PNC Bank on Thursday became the largest commercial bank in the Federal Home Loan Bank System.

Joe Irwin, executive vice president and chief investment officer of PNC, said his institution joined the Federal Home Loan Bank of Pittsburgh to gain access to potentially cheaper funding available through the system.

The system makes low-rate loans to its members, which use the funds to support home lending.

Expanding in Home Loans

The bank and its parent, PNC Bank Corp., are expanding mortgage lending. The holding company has announced plans to buy the mortgage banking operations of Sears, Roebuck and Co.

Mr. Irwin said PNC is a big borrower of short-term funds. It has met this need in the past two years largely by issuing bank notes maturing between one year and 15 months.

PNC Bank will purchase $94 million of Home Loan bank stock, Mr. Irwin said.

Norwest Belongs

Other PNC banks are applying for membership with the Federal Home Loan Bank of Cincinnati, Mr. Irwin said.

The largest commercial bank members after PNC are Norwest Bank in Minneapolis and First Tennessee Bank.

First Tennessee earlier this week joined the Home Loan Bank of Cincinnati. The bank was attracted by the "potential source of liquidity" available to members, said List Underwood, senior vice president and treasurer at First Tennessee National Corp.

Comprising 12 regional Federal banks, the system was set up in the 1930s for the thrift industry. Since 1989, the regional banks have served a growing number of commercial banks, credit unions, and insurance companies.

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