PNC Reports First-Quarter Net Income of $1.06B
PITTSBURGH -- PNC Financial Services Group Inc., parent of PNC Bank, Wednesday reported first-quarter net income of $1.060 billion, or $1.82 per diluted common share.
This compares to fourth-quarter net income of $1.074 billion, or $1.87 per share, and first-quarter 2013 net income of $995 million, or $1.74 per share.
Said William S. Demchak, president and CEO, “PNC had a successful first quarter -- our fourth straight quarter with net income of $1 billion or more. We grew both loans and deposits, and we lowered expenses even as we continue to make investments across our businesses to enhance customer experience and become more efficient. Based on the strength of our performance and balance sheet, we were pleased to announce plans to return more capital to our shareholders through a 9% increase in our quarterly dividend and reinstituted share repurchase programs.”
This month the board of directors raised the quarterly cash dividend to 48 cents per common share, an increase of four cents per share.
The board also authorized the repurchase of up to $1.5 billion in common shares beginning this quarter under PNC’s existing common stock repurchase program.
Among he highlights PNC cited in its earnings release:
- Net interest income of $2.195 billion fell $71 million, or 3%, from $2.226 billion the previous quarter, “reflecting fewer days in the quarter [90 versus 92] and lower purchase accounting accretion.”
- Noninterest income of $1.582 billion fell $225 million from $1.807 billion, or 12%, from the fourth quarter.
- Noninterest expense – includes salaries and benefits, rents, data processing and Federal Deposit Insurance Corp. premiums – of $2.264 billion fell $250 million, or 10%, to $2.514 billion the previous quarter “reflecting disciplined expense management and seasonality,” PNC said.
- Provision for credit losses declined to $94 million compared to $113 million in the fourth quarter and $236 million the first quarter a year ago, “as overall credit quality continued to improve,” PNC said.
Credit quality continued to improve as reflected by nonperforming loans (those 90 days past due) falling to $2.947 billion at March 31 from $3.088 billion at Dec. 31 and $3.422 billion at March 31, 2013. Nonperforming assets -- includes nonperforming loans plus maintenance of repossessed collateral -- stood at $3.304 billion at March 31 compared to $3.347 billion Dec. 31 and $3.927 billion March 31, 2013.
Net charge-offs for the quarter were $186 million compared to $189 million the preceding quarter and $456 million the first quarter a year ago.
Loans increased to $198.2 billion from $195.6 billion at Dec. 31 and $186.5 billion at March 31, 2013. Commercial lending increased while consumer lending declined. Commercial loans rose to $120.8 billion from $117.2 million Dec. 31 while consumer loans fell to $77.4 billion from $78.4 billion.
Total revenues were $3.777 billion ($2.195 billion in net interest income, $1.582 billion in noninterest income) compared to $4.073 billion for the quarter ended Dec. 31 ($2.266 billion net interest income, $1.807 billion noninterest income) and $3.955 billion a year ago ($2.389 billion net interest, $1.566 noninterest).
Key performance ratios for the quarters ended March 31 and Dec. 31 and March 31, 2013:
- Return on average assets, 1.35%, 1.36%, 1.33%.
- Return on average common equity, 10.36%, 10.71%, 10.58%.
- Net interest margin, 3.26%, 3.38%, 3.81%.
- Efficiency ratio, 60%, 62%, 60%.
Assets increased slightly from the last quarter of 2013, $323.423 billion versus $320.192 billion. They stood at $300.718 billion March 31, 2013.
Book value per commons share was $73.73 at the end of the quarter, up from $72.07 at Dec. 31 and $68.10 March 31, 2013.
Markets welcomed news of PNC’s earnings as reflected in its closing price of $84.38, $2.33 or 2.71% above Tuesday’s close. Trading volume was heavy, 4.32 million shares; its daily average is 2.36 million shares.
SOURCE: PNC
Published by The Business Journal, Youngstown, Ohio.
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