10-QPeriod: Q1 FY2013

PNC FINANCIAL SERVICES GROUP, INC. Quarterly Report for Q1 Ended Mar 31, 2013

Filed May 9, 2013For Securities:PNC

Summary

PNC Financial Services Group, Inc. reported solid performance for the first quarter of 2013, with net income attributable to common shareholders increasing by 23% to $938 million, or $1.76 per diluted share, compared to the prior year quarter. This growth was driven by a 6% increase in total revenue to $3.96 billion, fueled by higher net interest income and robust growth in noninterest income, particularly in corporate and consumer services. The company also demonstrated strong capital and liquidity positions, with its Tier 1 common capital ratio improving to 9.8%. Management highlighted a 10% increase in the quarterly common stock dividend to $0.44 per share, reflecting confidence in the company's financial strength and strategic execution. While the provision for credit losses increased due to a larger loan portfolio, overall asset quality showed improvement, with nonperforming loans to total loans decreasing year-over-year. PNC continues to focus on organic growth, deepening customer relationships, and disciplined expense management.

Financial Highlights

32 data points
Beta

Revenue

$3.96B

Net Income

$995.00M

25.2% Net Margin

EPS (Diluted)

$1.74

Total Assets

$300.81B

Free Cash Flow

$1.01B

Financial Statements
Beta
Revenue$3.96B
Interest Expense$222.00M
Net Income$995.00M
EPS (Basic)$1.76
EPS (Diluted)$1.74
Shares Outstanding (Basic)526.00M
Shares Outstanding (Diluted)528.00M

Key Highlights

  • 1Net income attributable to common shareholders rose 23% to $938 million, or $1.76 per diluted share.
  • 2Total revenue increased 6% to $3.96 billion, driven by higher net interest income and noninterest income.
  • 3Noninterest income grew 9% to $1.57 billion, primarily from increases in corporate services, consumer services, and asset management fees.
  • 4The provision for credit losses increased to $236 million, largely due to a larger loan portfolio.
  • 5Noninterest expense decreased 2% to $2.40 billion, reflecting lower integration costs and disciplined expense management.
  • 6Tier 1 common capital ratio improved to 9.8%, and the company announced a 10% increase in its quarterly common stock dividend to $0.44 per share.
  • 7Nonperforming assets to total assets improved to 1.31% compared to 1.47% in the prior year quarter, although there was a slight increase from the prior quarter due to policy alignment.

Frequently Asked Questions

PNC's net income attributable to common shareholders increased by 23% to $938 million in the first quarter of 2013, compared to $766 million in the first quarter of 2012. Diluted earnings per share rose to $1.76 from $1.44.

Total revenue grew by 6% to $3.96 billion. This was driven by a 4% increase in net interest income to $2.39 billion and a 9% increase in noninterest income to $1.57 billion. The growth in noninterest income was primarily due to higher fee income from corporate services, consumer services, and asset management.

PNC maintained a strong capital position. The Tier 1 common capital ratio increased to 9.8% at March 31, 2013, up from 9.6% at December 31, 2012. The company also announced a 10% increase in its quarterly cash dividend on common stock to $0.44 per share, effective with the May dividend.

PNC reported that overall credit quality improved during the first quarter of 2013. Nonperforming assets to total assets decreased to 1.31% from 1.47% in the prior year quarter, although there was a slight increase from the prior sequential quarter due to alignment with interagency guidance. Net charge-offs to average loans (annualized) were 0.99% for the quarter, which included $134 million related to alignment with interagency guidance. Excluding this impact, the annualized net charge-off ratio was 0.70%.