PNC's Mortgage Banking Profits Hold Steady at $91m
PNC Financial Services Group (PNC) earned net income of $559m, $1 per share, for Q309, compared with net income of $207m, $0.14 per share, in Q209. Mortgage banking revenue stayed even from the previous quarter, but originations plummeted from the year-ago period. Year-to-date net income through Q3 was $1.3bn, up from net income of $1.16bn during the same nine-month period of 2008. The deterioration of credit quality eased during the quarter, and the bank strengthened its loan loss reserves, PNC said. The provision for credit losses exceeded net charge-offs by $264m. The average loan balance decreased $371m compared to Q209, as increases in education loans were offset by declines in commercial, floor plan, residential mortgage and home equity loans. Consumer and commercial loan demand is being outpaced by refinances, paydowns and charge-offs, PNC said. PNC’s residential mortgage banking earned $91m in the Q309, relatively steady from $92m in the Q209. Total loan originations were $3.6bn, down from $6.4bn in Q308. PNC said it originated loans primarily through direct channels and under guidelines of Federal Housing Administration (FHA) and Veterans Administration (VA) government insurance programs and of agencies Fannie Mae (FNM) and Freddie Mac (FRE). Noninterest income was down from $245m in Q209 to $209m in Q309 due to lower loan sales revenue. Net interest income was also down from $87m in Q209 to $83m in Q309. PNC’s commercial mortgage servicing portfolio was $275bn at the end of Q309, up from $269bn at the end of Q209 and $247bn at the end of Q308. Write to Austin Kilgore.