LONDON, UK / ACCESSWIRE / July 18, 2017 / Pro-Trader Daily has just published a free post-earnings coverage on The PNC Financial Services Group, Inc. (NYSE: PNC) (“PNC Financial”), which can be viewed by registering at http://protraderdaily.com/optin/?symbol=PNC, following the Company’s reporting of its second quarter fiscal 2017 earnings results on July 14, 2017. The regional bank operator outperformed revenue and earnings expectations. Our daily stock reports are accessible for free, and with those to look forward today you also will be signing up for a complimentary member’s account at:
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For Q2 2017, PNC Financial reported that total revenue grew 5% to $4.06 billion compared to revenue of $3.88 billion in Q2 2016. The Company’s revenue numbers exceeded analysts’ expectations of $4.00 billion.
During Q2 2017, PNC Financial’s net interest income rose 9% to $2.26 billion compared with Q2 2016 net interest income of $2.16 billion. The growth was attributed to higher loan yields and balances. Additionally, higher securities balances and yields also contributed to the y-o-y gain. The Company’s net interest margin increased to 2.84% for Q2 2017 compared with 2.70% for Q2 2016.
PNC Financial’s non-interest income for Q2 2017 grew 4% to $1.80 billion compared $1.73 billion in Q2 2016. During the reported quarter, the Company’s Asset management revenue, which includes earnings from PNC’s equity investment in BlackRock, grew 6% on a y-o-y basis to $398 million; while corporate service fees rose 8% to $434 million due to higher capital markets revenue and treasury management fees. PNC Financial’s residential mortgage revenue fell 37% to $104 million, from lower loan sales revenue and lower net hedging gains on mortgage servicing rights.
For Q2 2017, PNC Financial’s non-interest expense increased 5% to $2.48 billion reflecting overall higher levels of business activity and ongoing investments in technology and business infrastructure.
PNC Financial’s net income attributable to diluted common shares rose to $1.10 billion in Q2 2017 compared to $989 million in Q2 2016. On a per share basis, the Company reported earnings of $2.10 per share compared to $1.82 per diluted share in the year earlier same quarter and ahead of Wall Street’s expectations of $2.02 per share.
Balance Sheet Review
As of June 30, 2017, PNC Financial’s total assets were $372.2 billion compared with $370.9 billion at March 31, 2017, and $361.3 billion at June 30, 2016. Assets grew 3% on a y-o-y basis driven by higher loans and investment securities and partially offset by lower deposits with the Federal Reserve Bank.
PNC Financial’s total loans grew $5.2 billion, or 2%, as of June 30, 2017, compared with $218.0 billion as of March 31, 2017. Commercial lending balances increased $5.1 billion in PNC’s corporate banking, real estate, and business credit businesses as well as the equipment finance business. The Company’s average loans grew 2%, or $4.1 billion, over a q-o-q basis to $216.4 billion from higher commercial lending balances of $4.4 billion and partially offset by lower consumer lending balances of $0.3 billion.
PNC Financial’s balances held with the Federal Reserve Bank decreased to $22.1 billion at June 30, 2017, compared with $27.5 billion at March 31, 2017, and $26.3 billion at June 30, 2016, in part attributable to loan growth. At June 30, 2017, PNC Financial’s total deposits decreased $1.5 billion compared with March 31, 2017, to $259.2 billion, reflecting a seasonal decline in consumer deposit balances. Average deposits increased $1.5 billion in the reported quarter on a q-o-q basis driven by growth in consumer savings and demand deposits. PNC Financial’s common shareholders’ equity at June 30, 2017, increased $0.3 billion to $42.1 billion compared with March 31, 2017, due to growth in retained earnings substantially offset by share repurchases.
PNC Financial completed common stock repurchase programs for the four quarter period ended in Q2 2017 and returned a total of $3.4 billion of capital to shareholders through repurchases of 21.5 million common shares for $2.3 billion and dividends on common shares of $1.1 billion. The Company returned $1.0 billion of capital to shareholders in the reported quarter through repurchases of 5.7 million common shares for $0.7 billion and dividends on common shares of $.3 billion.
In June 2017, PNC Financial announced share repurchase programs of up to $2.7 billion for the four-quarter period beginning in Q3 2017. These programs include repurchases of up to $.3 billion related to stock issuances under employee benefit plans. On July 06, 2017, PNC Financial’s Board of Directors raised the quarterly cash dividend by 36% to $0.75 per share on common stock, effective with the August 05, 2017, dividend payment.
Credit Quality Review
PNC Financial stated that overall credit quality for Q2 2017 remained stable with Q1 2017. Provision for credit losses for the reported quarter increased $10 million q-o-q to $98 million. The Company’s non-performing assets at June 30, 2017, decreased $362 million compared with 2.15 billion on June 30, 2016, reflecting lower consumer and commercial nonperforming loans. Nonperforming assets to total assets were 0.58% at June 30, 2017, compared with 0.70% at June 30, 2016.
PNC Financial’s net charge-offs for Q2 2017 decreased $24 million on a q-o-q basis to $110 million, attributable to energy-related loans. The Company’s net charge-offs for the reported quarter were 0.20% of average loans on an annualized basis versus 0.26% for the prior year’s comparable quarter.
PNC Financial’s allowance to total loans was 1.17% at June 30, 2017, 1.20% at March 31, 2017, and 1.28% at June 30, 2016. The Company’s allowance to nonperforming loans was 131% at June 30, 2017, 128% at March 31, 2017, and 119% June 30, 2016.
At the closing bell, on Monday, July 17, 2017, PNC Financial Services’ stock slightly climbed 0.15%, ending the trading session at $127.36. A total volume of 2.32 million shares has exchanged hands, which was higher than the 3-month average volume of 2.12 million shares. The Company’s stock price skyrocketed 7.56% in the last three months, 7.21% in the past six months, and 55.20% in the previous twelve months. Moreover, the stock gained 8.89% since the start of the year. The stock is trading at a PE ratio of 16.73 and has a dividend yield of 2.36%. The stock currently has a market cap of $61.70 billion.
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