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PNC Financial Reports Strong First Quarter Results

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PNC beats estimates

PNC Financial (PNC) reported its first quarter earnings for financial year 2015. It just managed to beat analysts’ estimates. PNC Financial outperformed EPS (earnings per share) estimates for the 13th straight quarter. PNC Financial reported net income of $1 billion, or $1.75 per diluted common share—compared to analysts’ estimate of $1.72 per diluted common share. However, the company reported $1.1 billion in net income for both 1Q14 and 4Q14.

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PNC Financial reported a decline in interest as well as non-interest income—compared to the previous quarter. The decline in the net interest income was marginal—mainly due to two less days in the quarter. However, non-interest income declined 10%—mainly due to higher fourth quarter gains on asset dispositions.

Diversified financial services

PNC Financial is engaged in retail, corporate, and institutional banking in the US. The company also provides asset management, mortgage banking, and other services. As of March 31, 2015, its total assets, total deposits, and shareholders’ equity stood at $351 billion, $236.5 billion, and $45 billion, respectively. PNC Financial also holds ~21.7% stake in BlackRock (BLK). It generates 12% of its net income.

PNC Financial’s stock fell by 1.5% after the announcement of its quarterly earnings. It faces competition in the banking division from JPMorgan Chase (JPM), Bank of America (BAC), Citigroup (C), Bank of Montreal (BMO), BB&T Corporation (BBT), US Bancorp (USB), and Wells Fargo (WFC). Together they form 31.92% of the Financial Select Sector SPDR (XLF).

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