PNC Financial Services Group Inc. on Thursday said its first-quarter profit fell almost 28 percent as it paid back government bailout funds.

But the Pittsburgh banking company's results when excluding charges beat Wall Street estimates, and it took a 28-percent smaller provision to cover bad loans during the quarter than it did in the previous three months.

PNC Bank has about 80 bank branches and 1,100 employees in the Indianapolis area, all doing business under the National City name. It ranks as the No. 2 bank in the area in terms of employment, according to IBJ research.

Like nearly all banks, PNC has battled mounting loan losses as consumers struggle to repay debt. The bank joined other national banks in reporting improvement in their consumer loan businesses for the most recent quarter.

Its shares rose $2.20, or 3.4 percent, to $67.50 each in pre-opening trading.

PNC said it earned $333 million, or 66 cents per share, in the January-March period. That's down from $460 million, or $1.03 a share, a year earlier.

The company says it would have earned $1.31 per share excluding a 50-cent charge related to the redemption of Troubled Asset Relief Program, or TARP, preferred shares.

PNC paid back $7.6 billion that it received under the bank bailout plan to the Treasury Department in February.

Analysts forecast earnings of 71 cents per share, and typically exclude one-time items from the estimates.

Revenue totaled $3.76 billion, just shy of analyst estimates of $3.85 billion.

PNC's provisions for credit losses narrowed to $751 million against $880 million in the year-ago period, which the company said is a sign that the pace of credit deterioration eased at the end of 2009.

Provisions are the extra money that banks set aside to offset current and future loan losses. Investors have been eager to see when those set-asides will fall. Many analysts predict loan losses should peak some time in the first half of 2010.

"While there is still uncertainty about the economic environment and potential regulatory changes, we believe PNC is well positioned for another good year," said James E. Rohr, chairman and CEO, in a prepared statement.