PNC Reports 3Q Income of $1.5B

PITTSBURGH, Pa. – PNC Financial Services Group reports third-quarter net income of $1.5 billion, or $3.30 diluted earnings per share.

That’s up from $1.1 billion reported in the second quarter. In a prepared statement, President and CEO Bill Demchak attributed the third-quarter results to revenue growth and strong credit quality performance. That reflects the full-quarter benefit of PNC’s $11.6 billion acquisition of BBVA USA Bancshares, which was completed in June.

“While average loans increased due to the full quarter benefit of BBVA USA, period-end loans decreased modestly due to Paycheck Protection Program loan forgiveness activity,” Demchak said. “Importantly, we have completed the conversion of BBVA USA, providing all existing and new PNC customers with access to our coast-to-coast franchise. With the significant expansion of our footprint and the continued execution of our strategic priorities, we see substantial opportunities to leverage our best-in-class products and services, and deliver enhanced shareholder value for years to come.”

The acquisition makes PNC the fifth-largest commercial bank in the country. As of Oct. 12, merging BBVA USA into PNC Bank has converted some 2.6 million customers, 9,000 employees and nearly 600 branches across seven states, according to the release.

Net interest income attributable to BBVA USA was $532 million in the third quarter and included a significant increase in premium amortization expense related to certain BBVA USA investment securities, according to the release. PNC remains on track to realize $900 million in cost saves.

Revenue for PNC increased to $5.19 billion, up from $4.66 billion in the second quarter.

Total loans as of Sept. 30 decreased to $290.2 billion from $294.7 billion in the second quarter. However, loans are up 16% from the same period a year ago.

Deposits at Sept. 30 decreased $4 billion compared with June 30, 2021, due to BBVA USA legacy commercial deposit outflows reflecting the impact of strategic repricing decisions, partially offset by growth in PNC legacy deposits. Compared to the same period last year, however, deposits are up $93.8 billion, reflecting deposits from BBVA USA and overall growth in commercial and consumer liquidity.

Other highlights offered by PNC in its earnings report include net interest income of $2.9 billion, up 11% from last quarter; noninterest income of $2.3 billion, up 12%; and noninterest expenses of $3.6 billion, up 18%, which include a full quarter of BBVA USA operating expenses.

Key performance ratios for 3Q and 2Q 2021, as well as 3Q 2020, include:

  • Return on average assets: 1.06%, 0.88%, 1.32%
  • Return on average common shareholder’s equity: 10.95%, 8.32%, 11.76%
  • Net interest margin: 2.27%, 2.29%, 2.39%
  • Efficiency: 69%, 65%, 59%

Published by The Business Journal, Youngstown, Ohio.