PNC Financial Tops 3rd-Quarter Estimate; Shares Ease

PNC Financial shares were lower after the Pittsburgh financial-services major reported third-quarter results that topped estimates.
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PNC Financial  (PNC) - Get Report shares were lower after the Pittsburgh banking and financial-services major reported third-quarter results that topped estimates. 

Third-quarter earnings per share rose 15% to $3.39 from $2.94 in the year-earlier quarter. Analysts surveyed by FactSet were looking for $2.12 a share.

"We continue to execute on our strategic priorities, including ongoing investments in our national expansion and digital offerings," Chief Executive Bill Demchak said in a statement.

"We have substantial capital and liquidity flexibility, and remain well positioned to take advantage of potential investment opportunities to enhance shareholder value." 

Revenue from interest on loans -- net interest income -- dropped 1% from a year earlier "due to lower yields on earning assets partially offset by lower rates on deposits and borrowings and higher average earning assets," the company said. 

Revenue from sources other than loans, noninterest income, advanced 3%. 

The net interest margin -- the difference between what a bank takes in on loans and pays out on deposits -- narrowed to 2.39% in the third quarter from 2.52% in the second quarter and 2.84% in the year-earlier third period "as a result of lower yields on loans and securities and higher balances held with the Federal Reserve, partially offset by lower rates on deposits and borrowings," PNC said.

In the previous quarter, PNC divested its entire 22.4% equity investment in BlackRock, yielding net proceeds of $14.2 billion and an after-tax gain of $4.3 billion.

The sale marked the end of an investment in BlackRock, the world's largest asset manager, that began more than a quarter-century ago. PNC had bought BlackRock in 1995. 

Analysts are expecting PNC to use the proceeds from the sale to make an acquisition, as it did during the 2008 financial meltdown when PNC purchased National City Corp.

At last check PNC shares eased 1.7% to $110.65.