PNC Financial Services Group’s retail banking earnings fell over the quarter and over the year, due to lower gains on residential mortgage servicing rights and lower mortgage loan revenues overall, the bank revealed in its first quarter earnings report released on Thursday.
PNC also reported lower revenue in commercial mortgage loans, which resulted in reduced Corporate and Institutional Banking earnings as well.
In total, PNC’s revenue grew by $10 million, hitting $3.9 billion for the quarter. Net interest income increased 1 percent—up to $2.2 billion. Thanks to a five-year extension in conforming to the Volcker Rule and nearly $50 million in positive valuation adjustments, PNC was able to offset seasonally lower fee incomes and report only a 1 percent dip in noninterest income, which totaled $1.7 billion for the quarter.
"PNC had a good start to the year," said William S. Demchak, Chairman, President, and CEO of PNC. "We grew loans and revenue, and we managed expenses well while continuing to invest in our businesses and to enhance innovation. As we progress through 2017, we are well positioned to benefit should environmental factors, including interest rates, turn more favorable."
Wells Fargo saw drops as well, with a drop in mortgage originations, but a slight boost in revenue. The bank's first quarter income was $5.5 billion, in line with Q1 2016.
Wells Fargo's net interest income in Q1 2017 decreased $102 million from fourth quarter 2016 to $12.3 billion, primarily due to two fewer days in the quarter. Net income was down $287 million, or 9 percent, from Q1 2016.
"Wells Fargo continued to make meaningful progress in the first quarter in rebuilding trust with customers and other important stakeholders, while producing solid financial results,” said CEO Tim Sloan. "While we have more work to do, I am pleased with all we have accomplished thus far."
The story was similar at JPMorgan Chase. JPMorgan Chase posted a net income of $6.4 billion, , slightly down from Q4 2016's 6.7 billion. JPMorgan's mortgage department struggled as well. Mortgage banking posted a drop to $1.5 billion in income for Q1 2017 from Q4 2016's $1.6 billion.
However, JPMorgan is optimistic going into the rest of the year.
“We are off to a good start for the year with all of our businesses performing well and building on their momentum from last year," said JPMorgan Chase Chairman and CEO Jamie Dimon. "The consumer businesses continue to grow core loans at double digits, outperform the industry in deposit growth, and we once again had very strong card sales volume growth this quarter–reflecting our commitment to providing our customers the innovative products and services they want.”