PNC Financial Services (NYSE:PNC) revealed stronger-than-expected second-quarter earnings on Wednesday but a decline in net interest income, pushing its shares down as much as 2% in early trade.
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The Pittsburgh-based bank reported net income of $1.1 billion, or $1.99 a share, compared with a year-earlier profit of $546 million, or 98 cents, topping average analyst estimates of $1.63 in a Thomson Reuters poll.
Revenue for the three-month period grew 3% to $4.06 billion from $3.6 billion a year ago, above the Street’s view of $3.9 billion, however net interest income fell by $268 million year-over-year to $2.3 billion, weighed down in part by lower yields on loans.
While improvements in noninterest income, more robust commercial lending that fueled a 5% increase in total loans held and declines in credit losses helped cushion the results, margins in net interest income fell to 3.58% compared with 4.08% in the 2012 period.
"We grew revenue on the strength of noninterest income, benefited from market conditions and remained disciplined on expense management," the company’s chief executive, William Demchak, said in a statement. "Overall credit quality continued to improve and our strong capital position should enable us to create greater long-term value for our shareholders."
Shares of PNC slumped 2% in early trade to $73 recently.