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PNC Fundings Fall, But Delinquency & Earnings Improve

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Quarterly residential originations plummeted at PNC Financial Services Group Inc. But earnings and delinquency saw a big improvement.

Home loan production was $3.6 billion during the third quarter, according to earnings data released today. Volume plummeted from the second quarter’s $6.4 billion, “reflecting a significant drop in refinancing activity.” The refinance share fell to 59 percent from 74 percent in the second quarter. A year earlier — before the Dec. 31, 2008, acquisition of National City Corp. — originations at National City were $3.6 billion.

Year-to-date residential fundings totaled $16.9 billion through Sept. 30.

The portfolio of mortgages serviced for others finished the latest quarter at $158 billion, lower than $161 billion three months earlier. National City’s servicing portfolio was $175.3 billion as of Sept. 30, 2008.

The Pittsburgh-based institution owned $18.5 billion in residential mortgages as of Sept. 30, less than $19.3 billion as of June 30 but more than double the $8.4 billion a year earlier. Home-equity line-of-credit holdings eased to $24.3 billion from $24.4 billion at the end of June and $7.6 billion at the end of the third-quarter 2008. Home-equity loans owned also eased — to $12.1 billion from $12.3 billion three months earlier and $7.3 billion at the end of September last year.

PNC also held $2.0 billion in residential construction assets, slightly less than the $2.2 billion held as of June 30. Construction holdings were $0.4 billion a year ago.

Residential delinquency of at least 30 days was 5.07 percent as of Sept. 30 — tumbling from 6.51 percent three months earlier. The decline was driven by a 190 basis point drop in 90-day delinquency; 30- to 89-day delinquency rose 46 BPS to 3.29 percent. Last year at the end of the third quarter, residential delinquency at National City was 5.82 percent.

Commercial real estate loans on the balance sheet finished the third quarter at $24.1 billion, lower than $24.9 billion at the end of the second quarter but more than double the $9.7 billion as of Sept. 30, 2008.

Commercial mortgage delinquency of at least 30 days jumped to 4.17 percent from the second quarter’s 3.30 percent.

Earnings from residential mortgage banking were $91 million in the third quarter, edging down from $92 million in the previous quarter. Data for the third-quarter 2008 was not presented.

Earnings at all of PNC climbed to $559 million from the second quarter’s $207 million and the third-quarter 2008’s $259 million.

There were 3,606 residential mortgage banking employees as of Sept. 30, slightly lower than 3,693 three months earlier. There were no mortgage banking employees a year prior.

PNC Financial Services employed 56,908 employees as of the end of last month, fewer than 58,070 at the end of June. A year prior, headcount was just 28,129.

Next month, National City Mortgage will be re-branded as PNC Mortgage, the report indicated.

“Overall, the acquisition of National City Corporation continued to exceed expectations,” the report said.

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