PNC Bank Adds to Loan Reserves, Profits Drop 39% PNC Financial Services ( PNC) reported its third-quarter profit fell 39%, after increasing the amount of funds set aside to cover bad loans. The company's EPS numbers were 17 cents below what analysts had been expecting. The company also had booked losses of $82 million on the value of commercial mortgage loans held for sale and $74 million on preferred stock in beleaguered mortgage giants Freddie Mac ( FRE) and Fannie Mae ( FNM).
Despite the bank increasing its allowance for loan and lease losses to $1.05 billion from $717 million, the company is continuing to make credit available to customers, as its loans jumped 13% this quarter over the same period last year. We had removed shares of PNC Bank from our "Recommended" list last week, when shares were trading at $67.75. This earnings report does not make us want to jump back in -- the company's losses were more than we thought they had exposure to. The company does have an attractive dividend yield of 4.28%, based on last night's closing stock price of $61.50. That being said, we are remaining cautious on the shares and would look for better risk/reward situations elsewhere. PNC Bank is not recommended at this time, holding a Dividend.com Rating of 3.4 out of 5 stars. Bank of New York Mellon Beats Forecast, Despite 53% Profit Drop In its latest earnings report, Bank of New York Mellon ( BK) reported EPS of 72 cents, above analysts' average forecast of 69 cents. The company's growth in securities servicing, which involves providing custodial and other services to institutional investors and is the bank's biggest source of revenue, helped offset $162 million of losses on mortgage and other securities holdings.