PNC Financial Services Group (NYSE: PNC) reported a 4% increase in third-quarter earnings, aided by higher interest income. The results also exceeded analysts’ expectations. The bank’s stock gained modestly early Wednesday, immediately after the announcement.
Third-quarter earnings rose to $2.94 per share from $2.82 per share last year. Driving the growth, revenues advanced 3% to $4.49 billion. Both earnings and the top-line came in above the estimates. Net income was broadly unchanged at $1.4 billion.
Loans Increase
Net interest income moved up 2% year-over-year and non-interest income rose by 5%. The results benefited from strong loan growth in both the commercial and consumer segments, higher securities balances and lower borrowing costs, which were partially offset by lower loan and securities yields.
Average loans increased 6% annually to $237.7 billion during the quarter, while average investment securities rose by 5% to $85.2 billion. There was a 6% growth in average deposits to $279.1 billion.
Interest Margin Dips
Meanwhile, net interest margin decreased to 2.84% from 2.99% in the third quarter of 2018. At the end of the quarter, the bank’s book value per common share was $103.3 million, up 11% year-over-year.
“Net interest income and fee income increased and we managed expenses well even as we continued to make investments. We are pleased with our performance and expect that continued execution of our strategies will drive differentiated growth across our franchise and generate long-term value for our shareholders,” said CEO Bill Demchak.
Stock Buyback
During the three-month period, the bank returned $1.5 billion of capital to shareholders by repurchasing 7.5 million shares for about $1 billion and through dividends of $0.5 billion. Earlier this month, the management declared a quarterly cash dividend of $1.15 per share, effective with the November 5, 2019, dividend payment date.
PNC Financial shares gained 13% in the past twelve months and moved up 17% since the beginning of the year. The stock closed the last trading session higher.