Mortgage-related Profit Down at PNC

The residential mortgage banking segment at PNC Financial Services Group, Pittsburgh, earned $88 million in the second quarter 2009, down from $221 million in the fist quarter of the year. The company blamed lower net mortgage servicing rights hedging gains and reduced loan sales revenue for the decline. Loan originations for the quarter were down slightly from the first quarter, $6.4 billion vs. $6.9 billion in the linked period. Refinancings caused the mortgage servicing rights portfolio to decline from $168 billion at the end of the first quarter to $161 billion as of June 30, 2009. PNC had net charge-offs during the quarter of $795 million, an increase of $364 million over the first quarter. Nonperforming assets as of June 30, 2009 were $4.5 billion, an increase of $1 billion over the first quarter. The increase consisted of $400 million for residential real estate loans and a $400 million increase in nonperforming commercial real estate loans (mainly residential real estate projects).