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PITTSBURGH - On Wednesday, PNC Financial Services Group (NYSE:PNC) reported second-quarter earnings that easily surpassed analyst expectations, driven by strong loan growth and improved efficiency.
The company’s shares gained 1.85% in premarket trading after the bank released its earnings.
The financial institution posted earnings of $3.85 per share, significantly beating the analyst consensus of $3.55. Revenue rose to $5.66 billion, exceeding estimates of $5.61 billion and increasing 4% from the previous quarter. The bank generated 4% positive operating leverage as pretax, pre-provision earnings increased 10%.
"Our national growth strategy continues to deliver results," said Bill Demchak, PNC Chairman and Chief Executive Officer. "New customer acquisition is accelerating, while we continue to deepen relationships with our existing customers across businesses. The strength of our franchise resulted in strong loan and revenue growth even through an uncertain macro environment, while expenses remained well controlled."
Average loans increased $6.1 billion, or 2%, from the first quarter, driven primarily by 4% growth in commercial and industrial loans. Net interest income rose 2% to $3.56 billion, while the net interest margin expanded by 2 basis points to 2.80%. Fee income grew 3% to $1.89 billion, primarily due to higher card and cash management revenue.
The bank maintained strong credit quality with net loan charge-offs of $198 million, representing 0.25% of average loans on an annualized basis, down from 0.26% in the previous quarter. The efficiency ratio improved to 60% from 62% in the first quarter.
PNC also announced a 10-cent increase to its quarterly dividend, raising it to $1.70 per share. The bank returned $1 billion to shareholders during the quarter through dividends and share repurchases while maintaining a CET1 capital ratio of 10.5%.
For the same quarter last year, PNC reported revenue of $5.41 billion and EPS of $3.39, representing YoY growth of 5% and 14%, respectively.
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