Summary
PNC Financial Services Group, Inc. (PNC) reported a significant increase in total revenue for the third quarter and the first nine months of 2009, largely driven by the acquisition of National City Corporation completed in December 2008. Total revenue more than doubled in the third quarter to $4.0 billion and increased from $5.5 billion to $11.9 billion for the nine-month period. Net income also saw substantial growth, with diluted earnings per common share at $1.00 for the quarter and $2.17 for the nine months, compared to $0.70 and $3.23 respectively in the prior year periods. Despite a challenging economic environment, the company highlighted improved net interest margin due to a lower cost of funds, well-controlled expenses, and strengthened capital ratios, with the Tier 1 risk-based capital ratio increasing to 10.9% at September 30, 2009. The acquisition integration is progressing well, with cost savings exceeding targets and the company on track to achieve its $1.2 billion noninterest expense reduction goal. Loan growth was impacted by paydowns and reduced demand, but credit quality deterioration slowed in the third quarter, with the provision for credit losses exceeding net charge-offs. The company continues to focus on managing its risk profile, maintaining strong capital and liquidity, and investing in its markets and products.
Financial Highlights
31 data points| Revenue | $3.85B |
| Operating Income | $1.25B |
| Interest Expense | $664.00M |
| Net Income | $559.00M |
| EPS (Basic) | $1.01 |
| EPS (Diluted) | $1.00 |
| Shares Outstanding (Basic) | 460.00M |
| Shares Outstanding (Diluted) | 461.00M |
Key Highlights
- 1Total revenue increased significantly due to the National City acquisition, reaching $4.0 billion in Q3 2009 and $11.9 billion for the first nine months.
- 2Diluted earnings per common share were $1.00 for Q3 2009 and $2.17 for the first nine months, showing a strong recovery from the prior year's nine-month performance.
- 3Net interest margin improved to 3.76% in Q3 2009 and 3.72% year-to-date, driven by a lower cost of funds.
- 4Capital ratios strengthened, with the Tier 1 risk-based capital ratio at 10.9% and Tier 1 common capital ratio at 5.5% as of September 30, 2009.
- 5Integration costs are being managed effectively, with cost savings exceeding targets and on track to meet the $1.2 billion noninterest expense reduction goal.
- 6Credit quality deterioration showed signs of slowing in Q3 2009, and the provision for credit losses exceeded net charge-offs.
- 7PNC maintains a strong liquidity position, with an 87% loan-to-deposit ratio and significant liquid assets and borrowing capacity.