MINNEAPOLIS (dpa-AFX) - Regional bank PNC Financial Services Group, Inc. (PNC) Wednesday reported a fall in profit for the second quarter, amid lower revenues, even as provision for credit losses declined. Meanwhile, diversified financial services provider U.S. Bancorp (USB) recorded an increase in second-quarter profit on higher revenues and a reduced provision for credit losses.
PNC's net income attributable to common shares declined to $995 million from $1.049 billion last year. Earnings per share fell to $1.85 from $1.98.
On average, 27 analysts polled by Thomson Reuters expected the company to report profit per share of $1.78 for the quarter. Analysts' estimates typically exclude special items.
Total revenue dropped 6 percent to $3.810 billion from $4.064 billion reported last year. Analysts expected revenue of $3.81 billion for the quarter.
Net interest income was $2.129 billion, down 6 percent from the prior year, as both core net interest income and purchase accounting accretion declined.
Non-interest income fell 7 percent to $1.681 billion. Within the business, Asset management revenue grew 6 percent, driven by increases in the equity markets and sales production.
Consumer services revenue advanced 3 percent, amid growth in customer-initiated transaction volumes.
Residential mortgage revenues were 9 percent higher at $182 million, supported by a lower provision for residential mortgage repurchase obligations.
Provision for credit losses declined to $72 million from $157 million in the prior year.
The net interest margin declined to 3.12 percent from 3.58 percent for the second quarter of 2013, reflecting lower loan yields, impact of the change in classification of certain commercial facility fees, and higher deposit balances maintained with the Federal Reserve Bank in light of proposed short-term liquidity regulatory standards.
William Demchak, chairman, president and CEO, said, 'We grew loans, our fee businesses performed well, expenses were well managed, credit quality continued to improve and capital levels strengthened.
Demchak said the near-term outlook is for a continuation of the low interest rate environment, and the firm is making important progress on its strategic priorities, which is expected to benefit long-term performance.
Meanwhile, U.S. Bancorp reported net income of $1.495 billion for the second quarter of 2014, compared with $1.484 million last year. Earnings per share rose to $0.78 per common share from $0.76 per common share. Analysts expected earnings of $0.77 per share for the quarter.
The latest second-quarter results included two items. The company reached a settlement with the U.S. Department of Justice to resolve an investigation relating to the endorsement of mortgage loans under the Federal Housing Administration's insurance program for $200 million.
In addition, prior to the FHA DOJ settlement, the company sold 3.0 million shares of the Class B common stock of Visa Inc. resulting in a net pretax gain of $214 million.
Combined, these items had no impact to earnings per common share for the current quarter.
Total net revenue increased 4.9 percent to $5.188 billion from $4.948 billion, while analysts projected $4.94 billion.
Net interest income rose 2.7 percent to $2.744 billion, while Non-interest income climbed 7.4 percent to $2.444 billion.
Provision for credit losses were $324 million, compared to $362 million last year.
U.S. Bancorp Chairman, president and chief executive officer Richard Davis said the result reflects the overall strength and diversity of its business.
PNC closed up 1.3 percent at $88.24 on Tuesday. USB closed up 0.6 percent at $43.30.
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