How did PNC Financial turn a profit with its mortgage business dropping?
PNC boasts 4Q net income of $1.1 billion
PNC Financial Services Group (PNC) reported 2013 net income of $4.2 billion, or $7.39 per share, compared with 2012 net income of $3 billion, or $5.30 per share.
Fourth-quarter 2013 net income hit $1.1 billion, or $1.85 per share, compared with $1 billion, or $1.79 per share, for the third quarter of 2013.
This beat analyst estimates of $1.64 per share.
"PNC reported record net income for 2013," said William S. Demchak, president and CEO. "These results validate the strategy that we've been executing."
Lower residential mortgages and home equity loans were offset by gains in auto and credit card loans, allowing consumer lending to grow $100 million.
Noninterest income for the fourth quarter of 2013 increased by $121 million compared with the third quarter of 2013 primarily due to a benefit related to residential mortgage repurchase obligations and strong fee-income growth.
Residential mortgage banking revenue declined $46 million principally from lower net hedging gains on residential mortgage servicing rights.
Noninterest income for the fourth quarter of 2013 increased $162 million compared with the fourth quarter of 2012 primarily as a result of the release of reserves for residential mortgage repurchase obligations in fourth quarter 2013 compared with a provision in the fourth quarter 2012.
Residential mortgage banking revenue declined due to lower loan sales revenue resulting from lower origination volume.