PNC plans Boston, Phoenix middle-market expansion in 2019

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Gains in retail banking and fee income boosted second-quarter results at PNC Financial Services Group in Pittsburgh.

Net income for the $380.7 billion-asset company rose 23.6% year over year to $1.4 billion. Earnings per share were $2.72, beating by 14 cents analysts’ average estimate tracked by FactSet Research Systems.

PNC also revealed plans to expand its middle-market business into Boston and Phoenix in 2019. It expanded that business in Denver, Houston and Nashville, Tenn., this year.

The company is “continuing to invest in our businesses, including our middle-market expansion and digital offerings," Chairman and CEO William Demchak said in a press release Friday.

Total revenue increased by 6.5% to $4.3 billion.

Net interest income rose 6.9% to $2.4 billion. Higher loan and securities yields and balances were partially offset by higher borrowing and deposit costs, the release said. The results also benefited from an extra day in the quarter. PNC’s net interest margin expanded by 12 basis points to 2.96%.

Income from PNC’s retail banking unit increased by 43.5% to $330 million. Corporate and institutional banking increased 30.3% to $675 million. The asset management group's income fell 5.8% to $49 million.

Total loans increased 2.2% to $222.8 billion. Commercial lending rose 2.7%, while consumer lending rose 1.2%. Total deposits rose 2.2% to $264.9 billion.

Noninterest income rose 6% to $1.9 billion. Asset management revenue included earnings from PNC’s investment in BlackRock increased, reflecting high equity markets. Consumer service fees grew because of higher customer activity including brokerage, debit card and credit card fees while corporate service fees benefited from growth in treasury management and merger-and-acquisition advisory fees, the release said.

Noninterest expense increased by 4.2% to $2.6 billion, driven largely by ongoing business investments and higher personnel costs, PNC said.

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