Earnings Reports

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PNC Financial $PNC reported better than expected second quarter earnings before the bell on Friday along with Wells Fargo $WFC, Citigroup $C and JPMorgan $JPM.  Beats on a growing loan book with improving interest rate margins.

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Earnings

Profit rose 24% to $1.35 billion, from $1.09 billion a year ago. Earnings per share of $2.72 beating the $2.58 per share expected by analysts polled by Thomson Reuters. PNC is the first major regional bank to report second-quarter earnings. 

PNC Financial Services Group Inc NYSE: $PNC

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Highlights

  • PNC benefited from higher interest rates, allowing it to charge more on loans.
  • Net interest income grew 7% from a year ago.
  • The bank's net interest margin also grew.
  • Total deposits were up 2%.
  • PNC decreased the amount it set aside for possible credit losses. 

Segments

  • Commercial lending grew 3% from a year ago. This business is a key revenue driver for Regional midsized banks like PNC.
  • Consumer lending grew 1% from a year ago. 

Outlook

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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