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Here are some additional tidbits of info on PNC's primary lending markets to serve as an adjunct to the PNC research I released the other day. Remember, this is all to be taken against the backdrop of the macro bank research that I released as well. If you haven't notice, when I take a short position, I am quite serious about it.

PNC Financial Services Group, citing the credit crunch currently roiling the financial services industry, shut down a program in December 2007 that offered home-equity loans via third-party mortgage brokers. PNC plans to close all brokered loans by Feb 29, 2008.release a couple of days ago. This is a trend among many, if not most banks. Reduce the risk and exposure to the HELOC market, and reduce or eliminate origination through brokers.

 Links:

http://www.post-gazette.com/pg/07359/844273-28.stm

http://www.gazette.net/stories/123107/businew134530_32356.shtml

The branch network is located primarily in Pennsylvania, New Jersey, Washington, DC, Maryland, Virginia, Ohio, Kentucky and Delaware.

The following are the micro trends in those areas where PNC has just concentrated (by reducing broker production to zero):

 

        2006 2007 2008        
Pennsylvania (Aggregate) Personal Bankruptcies 77,587 40000 48020        
    House Price Index 144.2 147.4 144.3        
    Unemployment Rate 5.2 5.0 5.1        
    Housing Permits (total units) 44,019 40,300 38,840        
      -% change in bankruptcies   -48.4% 20.1% Consumer financial lines pressured  
      -% change in housing permits   -8.4% -3.6% Mortgage originations pressured  
      -% change in Housing price index 2.2% -2.1% Extant LTVs increased    
    Philadelphia metro division Personal Bankruptcies 11,439 6,899 7,244        
    House Price Index 219.1 222.6 217        
    Unemployment Rate 4.7 4.4 4.5        
                     
    Pittsburgh   Personal Bankruptcies 12,577 7,731 9,275        
    House Price Index 158.4 164.2 159.1        
    Unemployment Rate 4.9 4.3 4.9        
                     
   Scranton/Wilkes-Barre MSA Personal Bankruptcies 2,114 1,162 1,362        
    House Price Index 171.8 182.2 177.3        
    Unemployment Rate 5.3 4.9 5.1        
                     
New Jersy   Personal Bankruptcies 48,811 30,800 36,600        
    House Price Index 521.4 574.6 618        
    Unemployment Rate 4.4 4.7 4.9        
    Housing Permits (total units) 38,375 35,200 31,300        
      -% change in bankruptcies   -36.9% 18.8% Consumer financial lines pressured  
      -% change in housing permits   -8.3% -11.1% Mortgage originations pressured  
      -% change in Housing price index 10.2% 7.6% Extant LTVs decreased (this trend is reversing though)
                     
Washington D.C. Personal Bankruptcies 12,071 8,927 10,758        
    House Price Index 278.8 280.2 267.2        
    Unemployment Rate 3.1 3.1 3.6        
    Housing Permits (total units) 27,958 22,402 17,505        
      -% change in bankruptcies   -26.0% 20.5% Consumer financial lines pressured  
      -% change in housing permits   -19.9% -21.9% Mortgage originations pressured  
      -% change in Housing price index 0.5% -4.6% Extant LTVs increased    
                     
Maryland - Baltimore Personal Bankruptcies 11,493 5,990 7,187        
    House Price Index 248.9 259.9 259.4        
    Unemployment Rate 4.10 4.00 4.60        
    Housing Permits (total units) 8,133 5,902 4,595        
      -% change in bankruptcies   -47.9% 20.0% Consumer financial lines pressured  
      -% change in housing permits   -27.4% -22.1% Mortgage originations pressured  
      -% change in Housing price index 4.4% -0.2% Extant LTVs increased    
                     
Ohio   Personal Bankruptcies 133,522 70,000 84,000        
    House Price Index 268 277.1 286        
    Unemployment Rate 5.9 5.5 5.7        
    Housing Permits (total units) 47,401 43,050 41,310        
      -% change in bankruptcies   -47.6% 20.0% Consumer financial lines pressured  
      -% change in housing permits   -9.2% -4.0% Mortgage originations pressured  
      -% change in Housing price index 3.4% 3.2% Extant LTVs decreased (I expect trend to reverse though)
                     
Delaware (Aggregate) Personal Bankruptcies 4150 2500 3100        
    House Price Index 451.4 496.8 531.3        
    Unemployment Rate 4.2 4.0 4.2        
    Housing Permits (total units) 8,195 7,000 6,460        
      -% change in bankruptcies   -39.8% 24.0% Consumer financial lines pressured  
      -% change in housing permits   -14.6% -7.7% Mortgage originations pressured  
      -% change in Housing price index 10.1% 6.9% Extant LTVs decreased (I expect trend to reverse though)
                     
   Wilmington Metro Division Personal Bankruptcies 2,025.30 1,504.80 1,700.40        
    House Price Index 213.2 220.2 212.5        
    Unemployment Rate 4.0 3.5 3.6        
                     
Kentucky   Personal Bankruptcies 39,860 21,000 26,200        
    House Price Index 271.8 282.7 292.9        
    Unemployment Rate 6.1 5.8 5.9        
    Housing Permits (total units) 8,133 5,902 4,595        
      -% change in bankruptcies   -47.3% 24.8% Consumer financial lines pressured  
      -% change in housing permits   -27.4% -22.1% Mortgage originations pressured  
      -% change in Housing price index 4.0% 3.6% Extant LTVs decreased    
                     
PNC's regional profile Unemployement   4.7 4.6 4.9        
      -% change in bankruptcies   -42.0% 21.2% Consumer financial lines pressured  
      -% change in housing permits   -16.5% -13.2% Mortgage originations pressured  
      -% change in Housing price index 5.0% 2.1% Extant LTVs decreased slightly, with a general reversal in trend back to higher LTVs for the medium terms