The residential mortgage banking division of PNC Financial Services Group reported a $61 million profit for the first quarter, turning around a $61 million loss suffered in 4Q.
In 1Q 2011 the same unit earned $71 million.
Noninterest expense for residential finance declined by $114 million from the fourth quarter as PNC reported lower foreclosure-related expenses. Still, the company booked a $240 million foreclosure-related charge in the period.
Meanwhile, a $74 million increase in noninterest income during the quarter is a result of higher net hedging gains on its mortgage servicing rights and higher loan sales revenue as originations increased by $400 million to $3.4 billion.
The company did see a 6% sequential quarterly increase in non-performing assets, which it attributed to the addition of ‘other real estate owned’ from RBC Bank (USA) which it acquired on March 2. It also was hurt by accelerating the placement of home equity loans on non-accrual status to 90 days delinquent from 180 days.
PNC's ratio of nonperforming assets to total assets on March 31 was 1.49%, compared with 1.90% on the same day one year prior.
As a whole, PNC earned $811 million in the first quarter, compared with $493 in 4Q. In 1Q of last year it booked a $832 million profit.
