The PNC Financial Services Group, Inc. PNC has pulled off a fourth-quarter 2021 positive earnings surprise of 1.94% on substantial recapturing of credit losses. Earnings per share, as adjusted (excluding pre-tax integration costs related to the BBVA USA acquisition), of $3.68 surpassed the Zacks Consensus Estimate of $3.61 and improved 12.5% year over year.Fee income growth on higher asset management revenues and corporate services were tailwinds. However, higher expenses, margin contraction and a decline in loans dragged results.Net income for the fourth quarter was $1.31 billion, lower than $1.46 billion in the prior-year quarter.Results for 2021 include the BBVA USA operations beginning Jun 1, 2021. In 2021, net income was $5.73 billion, up from the prior year’s $3 billion. Yearly earnings per share, as adjusted, of $14.18 lagged the Zacks Consensus Estimate of $15.85 but improved 122.6% from 2020.Quarterly Revenues Improve on Fee Income Growth, Expenses RiseTotal revenues in the reported quarter were $5.13 billion, up 22% year over year. The top line surpassed the Zacks Consensus Estimate of $5.10 billion.In 2021, revenues were $19.21 billion, up 13.7% year over year. The top line, however, missed the Zacks Consensus Estimate of $19.24 billion.Net interest income improved 18% from the year-ago quarter to $2.86 billion. The upswing is attributable to higher interest-earning assets, partially offset by lower securities yields. However, the net interest margin contracted 5 basis points to 2.27%, reflecting lower securities yields.Non-interest income grew 27% year over year to $2.65 billion on higher asset management, corporate services, consumer service revenues and residential mortgage revenues, offset by a decline in income from service charges on deposits.PNC Financial’s non-interest expenses totaled $3.79 billion, up 40% from the year-ago figure. The rise primarily resulted from the rise in operating and integration expenses related to the BBVA USA acquisition as well as increased business activities.The efficiency ratio was 74% compared with 64% in the year-ago quarter. A higher efficiency ratio indicates lower profitability.As of Dec 31, 2021, total loans were marginally down sequentially to $288.4 billion. Total deposits increased 1.9% to $457.3 billion.Credit Quality DecentThe company reported the recapture of credit losses of $327 million compared with the recapture of $254 million in the year-earlier quarter. The allowance for loan and lease losses declined 9.2% to $4.87 billion on a year-over-year basis.However, net loan charge-offs were $124 million, up 53% year over year. Non-performing loans increased 8% year over year to $2.48 billion.Capital Position Weak, Profitability Ratios DeclineAs of Dec 31, 2021, the Basel III common equity tier 1 capital ratio was 10.2% compared with 12.2% as of Dec 31, 2020.Return on average assets and average common shareholder’ equity were 0.92% and 9.61%, respectively, compared with 1.24% and 11.16% witnessed in the prior-year quarter.Capital Deployment ActivityIn the fourth quarter of 2021, PNC Financial returned $1.1 billion capital to shareholders through dividends on common shares of $0.5 billion and 2.9 million share repurchases amounting to $0.6 billion.Our ViewpointPNC Financial displayed decent performance in the fourth quarter. The company is well-poised to grow on the back of its diverse revenue mix. The acquisition of BBVA USA significantly increased its loan and deposit balances for 2021.With the gradual recovery of the economic backdrop, the company’s provisions are being released, which is encouraging. However, a lower net interest margin due to low rates and the declining loan balance is creating headwinds.The PNC Financial Services Group, Inc Price, Consensus and EPS Surprise The PNC Financial Services Group, Inc price-consensus-eps-surprise-chart | The PNC Financial Services Group, Inc QuoteCurrently, PNC Financial carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Performance of Other BanksFirst Republic Bank’s FRC fourth-quarter 2021 earnings per share of $2.02 have surpassed the Zacks Consensus Estimate of $1.91. Additionally, the bottom line improved 26.3% from the year-ago quarter.First Republic’srevenues were $1.37 billion in the December-end quarter, up 26.9% year over year. The figure also surpassed the Zacks Consensus Estimate of $1.34 billion.Citigroup Inc. C delivered an earnings surprise of 5.04% in fourth-quarter 2021. Income from continuing operations per share of $1.46 handily outpaced the Zacks Consensus Estimate of $1.39. However, the reported figure declined 24% from the prior-year quarter.Citigroup’s revenues increased 1% year over year to $17.02 billion in the December-ended quarter. The top line, however, lagged the Zacks Consensus Estimate of $17.06 billion.Wells Fargo & Company’s WFC fourth-quarter 2021 earnings per share of $1.38 surpassed the Zacks Consensus Estimate of 1.09. Also, the bottom line improved 86% year over year.Wells Fargo’s total quarterly revenues were $20.86 billion, surpassing the Zacks Consensus Estimate of $18.73 billion. Moreover, the top line was higher than the year-ago quarter’s $18.5 billion. Just Released: Zacks Top 10 Stocks for 2022 In addition to the investment ideas discussed above, would you like to know about our 10 top picks for the entirety of 2022? From inception in 2012 through 2021, the Zacks Top 10 Stocks portfolios gained an impressive +1,001.2% versus the S&P 500’s +348.7%. Now our Director of Research has combed through 4,000 companies covered by the Zacks Rank and has handpicked the best 10 tickers to buy and hold. Don’t miss your chance to get in…because the sooner you do, the more upside you stand to grab.See Stocks Now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Wells Fargo & Company (WFC): Free Stock Analysis Report Citigroup Inc. (C): Free Stock Analysis Report The PNC Financial Services Group, Inc (PNC): Free Stock Analysis Report First Republic Bank (FRC): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research