MINNEAPOLIS (dpa-AFX) - Lenders PNC Financial Services Group Inc. (PNC) and U.S. Bancorp (USB) Wednesday reported financial results for the first quarter.
For PNC, profit increased amid loan and deposit growth, well-controlled expenses and credit quality improvement as well as seasonal trends. As for U.S. Bancorp, profit dropped along with a decline in revenues. Mortgage banking revenue declined for both lenders.
PNC said its net income attributable to common shareholders increased to $992 million from the prior year's $928 million. Earnings per share improved to $1.82 from $1.74.
On average, 28 analysts polled by Thomson Reuters expected the company to report earnings of $1.66 per share for the quarter. Analysts' estimates typically exclude special items.
Total revenue dropped to $3.78 billion from last year's $3.96 billion due to lower net interest income that dropped 8 percent to $2.20 billion. Analysts estimated revenues of $3.85 billion for the quarter.
Noninterest income rose 1 percent to $1.58 billion, as Asset management revenue climbed 18 percent driven by increases in the equity markets and sales production.
Residential mortgage banking revenue decreased 31 percent, reflecting lower loan sales revenue from lower origination volume and lower net hedging gains on residential mortgage servicing rights. The division reported a loss of $4 million, compared to a profit of $45 million last year.
Segment income improved in Retail Banking, amid a gain of $62 million on the sale of 1 million Visa Class B common shares.
For Corporate & Institutional Banking, earnings declined amid lower net interest income as well as decreased Other noninterest income.
Overall credit quality continued to improve during the first quarter. Provision for credit losses declined 60 percent to $94 million.
PNC, which closed up 0.7 percent at $82.15, is gaining 2 percent in pre-market activity.
For U.S. Bancorp, first-quarter net income applicable to common shareholders declined to $1.331 billion from $1.358 billion in the same quarter last year. Earnings per share were unchanged at $0.73. Results are on a taxable-equivalent basis.
On average, 27 analysts polled by Thomson Reuters expected the company to report earnings of $0.73 per share for the quarter. Analysts' estimates typically exclude special items.
Total net revenue declined to $4.814 billion from the previous year's $4.874 billion. Analysts estimated revenues of $4.80 billion for the quarter.
While net interest income was nearly unchanged, noninterest income slid 2.6 percent due to lower mortgage banking revenue.
Provision for credit losses declined to $306 million from $403 million.
By business line, net income attributable to the company from Wholesale Banking and Commercial Real Estate fell nearly 10 percent to $288 million, amid a decrease in total net revenue and a higher provision for credit losses.
Consumer and Small Business Banking's profit was 21 percent lower at $291 million. Within the division, the retail banking division reported a 7.5 percent increase in its contribution over last year, principally due to a reduction in the provision for credit losses.
Payment Services' earnings climbed 11 percent to $233 million, driven by an increase in total net revenue.
USB closed up 1 percent at $41.01on Tuesday.
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