PNC Financial, Northern Trust Q3 Profit Up, U.S. Bancorp Earnings Nearly Flat

(RTTNews) - Regional banks PNC Financial Services Group, Inc. (PNC) and Northern Trust Corp. (NTRS) Wednesday reported higher earnings for the third quarter, amid a drop in provision for credit losses, while peer U.S. Bancorp (USB) reported a near flat profit due to a reduction in mortgage banking revenue.

PNC's net income attributable to common shareholders increased to $966 million or $1.79 per share from $876 million or $1.64 per share in the previous year.

According to the lender, earnings reflected fee income as well as loan growth, improvement in credit quality and disciplined expense management.

Provision for credit losses fell to $137 million from $228 million, amid continued improvement in overall credit quality including the purchased impaired loan portfolio.

The latest results included an after tax gain of $0.10 per share on the sale of Visa Class B common shares.

On average, 28 analysts polled by Thomson Reuters expected the company to report earnings of $1.62 per share for the quarter. Analysts' estimates typically exclude special items.

Total revenues, however, declined to $3.92 billion from $4.09 billion. Analysts had a consensus revenue estimate of $3.88 billion for the quarter.

Net interest income slipped 7 percent to $2.23 billion due to lower core net interest income from lower yields on loans and securities.

Non-interest income was unchanged from last year at $1.69 billion, as an 8 percent increase in Asset management and a 10 percent rise in Consumer services was offset by a 27 percent decline in Residential mortgage banking due to lower loan sales revenue.

Business segment-wise, income declined year-over-year in Retail banking, Corporate & Institutional Banking as well as Residential Mortgage Banking, while Asset Management Group reported higher quarterly profit.

PNC close at $72.51 on Tuesday. In the meantime, Northern Trust Corp. (NTRS) said its quarterly earnings allocated to common and potential common shares grew to $203.0 million from the previous year's $176.0 million. Net income per share improved to $0.84 from $0.73.

The provision for credit losses halved to $5.0 million in the quarter.

Analysts expected earnings of $0.77 per share for the quarter.

Consolidated revenue rose 8 percent to $1.05 billion from $972.5 million. Analysts had a consensus revenue estimate of $1.03 billion for the quarter.

Noninterest income increased 11 percent to $810.2 million, reflecting higher trust, investment and other servicing fees.

Net interest income, however, slid 4 percent to $237 million, as interest income fell 10 percent from last year.

Trust, investment and other servicing fees climbed 8 percent to $648.0 million, owing to new business and the favorable impact of equity markets on fees.

Assets under custody and assets under management are the primary drivers of the lender's trust, investment and other servicing fees. Assets under custody increased 10 percent from last year while assets under management improved 13 percent.

NTRS settled at $54.48 on Tuesday.

U.S. Bancorp (USB) reported third-quarter net income applicable to shareholders of $1.400 billion or $0.76 per share, compared to $1.404 billion or $0.74 per share last year. Analysts expected the company to report profit per share of $0.76 for the quarter.

Total net revenue decreased to $4.89 billion from $5.18 billion, missing analysts' view of $4.96 billion for the quarter.

Total interest income fell 5 percent to $3.068 billion, with drops in Loans and Investment Securities.

Total non-interest income was 9 percent lower at $2.177 billion with a sharp decline in Mortgage banking revenue as a result of lower origination and sales revenue.

Provision for credit losses fell 39 percent on a taxable-equivalent basis to $298 million.

Average total loans were 5.7 percent higher, driven by a near 20 percent growth in residential mortgages and an 11 percent increase in commercial loans.

USB ended down 0.8 percent at $36.88 on Tuesday.