A quarter-over-quarter slump in mortgage lending at The PNC Financial Services Group Inc. was met with annual production that managed to keep up with the prior year.
Earnings before income taxes and non-controlling interest were $1.37 billion in the three months ended Dec. 31, 2016, according to fourth-quarter 2016 financial results.
Profits at Pittsburgh-based PNC improved from $1.35 billion in the third quarter. But there a modest reduction compared to $1.38 billion
in the final quarter of the prior year.
“Although the financial results finished slightly below 2015, this was due in part to our disciplined risk management efforts throughout the year to position PNC well in the current credit and interest rate cycle,” PNC Chairman, President and Chief Executive Officer William S. Demchak said in the report.
The financial institution reported $39 million in income from in residential mortgage banking. Home-lending earnings increased from $13 million in the third quarter and swung from a $17 million loss in the fourth-quarter 2015.
Residential loan originations totaled $3.0 billion for the period from Oct. 1, 2016, through Dec. 31, 2016. Business slipped from $3.1 billion during the prior three-month period
but was stronger than $2.3 billion during the same three months of 2015.
Refinance share widened
to two-thirds from 59 percent during the last reporting period and 55 percent in the final quarter of 2015.
Full-year overall originations inched up to $10.6 billion from $10.5 billion in 2015.
As 2016 concluded, the serviced-portfolio balance was $125 billion, off $1 billion from the prior period and up $2 billion from the year-prior point.
The capitalization rate on mortgage-servicing rights rose to 94 basis points from 65 BPS in the third quarter and 86 in the final-three months of 2015.
Residential assets ended 2016 at $45.330 billion —
including $15.381 billion in mortgages, $17.738 billion in home-equity lines of credit and $12.211 billion in home-equity loans. Residential investments were less than $45.347 billion as of Sept. 30 and $46.295 billion as of year-end 2015.
Delinquency of at least 30 days on residential non-government loans was 0.93 percent as of year-end 2016. The rate worsened from 0.65 percent three months earlier and 0.89 percent one year earlier.
Government mortgage delinquency was 3.73 percent improving by 10 BPS from Sept. 30, 2016.
A 75-basis-point improvement has been made versus 12 months prior.
Delinquency on HELs inched up to 0.31 percent from 0.27 percent as of the end of the third quarter and 0.29 percent as of the end of 2015.
PNC owned $41.147 billion in commercial real estate loans, trimming its portfolio from $41.544 billion as of Sept. 30, 2016. But the CRE portfolio has expanded from $39.376 billion as of the close of 2015. At the end of last year, the total included $11.920 billion in real-estate related loans, $16.312 billion in real estate projects, $0.217 billion in residential construction and $12.698 billion in commercial mortgages.
Residential construction loans were added to the CRE balance in the most-recent period. In addition, prior periods were revised to reflect the inclusion of residential construction.
CRE loan delinquency closed out last year at 0.03 percent, lower than 0.09 percent as of the end of the third quarter. At the finish of 2015, CRE delinquency was 0.05 percent.
PNC’s payroll covered 52,006 people, 37 fewer than as of the prior quarter and 507 fewer than as of the prior year.
Last year ended with 2,520 branches, 80 fewer than three months earlier and nearly a hundred less than at the end of 2015.
