PNC Financial Services Group's residential mortgage business lost $13 million in the first quarter because of hedging losses related to its mortgage servicing portfolio as well as lower secondary market loan sales revenue.
This compares with a profit of $28 million for the first quarter of 2015.
Noninterest income generated by the segment was $105 million, compared with $177 million for the same period last year. Noninterest expenses also declined but not as much: $152 million for the most recent period versus $161 million one year ago.
Originations at the company fell to $1.9 billion for the quarter, down from $2.6 billion the year prior. Approximately 40% of the volume was purchase, up from 31% last year.
During a conference call, Chief Financial Officer Rob Reilly said the drop in origination volume was "due in part to closing delays resulting from the implementation of new disclosure requirements."
Loan sales revenue totaled $64 million for the quarter, compared with $104 million the prior year.
PNC reported net earnings of $943 million for the quarter, down from $1 billion for the same period in 2015. Residential mortgage banking was the only business segment to report a loss, although year-over-year income also declined in corporate and institutional banking, the non-strategic assets portfolio and in what the company categorizes as "other," which includes BlackRock.
