PNC Financial quarterly earnings top expectations

Back to TopCommentsE-mailPrintBookmark and Share

PNC Financial reported a nearly 13-percent increase in second-quarter earnings Wednesday, easily beating Wall Street expectations, as the regional bank set aside far less money to cover bad loans.

Pittsburgh-based PNC is the parent company of PNC Bank, which has 1,200 employees and 88 branches in the Indianapolis area.

Improving credit quality helped the company offset lower net interest income and lower revenue from overdraft fees.

PNC posted net income of $888 million, or $1.67 per share, for the three months ended June 30. That was up from $786 million, or $1.47 per share, in the same quarter a year ago.

Analysts surveyed by FirstCall had expected far lower earnings of $1.48 per share, on average, in the latest quarter.

The Pittsburgh bank said its provision for loan losses — money set aside to cover souring loans — dropped to $280 million, about one-third of the $823 million provision in the year-ago quarter. Further signs of improving credit included declines in nonperforming assets and net charge-offs, or loans written off as uncollectable.

Those improvements were partly offset by a nearly 12 percent decrease in net interest income, or money earned from deposits and loans, which fell to $2.15 billion. With short-term interest rates near zero, bank profits have been squeezed because the difference between what they pay depositors and what they make from investments and lending has narrowed.

And analysts with Jefferies & Co. said investors may be put off by weakness in corporate services and mortgage banking.

"Fees came in weaker-than-expected," said Ken Usdin, and company shares pointed lower before the market opened.

Noninterest income, or earnings from fees and charges, slipped 2 percent to $1.45 billion. PNC attributed that decline primarily to lower service charges on deposits resulting from new regulatory restrictions on overdraft fees.

Noninterest expenses rose nearly 9 percent to nearly $2.18 billion.

But the bank reported strong growth in new checking accounts among retail and small business customers, and a nearly 2 percent increase in customer deposits compared with a year ago.

PNC also said its board of directors recently declared a quarterly common stock cash dividend of 35 cents per share payable on August 5. The bank boosted the quarterly payout to 35 cents from 10 cents in April after federal regulators cleared the move. During the financial crisis, regulators forced many banks to suspend dividends in order to increase their capital cushions. The banks were barred from raising their dividends until they passed a fresh round of "stress tests" this year and received permission from federal regulators. PNC said in March that regulators had approved its capital plan, which included the dividend boost and the share repurchases.

Last month, PNC said it was buying the U.S. retail operations of Royal Bank of Canada for $3.45 billion. The transaction will bring PNC's total to 2,870 branches and make it the fifth biggest among U.S. banks.

PNC Financial Services Group Inc. offers retail banking, corporate and institutional banking, asset management, and residential mortgage banking, among other services.


  • Taxes and Insurance Not Needed??
    Paying taxes and insurance on your home protects not only the bank, but also you - if you have any hope to keep the home. Regardless, the bank would be very foolish not to pay those amounts if you failed to do so. Saying that was "not needed" is just wrong headed. Banks are easy to demonize, but use some common sense when you do it.
  • Help for unemployed
    Al - there is grant money available to help folks who are unemployed make their mortgage payments. Contact www.877GetHope.org or call
  • Doing business with PNC is GREAT!!!
    I have both mortgages with PNC. I was laid off from my job in November and still unemployed. I contacted PNC regarding the Making Homes Affordable program. Despite the fact that I didnt qualify they went ahead and paid taxes and insurances on my home that were not needed. I am now stuck with higher monthly payments when my original goal was to find a way to reduce my monthly costs until I can be gainfull employed. Its these kind of tactics that I am sure have helped the company and their shareholders. Kudos PNC for how you do business regardless of the damages you cause. Believe me as soon as I am out of this house I will never do business with you again.

    Post a comment to this story

    We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
    You are legally responsible for what you post and your anonymity is not guaranteed.
    Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in IBJ editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
    No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
    We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.

    Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

    Sponsored by

    facebook - twitter on Facebook & Twitter

    Follow on TwitterFollow IBJ on Facebook:
    Follow on TwitterFollow IBJ's Tweets on these topics:
    Subscribe to IBJ
    1. Good Day I am Mr (Victoria Wright) from United state of America, i stayed in NEW YORK, and i have a broke up business, until i found this company email who help me to gain a loan for business,, and now i want to used this short medium to congratulate the below company for the fast and safe money they loan to me without any form of collateral, i loan 500,000USD from the company to save my business and lots more, i saw their mail on the internet, everyone always give testimony for what they did, so i quickly contacted them and they all did everything for me without stress and my money was sent to my account just 3 days later, i was surprise and i feel so glad, now i have a standard business control agent who help me, now i will advice those who need urgent loan to contact him at the bellow email:zenithfirm12@gmail.com

    2. NOTICE:This is to inform the general public that Vampires are real. My name is James Franklyn.,am an agent of vampire,am here to introduce our new world trend to you,a world of vampire where life get easier,we have made so many persons vampires and have turned them rich,you will be assured long life and prosperity,you shall be made to be very sensitive to mental alertness,stronger and also very fast,you will not be restricted to walking at night only even at the very middle of broad day light you will be made to walk.In case you are wildly oppressed by some unscrupulous persons we can still help you fight them.Your protection is assured immediately you join.Just contact the bellow email if you are interested we are here to attend to you anytime you want us. Contact the bellow email for more details. Email:vampirescreed@hotmail.com Sincerely: James Franklyn.

    3. Bravo! Someone else that is willing to speak the truth! Bravo!_____NBCSN is available in almost 2 MILLION more homes than just a few years ago, but Indycar STILL gets less total viewers than it did just a few years ago when NBC took over Versus. Attendance and ratings cratered with the end of season races (just when the title battle got "interesting" HAH!__________And now...new race in Basilia, where Miles celebrated the "rich history" of Indycar racing there. Rich history? What, 7 events in the 100 years of AOW? Yep, some history. Well, at least its an oval. It's not??? Are you kidding me??? Gosh darn road racin furriners.

    4. PURITY RAY LOAN OFFER........ Have you been denied by your banks,or are you in need of of an urgent loan to pay of your bills we are capable of giving loans @ cheaper rate to interested individuals, student, companies and members of the public in need of finance to settle bills, we do offer considerable loans which you can count on. For more information on our various types of loan,then you will have to contact PURITY RAY LOAN FIRM, to help you achieve your desire LOAN APPLICATION FORM TO BE FILLED BORROWERS INFORMATION * Full name:………………………. * SEX * ……………………………. * Country………………………….. * State:……………………………. * Land:…………………………….. * Occupation:…………………….. * phone number:…………………. * Telephone: ………………………….. * Age:………………………………. * Amount needed as loan:……… * Loan Duration:………………….. * Propose of Loan:……………….. * Annual revenue:………………… * Monthly Income:……………….. * Guarantee:………………………. * Payment: monthly or annually Email.....purityrayloanfirm@gmail.com Thank you and God bless Mr Purity Ray PURITY RAY LOAN FIRM we tend to serve you better

    5. Problem: most of the people responding to this article don't know about this service AT ALL! Why? Lack of awareness. This isn't IndyGo. This is CIRTA: might as well be the mattress company because they are asleep at the wheel - something like 3 directors over the last year? Playing with federal grant money is great! This "region" wants commuter rail service, has spent MILLIONS on Transportation studies yet can't even support a commuter bus line? This is largely for suburban riders to get to downtown - not for "service people to work in our hotels and restaurants" ! Get your head out of your backside!! These are professionals, students etc. that don't want to fight traffic, save some money on parking, gas, stress.... if CIRTA would put their federal money into widely promoting the sevive to Greenwood, Fishers & Carmel instead of finding directors and studies - this would be a successful service. Our family uses(d) it daily for the last several years - but the recent uncertainty & now unreliability due to cuts from Carmel has been a problem. Now, costs us an additional $350/month for gas & parking ( $4200/year) plus vehicle wear, service, environmental impact ... YES - this REGION needs this this type of service in order to keep growing and getting the people it needs to fill skilled positions in downtown Indianapolis. Think outside of your own car !!!