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PNC more than doubles Q2 profit
Pittsburgh
PNC Financial Services Group, the nation’s seventh-largest bank by deposits, reported a second-quarter profit of $1.12 billion, or $1.99 per share, Wednesday.
That’s more than double the $546 million, or 98 cents per share, the bank reported last year for the same period.
Second-quarter earnings at the bank mainly reflected growth in fee-based revenue when it added more clients to its asset-management business. The bank also made gains on asset sales and had higher valuations on certain assets that rose as a result of the gradual increase in longterm interest rates.
Still, those gains partially were offset by a $131 million decrease in net interest income, which sank with lower balances on securities and lower yields on loans.
Results at the bank beat the expectations of analysts polled by FactSet, which forecast earnings of $1.62 per share.
“PNC’s second-quarter results reflect the progress we’re making in the execution of our strategic priorities,” said William S. Demchak, president and chief executive officer, in a statement. “We grew revenue on the strength of noninterest income, benefited from market conditions and remained disciplined on expense management.”
Total revenue at PNC increased 12 percent to $4.06 billion, up from $3.62 billion a year ago. Loans grew by 2 percent to $3.3 billion — boosted mainly by commercial lending and small increases in home-equity and auto loans.
Credit quality improved as well, with net charge-offs, or uncollectible loans, decreasing by 34 percent to $208 million in the second quarter. Nonperforming assets also declined by 4 percent to $3.8 billion compared with last year.
Larger banks, such as JPMorgan Chase and Wells Fargo, reported strong profits last week, buoyed by significant reductions in loan losses.
PNC, however, didn’t report a slowdown in mortgage lending as a result of increasing interest rates in the way those banks did, saying instead that 28 percent of its loan-origination volume was related to home- purchase transactions.
The bank also will continue to consolidate its retail banking branches. It consolidated 108 during the first and second quarters, and it has plans to close an additional 92 branches this year.
Checking accounts increased 2 percent to reach more than 6.5 million.
PNC is Youngstown’s third-largest bank with 12.86 percent of the market’s deposits.