PNC Reports 3Q Net Income of $1.4 Billion

PITTSBURGH — PNC Financial Services Group today reported third-quarter net income of $1.400 billion, or $2.82 per diluted common share. 

This compares to the $1.356 billion in net income, or $2.72 per diluted common share, during the second quarter and $1.126 billion in net income, or $2.16 per diluted common share, for the third quarter of 2017.

On Oct. 4, PNC’s board of directors declared a quarterly cash dividend of 95 cents per common share. The dividend is payable Nov. 5 to shareholders of record Oct. 17.

In a prepared statement, PNC chairman, president and CEO William Demchak, said, “PNC delivered another good, consistent quarter. We grew average loans and deposits and continued to add new clients. Net interest income and our margin and fee income increased. We’re experiencing success with our national initiative to expand our middle market capabilities in faster growing markets, and we launched our national retail digital strategy with a high yield savings offer to be supported by an ultra-thin retail network. Looking ahead, we’re positioned to drive growth and efficiency over the long term.”

Highlights PNC cited include:

  • Total revenue for the third quarter increased $33 million, or 1%, to $4.357 billion.
  • Fee income grew $13 million, or 1%, to $1.6 billion led by higher asset management revenue and consumer activity.
  • Provision for credit losses was $88 million, an increase of $8 million reflecting a higher provision for consumer loans.
  • Average commercial lending balances grew $.2 billion primarily in PNC’s equipment finance and business credit businesses. Loan growth was moderated by substantial payoff volumes.
  • Average consumer lending balances increased $.5 billion due to growth in auto, residential mortgage, credit card and unsecured installment loans partially offset by lower home equity and education loans.

Key financial ratios for the quarters ended Sept. 30, June 30, and Sept. 30, 2017:

  • Return on average assets, 1.47%, 1.45%, 1.20%.
  • Return on average common equity, 12.32%, 12.13%, 9.89%.
  • Net interest margin, 2.99%, 2.96%, 2.91%.
  • Efficiency, 60%, 60%, 60%.

Net interest income increased to $2.466 billion compared to $2.413 billion reported for the second quarter and $2.345 billion the year-ago quarter.

Noninterest income was $1.891 billion, compared to $1.911 billion the preceding quarter and $1.780 billion for the quarter ended Sept. 30, 2017, while noninterest expense (such as wages and benefits, rents, advertising and Federal Deposit Insurance Corp. premiums) was $2.608 billion, $2.584 billion and $2.456 billion respectively.

Total deposits reached $264.884 billion at Sept. 30, slightly down from $264.885 billion at June 30 and up from $260.735 billion at Sept. 30, 2017.

Total loans grew to $223.053 billion for the third quarter, from $222.855 billion at the second quarter and $221.109 billion the year-ago quarter.

Nonperforming loans fell to $1.694 billion from the second quarter of $1.719 billion, and the year-ago quarter of $1.873 billion. Overall credit quality remained strong.

Total assets fell slightly to $380.080 billion during the quarter, compared to $380.711 billion at June 30, and increased from $375.191 billion the year-ago quarter.

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