3Q profit slips for PNC
PNC Financial Services Group Inc. (PNC) reported a third-quarter profit of $834 million, or $1.55 a share, down from $1.1 billion, or $2.07 a share, in the year-ago period, but the company reported improving credit quality. Last year's third quarter included a gain of $328 million, or 62 cents a share, for the sale of PNC Global Investment Servicing. For the first nine months of 2011, the Pittsburgh, Pa.-based company earned $2.6 billion, or $4.79 a share, compared to the same total, but $4.24 a share, for the first nine months of 2010. Total revenue dipped to $3.5 billion for the third quarter of 2011 from $3.6 billion a year ago. Analysts polled by Thomson Reuters predicted earnings of $1.49 a share on $3.57 billion in revenue. Residential mortgage revenue increased $35 million to $198 million compared with the second quarter as a result of higher loan sales revenue and net hedging gains on mortgage servicing rights, the company said. The residential mortgage banking unit earned $22 million in the third quarter compared to $97 million in the third quarter of 2010. The decline comes primarily from higher noninterest expenses and lower net hedging gains on mortgage servicing rights. Total loan originations were $2.6 billion, slipping from $2.7 billion in the third quarter of 2010. Loans serviced for others totaled $121 billion at Sept. 30, compared with $131 billion at Sept. 30, 2010. Payoffs continued to outpace new loan production. PNC recorded $68 million in net gains on sales of securities — derived primarily from sales of agency residential mortgage-backed securities. The bank said it grew customers, loans and deposits in 3Q with improving overall credit quality and disciplined expense management. PNC said it lowered its provision for credit losses to $261 million for the third quarter from $280 million in the second quarter due to improving credit quality. Net charge-offs declined to $74 million for the third quarter from $107 million for the third quarter of 2010. Write to Kerry Curry. Follow her on Twitter @communicatorKLC.