PNC Financial Beats Estimates

PNC Financial beats estimates, helped by lower provisions, improving interest margins and cost savings from National City acquisition.
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PITTSBURGH (

TheStreet

) --

PNC Financial Services

'

(PNC) - Get Report

saw earnings rise sharply during the second quarter, driven by improving interest margins, cost savings from its acquisition of National City and lower provisions for loan losses.

Earnings for the three months ended June 30 vaulted to $786 million, or $1.47 per diluted share, compared with earnings of $65 million, or 14 cents, in the same period a year ago.

Net income from continuing operations rose to $1.43 from 11 cents. Analysts were expecting profits of $1.23 a share.

Revenue rose 2.9% to $3.91 billion from $3.8 billion, helped by a 11% gain in interest income and a 8.3% rise in noninterest income due to gains from asset sales.

Weak demand and slower loan repayments continued to pressure loan growth. Loans to commercial real estate dropped 7%, residential mortgage loans declined 4% and commercial loans declined 2%.

PNC did not see the dramatic improvement in credit quality that has been reported by other regional banks so far. Provision for credit losses did decline 24.3% to $823 million from $1.09 billion in June 2009. However, the bank reported an increase in troubled debt restructurings to $490 million, up 24% from $385 million in the first quarter and a nearly four-fold increase from $127 million in the year-ago quarter.

Nonperforming loans declined to 3.4% of total loans from 3.7% in the first quarter, but was higher than 2.5% in the year-ago quarter. Net charge-offs also increased to $840 million or 2.2% of loans from $691 million.

The stock is up 3.3% at $ 60.49 on Thursday morning.

PNC Financial Stock Rating Report (PNC) Rating and Financial Analysis

-- Reported by Shanthi Venkataraman in New York.

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