PNC Financial Services Group said earnings from its mortgage banking business rebounded in the third quarter due to higher single-family originations and much lower provisioning for mortgage repurchase demands.
The Pittsburgh-based bank reported $36 million in earnings from residential finance related activities compared to a $213 million loss in second quarter.
In the third quarter, PNC added just $37 million to its repurchase provisions.
The bank’s mortgage division originated $3.8 billion of new loans, an increase of $200 million from 2Q.
During the first three quarters of this year, the regional bank has originated $10.8 billion of single-family loans. PNC Mortgage ranks 16th nationwide among all residential lenders, according to figures compiled by National Mortgage News and the
PNC chairman and chief executive James Rowe said mortgage originations were “strong” in the third quarter due to refinancings. HARP refis comprised 30% of loan production.
The CEO stressed that the regional bank is focusing on purchase mortgages, too. “As refinancing activity decreases, it will drive longer-term value for this business,” Rowe said during the earnings conference call.
PNC CFO Richard Johnson told investors and analysts that the $37 million recorded for GSE repurchases in the third quarter “reflects new origination activity and refinements to the life-of-the-loan reserve estimates.”
