Banking & Finance

PNC Reports Record Full-Year Net Income of $5.4B

PITTSBURGH — PNC Financial Services Group today reported fourth-quarter net income of $2.091 billion, or $4.18 per diluted common share, and full-year net income of $5.388 billion, or $10.36 per diluted share.

Fourth-quarter net income compares to $1.126 billion the third quarter, or $2.16 per diluted share, and fourth-quarter 2016 income of $1.047 billion, or $1.97 per diluted Share.

Net income for 2016 was $3.985 billion, or $7.30 per diluted share.

In a prepared statement, PNC chairman, president and CEO William Demchak said, “We grew loans and deposits and added customers across our businesses, continued to focus on expense management, and generated record fee income for the year, as well as in the fourth quarter. The year ended with a benefit from the new tax legislation, giving us increased flexibility as we continue to invest in our businesses, communities and our employees, which helps drive our Main Street banking model. As we enter the new year, we believe we are firmly positioned to create long-term value for our shareholders.”

The new federal tax legislation impacted the full-year and fourth quarter net income by $911 million.

The benefit from tax legislation on fourth quarter 2017 net income was primarily attributable to revaluation of deferred tax liabilities at the lower statutory tax rate, PNC said.

Highlights PNC cited include:

  • Total revenue growth rose $4.260 billion, or 3%, from the third quarter of $4.125 billion.
  • Net interest margin was 2.88% compared with 2.91% in the third quarter. The impact of tax legislation related to leveraged leases reduced the margin by 3 basis points.
  • Provision for credit losses was $125 million, a decline of $5 million, as a higher provision for the consumer loan portfolio was more than offset by a lower provision for the commercial lending portfolio.

Key financial ratios for the quarters ended Dec. 31, Sept. 30, and Dec. 31, 2016:

  • Return on average assets, 2.20%, 1.20%, 1.13%.
  • Return on average common equity, 18.90%, 9.89%, 9.31%.
  • Net interest margin, 2.88%, 2.91%, 2.69%.
  • Efficiency, 72%, 60%, 63%.

Net interest income remained at $2.345 billion for the fourth and third quarter compared to $2.130 billion the year-ago quarter.

Noninterest income was $1.915 billion, compared to $1.780 billion the preceding quarter and $1.744 billion for the quarter ended Dec. 31, 2016, while noninterest expense (such as wages and benefits, rents, advertising and Federal Deposit Insurance Corp. premiums) was $3.061 billion, $2.456 billion and $2.441 billion respectively.

Deposits rose with total deposits reaching $261.053 billion at Dec. 31, up from $260.735 billion at Sept. 30 and $257.164 billion at Dec. 31, 2016.

Total loans reached $220.458 billion at Dec. 31, from $221.109 billion at Sept. 30 and $210.833 billion at Dec. 31, 2016.

Nonperforming loans fell to $1.865 billion from the third quarter of $1.873 billion, and the year-ago quarter of $2.144 billion. Credit quality improved as reflected by the nonperforming loans falling 13%.

Total assets increased to $380.768 billion during the quarter, compared to $375.191 billion at Sept. 30, and $366.380 billion the year-ago quarter.

Published by The Business Journal, Youngstown, Ohio.