Oct. 15, 2013, 5:30 PM
Oct. 7, 2013, 3:52 PM
- Among banks and credit card names, FBR favors those picking up new teams/market share - namely Signature Bank (SBNY -1.4%) and Discover (DFS) - as well as those trading near book value, like HomeStreet (HMST -0.6%). PNC Financial remains a favorite for its strong growth prospects, as well as servicers like Nationstar (NSM +0.2%), Walter Investment (WAC -2.3%), and New Residential (NRZ -0.3%).
- Those most exposed to a protracted government shutdown are smaller community banks in the D.C. area like Eagle Bancorp (EGBN -1.4%), and Cardinal FInancial (CFNL -0.2%). Capital One (COF -1.9%) - by dint of its Chevy Chase acquisition - would also feel a pinch.
- On mREITs (REM -0.1%), the team expects Q3 book values to increase slightly, but warns its estimates are based on relatively static portfolios - "but for most names, portfolios are anything but that." With all the volatility, most mREITs may have hedged away the recent MBS rally. Starwood Property Trust (STWD) remains FBR's best idea thanks to its commercial real estate exposure.
- Financials ETFs: XLF, IYF, PFI, VFH, RYF, RWW, FAS, UYG, FAZ, SKF, SEF, IAI, FXO, PSCF, KBWD, KBWB, IYG, FINU, FINZ.
Oct. 3, 2013, 10:12 AM
Sep. 19, 2013, 3:05 PM
- Regional banks have fallen and can't get up following yesterday afternoon's non-taper announcement. The SPDR Regional Banking ETF (KRE -1.7%) is off about 3% from where it stood prior to 2 PM ET yesterday.
- The sector sliced right through the bond market tumble this summer as higher rates were expected to boost profitability for the lenders, and investors are using the excuse of the taper delay to cash in some chips (as they are with another higher-rate beneficiary, the insurance sector).
- Individual names of note: Huntington (HBAN -2%), Regions (RF -3.7%), SunTrust (STI -3.1%), First NIagara (FNFG -2.8%), Synovus (SNV -1.8%), KeyCorp (KEY -3.9%), ZIons (ZION -3.1%), Flagstar (FBC -2.3%).
- Perhaps a little less asset-sensitive and performing better: U.S. Bancorp (USB -0.4%), BB&T (BBT -0.3%), PNC Financial (PNC -0.5%), Hudson CIty (HCBK -0.9%), Fifth Third (FITB -1%).
- Other ETFs: KBE, KBWB.
Sep. 16, 2013, 3:44 PM
- PNC Bank easily passes its self-administered stress test, showing a Tier 1 common capital ratio of 10.2% after 9 quarters of "severely adverse" conditions. This compares to the current ratio of 9.8% and the 7.9% result seen at the March exam.
- Why the big improvement? Two quarters of additional earnings have been booked, two quarters of house price increases have occurred, higher forecast revenues, higher projected economic activity, and lower-than-forecasted mortgage rates.
- Previous: A number of other lenders pass their stress tests.
- The results of the Fed's CCAR - and the determination on approval of banks' capital plans - are due in March.
- PNC's Mid-Year Stress Test Results.
Sep. 13, 2013, 3:57 PM
Sep. 13, 2013, 12:46 PM
- Following dour management commentary about the mortgage banking slowdown at investor conferences this week, Credit Suisse cuts 2013 EPS estimates at BAC, C, PNC. For Wells Fargo (WFC), estimates for 2014 and 2015 are revised lower by 1% due to worse-than-expected guidance for gain-on-sale margins. JPMorgan (JPM) and U.S. Bancorp (USB) see no cut in the out years as weaker revenue should be offset by better credit performance.
- Indeed, after hearing management commentary, Credit Suisse is forecasting loan-loss reserve declines at every bank in its coverage universe for Q3.
- JPMorgan's presentation is a good indication of what the banks are facing with regards to mortgages. Wells Fargo's too.
- Bank ETFs: KBE, KBWB, KRE.
