PNC Beats Analysts’ Estimates on Gains in Commercial Lending

PNC Financial Services Group Inc., the second-largest U.S. regional bank, posted profit that beat analysts’ estimates as commercial lending accelerated.

First-quarter net income fell 5.3 percent to $1 billion, or $1.75 a share, from $1.06 billion, or $1.82, a year earlier, the Pittsburgh-based lender said Wednesday in a statement. The average estimate of 20 analysts surveyed by Bloomberg was for profit of $1.72 a share.

Chief Executive Officer 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 percent 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 percent to 51 cents a share after regulators approved the firm’s capital plan.

Wells Fargo & Co., the most valuable U.S. bank, said Tuesday that low interest rates pushed first-quarter lending margins below 3 percent for the first time since at least 1994 as net income fell 1.5 percent to $5.8 billion. JPMorgan Chase & Co., the biggest U.S. bank, said Tuesday that profit for the first three months of the year rose 12 percent to $5.91 billion, or $1.45 a share.

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