PNC Financial Services (PNC) was climbing more than 1% in Wednesday morning trading as the bank's first-quarter earnings topped expectations.
PNC reported earnings of $1.06 billion, or $1.82 per share, up from $1.74 a share a year ago and above the $1.66 a share analysts were expecting.
However, a good part of that beat came from lower costs, as PNC, along with its peers, is still dealing with an environment of low loan demand and interest rates. Revenue in the quarter slipped 4.5% to $3.78 billion, below the $3.85 billion consensus, and its consumer-loan portfolio grew only 1.6%, reflecting the sluggish mortgage market.
Nonetheless, PNC saw its overall loan portfolio climb 6.3% to $198.3 billion, helped by commercial loans, which rose 9.5%.
Citigroup's Keith Horowitz was impressed by the bank's expense control but kept a Hold rating on the stock, writing "Relative to our estimates, the beat was driven by: 1) 23c on better core PTPP, largely from significantly better expense trends, 2) 9c on credit due to higher than expected LLR release, partially offset by 3) 9c from higher one-timers (est $55 mil in legal exp), and 4) 6c from higher tax and share count."
Other financial names that reported this morning include Bank of America (BAC), Credit Suisse (CS) and U.S. Bancorp (USB).
Update: On its conference call, management also said there is the possibility of doing an annual special dividend, but it depends on the CCAR process.
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