10-QPeriod: Q1 FY2017

PNC FINANCIAL SERVICES GROUP, INC. Quarterly Report for Q1 Ended Mar 31, 2017

Filed May 3, 2017For Securities:PNC

Summary

PNC Financial Services Group, Inc. reported a strong first quarter for 2017, with net income increasing by 14% to $1.1 billion, or $1.96 per diluted common share, compared to the prior year quarter. This growth was driven by a 6% increase in total revenue, reaching $3.9 billion, supported by a 3% rise in net interest income and a 10% increase in noninterest income, primarily from fee income. The company's balance sheet remained robust, with total assets growing to $370.9 billion. Loans increased by 1% to $212.8 billion, with notable growth in commercial lending. Deposits also saw a 1% increase, reaching $260.7 billion. Credit quality remained stable, with a decrease in nonperforming assets by 7% and a reduction in net charge-offs. PNC continued to prioritize returning capital to shareholders, repurchasing $0.6 billion in common shares and paying $.3 billion in dividends during the quarter, supported by an increase in its share repurchase programs.

Financial Statements
Beta
Revenue$3.88B
Interest Expense$360.00M
Net Income$1.07B
EPS (Basic)$1.99
EPS (Diluted)$1.96
Shares Outstanding (Basic)487.00M
Shares Outstanding (Diluted)492.00M

Key Highlights

  • 1Net income rose 14% year-over-year to $1.1 billion ($1.96 per diluted share).
  • 2Total revenue increased 6% to $3.9 billion.
  • 3Net interest income grew 3% to $2.2 billion, with net interest margin improving slightly to 2.77%.
  • 4Noninterest income increased 10% to $1.7 billion, driven by higher fee income.
  • 5Provision for credit losses decreased to $88 million from $152 million in the prior year quarter.
  • 6Total assets grew to $370.9 billion, with loans increasing 1% to $212.8 billion.
  • 7Nonperforming assets decreased 7% sequentially, and the company returned $0.9 billion to shareholders via repurchases and dividends.

Frequently Asked Questions

PNC reported a net income of $1.1 billion for the first quarter of 2017, which translated to diluted earnings per common share of $1.96. This represents a 14% increase compared to the same period in the prior year.

Total revenue for the first quarter of 2017 increased by 6% to $3.9 billion. This growth was driven by a 3% increase in net interest income to $2.2 billion and a significant 10% rise in noninterest income to $1.7 billion, largely due to higher fee income.

PNC's total loans increased by 1% to $212.8 billion. Commercial lending saw a 2% increase, while consumer lending experienced a 1% decrease. Total deposits grew by 1% to $260.7 billion.

PNC maintained a strong capital position, with its Transitional Basel III Common Equity Tier 1 capital ratio at 10.5%. In the first quarter of 2017, the company returned $0.9 billion to shareholders through $0.6 billion in common share repurchases and $0.3 billion in dividends. PNC also announced a $300 million increase to its common stock repurchase programs.