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Mostly Good PNC Results

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The PNC Financial Services Group Inc. managed a quarterly increase in its servicing portfolio, though its mortgage assets declined. Residential delinquency was lower, but late payments on commercial mortgages worsened. Residential production was down 9 percent during the quarter.

From January through March, total mortgage fundings were $3.2 billion, off from $3.5 billion in the prior three-month period, according to earnings data. Business was much better, however, than the $2.0 billion originated in the first quarter of last year.

The third-party servicing portfolio inched up to $127 billion from $125 billion on Dec. 31, 2010 — reflecting the acquisition of a $4.6 billion servicing portfolio during the period. PNC serviced $141 billion a year earlier.

Home-loan holdings fell to $14.6 billion from $15.3 billion and were $17.6 billion a year earlier. Delinquency of at least 30 days on those loans was 3.06 percent on March 31, about 2 basis points better than on Dec. 31, 2010.

Home-equity line-of-credit holdings were trimmed to $23.0 billion from $23.5 billion and the first-quarter of last year’s $24.0 billion. Home-equity loans on the books eased to $10.7 billion from $10.8 billion and were higher a year prior at $11.4 billion.

Home-equity delinquency improved to 1.21 percent from the fourth quarter’s 1.24 percent.

PNC also owned $0.7 billion in residential construction assets, unchanged from the fourth quarter but less than half of the $1.7 billion owned in the first-quarter 2010.

Holdings of commercial real estate loans declined to $17.1 billion from $17.9 billion at the close of the fourth quarter. CRE assets were $22.0 billion in the same quarter during 2010.

Commercial mortgage delinquency deteriorated to 2.26 percent from the previous period’s 1.30 percent.

The home-lending business brought in $71 million in net income, better than the $3 million earned in the last three months of 2010. But earnings were higher a year earlier at $78 million.

The bank-holding company earned $1.1 billion before income tax expense, about the same as the fourth quarter. But earnings improved form $0.9 billion during the same three months last year.

“Confidence is returning to the economy, and our strong balance sheet, capital position and sales momentum create tremendous opportunities for PNC to increase market share,” PNC Chairman and Chief Executive Officer James E. Rohr said in the report.

PNC closed out March with 3,682 employees in residential mortgage banking, 143 more than on Dec. 31, 2010. Mortgage headcount was also higher than 3,340 on March 31, 2010.

Company-wide staff size was 51,126, more than the 50,769 people employed as of the end of last year but fewer than 56,098 in the first quarter of last year.

PNC operated 2,446 branches as of the end of last month.

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