PNC Reports Flat Earnings, Notes Drop in Net Interest Margin

PNC Financial reported Q3/14 net income of $1.0 billion was essentially flat compared with net income of $1.0 billion in Q3/13. Revenue of $3.84 billion was down 2% from $3.92 billion in Q3/13.

PNC said net charge-offs in Q3/14 was $82 million, down 63% or $142 million from $224 million in the same 2013 quarter. The provision for credit losses of $55 million was down 60% from a provision charge of $137 million a year earlier. The bank noted that nonperforming assets were .89% at September 30, 2014 compared to 1.17% at the end of the same period in 2013.

PNC said net interest income of $2.10 billion in Q3/14 decreased $130 million or 6% compared to $2.23 billion in Q3/13. The bank said the decline was in part due to lower earning asset yields and the impact of the company’s liquidity position.

The net interest margin was 2.98% in Q3/14 compared with 3.12% for Q2/14 and 3.47% in Q3/13. The decrease in the margin reflected lower earning asset yields and higher deposit balances maintained with the Federal Reserve Bank in light of regulatory short-term liquidity standards partially offset by commercial loan growth in the third quarter 2013 comparison. Additionally, the impact of the change in classification of certain commercial facility fees contributed to the margin decline compared with third quarter 2013.

“In the third quarter, PNC continued to deliver solid performance in a challenging revenue environment by executing on our strategic priorities,” said William S. Demchak, chairman, president and chief executive officer. “We added customers, grew deposits, and increased fee income and capital. We also effectively managed expenses even as we made targeted investments in our businesses and technology. Looking ahead, balance sheet discipline should continue to differentiate PNC and help to drive long-term shareholder value.”

To view the full PNC Financial news release, click here.

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