PNC Financial Services Group, Inc. (PNC) reported Thursday a surge in third-quarter profit, helped by strong net interest income and non-interest income growth as well as higher interest margins. PNC said its diverse sources of revenue continued to deliver high quality results during the period. The company also said that the acquisition of National City Corp. was accretive to year-to-date earnings and expected to be accretive for the full year. Shares of PNC are currently trading up by over 8% on the NYSE. The Pittsburgh, Pennsylvania-based company's net income for the third quarter increased to $559 million from $259 million in the previous year. Net income attributable to common stockholders was $467 million or $1 per share, compared net income of $248 million or $0.70 per share in the same quarter last year.
On average, 22 analysts polled by Thomson Reuters expected the company to report earnings of $0.31 per share for the quarter. Analysts' estimates typically exclude special items.
Segment wise, Retail Banking segment earned $50 million, compared to $36 million in the previous year. Quarterly earnings contributed by Corporate & Institutional Banking were $283 million, up from $90 million last year. Asset Management Group earned $35 million for the third quarter, higher than $26 million reported in 2008. Residential Mortgage Banking earned $91 million in the third quarter of 2009. Earnings from Global Investment Servicing were $19 million, compared to $34 million last year, while Distressed Assets Portfolio segment had earnings of $39 million for the quarter. PNC recorded earnings of $42 million in 'Other, including BlackRock' for the third quarter, lower than $73 million reported in the prior year.
In its second quarter, the company had reported a 60% drop profit, primarily due to a special FDIC assessment as well as integration costs related to the National City acquisition. Net income for the second quarter declined to $207 million or $0.14 per share from $517 million or $1.45 per share in the previous year.
Total revenues for the third quarter surged to $4.05 billion from $1.65 billion in the earlier year. Eleven analysts had a consensus revenue estimate of $3.78 billion for the quarter. Net interest income was $2.22 billion, significantly up from $1 billion in the prior year. Non-interest income grew to $1.83 billion from $654 million in the same quarter last year. The diversified financial services company's net interest margin for the quarter increased to 3.76% from 3.46% in the prior year.
Retail Banking revenues increased to $1.43 billion from $662 million in the earlier year. Revenues from Corporate & Institutional Banking were $1.32 billion, compared to $443 million in the preceding year. Asset Management Group revenues increased to $225 million from $141 million last year.
Residential Mortgage Banking segment generated revenues of $292 million for the quarter. Global Investment Servicing revenues decreased to $198 million from $237 million in the earlier year. Distressed Assets Portfolio posted revenues of $254 million, while Other, including BlackRock, reported revenues of $329 million, higher than $171 million in the previous year. During its immediately preceding second quarter, total revenues surged to $3.99 billion from $2.04 billion in the prior year. Provision for credit losses during the quarter increased to $914 million from $190 million in the preceding year.
For the nine-month period, the company's net income increased to $1.3 billion from $1.16 billion in the year earlier. Net income attributable to common stockholders declined to $992 million or $2.17 per share from $1.13 million or $3.23 per share in the previous year. Total revenues for the period jumped to $11.91 billion from $5.51 billion in the prior year. Net interest income grew to $6.71 billion from $2.83 billion last year. Non-interest income increased to $5.2 billion from $2.68 billion in the year-ago period. Commenting on the performance, James Rohr, chairman and chief executive officer said, "We strengthened our balance sheet which we believe is well positioned as the economy begins to recover and the pace of credit quality deterioration eases. Sales across the franchise were strong and we see growing momentum as we added clients and deepened customer relationships in the quarter." The company noted that consolidated financial information for all 2009 periods include the impact of National City, which was acquired on December 31, 2008. "We are building on the value of our combined company and are well prepared for the first wave of National City client conversions in early November," added James Rohr. Among peers, U.S. Bancorp (USB) reported yesterday a 4.7% increase in profit for the third quarter, as revenues grew 26% from last year due to higher net interest income and fee revenue. Earnings per share, however, dropped 6.3% from last year on higher share count. The Minneapolis, Minnesota-based company's net income applicable to U.S. Bancorp rose to $603 million from $576 million in the year-ago quarter. Earnings per share dropped to $0.30 from $0.32 in the previous year quarter. Total net revenue for the quarter increased to $4.25 billion from $3.38 billion in the same quarter last year. PNC is currently trading at $48.63, up $3.67 or 8.16%, on a volume of 6.07 million shares. In the past 52 weeks, the shares have been trading in a wide range of $16.2 - $74.68 on the NYSE.
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