National City acquisition fuels growth for PNC Financial; U.S. Bank moves forward without TARP strings; Northern Trust reports profitable quarter; Bank Mutual’s provision for loan losses continues to rise; M&I seeks to balance its books by selling more stock
National City acquisition fuels growth for PNC Financial
The PNC Financial Services Group Inc. has reported net income of $559 million, or $1 per diluted common share, for the third quarter, up from $259 million, or 70 cents per share, in the same period a year ago.
The Pittsburgh-based company said its acquisition of National City Corp. on Dec. 31, 2008, continued to exceed expectations. The transaction was accretive to year-to-date earnings and is expected to be accretive for the full year
The first major conversion of National City customers to the PNC platform is scheduled for completion by Nov. 9, with the remaining conversions to be completed by June 2010. The consolidation of bank charters is planned for early November 2009.
The company continues to expand its presence in the Milwaukee market.
"PNC continued to demonstrate its resiliency in the economic downturn with strong third quarter earnings growth," said James Rohr, chairman and chief executive officer. "Once again, we delivered pretax pre-provision earnings significantly in excess of our credit costs resulting in growth in capital. We strengthened our balance sheet, which we believe is well-positioned as the economy begins to recover and the pace of credit quality deterioration eases. Sales across the franchise were strong, and we see growing momentum as we added clients and deepened customer relationships in the quarter. We are building on the value of our combined company and are well prepared for the first wave of National City client conversions in early November. As our results demonstrate, we continue to execute against our plans to deliver significant shareholder value now and in the future."
U.S. Bank moves forward without TARP strings
U.S. Bancorp has posted third quarter net income of $603 million, or 30 cents per share, compared with $576 million, or 32 cents per share, in the same period a year ago.
Early in the third quarter, U.S. Bancorp repurchased the 10-year warrant issued to the U.S. Treasury, effectively concluding its participation in the federal Troubled Asset Relief Program (TARP).
"The cost of repurchasing the warrant was $139 million and was recorded as a reduction to shareholders’ equity. We now move forward with the capacity to continue to invest, unencumbered, in our franchise and fee-based businesses, as we remain profitable during this difficult business cycle, generating capital for growth opportunities and our shareholders," said U.S. Bancorp chairman, president and chief executive officer Richard Davis.
Quarterly earnings for the Minneapolis-based parent company of U.S. Bank were driven by record total net revenue of $4.3 billion, the result of strong year-over-year growth in both net interest income and fee revenue.
The company’s net charge-offs and nonperforming assets increased, but the rate of growth moderated to 12.1 percent and 9.4 percent, respectively, on a linked quarter basis
"We are operating in a challenging and uncertain economic environment, but our vision into the future is clearer today than it was just three months ago,” Davis said. “We are seeing signs of stabilization and even some improvement in the economy. While unemployment has not peaked, the rate of increase has moderated. The housing sector is weak, but the pressure on housing prices has lessened. Our commercial customers are not yet increasing the usage of their lines of credit for new investments or expansion, but they are efficiently managing their businesses through the cycle. Credit costs remain high, but the rate of deterioration has slowed. These are all indications of progress in this otherwise difficult environment."
Northern Trust reports profitable quarter
Northern Trust Corp., a Chicago-based bank that operates an office in downtown Milwaukee, reported a third-quarter profit of $187.9 million, or 77 cents per share, a vast improvement over a loss of $148.3 million, or 66 cents per share, in the same period a year ago.
The company’s total quarterly revenue was $927.6 million, down 1.2 percent from a year earlier.
Frederick Waddell, president and chief executive officer of Northern Trust, said, "The financial markets continue to send mixed signals. Although equity markets improved compared with the second quarter, they remain well below year-ago levels and interest rates have fallen dramatically year-over-year. Amidst these crosscurrents, we experienced strong growth in client assets, with assets under custody increasing 11 percent and assets under management increasing 9 percent in the quarter. Our focused business model, strong balance sheet, and conservative financial management continue to position us well to serve the evolving needs of our personal and institutional clients."
During the quarter, Northern Trust repurchased the warrant that was issued to the U.S. Department of the Treasury under its Capital Purchase Program at a cost of $87 million, thereby relieving the company of any obligations to the Troubled Asset Relief Program (TARP).
Bank Mutual’s provision for loan losses continues to rise
Milwaukee-based Bank Mutual Corp. reported third quarter net income of $1.2 million, or 3 cents per share, compared with $1.6 million, or 3 cents per share, in the same period a year ago.
Bank Mutual’s provision for loan losses was $5.2 million in the most recent quarter, compared with $1.1 million in the same period last year.
"Our third quarter performance was affected by deterioration in the value of certain commercial and investment real estate properties that secure several of our loans,” said Michael Crowley Jr., chairman, president, and chief executive officer of Bank Mutual. “Although the impact this development had on our earnings is a disappointment to us, we are very pleased that our level of non-performing loans did not increase during the quarter. We are also pleased that our year-to-date earnings continue to exceed the previous year’s results in what has proven to be a very difficult operating environment for financial institutions."
M&I seeks to balance its books by selling more stock
Marshall & Ilsley Corp., which lost $248.4 million in the third quarter, announced that it has commenced a public offering of $775 million of its common stock for sale to the public.
The Milwaukee-based parent company of M&I Bank intends to use the net proceeds of the offering for general corporate purposes and may contribute some portion of the net proceeds to the capital of its subsidiaries, which will use the contributions for their general corporate purposes.
M&I also may use a portion of the net proceeds of the offering to repurchase portions of its outstanding indebtedness.
The company today reported a third quarter net loss of $248.4 million, or 68 cents per share, compared with net income of $83.1 million, or 32 cents per share, in the same period a year ago.
M&I’s provision for loan and lease losses was $578.7 million in the third quarter of 2009, which was a slight improvement over the $619.0 million in the previous quarter. The company’s net charge-offs for the period were $532.7 million, which was slightly better than $603.3 million in the second quarter.
The company’s early stage loan delinquencies fell $218 million, or 21 percent, from the second quarter.
"Our financial results during the third quarter of 2009 were negatively impacted by bank holding company loans and housing-related credits," said Mark Furlong, president and chief executive officer of Marshall & Ilsley Corp. "The company remains focused on the aggressive resolution of these loans in order to return M&I to profitability as soon as possible. There are some encouraging early signs that credit quality is improving, but we realize it will take a few more quarters to fully address our problem loans."
