- PNC on Friday reported $1.46 billion in net income for the fourth quarter, a 5.8% increase from $1.38 billion in the same quarter of 2019.
- The increase stems from $254 million in reserves the Pittsburgh-based bank recaptured as it saw economic conditions improve. Reserves for credit losses jumped to $221 million in the fourth quarter, from $52 million in the third.
- For the year, the bank posted just over $3 billion in net income from continuing operations, down from $4.59 billion in 2019. The drop stems largely from the money it set aside as the pandemic gripped the country. "Net income from continuing operations decreased as we built substantial reserves to address the uncertain economic environment that still remains," said Bill Demchak, the bank's chairman, president and CEO.
PNC saw 25% growth in deposits year over year and reported loan growth of 3%, to just under $360 billion.
Net interest income fell 2%, to $2.42 billion; net interest margin fell by 7 basis points, to 2.32%; average loans decreased by 3%, to $245.8 billion; and average deposits increased 3% to $359.4 billion.
"PNC had a notable year in 2020 amid the many challenges of the pandemic," Demchak said. "We achieved solid financial results, grew loans and deposits, delivered positive operating leverage, and maintained our strong capital position."
In his statement, however, it was clear Demchak was focused on the future — particularly, PNC's $11.6 billion acquisition of BBVA's U.S. retail arm. The deal is expected to close midyear.
PNC sold its $17 million stake in BlackRock and put the proceeds toward that effort to grow. Adding BBVA USA would bump PNC's asset total by an estimated $102 billion, creating the nation's fifth-largest bank and giving PNC a presence in 29 of the 30 largest U.S. markets.
"With the continued execution of our strategic priorities and the planned addition of BBVA USA, we believe we are well positioned to deliver for all our stakeholders in 2021 and beyond," Demchak said.