PNC plans more cuts to branches

Bank aiming to slim by 100 locations

PNC Financial Services Group expects to close 100 branches systemwide this year, continuing to pare its brick-and-mortar footprint as more customers conduct the majority of their transactions electronically.

So far this year, Pittsburgh’s biggest bank has trimmed 50 offices, CEO William Demchak told analysts during an earnings call Wednesday.

Locally, the closures included one in Blairsville, one in Sheraden and two in Murrysville that were consolidated into a new location nearby, spokeswoman Marcey Zwiebel said. She declined to say how many local branches might be among the 50 others set to close.

Including this year’s planned closures, PNC will have shuttered more than 400 branches over the last few years, reducing its network by about 10 percent, Mr. Demchak said.

“As you would expect, we get the occasional complaint when we do consolidations,” he said in response to an analyst’s question about how customers were reacting.

Affected customers are notified 90 days in advance of any branch closing, Ms. Zwiebel said.

Mr. Demchak’s remarks came as PNC reported net income for the second quarter of $987 million, down 0.8 percent from $995 million a year earlier. Profit margins continue to be squeezed by persistently low interest rates.

On a per share basis, net income rose 1.6 percent to $1.88 vs. $1.85 last year, reflecting fewer shares outstanding.

Revenue for the three months ended June 30 increased 1 percent to $3.87 billion from $3.81 billion on higher fee income.

“PNC had a successful second quarter,” Mr. Demchak said in a statement. “We grew fee income on higher client activity, made positive progress on our strategic priorities and managed our expenses well despite low interest rates that continue to pressure net interest income industrywide.”

One of the bank’s priorities has been to cut costs. On Wednesday, officials said PNC expected to slash expenses by an extra $100 million this year, bringing the total for the year to some $500 million.

The added $100 million was the result of “broad belt-tightening across the organization,” chief financial officer Robert Reilly said during the conference call.

The savings come on the heels of about $500 million in cost cuts last year and nearly $800 million in 2013.

PNC’s share added 82 cents Wednesday, or 0.84 percent, to close at $98.32.