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PNC Originations Drop, Delinquency Improves

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Residential loan production tumbled at The PNC Financial Services Group Inc. The company, however, boosted its home loan assets and cut its residential delinquency.

With $3.7 billion in home loan originations during the three months ended last month, volume tumbled from $4.7 billion in the second quarter.

The operational data was included as part of the company’s third-quarter earnings report which was released this week.

Mortgage production came in just below the $3.8 billion in residential loans closed in the third-quarter 2012.

Mortgage fundings for the first nine months of 2013 were $12.6 billion.

PNC cut its refinance share to 62 percent in the most recent three-month period from 72 percent in the second quarter. Nearly a third of overall volume was generated through the Home Affordable Refinance Program.

While refinance volume was down, home purchase production was up 5 percent from the second quarter.

As of Sept. 30, PNC serviced $115 billion in residential loans for third parties. The servicing portfolio inched lower from $116 billion as of June 30 and was also down from $119 billion as of the same date in 2012.

PNC owned $14.709 billion in residential loans, a little more than its $14.051 billion in residential holdings as of June 30 and $14.505 billion as of Sept. 30, 2012.

On non-government loans, residential delinquency of at least 30 days was 1.20 percent, improving from 1.35 percent in the second quarter and 1.93 percent in the same period last year.

Government mortgage delinquency was cut to 8.79 percent from 10.24 percent three months earlier and 13.37 percent 12 months earlier.

Home-equity loans on the books increased to $14.548 billion from $13.587 billion and have expanded from just $11.871 billion as of Sept. 30, 2012.

Another $22.043 billion in home-equity lines of credit were owned, off from $22.559 billion in the second quarter and $24.007 billion in the third-quarter 2012.

Home-equity delinquency rose to 0.33 percent from 0.29 percent but was down from 0.55 percent one year prior.

Residential construction loans on the balance sheet slipped to $0.683 billion from $0.726 billion and were down even more from $0.878 billion one year prior.

As of Sept. 30, the commercial mortgage servicing portfolio was $298 billion, up from the previous quarter’s $294 billion and from $265 billion in the third quarter 2012.

PNC finished September with $20.131 billion in commercial real estate loans, more than $18.991 billion at the end of June and $18.609 billion at the same point in 2012. Last month’s total included $13.036 billion in real estate projects and $7.095 billion in commercial mortgages.

CRE loan delinquency was trimmed to 0.43 percent from 0.47 percent as of the end of June. The improvement was more dramatic compared to the third-quarter 2012, when the CRE rate was 1.03 percent.

Income from residential mortgage banking increased to $28 million from $20 million but has fallen from $36 million in the third quarter of last year.

The bank-holding company reported income of $1.359 billion before income taxes and non-controlling interests. Earnings fell from $1.472 billion three months earlier but was better than $1.210 billion a year earlier.

At 54,934, the number of employees on PNC’s payroll was down from 55,780 at the end of the second quarter and 56,534 as of the end of the third quarter of last year.

Bank branch count increased to 2,724 from 2,780 as of June 30.

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