Jan. 17, 2014, 12:37 PM
- PNC Financial (PNC +3%) enjoys a second day of big gains following its earnings report on Thursday morning.
- Upgraded to Buy late yesterday by Sandler O'Neill, PNC gets additional boosts from an upgrade to Buy at Rafferty Capital (with price target lifted to $93 from $81).
- BMO Capital retains its Market Perform rating, but lifts the price target to $88, while Bernstein and RayJay raise to $90.
Jan. 16, 2014, 3:59 PM
- About the only green on the screen in the regional bank sector (KRE -0.9%) is PNC Financial (PNC +2.7%) after this morning's earnings beat. Sandler O'Neill is impressed enough to lift its rating to Buy with price target of $93.
- Boding well for earnings in 2014? $130M remain in repurchase reserves - a number management (on the earnings call) says should come down thanks to settlements with the GSEs.
Jan. 16, 2014, 8:38 AM
- Net interest income of $2.27B falls 7% Y/Y, with NIM of 3.38% down from 3.85% a year ago.
- Noninterest income of $1.8B grows 10% Y/Y and 7% from last quarter thanks to a benefit of mortgage repurchase obligations which boosted income by $158M this year after a $254M hit a year ago. Mortgage banking income of $147M falls 42% Y/Y. Asset management income of $364M up 21%.
- Noninterest expense of $2.55B falls 10% Y/Y, the comparison helped by some extraordinary charges a year ago. Personnel expenses of $1.2B fall 1%.
- Basel Tier 1 common capital ratio of 10.5% vs. 9.6% at the start of 2013. Tangible book value per share of $54.68 vs. $49.18 at the start of the year.
- CC at 10 ET
- Q4 results, press release
- PNC flat premarket
Jan. 16, 2014, 6:38 AM| Comment!
Jan. 16, 2014, 12:05 AM
Jan. 15, 2014, 5:30 PM
Jan. 7, 2014, 2:47 PM
- Fairly lukewarm on the large cap regional banking sector (KRE +0.7%) amid pricey valuations and the likelihood 2014 estimates are set to be trimmed after Q4 earnings reports, Citi's Keith Horowitz does have a favorite ...
- BB&T Corporation (BBT +1.4%) deserves a premium multiple, says Horowitz, thanks to its above-average returns and quality of the management team.
- The rest? Wells Fargo (WFC -0.1%) is likely to beat Q4 estimates due to lower expenses (the bank has been busy cutting mortgage staff), but Horowitz is Neutral on the name. U.S. Bancorp (USB +1%) is Neutral as well thanks to its premium valuation. Also not meriting a Buy rating are Fifth Third (FITB +0.4%), M&T (MTB +0.8%), and PNC Financial (PNC +0.9%).
- JPMorgan today upgrades BB&T to a Buy with $42 price target.
Jan. 2, 2014, 11:22 AM
Dec. 17, 2013, 4:19 AM
- The Fed intends to use its own estimates about the effect of a recession on bank balance sheets in its stress tests. Previously, the Fed has relied on data from the firms themselves.
- The central bank could project that bank assets would grow during a slump, as has happened in the past three recessions, rather than fall, as the banks have predicted.
- With such a finding, the Fed could require banks to hold more loss-absorbing capital or limit shareholder payouts. (Fed letter)
- Tickers: GS, JPM, BAC, BK, AXP, COF, C, FITB, MS, PNC, RF, STT, STI, USB, WFC.
- ETFs of interest: KBE, KBWB, KRE, KCE, KBWC, XLF, IYF, PFI, VFH, RYF, RWW, FAS, UYG, FAZ, SKF, SEF, IAI, FXO, PSCF, KBWD, KBWB, IYG, FINU, FINZ.
Dec. 16, 2013, 2:57 PM
- Alongside upgrades to Citi and Fifth Third, Evercore removes its Buy rating on PNC Financial (PNC +0.3%). "Ongoing productivity improvements in newer markets [are] unlikely to offset continued spread revenue headwinds and limited expense flexibility," writes analyst Andrew Marquardt. At 11.5x 2014 EPS, valuation isn't unattractive, he says, but mixed near-term fundamentals and the potential for disappointment (his estimates are below consensus) has him moving to the sidelines.
