Unlike some of its peers, fourth-quarter income at The PNC Financial Services Group Inc. benefited from the new tax law. But home lending dropped, mortgage earnings fell and residential delinquency rose.
Fourth-quarter earnings data released Tuesday indicate that income before taxes and non-controlling interests fell to $1.1 billion from $1.4 billion in the final three months of 2016.
Earnings at the Pittsburgh-based financial institution also weakened compared to the previous three-month
period, when pre-tax income came to $1.5 billion.
After-tax earnings were $2.1 billion, nearly doubling from the prior quarter and a year prior. The new tax legislation benefited earnings by $1.2 billion.
Residential mortgage income plunged to $29 million from $142 million in the fourth-quarter 2016 and also sank from $104 million in the third-quarter 2017.
PNC said the deterioration was due to a $71 million negative adjustment for mortgage servicing rights and lower sales revenue.
Loan originations totaled $2.4 billion during the final-three months of last year. Business slowed from $2.5 billion the previous quarter and $3.0 billion the last three months of 2016.
Refinance share was exactly half, more broad than the third quarter’s 43 percent.
For all of 2017, mortgage production came to $9.0 billion, a little less than $10.6 billion the preceding year.
PNC serviced $127 billion in residential loans for third parties as of Dec. 31, 2017. The portfolio was trimmed from $129 billion as of Sept. 30, 2017, but lifted from $125 billion as of Dec. 31, 2016.
Residential assets ended last month at $45.576 billion, growing from $45.412 billion at the end of September and an upwardly revised $45.547 billion at the end of 2016. The year-end 2017 total was comprised of $17.212 billion in mortgages and $28.364 billion in home-equity assets.
Conventional mortgage delinquency of at least 30 days was 0.78 percent as the conclusion of the fourth quarter, worsening from 0.62 percent three months earlier but down from 0.93 percent one year earlier.
On government-guaranteed mortgages, delinquency jumped to 3.34 percent from 3.14 percent but improved from 3.73 percent in the same report a year ago.
HEL delinquency was 0.36 percent, dipping a basis point but 5 BPS worse that at the end of 2016.
Commercial real estate holdings ended 2017 at $41.474 billion, diminishing from $41.690 billion three months prior but up from a downwardly revised $40.930 billion one year prior. Most recently, CRE assets consisted of $12.496 billion in real-estate-related loans and $28.978 billion in commercial mortgages.
CRE loan delinquency
rose to 0.10 percent from 0.07 percent the previous period and 0.03 percent a year previous.
Headcount ended 2017 at 52,906 people, more than 52,768 at the conclusion of September. It was also up from year-end 2016, when 52,006 employees were on the payroll.
Branch count was reduced to 2,459 from 2,474.
