PNC Financial Services Group Inc., the fifth-biggest U.S. bank by deposits, said the country is "mid-cycle" through the recession and that the company expects to build reserves for bad loans through the end of this year, Bloomberg News reported today.

The biggest credit losses tied to residential real estate are in the past, though commercial real estate and general corporate borrowing are beginning to show "weakness," Pittsburgh-based PNC's Michael Hannon, the bank's chief risk officer, said today during a conference call in which the news service participated.

PNC posted a profit decline for 2008 and a fourth-quarter loss after agreeing to buy Cleveland-based National City Corp., ranked among the top 10 subprime lenders in 2006, Bloomberg reported. Losses from commercial real estate and commercial and industrial loans will probably be less severe than those seen from residential loans, Hannon said in the call, according to the news service.

Company shares shed $1.11 (2.62 percent) to trade at $41.32 early this afternoon.