PNC Reports Quarterly Income Up Year-Over-Year to $1.5B

PITTSBURGH, Pa. – PNC Financial Services Group reports third-quarter net income of $1.532 billion, or $3.39 per diluted share.

That figure is up slightly from the $1.392 billion reported in the same quarter a year ago. It is, however, a steep drop from the second quarter’s $3.655 billion, though that number comes with a caveat: PNC divested its entire equity investment in BlackRock, which resulted in an after-tax sales gain of $4.3 billion, giving a large boost to the bank’s financials.

“PNC delivered solid third quarter results against the backdrop of a continuing uncertain economy,” said President and CEO Bill Demchak in a statement. “Noninterest income increased, expenses were well managed and we continued to generate positive operating leverage. Deposits grew while loans declined as a result of lower commercial loan utilization rates, despite growth in loan commitments. Our provision for credit losses was significantly less than last quarter, reflecting stable reserve levels. We continue to execute on our strategic priorities, including ongoing investments in our national expansion and digital offerings. We have substantial capital and liquidity flexibility, and remain well positioned to take advantage of potential investment opportunities to enhance shareholder value.”

Among the highlights PNC cited are:

  • Total revenue of $4.3 billion, increased 5%.
  • Net interest income of $2.5 billion decreased $43 million, or 2%, as lower yields on loans and securities and a decline in loan balances more than offset the benefit of lower rates on deposits and borrowings.
  • Fee income of $1.3 billion increased $62 million, or 5%, as a result of increases in consumer service fees, service charges on deposits and asset management revenue partially offset by lower corporate service fees and residential mortgage revenue.
  • Provision for commercial loans was $219 million largely related to borrowers in industries adversely impacted by the pandemic, primarily within the commercial real estate portfolio.
  • The effective tax rate declined to 9.8% for the third quarter compared with 17.5% for the second quarter primarily due to tax credit benefits and the favorable resolution of certain tax matters.

Key financial ratios for the quarters ended Sept. 30, June 30 and Sept 30, 2019:

  • Return on average assets: 1.32%, 3.21%, 1.36%.
  • Return on average common equity: 11.76%, 30.11%, 11.56%.
  • Net interest margin: 2.39%, 2.52%, 2.84%.
  • Efficiency: 59%, 62%, 62%.

Noninterest income was $1.797 billion, up from $1.549 billion in the second quarter and $1.738 billion in the third quarter of 2019.

Deposits totaled $355.1 billion, up from $346 billion in the previous quarter and $285.6 billion in the year-ago quarter.

Loans totaled $249.3 billion, down from $258.3 in the second quarter but up from $237.4 billion in the third quarter of 2019. Commercial loans totaled $172.7 billion, down from $180.2 billion in the second quarter and up from the $237.4 billion reported in the third quarter last year.

Nonperforming loans totaled $2.085 billion, up from $1.876 billion reported in the previous quarter and $1.728 in the year-ago quarter

Total assets were $462.1 billion, up from the $457.3 billion reported in the second quarter and the $406.7 billion reported in the third quarter last year.

Copyright 2020 The Business Journal, Youngstown, Ohio.