Dec. 6, 2013, 9:17 AM
- The agreement resolves substantially all indemnification and repurchase obligations on 900K loans originated and sold by PNC to Freddie Mac (FMCC) between 2000 and 2008. PNC will pay Freddie $89M (less credits of $8M).
- This follows an agreement in principal between PNC and Fannie Mae. Both deals require final approvals from the FHFA.
- Press release
Nov. 27, 2013, 1:42 PM
- American Express (AXP +0.4%), Discover (DFS +0.3%), U.S. Bancorp (USB +0.2%), and Wells Fargo (WFC -0.1%) are best positioned to be allowed large capital returns (about 70%) after the Fed's early 2014 stress tests, says Credit Suisse's Moshe Orenbuch, while Ciitgroup (C +0.2%) and PNC Financial (PNC +0.9%) are likely to show the biggest improvement from last year.
- Overall, his team expects large cap bank capital returns to be 65% next year vs. about 48% in 2013. The median dividend payout ratio is expected at 22%, level with this year.
- Orenbuch notes the CCAR will be tougher this time around - notably by assuming a global, not just domestic meltdown, and assuming a significant reversal in the property market - with commercial real estate exposure particularly harshly judged.
- Balanced against that and likely winning, however, are far stronger capital positions of the banks, says Orenbuch.
- Financial and banking ETFs: FAS, XLF, FAZ, UYG, KRE, KBE, VFH, IYF, IPF, SEF, IAI, IAT, IYG, FXO, PFI, IXG, KBWB, RKH, QABA, KCE, FINU, RWW, KRU, RYF, KBWR, AXFN, PSCF, KRS, FNCL, FINZ, KBWX, KBWC
Nov. 8, 2013, 10:41 AM
- Up sharply as interest rates fly higher (the 10-year is up 15 basis points to 2.75%) are the life insurers - all of whom have had their investment returns more than a little constrained by puny yields. IAK +2.4%
- MetLife (MET +5.9%), Prudential (PRU +4.5%), Lincoln National (LNC +6.8%), Hartford (HIG +3.1%).
- Also set to benefit from a steeper yield curve (if we're to believe their models) are the banks, and they're leading the S&P 500 higher. The TBTFs: Bank of America (BAC +3.3%), JPMorgan (JPM +3.1%), CItigroup (C +3.3%), Wells Fargo (WFC +2.6%). The regionals (KRE +3.4%): Huntington (HBAN +2.6%), Regions (RF +4.2%), PNC (PNC +2.8%), FIfth Third (FITB +3.4%), First Niagara (FNFG +2%), Keycorp (KEY +3.5%), Zions (ZION +4.1%), Comerica (CMA +3.1%).
- The XLF +1.9%.
- FInancial sector ETFs: FAS, XLF, FAZ, UYG, KRE, KBE, VFH, IYF, KIE, SEF, IAT, IAI, IYG, IAK, FXO, PFI, KBWB, RKH, QABA, RWW, FINU, RYF, KRU, KBWR, PSCF, KBWP, KBWI, KRS, FINZ, FNCL
Oct. 16, 2013, 7:57 AM
- We've heard from some of the TBTF banks, but what do the regionals have to say? PNC net income of $1B is down from $1.1B in Q2.
- Net interest income of $2.2B is off 1% from Q2 as net interest margin of 3.47% fell 9 basis points.
- Noninterest income of $1.7B is off 6.6% from Q2, with mortgage banking income falling 20% to $193M. Total loans up 2% Q/Q, up 6% Y/Y, led by a 9% increase in commercial lending.
- Expenses of $2.4B are flat with last quarter and down 9% from a year ago, mostly thanks to charges related to the redemption of trust preferred securities.
- Tier 1 capital ratio of 10.4% is up from 10.1% last quarter.
- Conference call at 10 ET.
- Q3 results, press release.
- Shares +2.1% premarket.
Oct. 16, 2013, 6:38 AM
Oct. 16, 2013, 12:05 AM
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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