Oct. 20, 2014, 12:54 PM
- "Credit leverage has mostly played out, VISA gains seem to be reflected in 2015 estimates (we assume $200M in our $7.39 estimate) and [the bank] has outperformed large regionals," says Matt O'Connor, downgrading PNC Financial (PNC -0.4%) to Hold as his Buy catalysts are about gone. The price target is cut to $87 from $94.
- He notes PNC has outperformed peers by 700 basis points YTD (and by 1.1K basis points vs. the five big asset-sensitive banks), making PNC the second-best performing name in his team's 29 regional bank coverage universe.
Oct. 15, 2014, 7:48 AM
- Q3 net income of $1B or $1.79 per share vs. $1B and $1.77 one year ago.
- Net interest income of $2.104B fell 6% from a year ago, with net interest margin of 2.98% down a whopping 49 basis points.
- Noninterest income of $1.737B up 3% from a year ago, with asset management revenue of $411M up 25%. Residential mortgage income of $140M fell 30%.
- Noninterest expense of $2.357B falls 2% from a year ago, with personnel expense of $1.189B up 1%.
- Tier 1 capital ratio of 10.1% up from 8.7% a year ago. 4.2M shares repurchased for $400M in Q3 vs. 2.6M for $200M in Q2. Buyback plan is for up to $1.5B ending in Q2 2015.
- Conference call at 10 ET
- Previously: PNC Financial beats by $0.08, beats on revenue
- PNC +1.7% premarket
Oct. 15, 2014, 6:45 AM
Oct. 14, 2014, 5:30 PM
Oct. 14, 2014, 3:31 PM
- Global growth, foreign-exchange, oil, and small caps are the subject of every client inquiry, says David Kostin. His team's recommendation: Buy "American exceptionalism."
- In Kostin's view, U.S. economy and corporate fundamentals are still strong, with economic growth expected by Goldman economists to be 3.2% next year, the fastest expansion since 2005. Europe is expected to grow just 1%.
- What his team likes are those stocks of companies which have a high proportion of domestic sales, plus sectors like Consumer Staples (XLP -0.1%) and Discretionary (XLY +0.7%) which stand to benefit from lower oil prices (plunging again today).
- As for small caps (IWM +0.9%), Kostin is wary, noting downward earnings revisions have boosted small cap P/E ratios even as prices have declined.
- The list of S&P 500 names capturing two or more of Kostin's themes: GT, GM, PCLN, AMZN, CMCSA, LOW, DG, TSN, ADM, CVS, AVP, WAG, PXD, HAL, JPM, BAC, SCHW, PNC, MS, C, GNW, LNC, MET, THC, AET, UNH, ESRX, HUM, WLP, BIIB, GILD, DAL, CMI, FLR, CRM, JBL, MA, FB, MU, FSLR, VMC, MON, T.
Oct. 2, 2014, 10:35 AM
- An outlier to the downside among Canadian lenders is Scotiabank (BNS -1.6%) as TD Securities pulls its Buy rating, the stock in the last two months giving up all and more of its gains this year.
- Another sizable bank downgraded today is PNC Financial (PNC -0.8%), with Jefferies citing valuation as it cuts to a Hold.
Sep. 18, 2014, 12:53 PM
- Banks, insurers, brokerages and anything else starved for yield continue to gain following yesterday's FOMC news. Among the gainers are Bank of America (BAC +1.9%) - which breaks above $17 for the first time since April - Citigroup (C +2.7%), Wells Fargo (WFC +1.1%), PNC (PNC +1.1%), Fifth Third (FITB +1.7%), SunTrust (STI +1.2%), Schwab (SCHW +2.3%), Prudential (PRU +2.5%), and Lincoln National (LNC +2.4%).
- The XLF +1.2%, KBE +1.5%, and KRE +2%.
- Financial sector ETFs: XLF, FAS, FAZ, UYG, KRE, VFH, KBE, IYF, IAT, SEF, IYG, FXO, KBWB, FNCL, RKH, QABA, FINU, KRU, KBWR, RWW, RYF, KRS, FINZ
- Lit up bright red is the utility sector (XLU -1%), led by Southern Company (SO -1.1%), Dominion Resources (D -1.2%), Duke Energy (DUK -1.4%), and Pinnacle West (PNW -1.9%).
