Acquisition Drives PNC Q1 Profit

PNC Financial Services disclosed Friday a $530m, or $1.03 per share, first-quarter income, marking a significant 38% year-over-year increase driven largely by its recent acquisition of National City Bank. “In a very challenging environment we further strengthened our capital and liquidity positions and loan loss reserves,” says James Rohr, chairman and CEO. “We are on pace to exceed the strategic objectives of our acquisition…” PNC’s total revenue sits at $3.9bn for the first quarter. Non-interest income is $1.6bn, compared with $967m for the first quarter of 2008 and $684m for the fourth quarter of 2008. PNC says first-quarter 2009 noninterest income benefited from strong fee income from residential mortgage banking activity related to refinancing volumes, amounting to $175m, and $202m in gains on hedging mortgage servicing rights. A decline in home equity installment loans, however, offset increases in residential mortgage and education loans. Total loan originations and new commitments and renewals were approximately $26bn in the first quarter of 2009, including $6.9bn of originations for increased demand for first mortgages. Credit quality deterioration continued during the first quarter as expected, PNC said,  reflecting further economic weakening and resulting in additions to loan loss reserves beyond net charge-offs. Nonperforming assets increased during the quarter and were 2.02% of total loans and foreclosed assets at March 31, 2009 compared with 1.23% at year-end. Write to Kelly Curran at [email protected]. Disclosure: The author held no relevant investment positions when this story was published. Indirect holdings may exist via mutual fund investments.