PNC forecasts Q4 cut in profit
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PNC Financial Services Group on Wednesday said special charges primarily related to its residential mortgage business, including the costs of settling federal complaints about foreclosure abuses, would cut fourth-quarter profit by about 47 cents per share.
The charges include about $70 million related to the deal announced earlier this week with federal regulators by 10 major U.S. banks, including PNC, Pittsburgh's dominant bank said in a Securities and Exchange Commission filing.
The banks agreed to provide a total of $8.5 billion in direct payments and mortgage assistance to homeowners nationwide to settle allegations that they were wrongly foreclosed upon in 2009 and 2010.
PNC also recorded a $254 million pretax provision for residential mortgage repurchase demands related to an expected increase in requests from government-sponsored mortgage buyers Freddie Mac and Fannie Mae. That bolstered the bank's reserve for residential mortgage repurchase claims to $614 million as of Dec. 31, 2012, the filing said.
Fannie Mae and Freddie Mac have been demanding that lenders repurchase problem mortgages after questioning property values and the accuracy of appraisals.
In PNC's case, many of the buybacks are tied to mortgages PNC inherited when it bought Cleveland-based National City Bank in 2008.
PNC's shares fell Wednesday by 8 cents, or 0.13 percent, to $60.17 at the close of normal trading.
The bank is to report financial results for the fourth quarter and full year next Thursday.
First Published January 10, 2013 12:00 am