PNC bank reports decline in profits

PNC bank reports decline in profits

Pittsburgh-based PNC bank reported a 40 percent decline in second quarter profits today when it released its earnings.

The bank revealed that it earned $546 million during the second quarter, or 98 cents per share, compared with $912 million, or $1.67 per-share a year earlier. However, 2012 earnings were reduced by $403 million on an after tax basis, or 54 cents per share. The reduction largely stems from a $284 million cost related to residential mortgage repurchase demands.

PNC is confronting increased claims related to loans sold to government-sponsored enterprises after it acquired National City Corp. in 2009.

“PNC has and expects to experience elevated levels of residential mortgage loan repurchase demands reflecting a change in behavior and demand patterns of two government-sponsored enterprises,” the company said in a statement referring to Fannie Mae and Freddie Mac, the government backed companies that guarantee mortgage-related securities and participate in the secondary mortgage markets by purchasing loans from lenders.

PNC has more than 400 branches throughout Ohio, it is the seventh largest U.S. bank by deposits.