WASHINGTON (dpa-AFX) - Regional bank PNC Financial Services Group, Inc. (PNC) reported Wednesday a profit for the first quarter that decreased six percent from last year, reflecting a decline in net interest income and higher expenses. However, earnings per share topped analysts' expectations, while quarterly revenues missed their estimates by a whisker.
Meanwhile, overall credit quality for the first quarter improved, with net charge-offs decreasing 45 percent to $103 million from last year's $186 million. Provision for credit losses also declined 43 percent to $54 million from last year's $94 million.
'PNC delivered solid results in the first quarter, continuing the consistent performance that has been characteristic of our strategic execution. We grew average loans and deposits, controlled expenses and benefited from modestly improved credit quality this quarter,' Chairman, President and CEO William Demchak said.
Pittsburgh, Pennsylvania-based PNC reported net income attributable to common shareholders of $926 million or $1.75 per share for the first quarter, lower than $983 million or $1.82 per share in the prior-year quarter.
On average, 29 analysts polled by Thomson Reuters expected the company to report earnings of $1.72 per share for the quarter. Analysts' estimates typically exclude special items.
PNC noted that first-quarter earnings reflect average loan and deposit growth, disciplined expense management, modestly improved credit quality and seasonal client trends.
Total revenue for the quarter edged up 1 percent to $3.73 billion from $3.78 billion in the same quarter last year, but missed nineteen Wall Street analysts' consensus estimate of $3.75 billion by a whisker.
Net interest income for the quarter decreased 6 percent to $2.07 billion, while non-interest income grew 5 percent to $1.66 billion from the year-ago quarter.
Net interest income declined primarily due to lower loan yields, partially offset by commercial and commercial real estate loan growth.
Meanwhile, net interest margin was 2.82 percent, down from 3.26 percent last year, principally due to the impact of balance sheet management activities related to regulatory short-term liquidity standards, lower loan yields and lower benefit from purchase accounting accretion.
Non-interest expense increased 4 percent to $2.35 million from a year ago, primarily related to PNC's investments in technology and business infrastructure and higher benefits costs, partially offset by lower legal and residential mortgage compliance costs.
Retail banking net income grew 28 percent to $202 million, while corporate & institutional banking net income declined 8 percent to $482 million from a year ago.
On April 2, the PNC board of directors raised the quarterly cash dividend on common stock by 6 percent to $0.51 per share, effective with the May 5 dividend payment. These capital actions are consistent with PNC's capital plan which was accepted by the Board of Governors of the Federal Reserve System in March 2015.
'We completed our existing share repurchase program and announced new actions to return more capital to shareholders. Looking ahead, we like how we are positioned to help our customers achieve their financial goals and to perform for our shareholders,' Demchak added.
In Wednesday's regular trading session, PNC is currently trading at $93.45, down $0.21 or 0.18% on a volume of 0.48 million shares. In the past 52-week period, the stock has been trading in a range of $76.69 to $96.71.
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