USB US Bancorp

By Allison Prang 

Fourth-quarter earnings results varied at two of the country's largest regional banks, while both firms reported a drop in expenses and an increase in revenue.

Both U.S. Bancorp and PNC Financial Services Group reported their fourth-quarter earnings results before the market opened Wednesday. U.S. Bancorp said earnings were $1.10 a share, up from 97 cents a share a year earlier. PNC said earnings were $2.75 a share, down from $4.18 a share. PNC said that in the fourth quarter of 2017, its earnings included a $900 million benefit from the new tax law and other items.

Analysts polled by FactSet were expecting U.S. Bancorp to report earnings of $1.06 a share and PNC to report earnings of $2.79 a share.

Net interest income at U.S. Bancorp rose 4% to $3.3 billion. It rose 5.8% at PNC to $2.48 billion.

U.S. Bancorp's net interest margin, which indicates how profitable a bank is, was 3.15%, unchanged from the third quarter. Compared with the fourth quarter a year ago, it expanded by 4 basis points.

PNC reported a net interest margin of 2.96%, a drop of 3 basis points from the third quarter but up 8 basis points compared with the fourth quarter a year ago.

Noninterest expenses at U.S. Bancorp fell 16% to $3.28 billion. In the comparable quarter a year ago, U.S. Bancorp recorded $825 million in costs that included settling a regulatory issue, among other items.

PNC's noninterest expenses fell 16% to $2.58 billion in large part because of the comparison to the fourth quarter a year ago, which included expenses such as a $200 million contribution to the company's foundation.

Sandler O'Neill + Partners said in an analyst note previewing banks' fourth-quarter earnings results that recent rate increases from the Federal Reserve could help banks' net interest margins, but said they expect the flattening yield curve in the latter part of 2018 to hurt results.

Shares of U.S. Bancorp were unchanged in premarket trading and shares of PNC shares fell 0.6%.

Write to Allison Prang at allison.prang@wsj.com

(END) Dow Jones Newswires

January 16, 2019 08:07 ET (13:07 GMT)

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