Regional bank PNC Financial Services Group, Inc. (PNC: Quote) on Wednesday said profit in the first quarter declined from last year owing to integration costs related to a recent acquisition. The company reported increase in revenue and an improvement in loan loss provisions.
Net income attributable to common shareholders dropped to $766 million or $1.44 per share from $833 million or $1.57 per share last year, yet increased from last quarter's $451 million or $0.85 per share.
PNC completed the acquisition of RBC Bank (USA), the U.S. retail banking subsidiary of Royal Bank of Canada, on March 2. Integration costs related to the acquisition had an impact of $0.18 on earnings per share. Excluding integration costs, the acquisition was accretive to first quarter earnings.
The latest results also included $0.05 per share of residential mortgage foreclosure-related expense.
On average, 31 analysts polled by Thomson Reuters expected the company to report earnings of $1.43 per share. Analysts' estimates typically exclude special items.
Total revenue grew to $3.73 billion from $3.63 billion in the prior year and $3.55 billion in the previous quarter. Analysts estimated revenues of $3.59 billion.
Net interest income rose to $2.29 billion from $2.18 billion, mainly due to loans from the RBC Bank (USA) acquisition, organic loan growth and lower funding costs.
Non-interest income slipped to $1.44 billion from $1.46 billion in the prior-year quarter, primarily due to regulatory impact of lower interchange fees on debit card transactions.
Retail Banking reported a profit for the quarter, compared to a loss last year, due to lower provision for credit losses and improved net interest income.
Corporate & Institutional Banking revenues improved from last year, but declined from the prior quarter.
PNC recorded earnings of $131 million related to its equity interest in BlackRock, down from earnings of $279 million last year.
Provision for credit losses declined to $185 million from $421 million in the prior year and $190 million in the previous quarter.
James Rohr, chairman and chief executive officer, said, "Our success in growing revenue is a direct result of our success in growing customers and loans...We are confident that our strong capital levels and our ability to execute will lead to another good year in 2012."
The stock closed on Tuesday at $63.41, up from the prior close of $62.14, on a volume of 3.73 million shares.
by RTT Staff Writer
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