By Matthias Rieker PNC Financial Services Group Inc. (PNC) is setting aside an additional $350 million in second-quarter reserves to cover demands to repurchase bad mortgages, a 10-fold increase from the prior quarter. Shares of the Pittsburgh bank, the nation's eighth-largest, fell 3.4% to $56.17 in recent trading, illustrating how sensitive investors remain to mortgage issues around five years after the mortgage meltdown began. Chief Executive Jim Rohr is set to tell investors at the Morgan Stanley financial services conference in New York that demands on the bank to repurchase faulty mortgages have increased in the second quarter, forcing the increase in the reserve this quarter to cover the repurchases, according to a slide presentation on the company's website. In the first quarter, it added $32 million to its repurchase demands from government-sponsored entities. So far, PNC lost $1.6 billion from mortgages originated by PNC and sold to government-sponsored entities but later bought back because the underwriting was alleged to be faulty, the presentation said. "Barring significant changes in the future behaviors and demand patterns of investors, we believe we are appropriately reserved against future demands," the bank said. Wells Fargo & Co. (WFC) Chief Financial Officer Tim Sloan told investors at the same conference earlier Tuesday morning that the San Francisco bank hasn't decided yet how much it would add to its repurchase reserve, but that it didn't see "any significant changes" in repurchase demands. Write to Matthias Rieker at matthias.rieker@dowjones.com
