PNC Financial Services Group's mortgage income rebounded in the second quarter as the company's servicing hedging activities returned to profitability.
For the period, the company recorded $46 million in mortgage banking income, up from
PNC was able to turn around a first-quarter $8 million mortgage servicing rights hedging loss to a profit of $35 million for the most recent period.
Noninterest income was $182 million compared with just $105 million in the first quarter and $176 million one year ago.
For the most recent period, PNC had servicing fee revenue of $56 million and loan sales revenue of $95 million. A year ago, that was $46 million and $99 million, respectively.
Loan origination volume was $2.6 billion, up from $1.9 billion in the first quarter but down from $2.9 billion in last year's second quarter. The bank reported its loan sale margin declined by two basis points on a year-over-year basis, to 342 bps from 344 bps.
The share of originations was 48% purchase and 52% refinance, compared with 40%-60% in the first quarter and 50%-50% a year ago.
Going forward, PNC expects a modest increase in third-quarter originations because of seasonal purchase activity and more refinancing applications as a result of lower interest rates, said Executive Vice President and Chief Financial Officer Rob Reilly during the conference call.
But PNC is still working through issues involving implementing the TILA/RESPA integrated disclosures which held back its first-quarter volume, he said, adding, "I do see some pickup there but not necessarily dramatic."
