PNC Financial Service Group on Thursday said profits for the fourth quarter shot up 48 percent and hit a record for the full year as Pittsburgh's dominant bank set aside less money to cover bad loans and continued to work on reducing costs.
The bank said it exceeded its $700 million cost-cutting goal in 2013 by $75 million, and would seek to slash another $500 million in expenses in the coming year to offset an expected decline in revenue.
Cost-cutting measures last year included laying off staff in the residential mortgage unit and closing about 200 branches across the bank's multi-state footprint.
For now, the current number of branches "feels about right," CEO William Demchak told analysts in a conference call Thursday.
But as customers continue a shift toward electronic banking with less of a need to go inside branches, PNC expects to continue reducing the size of existing offices, he said, equipping them with fewer tellers and with more enhanced ATMs that cash checks and dispense $1 bills.
Mr. Demchak said PNC was in good shape to increase its dividend this year but he wasn't more specific. PNC and other big banks must submit their dividend and other capital plans to the Federal Reserve for approval.
"Without question, 2013 was a good year for us" and for the banking industry in general, Mr. Demchak told analysts.
Earnings for the final three months of 2013 were $1.1 billion, or $1.85 per share, compared with $719 million, or $1.24, in the same period a year earlier, when profits were knocked back by special charges.
Revenue for the quarter was flat at $4.1 billion.
For the full year, PNC earned $4.2 billion, or $7.39 per share, up 41 percent from $3 billion, or $5.30, in 2012. Revenue rose 3 percent to $16 billion from $15.5 billion.
The provision for loan losses was $643 million in 2013 vs. $987 million the previous year.
PNC's shares rose $2.09 Thursday, or 2.65 percent, to close at $80.93.
Patricia Sabatini: email@example.com or 412-263-3066.
Patricia Sabatini: firstname.lastname@example.org or 412-263-3066. First Published January 16, 2014 9:02 AM