PNC Financial Services Group posted profit that beat analysts' estimates as commercial lending accelerated.
First-quarter net income fell 5.3% to $1 billion, or $1.75 a share, from $1.06 billion, or $1.82, a year earlier, the Pittsburgh lender said Wednesday. The average estimate of 20 analysts surveyed by Bloomberg was for profit of $1.72 a share.
Chief Executive Bill Demchak has relied on gains in commercial borrowing and fee-generating businesses including asset management as the lender waits for higher interest rates to boost lending margins.
With the U.S. economy improving, PNC has benefited from an increase in specialty commercial lending where there's fewer competitors, Demchak said in a January conference call.
"Strong commercial growth is unequivocally a positive," R. Scott Siefers, an analyst at Sandler O'Neill & Partners LP, said before results were released. "It's not shocking since that's what's been driving growth for the past year or two at this point, but we'll take it."
PNC climbed 2.6% this year through Tuesday, the fifth-best performance in the 24-company KBW Bank Index. Earlier this month, PNC raised its quarterly dividend 6.3% to 51 cents a share after regulators approved the firm's capital plan.
Wells Fargo said Tuesday that low interest rates pushed first-quarter lending margins below 3% for the first time since at least 1994 as net income fell 1.5% to $5.8 billion. JPMorgan said Tuesday that profit for the first three months of the year rose 12% to $5.91 billion, or $1.45 a share.
