PITTSBURGH (AP) — PNC Financial Services Group Inc. said Wednesday that its fourth-quarter net income dropped 43 percent on higher expenses and a comparison to a year-ago stock sale gain, while revenue fell.
Shares dropped $2.52, or 4.1 percent, in morning trading to $58.72.
The regional bank‘s net income attributable to common shareholders was $451 million, or 85 cents per share, for the October-December quarter, compared with $798 million, or $1.50 per share, in the same three months the year before.
Revenue fell 9 percent to $3.55 billion.
Analysts polled by FactSet were expecting a profit of $1.37 per share on revenue of $3.52 billion.
The largest part of the bank’s revenue, net interest income, or money earned from loans and deposits, was essentially flat with the fourth-quarter of 2010 at $2.2 billion. Lending grew $4.5 billion, or 3 percent, during the quarter.
Noninterest income, or income from fees and charges, fell 21 percent from a year earlier because the fourth quarter of 2010 included a $160 million gain on the sale of stock. New government regulations on debit card fees also reduced revenue.
The company, echoing many other banks, said that the credit quality of its loans was improving. PNC put less aside less than half what it did a year earlier for credit losses — $190 million in the fourth quarter compared with $442 million at the end of 2010.
Noninterest expenses, which included $156 million in after-tax expenses related to residential mortgage foreclosures, rose 16 percent. Noninterest expenses can include everything from salaries to loan loss provisions.
For all of 2011, the company’s net income attributable to common shareholders was almost unchanged at $3 billion, or $5.64 per share, compared with $3.01 billion, or $5.74 per share, in 2010. Revenue fell 5.5 percent to $14.33 billion from $15.18 billion.
PNC is based in Pittsburgh.
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