down to $24.2 billion from $24.3 billion. Residential construction lending accounted for another $1.6 billion, less than $2.0 billion.

Residential delinquency of at least 30 days was 5.19 percent at the end of last month, rising from 5.07 percent at the end of September and 3.85 percent at the end of 2008.

The company’s commercial mortgage servicing portfolio was $287 billion on Dec. 31, higher than $275 billion on Sept. 30 and $270 billion on Dec. 31, 2008.

Commercial mortgage holdings finished last year at $7.5 billion, less than $7.9 billion three months earlier, while financing for real-estate projects stood at $15.6 billion, falling from $16.1 billion.

Commercial real estate delinquency of at least 30 days finished last year at 3.80 percent, falling from 4.17 percent the prior quarter though higher than 1.90 percent the prior year.

Residential mortgage-banking earnings were $25 million, sinking from the third quarter’s $91 million and in line with declining originations. While the figures weren’t available for the fourth-quarter 2008, earnings reached $227 million in the first quarter. For all of last year, earnings from mortgage banking were $435 million.

Combined income from all PNC activities totaled $1.7 billion before taxes, more than double the third quarter’s $0.8 billion and better than the fourth-quarter 2008 loss of $0.4 billion. Full-year earnings more than doubled to $9.7 billion from $4.4 billion.

PNC employed 3,267 people in mortgage banking as of 2009’s end, dropping from 3,606 at the end of the previous quarter. Headcount at the unit was 3,637 at the end of the previous year.

Company-wide headcount declined to 55,820 from 56,908 three months prior.

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