PNC Shares Rise on Profit Spike

PNC(PNC Quote) blew away Wall Street estimates on Thursday, reporting a profit increase of more than 19% as it grew revenue while managing expenses and risk.

The Pittsburgh-based bank earned $505 million, or $1.45 per share, during the second quarter, up from $423 million, or $1.22 per share, a year earlier. Analysts had expected a profit of $1.16 per share, on average, according to Thomson Reuters.

Lower interest rates and acquisitions pushed PNC's net interest income up 32% to $977 million. Added fees from services and asset management boosted non-interest income 9% to $1.06 billion.

At the same time, PNC showed some stress from the tight, expensive credit markets and the decline of the housing market. The bank boosted its provision for credit losses to $186 million from $54 million a year earlier and $151 million the previous quarter.

PNC's net charge-offs from bad loans totaled $112 million, or 0.62% of average loans. The charge-off ratio grew from 0.2% a year earlier and 0.57% during the first quarter, due to commercial real-estate assets and consumer loans. Similarly, nonperforming assets grew to $733 million, or 1% of total loans and foreclosed assets from 0.4% a year earlier and 0.87% the previous quarter.

Still, the company said asset quality remains at a "manageable level" and Chairman and CEO James Rohr said PNC "remained focused on our customer growth strategies in this challenging environment."

Shares were rising 8% to $62.52 in recent trading.