PNC Reports Full-Year Net Income of $5.3B

PITTSBURGH — PNC Financial Services Group today reported fourth-quarter net income of $1.351 billion, or $2.75 per diluted common share, and full-year net income of $5.346 billion, or $10.71 per diluted share.

Fourth-quarter net income compares to $1.400 billion the third quarter, or $2.82 per diluted share, and fourth-quarter 2017 income of $2.091 billion, or $4.18 per diluted Share.

Net income for 2017 was $5.388 billion, or $10.36 per diluted share.

In a prepared statement, PNC chairman, president and CEO William Demchak said, “2018 was a successful year for PNC. Earnings per share increased, and our returns on average assets and common equity were strong. Record revenue was driven by higher net interest income and noninterest income, and we generated positive operating leverage for the year. We grew loans and deposits, and expanded to new markets with our middle market corporate banking franchise and the successful launch of our national retail digital strategy. Supported by our strong capital and liquidity positions, we are entering 2019 well positioned to create long-term value for our shareholders.”

Fourth quarter and full year 2017 net income included a net benefit of $0.9 billion from federal tax legislation and significant items.

Highlights PNC cited include:

  • Total revenue for the fourth quarter of $4.3 billion declined $17 million.
  • Net interest income of $2.5 billion increased $15 million, or 1%, due to higher loan and securities yields and balances partially offset by increased funding costs.
  • Provision for credit losses was $148 million, an increase of $60 million resulting from a higher commercial loan provision reflecting portfolio growth and a benefit from lower specific reserves in the third quarter.

Key financial ratios for the quarters ended Dec. 31, Sept. 30, and Dec. 31, 2017:

  • Return on average assets, 1.40%, 1.47%, 2.20%.
  • Return on average common equity, 11.83%, 12.32%, 18.90%.
  • Net interest margin, 2.96%, 2.99%, 2.88%.
  • Efficiency, 59%, 60%, 72%.

Net interest income increased to $2.481 billion for the fourth quarter compared to $2.466 billion the third quarter and $2.345 billion the year-ago quarter.

Noninterest income was $1.859 billion, compared to $1.891 billion the preceding quarter and $1.915 billion for the quarter ended Dec. 31, 2017, while noninterest expense (such as wages and benefits, rents, advertising and Federal Deposit Insurance Corp. premiums) was $2.577 billion, $2.608 billion and $3.061 billion respectively.

Deposits rose with total deposits reaching $267.839 billion at Dec. 31, up from $264.884 billion at Sept. 30 and $265.053 billion at Dec. 31, 2017.

Total loans reached $226.245 billion at Dec. 31, from $223.053 billion at Sept. 30 and $220.458 billion at Dec. 31, 2017.

Nonperforming loans remained the same for the fourth and third quarter of 2018 at $1.694 billion, but fell from the year-ago fourth quarter of $1.865 billion. Credit quality remained strong.

Total assets increased to $382.315 billion during the quarter, compared to $380.080 billion at Sept. 30, and $380.768 billion the year-ago quarter.

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