PNC Financial Services Group, Inc. (PNC: Quote) reported Thursday a profit for the fourth quarter that increased from last year, reflecting gains from the sale of Visa, Inc. (V) shares and improved revenues. This, despite higher provision for credit losses.
Pittsburgh, Pennsylvania-based PNC reported net income attributable to common shareholders of $664 million or $1.24 per share for the fourth quarter, higher than $451 million or $0.85 per share in the prior-year quarter.
The earnings for the latest quarter was reduced by $0.47 per share for the net impact of the actions taken in the fourth quarter associated with residential mortgage banking activities and other items.
On average, 15 analysts polled by Thomson Reuters expected earnings of $1.57 per share for the quarter. Analysts’ estimates typically exclude one-time items.
Total revenue for the quarter increased 15 percent to $4.07 billion from $3.55 billion in the same quarter last year, and topped twenty-three Wall Street analysts’ consensus estimate of $3.94 billion.
Excluding the impact of the provision for residential mortgage repurchase obligations and gains on sales of Visa shares in the latest quarter, total revenue increased 17 percent from last year.
PNC noted that its businesses and markets drove growth in loans, deposits and customers, resulting in strong revenue in the fourth quarter.
PNC sold a portion of its investment in Visa and recognized gains of $130 million on the sale of 4 million Visa Class B common shares during the quarter.
Net interest income for the quarter increased 10 percent to $2.42 billion, and non-interest income grew 22 percent to $1.65 billion from the year-ago quarter.
Meanwhile, net interest margin was 3.85 percent, down from 3.86 percent last year. Non-interest expense grew 4 percent to $2.83 from a year ago. Provision for credit losses increased to $318 million from $190 million.
Retail banking earnings surged 59 percent to $121 million, and corporate & institutional banking earnings grew 52 percent to $649 million, while residential mortgage banking loss sharply widened to $192 million from $61 million in the year-ago quarter.
At December 31, 2012, PNC had a strong capital position, with Tier 1 common capital ratio at an estimated 9.6 percent, and estimated proforma Basel III Tier 1 common capital ratio at 7.3 percent.
For fiscal 2012, the company reported net income attributable to common shareholders of $2.83 billion or $5.30 per share, lower than $3.0 billion or $5.64 per share in the prior year. Analysts expected the company to report earnings of $5.62 per share for fiscal 2012.
Net revenues for the full year grew to $15.51 billion from $14.33 billion in the previous year. Street was looking for full-year 2012 revenues of $15.46 billion.
“While we are pleased with the progress we have made, our financial results do not yet reflect the full potential from our investments. Our commitment to revenue growth, expense reduction and efficient capital management in 2013 should position PNC to deliver even greater shareholder value,” Chairman and CEO James Rohr said in a statement.
In Thursday’s regular trading session, PNC is currently trading at $61.50, up $1.72 or 2.88% on a volume of 0.83 million shares.
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by RTT Staff Writer
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