PNC Financial Services Group
shares rose more than 2% in premarket trading Thursday after the Pittsburgh-based financial services provider posted better than expected third-quarter earnings because of higher revenue, lower expenses and benefits from its National City acquisition.
In a press release before the opening bell, PNC reported earnings of $559 million,or a $1 a share, up from a year-ago profit of $259 million, or 70 cents a share, in theyear-ago quarter. The company paid total preferred dividends of $99 million in the quarter, with $95 million, an impact of 21 cents a share, of those payments related to its TARP participation.
The average estimate of analysts polled by Thomson Reuters was for earnings of 31 cents a share in the September period.
Total revenue increased to $4.05 billion in the latest three months from $1.65 billion in the year-ago equivalent period, largely because of the acquisition of National City, which was completed at the end of 2008. In the second quarter ended in June, revenue totaled $4 billion.
Before the opening bell, shares were up $1.02 at $45.98.
PNC's credit loss provision swelled to $914 million during the quarter from $190 million a year-ago, though that's down on a sequential basis from $1.09 billion. The bank's ratio of nonperforming assets also grew to 3.5% of its portfolio, up from 1.16% last year, due to jumps in nonperforming commercial, commercial real estate, and residential real estate loans.
With net-charge offs at $650 million, the ratio of net charge-offs to average loans also grew to 1.59%. In the year-ago quarter, the ratio stood at 0.66%, though third quarter net-charge offs were down slightly from the 1.89% posted in the second quarter.
Of National City, the company said the deal has been accretive year-to-date and it expects it to add to earnings for the full year as well. PNC estimates it realized cost savings of roughly $200 million related to the transaction in the third quarter, bringing total cost savings for the year to $460 million.
--Written by Sung Moss in New York
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