PNC turns in better 1Q profit, beats estimates

PNC said net income rose 24 percent in the first quarter, trumping estimates

Associated Press

PITTSBURGH (AP) -- A growing customer base and shrinking provisions for credit losses during the first quarter helped PNC beat out Wall Street expectations.

That pushed company shares close to a new high for the year on a day when there was a broad sell-off on all major U.S. indexes.

First-quarter net income was just over $1 billion, or $1.76 per share, up from $811 million, or $1.44, during the same period last year. That topped expectations of $1.57 per share, according to a poll of analysts by FactSet.

Revenue rose 6 percent to $3.96 billion. That's up from $3.73 billion in the same quarter of 2012 but slightly less than analyst predictions.

Revenue was driven by higher interest income from lending as well as noninterest income, a term for the fees banks generate from handling transactions and managing money. Compared to the first quarter of last year, income from lending, minus the costs of handling loans, rose 4 percent to $2.39 billion, while noninterest income rose 9 percent to $1.57 billion.

The bank's commercial and consumer loans totaled $186.5 billion at the end of March, up 6 percent from the year before.

PNC said more customers for its asset management business and other services pushed up income from fees. More activity in commercial mortgages helped lift quarterly revenue.

Costs shrunk, thanks largely to a 34 percent drop in marketing expenses compared to the prior year.

The company recently announced that it was raising its dividend by 10 percent, to 44 cents.

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