Banking & Finance

PNC Reports Q2 Net Income of $1.4B

PITTSBURGH — PNC Financial Services Group today reported second-quarter net income of $1.356 billion, or $2.72 per diluted common share.

This compares to first-quarter net income of $1.239 billion, or $2.43 per diluted common share, and year-ago income of $1.097 billion, or $2.10 per diluted common share.

In a prepared statement, PNC chairman, president and CEO William Demchak said, “PNC’s second quarter results were strong. We grew fee income and net interest income, expanded our margin, managed expenses well and maintained stable credit quality. Our board recently increased the common stock dividend 27% to an all-time high. We are continuing to invest in our businesses, including our middle market expansion and digital offerings, and remain focused on opportunities for growth and efficiency that will create long-term value for our shareholders.”

Highlights PNC cited include:

  • Total revenue for the second quarter increased $213 million, or 5%, to $4.324 billion.
  • Growth in fee income of $72 million, or 5%, reflected seasonality and higher business activity.
  • Provision for credit losses was $80 million, a decrease of $12 million reflecting a lower provision for commercial loans.
  • PNC’s board of directors raised the quarterly cash dividend on common stock to 95 cents per share, an increase of 20 cents per share, or 27%, effective with the August dividend. The dividend is payable Aug. 5 to shareholders of record July 17.

Key financial ratios for the quarters ended June 30, March 31, and June 30, 2017:

  • Return on average assets, 1.45%, 1.34%, 1.19%.
  • Return on average common equity, 12.13%, 11.04%, 9.88%.
  • Net interest margin, 2.96%, 2.91%, 2.84%
  • Efficiency, 60%, 61%, 61%

Net interest income increased to $2.413 billion for the second quarter of 2018 compared to $2.361 at March 31 and $2.258 billion the year-ago quarter. Due to higher loan and securities yields and an additional day in the second quarter partially offset by increased funding costs.

Noninterest income was $1.911 billion, compared to $1.750 billion the preceding quarter and $1.802 billion for the quarter ended June 30, 2017, while noninterest expense (such as wages and benefits, rents, advertising and Federal Deposit Insurance Corp. premiums) was $2.584 billion, $2.527 billion and $2.479 billion respectively.

Total deposits reaching $264.885 billion at June 30, slightly up from $264.704 billion at March 31 and $259.176 billion at June 30, 2017.

Total loans grew to $222.855 billion for the second quarter, from $221.614 billion at the first quarter and $218.034 billion the year-ago quarter.

Nonperforming loans fell to $1.719 billion from the second quarter of $1.842 billion, and the year-ago quarter of $1.957 billion. Overall credit quality remained strong.

Total assets increased to $380.711 billion during the quarter, compared to $379.161 billion at March 31, and $372.190 billion the year-ago quarter.

Published by The Business Journal, Youngstown, Ohio.