- Utility ETFs: XLU, IDU, VPU, UPW, RYU, FUTY, PUI, FXU, SDP, PSCU
Sep. 9, 2014, 11:18 AM
- A full 33% of PNC's deposits in Q2 were by ATM or from mobile devices, says CEO William Demchak, presenting at the Barclays Financial Services Conference. That's up from 23% in 2013's Q2.
- Presentation slides
- So-called "digital consumer customers" - those consumer checking clients who do the majority of their transactions without a teller - rose to 45% in Q2 from 37% a year ago.
- The result: Retail Banking Headcount fell 5% for the year, with tellers down 16%. Added were call center reps (up 6%) and investment professionals (up 4%).
Jul. 16, 2014, 9:46 AM
- Net interest income of $2.129B falls 6% Y/Y, with NIM slipping a whopping 46 basis points from a year ago and 14 bps from Q1.
- Noninterest income of $1.681B falls 7% Y/Y, with increases in about all categories offset by a lower gain on sale from Visa shares.
- Noninterest expense of $2.328B falls 3% Y/Y
- 2.6M shares repurchased during quarter.
- Common equity Tier 1 capital ratio of 11%, up from 10.8% at end of Q1.
- PNC -4%
- Previously: PNC Financial beats by $0.07, revenues in line
Jul. 16, 2014, 6:42 AM
Jul. 15, 2014, 5:30 PM
Jul. 11, 2014, 3:58 PM
- Wells Fargo’s (WFC -0.7%) disappointing Q2 results could be good news for PNC Financial Services (PNC +0.4%), Fifth Third (FITB +1%), KeyCorp (KEY +0.1%) and Comerica (CMA +0.5%), according to Nomura analysts.
- The strength in WFC’s commercial loan portfolio - total core loan growth came in at 6.9% Y/Y, up from 5.6% last quarter - bodes well for other regional banks, given high C&I growth correlations (~80% or higher); total loan growth correlations also exceed 90% for PNC, FITB, KEY and CMA.
- The firm notes that the R-squared between earning asset growth and net interest income growth is 98% for regional banks, suggesting that stronger loan growth will lead to positive EPS revisions.
Jul. 3, 2014, 10:43 AM
May 30, 2014, 8:56 AM
May 28, 2014, 12:25 PM
- "It's going to be a real tough year in origination," PNC Financial chief Bill Demchak tells the crowd at the Deutsche conference. "There is quite clearly much more capacity in the market right now than there is people who want mortgages.”
- Mortgages aren't as large a part of PNC's business as for some competitors, but it's an important product, says Demchak, if only for the fact that it brings people into branches. Income from residential mortgage production fell 31% Y/Y in Q1 for PNC, and makes up about 10% of the bank's overall noninterest income.
May 21, 2014, 2:33 PM
- The latest issue for the crusader from the NY Dept. of Financial Services is a Reuters report on Ocwen Financial (OCN -2.5%) - along with banks like PNC Financial, and Bank of America (BAC) - routinely demand homeowners promise to say bad things about them publicly in exchange for mortgage modifications.
- "Deeply troubling and offensive," Lawsky tells Reuters, promising an investigation.
- A PNC spokesperson: "These clauses are part of the consideration we receive for agreeing to settle the case. This helps to ensure that the discussion is not re-opened in public after the case has been settled."
- "When [we] take a closer look at some of these non-bank servicers, we find corners being cut, to the disadvantage of homeowners," said Lawsky in a speech yesterday, in which he makes clear his serious issues with the business models of companies like Ocwen (and affiliates like ASPS), Nationstar Mortgage (NSM -0.7%), and Walter Investment (WAC -2.4%).
PNC vs. ETF Alternatives
PNC Financial Services Group Inc is a financial services company. It operates in six segments: Retail Banking; Corporate & Institutional Banking; Asset Management Group; Residential Mortgage Banking; BlackRock; and Non-Strategic Assets Portfolio.
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