PNC Posts Q2 Income of $3.65B

PITTSBURGH – PNC Financial Services Group reports second-quarter net income of $3.65 billion, or $8.40 per diluted share. 

That compares to $915 million in net income during the first quarter and $1.37 billion during the second quarter of 2019. 

In a statement, PNC President and CEO Bill Demchak attributed the increase in earnings to the sale of the bank’s stake in investment firm BlackRock for $14.2 billion in May.

“During this remarkable period in the midst of the pandemic and economic downturn, PNC has remained steadfast in our commitment to our customers, communities, employees and shareholders. While our pre-provision results for the second quarter were good in the context of a lower rate environment and business headwinds, the uncertainty in the economy related to the pandemic resulted in a substantial loan loss reserve build,” he said. “The monetization of our BlackRock investment and recent CCAR results underscore the strength of our balance sheet. Our book value per share increased significantly, and PNC is very well positioned with substantial capital and liquidity flexibility to continue to support our constituents and capitalize on opportunities that may arise during these challenging times.”

Among the highlights PNC reported in its quarterly earnings report are:

  • Total revenue declined 6% to $4.1 billion.
  • Net interest margin decreased 32 basis points to 2.52%, reflecting the full quarter impact of the 1.5 percentage point reduction in the federal funds rate by the Federal Reserve in March 2020.
  • Provision for credit losses increased to $2.5 billion for the second quarter, compared with $914 million for the first quarter due to the significant estimated economic impact of the pandemic. The provision was calculated using the Current Expected Credit Loss standard adopted by the bank Jan. 1.

Key performance ratios include for the quarters ended June 30, March 31 and June 30, 2019:

  • Return on average assets, 3.21%,  0.89%, 1.39%.
  • Return on average common equity, 30.11%, 7.51%, 11.75%.
  • Net interest margin 2.52%, 2.84%, 2.91%.
  • Efficiency, 62%, 59%, 62%.

Net interest income totaled $2.53 billion in the second quarter, up slightly from $2.51 billion in the first quarter and $2.5 billion in the year-ago quarter.

Noninterest income fell to $1.55 billion in the second quarter from $1.83 billion in the previous quarter and $1.72 billion in the second quarter of 2019.

Deposits totaled $346 billion, up from $305.2 billion in the first quarter and $273.3 billion in the second quarter last year.

Total loans were $258.2 billion, down from $264.6 billion in the prior quarter but up from $237.2 billion in the year-ago quarter. Commercial loans totaled $180.2 billion and consumer loans totaled $78 billion, both declines from the previous quarter marks of $184.7 billion and $79.9 billion, respectively.

Total assets were $459 billion at the end of the second quarter, up from the previous quarter’s mark of $445.5 billion and the year-ago quarter level of $405.8 billion.

Published by The Business Journal, Youngstown, Ohio.