Third-quarter profit at PNC Financial Services Group in Pittsburgh declined on a yearly basis as a higher tax rate and increased expenses ate into improved revenue in both lending and fee-based products.
Net income at the $369 billion-asset company fell 7.5% to $913 million from a year earlier. Earnings per share were $1.84 compared with the consensus analyst estimate of $1.78 as tabulated by Bloomberg. Total revenue rose 1.4% to $3.8 billion. PNC's effective tax rate rose to 25.4% from 20%.
Net interest income rose 1.6% to $2.1 billion. Higher earning assets were partly offset by lower yields. The provision for credit losses rose 7% to $87 million; however, it declined 31% from the second quarter due to the stabilization of PNC's energy loan book.
Total loans rose 3% to $210 billion on higher corporate banking and real estate lending, and growth in auto and credit card loans and residential mortgages.
Noninterest income increased 1.2% to $1.7 billion. Revenue from asset management, which includes results from PNC's investment in BlackRock, rose 7% to $404 on stronger equity markets.
Noninterest expense rose 1.8% to $2.4 billion, in part because of a new Federal Deposit Insurance Corp. surcharge. PNC also increased marketing expenses by 13% to $72 million.