Regulatory Fee, Layoff Expenses Drag Down PNC Profit

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Key Takeaways

  • PNC Financial Services Group Inc.'s profit was hurt by a charge from regulators and layoff expenses.
  • The company's net interest income and net interest margin declined for the fourth quarter.
  • PNC also provided guidance that revenue would decline 3% to 4% in the current quarter.

Shares of PNC Financial Services Group Inc. (PNC) fell early Tuesday but later recovered as the bank’s earnings slumped on a regulatory charge and costs for layoffs. 

PNC reported fourth-quarter 2023 net income tumbled 43% to $883 million, or $1.85 per share, less than forecasts. Revenue dropped 7% to $5.36 billion, slightly better than estimates.

The bank said that it paid $515 million for a Federal Deposit Insurance Corp. (FDIC) special assessment on big financial firms that was related to the collapse of Silicon Valley Bank and Signature Bank in early 2023. Executives also said the bank took $150 million in charges for workforce reductions. It pointed out that without those charges, earnings per share (EPS) would have been $3.16.

The company said net interest income was down $281 million from the year-earlier quarter and that net interest margin slipped 26 basis points (bps). It noted that for both, the benefit of higher interest-earning asset yields was more than offset by increased funding costs.

PNC also provided current-quarter revenue guidance of a decline of 3% to 4% and net interest income falling 2% to 3%.

Shares of PNC Financial Services Group dropped as much as 2.4% early Tuesday but recovered to trade flat by midday. The stock is down 7.6% over the last year.
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