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A blowout third quarter report for PNC Financial [PNC
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], as the regional bank managed to avoid the same fate that brought down earnings at Fifth Third Bancorp [FITB
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] and SunTrust Banks [STI
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].
PNC avoided big bets on construction loans and posted a profit of $559 billion or $1 a share. Revenues, meanwhile surged 145% to $4 billion.
In an exclusive interview with Maria Bartiromo, James Rohr, Chairman & CEO of PNC said that "Q3 was good for us relative to the economy we've had." Some of PNC's highlights include making 61 basis points on assets over the nine months, revenues held up extremely well, charge-offs down and cost savings coming in from the National City acquisition. Rohr also added that the profit gains were across the board, particularly in their market-based businesses like asset management and venture capital.
While PNC was not as negatively impacted by commercial real estate as its peers, it still has more than $21B in loans on its books.
Rohr responded by saying that "in comparison to other banks, we're one of the very lowest banks in percentage of assets that are tied up in commercial real estate." He also added that while this will be an issue, it won't be "as large as the residential problems that we've had for the last two years." For PNC, a large portion of its commercial real estate exposure was a result of its National City acquisition.
Looking out in the next three to six months, Rohr expects PNC's "revenue base to remain stable", He's also looking for opportunities as PNC further integrates with the National City franchise. While the bank's non-performing assets have been getting lower each quarter and delinquencies flat, Rohr "hopes to see a bottoming out in the next six to nine months."
Finally, with PNC being one of the banks that have yet to repay its $7.6 billion in TARP funds, Bartiromo asked for his reaction to the pay czar's orders to cut salaries of top executives. Rohr told her that he had actually met with Kenneth Feinberg some six months ago after he was appointed, and added that PNC's compensation plan has "always been consistent with the Treasury announcement."
Liza Tan contributed to this article.
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