Quarterly mortgage production jumped 16 percent at The PNCÂ Financial Services Group Inc., while delinquency dropped. Repurchase losses on older vintage agency loans dragged down overall earnings at the bank.
During the fourth quarter, residential loan originations amounted to $4.4 billion based on quarterly earnings data.
Business strengthened from $3.8 billion originated during the prior three-month period. It was also better than in the fourth-quarter 2011, when mortgage production totaled $3.0 billion.
The latest activity brought full-year production to $15.2 billion. PNC pushed up annual volume from $11.4 billion originated during 2011.
Refinances accounted for 80 percent of fourth-quarter 2012 business, up from 74 percent three months prior. Production from the Home Affordable Refinance Program accounted for 30 percent of activity.
The Pittsburgh-based company serviced $119 billion in residential loans for third parties, unchanged from the prior period. The servicing portfolio inched up from $118 billion as of Dec. 31, 2011.
Residential loan investments slipped to $14.430 billion from $14.505 billion at the end of the third quarter. At the end of 2011, residential holdings were $13.885 billion.
Residential delinquency of at least 30 days, excluding government mortgages, closed out last year at 1.61 percent, tumbling from 1.93 percent three months earlier and 2.79 percent one year earlier.
On government loans, the delinquency rate rose to 13.64 percent from 13.37 percent but was better than 16.27 percent as of Dec. 31, 2011.
Home-equity loans on the balance sheet grew to $12.344 billion from $11.871 billion as of Sept. 30, 2012. HELÂ assets were $10.598 billion at the same point in 2011.
In addition, the investment portfolio included $23.576 billion in home-equity lines of credit, less than $24.007 billion three months earlier but more than $22.491 billion a year earlier.
Home-equity delinquency, excluding loans 90 or more days past due, fell to 0.49 percent from 0.55 percent in the prior quarter and 0.86 percent at the same point in the prior year.
Residential construction loans totaled $0.810 billion, a little less than the $0.878 billion at the end of September but more than $0.584 billion a year prior.
As of the end of last year, PNC serviced $282 billion in commercial mortgages, growing the portfolio from $265 billion at the end of September. One year prior, the portfolio stood at $267 billion.
Commercial real estate loans owned by PNC finished last year at $18.655 billion, an increase from $18.609 billion at the end of the prior quarter and $16.204 billion at the end of the prior year. The most-recent figure reflected $12.347 billion in real estate projects and $6.308 billion in commercial mortgages.
CRE delinquency fell to 0.93 percent from 1.03 percent in the third quarter and 0.85 percent in the year-earlier period.
Repurchase reserves worsened to $614 million from $421 million at the end of September. The total reflected $61 million in repurchase losses during the latest period.
“Fourth quarter 2012 included a $254 million provision for residential mortgage repurchase obligations related to expected elevated levels of repurchase demands primarily as a result of further changes in behavior and demand patterns of FHLMC and FNMA for loans sold into agency securitizations, including the years 2004 and 2005,” the report stated.
Also impacting earnings was a $70 million charge tied to a settlement with the Office of the Comptroller of the Currency and Federal Reserve System that ended independent foreclosure reviews required by consent orders issued in April 2011.
Earnings from residential mortgage banking swung to a $192 million loss from a $36 million profit in the third quarter. The unit lost $61 million in the fourth-quarter 2011.
PNC said its company-wide income before income taxes and non-controlling interests fell to $0.9 billion from $1.2 billion but was better than the $0.6 billion earned in the fourth-quarter 2011.
As of Dec. 31, 2012, PNC employed 56,285 people across the organization, trimming its staff from 56,534 as of Sept. 30. Headcount was 51,891 at the end of 2011.
As of the end of last year, 2,881 PNC branches were in operation, more than the 2,887 branches as of the end of the third quarter.
