Submitted by Fox First at Ten on October 16th
PITTSBURGH (AP) - The PNC Financial Services Group Inc.'s net income rose solidly in the third quarter, boosted by a one-time gain from a sale of Visa shares and higher fees from corporate clients.
The bank's income from interest on loans increased, bucking an industry-wide trend, because PNC acquired RBC Bank (USA) since last year's third quarter.
PNC said Tuesday that its net income available to common shareholders rose to $876 million, or $1.64 per share, in the quarter ended Sept. 30 from $826 million, or $1.55 per share, in the same period a year earlier.
The quarter included a $137 million pretax gain from the sale of part of PNC's investment in Visa. The company also set aside less money to cover souring loans - $228 million, compared with $261 million a year earlier.
PNC's revenue jumped 15 percent to $4.08 billion from $3.54 billion a year earlier.
Net interest income, which combines income from interest on loans and the cost of interest paid to depositors and lenders, rose by 10 percent, to $2.39 billion from $2.18 billion.
Interest income is declining at many other banks as record-low interest rates and strong competition for deposits chisel away at their margins. PNC avoided that fate mainly through the acquisition of RBC Bank (USA), which helped boost PNC's total loan size by 18 percent over last year's third quarter.
Noninterest income, which includes fees and other sources of revenue like the sale of Visa shares, rose 23 percent, to $1.69 billion from $1.37 billion. Corporate services saw the strongest growth. The company also set aside less money to buy back lousy mortgages from investors making legal claims about them.
The results bested Wall Street's expectations. On average, analysts surveyed by FactSet anticipated earnings of $1.61 per share on revenue of $4.01 billion.
PNC, based in Pittsburgh, is a one of the nation's largest regional banks, with 2,511 branches at 6,806 ATMs in Washington and 14 states. It offers a range of financial services, reporting results in segments including retail banking, corporate and institutional banking, asset management, residential mortgage banking and non-strategic assets. PNC also owns a major stake in BlackRock, the biggest publicly-traded asset manager.
PNC shares fell $2.53, or 4 percent, to close at $60.40 Tuesday.
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