Earnings Reports

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PNC Financial $PNC reported better than expected fourth quarter earnings before the bell on Friday ahead of Wells Fargo $WFC and JPMorgan $JPM.  Beats on margins, worries linger on Tax effects.

pnc bank atm

Earnings: EPS of $2.29 beat expected $2.20 on revenue of $4.26 v expected $4.168 billion

Reaction: The PNC Financial Services $PNC  NYSE

Premarket  $150.56 -.093  -0.61% 

Highlights

  • Average loans grew $1.9 billion, or 1 percent, to $221.1 billion in the fourth quarter compared with the third quarter.
  • Average commercial lending balances increased $1.6 billion reflecting growth across PNC's business credit, real estate, corporate banking and equipment finance businesses.
  • Average consumer lending balances increased $.3 billion as growth in residential mortgage, auto and credit card loans was partially offset by lower home equity and education loans. 

Buybacks

$PNC returned $.09 billion of capital to shareholders in the fourth quarter through repurchases of 3.7 million common shares for $.5 billion and dividends on common shares of $.4 billion

Outlook

After adjusting FY17 results,$PNCexpects FY18 revenue to be up by mid-single digits, noninterest expenses to be up by low single digits and effective tax rate to be about 17%.

The banking sector received a boost earlier in the year after the largest U.S. banks passed Fed stress tests and were allowed to raise dividends and share buybacks. The Fed as it raise rates is helping banks' finances. Since Donald Trump won on Election Day has been a huge run higher on PNC and the other bank stocks. Auto and student loans also overhang the banking and finance sectors. 

The bank rally had been fueled by expectations for easier regulations including a possible repeal of DoddFrank and infrastructure spending. The new surge in home prices has also buoyed optimism for the mortgage business and banks profits thereto.

Source: PNC Earnings Release 

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