NEW YORK CITY (dpa-AFX) - Regional banks on Wednesday reported mixed results for the second quarter, with Bank of New York Mellon Corp. (BK) and PNC Financial Services Group, Inc. (PNC) hit by significant one-time charges. U.S. Bancorp's (USB) profit climbed and topped Street projections and Northern Trust Corp. (NTRS) posted higher profit.
In the second quarter, Bank of New York Mellon, known as BNY Mellon, reported net income applicable to common shareholders of $466 million, down 36.6 percent from last year, with earnings per share dropping to $0.39 from $0.59 in the prior year. The latest quarter's earnings included an earlier announced litigation charge of $212 million or $0.18 per share.
On average, 20 analysts polled by Thomson Reuters expected earnings of $0.53 per share for the quarter. Analysts' estimates typically exclude one-time items.
Total revenue decreased 6 percent to $3.62 billion and adjusted revenue, which excluded fee and other revenue related to Shareowner Services, fell 5 percent to $3.59 billion. Analysts expected revenues of $3.62 billion.
Net interest margin was hit by increased client deposits which were invested in lower-yielding assets. Fee and other revenue were hurt mainly by the sale of the Shareowner Services business. Foreign exchange revenue fell 15 percent. Investment and other income decreased from the prior year.
BNY Mellon's assets under management rose 2 percent to $1.3 trillion. The company also declared a quarterly stock dividend of $0.13 per share.
PNC Financial's attributable net income plunged 40.8 percent to $526 million or $0.98 per share hurt by $403 million or $0.76 per share charges on residential mortgage loan repurchase obligations, trust preferred redemptions, and integration costs. Analysts expected earnings of $1.24 per share.
Total revenue edged up 1 percent to $3.62 billion, but missed Wall Street analysts' consensus of $3.71 billion. The company recorded 17 percent increase in net interest income primarily due to RBC Bank (USA) acquisition was almost offset by a 24 percent decline in non-interest income. Provision for credit losses declined in the quarter.
U.S. Bancorp's applicable net income grew 15.3 percent to $1.35 billion and earnings per share rose 18.3 percent to $0.71, driven by growth in net interest income and fee-based revenue, as well as a 17.8 percent decline in provision for credit losses. Analysts expected earnings of $0.70 per share.
Total revenues on a taxable-equivalent basis rose 8.1 percent to $5.07 billion, beating analysts' estimate of $4.98 billion. The 9.7 percent growth in fee-based revenue was driven by higher mortgage banking revenue. Net interest margin, however, declined to 3.58 percent from 3.67 percent last year.
Northern Trust's net income for the quarter climbed 18 percent to $179.6 million or $0.73 per share partly benefited by a decline in restructuring, acquisition, and integration related charges. Wall Street analysts were looking for earnings of $0.75 per share.
Revenue grew 5 percent to $988.5 million, while analysts expected $1 billion. Higher trust, investment and other servicing fees, the largest component of its revenues, were partly offset by a 27 percent decline in foreign exchange trading income. Reduced currency market volatility and client volumes impacted the results.
In pre-market activity, BNY Mellon shares are currently trading at $21.20, down $0.52 or 2.39 percent and PNC shares are at $61, down $0.59 or 0.96 percent.
U.S. Bancorp's shares declined $0.25 or 0.76 percent and currently trading at $32.70.
Northern Trust's shares edged up 0.09 percent and settled on Tuesday at $47.07.
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