Sep. 6, 2013, 7:42 AM
- The unit is a variable interest entity (VIE) - a vehicle which allows the bank to make off-balance sheet investments (think subprime mortgages in the last cycle). The decision is being made in part in response to a DOJ investigation over the bank's issuance of mortgages.
- The commitments and outstanding loans of Market Street ($5.9B of commercial paper outstanding as of the end of June) will be folded into the bank.
- PNC doesn't expect the wind-down - which will completed by Q4 - to have a material impact on financial results.
Aug. 28, 2013, 8:24 AM
- The "smart" ATMs will allow customers to cash checks and deposit checks/cash without an envelope at any hour on any day of the week. 3,600 - half of the bank's 7,200 ATMs nationwide - were upgraded.
- For PNC's part, the new ATMs should help cut costs at a time of slow revenue growth. The bank notes - prior to the completion of the ATM upgrades - deposits via ATMs and the mobile app increased to 23% of deposits from 14% a year ago.
- Source: Press release.
Aug. 14, 2013, 3:25 PM
- The investigation into PNC's mortgage practices may just be the start, lenders fear, as regulators crack down on lending and servicing discrimination ahead of a Supreme Court decision which could end the use the "disparate impact" theory.
- The bank last week disclosed the DOJ's civil rights division and the CFPB were looking into mortgage loan pricing by National City (purchased by PNC in 2008) and PNC and whether they had a "disparate impact" on protected classes.
Aug. 13, 2013, 11:03 AM
- BMO Capital's Lana Chan plugs Fed rate hikes into her models and raises price targets on eight regional banks. Her assumptions are rate hikes beginning in mid-2015 and totaling 100 bps by the end of the year, with another 100 bps of hikes by the middle of 2016 - a total off 200 basis points over one year.
- Hold-rated BB&T (BBT +0.3%) is upped to $40 from $38, Comerica (CMA -0.2%) to $42 from $41, PNC Financial (PNC -0.7%) to $78 from $76, SunTrust (STI -0.3%) to $36 from $35, U.S. Bancorp (USB -0.4%) to $39 from $38, and Wells Fargo (WFC -0.1%) to $47 from $46.
- M&T Bank (MTB -0.7%) - still awaiting approval of its buyout of Hudson City Bancorp (HCBK -0.6%) - is lifted to $124 from $117.
- Buy-rated Fifth Third (FITB -1.3%) with price target $22, KeyCorp (KEY -0.4%) with price target $14, and Zions (ZION -1.7%) with price target $33 receive no boost, but Regions Financial (RF -0.1%) is lifted to $13 from $12.
- Many banks disclose their own analysis - but these (probably like Chan's) assume a "parallel" increase in rates in which the yield curve shape doesn't change. By their own analysis, Zions see itself benefitting more than its competitors, with net interest income to rise 18.1% on a 200 bp parallel increase in rates.
- Regional bank ETFs: IAT, KBE, KRE, RKH, QABA, KRU, KRS, KBWR.
Jul. 25, 2013, 8:35 AMPNC Financial is downgraded to Hold from Buy at Morgan Stanley, the team citing valuation after a big run for the stock. It's the 4th downgrade for PNC since earnings last week and we've lost count of the regional bank stock (KRE) downgrades over the past few days. Nearly all the cuts were from Buy to Hold and come citing valuations amid the mortgage slowdown. | Comment!
Jul. 17, 2013, 7:54 AMMore on PNC Financial (PNC) Q2 earnings: Net income of $1.1B about doubles last year's result. Net interest income of $2.3B off 11% Y/Y, with NIM of 3.58% down 50 bps from a year ago. Noninterest income of $1.8B up 65% Y/Y, led by growth in Asset Management and Corporate Service Fees (think higher rates on commercial MSRs). Basel III Tier 1 capital ratio of 8.2%. Book value/share of $68.46. CC at 10 ET. Shares +1.3% premarket. (PR) | Comment!
Jul. 17, 2013, 6:46 AM
Jul. 17, 2013, 12:05 AM
Jul. 16, 2013, 5:30 PM
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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