PNC Says NatCity Loans Worse Than Thought

PNC Financial Services Group Inc. says in a new public filing that the troubled loans it inherited through its purchase of National City Corp.-once a top 10 ranked residential lender-eroded more than expected during the first quarter. PNC, which has emerged stronger from the financial crisis, set aside an additional $100 million to offset future losses from the loans. The Pittsburgh-based depository now has $604 million in reserves to account for future losses it expects to be generated by the $9.8 billion portfolio of loans. PNC has kept most of NatCity's residential production and servicing division intact, but is in the process of winding down its warehouse lending unit. Besides operating a mortgage banking affiliate, NatCity was an active home equity and commercial real estate lender. In late 2008 PNC bought the Cleveland-based regional.