PNC Bank Corp. now confirms that it is leaving mortgage warehouse lending.
In an interview Friday, William Lashbrook, senior vice president in charge of secured lending, said the bank had notified employees the day before.
Mr. Lashbrook said PNC had begun to notify clients of its plans to leave the business, but it will honor any funding commitments. It has also offered "retention incentives" for the unit's 30 employees so the bank can honor contractual obligations and give customers time to find alternative financing arrangements. He said he expected the operation to have wound down by the third quarter of next year.
Mr. Lashbrook said PNC has been reconsidering since mid-1998 whether the warehouse business fit its strategy, and insisted that its decision to scrap it was not prompted by the bankruptcies of two clients, United Companies Financial Corp. and Harbor Financial Mortgage.
In mid-October, the banking company denied it planned to shut down the Louisville, Ky., operation. On Friday, Mr. Lashbrook said, "No decision had been finalized" on Oct. 12, when American Banker reported that PNC was on the verge of closing the unit. -- Marc Hochstein