PNC cuts jobs in mortgages
PNC Financial Services Group laid off several dozen residential mortgage employees at each of its four mortgage facilities in three states, including its operation in Pittsburgh, during the past two weeks in response to a slowdown in the home mortgage business.
The layoffs included “dozens” of mortgage servicing and sales workers at PNC's operation in Allegheny Center on Pittsburgh's North Shore, PNC spokeswoman Marcey Zwiebel confirmed on Wednesday. The other three operations are in Miamisburg, southern Ohio, Jacksonville, Fla., and Downers Grove, Ill., outside Chicago. Zwiebel would not say whether more layoffs are planned.
Like many other banks, PNC has seen a drop-off in its home mortgage business — especially refinancing activity but also loan originations — because mortgage interest rates have risen since the spring. Near record-low mortgage interest rates increased mortgage volumes and “made the business incredibly profitable” earlier this year, said bank analyst Gerard Cassidy.
“But it wasn't sustainable, and now we're getting back to more normal levels,” said Cassidy, of RBC Capital Markets, Portland, Maine.
The biggest players in home mortgage lending have responded by laying off thousands. The nation's second-largest bank, Bank of America, slashed 3,600 mortgage jobs in recent months, including 209 at its mortgage call center in Upper St. Clair, which closed in September. Wells Fargo, the nation's largest mortgage lender, slashed 2,300 mortgage jobs in late August but has said none of the cuts were in Western Pennsylvania.
Mortgage banking accounts for a small portion of PNC's business so the cuts are not as dramatic as seen at the other banks. During a conference call with analysts Wednesday, executives of parent PNC Financial Services Group said the bank had cut 7 percent of its residential mortgage work force. Zwiebel would not disclose exactly how many mortgage workers lost their jobs or the total size of PNC's home mortgage staff.
The mortgage banking softening was evident in third-quarter financial results the company reported Wednesday. PNC earned $28 million on its mortgage banking business during July-September period, a drop from $36 million the year earlier. That $28 million represented about 3 percent of the bank's overall earnings.
The cuts in the mortgage banking staff were made as PNC moved to slash expenses by $700 million this year, a target the bank reached by Sept. 30, executives said. PNC announced in March that it would shed 200 branches across its 19-state retail banking footprint. It had shut 170 offices by the end of September.
The bank said it will close about 30 more bank branches by year-end, including two in the Pittsburgh region — the Cedarhurst branch in the South Hills in October, and another in Richeyville, Washington County, in November.
The bank already has shuttered 10 local branches this year. No other area closings are expected this year, said Zwiebel. The cuts in expenses combined with a gain in PNC's lending operations helped boost the company's profit by 10 percent in the third quarter to $966 million, or $1.79 per share, from $876 million, or $1.64 per share, in the same period ago. The results, which included a $55 million gain after taxes from the sale of securities, beat Wall Street analysts' estimates for earnings of $1.62 per share.
Cassidy said the results were “strong” and better than he'd expected. He pointed to an improvement in loan quality, expense reductions and a lower tax rate. PNC's reserves to cover losses from bad loans fell to $137 million from $228 million because of improvement in the quality of its portofolio.
The bank's total revenue declined 4 percent to $3.92 billion from $4.09 billion, mainly because of lower net interest income. CEO William Demchak told analysts it is a “fight” to grow revenue in the current economic and interest-rate environment.
“PNC continued to make significant progress on our strategic priorities as we advanced our efforts to deepen relationships with customers in the third quarter,” said Demchak in a statement.
PNC reported growth in loans, as new commercial and industrial loans — especially in the Southeast market PNC entered by acquisition last year — offset the decline in home mortgages. Average loan balances during the period grew 5.4 percent to about $190 billion from about $181 billion a year ago.
Noninterest expenses fell 8.7 percent to $2.42 billion from $2.65 billion the year earlier. The year-ago period also included merger-integration and mortgage foreclosure-related costs.
Thomas Olson is a Trib Total Media staff writer. He can be reached at 412-320-7854 or at email@example.com.
Show commenting policy
TribLive commenting policy
You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.
We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.
While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.
We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers.
We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.
We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.
We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.
We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.
- Drops in gasoline prices won’t likely last, analysts say
- Energy companies vie for experienced workers with skills in high demand
- Energy Spotlight: Adam Pope
- Energy-saving tactics pay off in Green Workplace Challenge
- U.S. Steel plans to close two plants affecting 545 workers
- Former athletes open businesses
- News keeps getting better at the pump, as national average nears $2 a gallon
- Chevron laying off 162 workers from Moon-based unit
- Password change can block hackers from wireless cameras
- Energy industry says it’s on top of methane leaks, but environmentalists want oversight
- Shale sector won’t gut area workforce