PNC Financial Services Group Inc
PMI Index: Component Growth Impacts Banks
A growing economy definitely benefits the banking sector. The impact will be positive for big banks and also for regional banks.
Must-know: Determining a bank’s value
The first challenge is that banks are highly regulated and any change in regulations has a huge impact on the valuation of a bank—the second challenge is that it’s difficult to determine cash flow for a bank because both debt and reinvestment are difficult to calculate.
Why Are Market Participants Concerned about December 2015?
The addition of “at its next meeting” in the FOMC’s October statement has led market participants to believe that a rate hike may be effected in its December meeting.
How Does BlackRock Make Money?
BlackRock, an investment management giant, had $7.0 trillion in AUM (assets under management) at the end of the third quarter.
The Big Picture in US Equity Mutual Funds: November Rundown as of October
Investors need to keep a close watch on signs that indicate a “liftoff” in December and should be ready to rebalance their equity mutual funds accordingly.
Must-know: Traditional banks face challenges
When a borrower isn’t able to pay back the loan, the loan is considered a non-performing asset (or NPA)—since the money for lending came from a depositor, the bank needs a large enough pool of capital to withstand such a shock.
Which FAANG Stock Will Sit on the Iron Throne?
With earnings around the corner, which FAANG stock will perform the best?
Berkshire Hathaway’s Banking Holdings in Q1
Among Berkshire Hathaway’s financial holdings, JPMorgan Chase was the worst performer, while Goldman Sachs was the top performer.
Did Buffett Miss the Bus on Apple?
Berkshire Hathaway (BRK-B) is Apple’s second-largest shareholder.
Buffett’s Love for Banking Stocks Continued in Q4
Berkshire Hathaway is the largest shareholder in Wells Fargo (WFC), Bank of America (BAC), U.S. Bancorp (USB), and American Express (AXP).
Key Changes in Berkshire Hathaway’s Holdings in Q3
Looking at Berkshire Hathaway’s third-quarter 13F, the company added more Apple shares and added a new position in JPMorgan Chase.
TD Ameritrade Converted Scottrade Brokerage Accounts
TD Ameritrade Holding (AMTD) announced on February 28, 2018, that it has converted the brokerage accounts of Scottrade.
What Analysts Are Saying about TD Ameritrade
TD Ameritrade Holding (AMTD) is tracked by 19 analysts in March 2018. Eight of them are suggesting a “hold” for the stock.
Analyzing TD Ameritrade’s Premium Valuations
The PE ratio of TD Ameritrade Holding (AMTD) was 17.14x on an NTM (next-12-month) basis, which represents a premium valuation.
What Analysts Are Recommending for State Street Today
Of the 20 analysts tracking State Street (STT) in January 2018, none has recommended a “strong sell” or a “sell.”
Can State Street Recover from Discounted Valuations?
State Street’s (STT) PE (price-to-earnings) ratio stood at 14.6x on an NTM (next-12-month) basis, compared with the peer average of 17x.
Understanding State Street’s Balance Sheet
State Street’s (STT) total assets stood at $238.4 billion at the end of 4Q17, compared with $242.6 billion in 4Q16.
Invesco’s Total Operating Revenues Rose Marginally
Invesco (IVZ) generated total operating revenues of $3.7 billion in the first nine months of 2017.
PNC Financials’ Non-Interest Income Ratio Continues to Expand
PNC Financial’s non-interest income for 2Q16 increased by 10% over the previous quarter, mainly due to higher fee income growth.
We Have Liftoff: Federal Reserve Hikes the Federal Funds Rate
On December 16, 2015, the Federal Open Market Committee unanimously decided to hike the federal funds rate by 25 basis points to 0.25–0.50%.
Rate Hike Expectations Propelled Financial Stocks Higher
Many banks and financial service providers’ stocks rose on December 15. US investors picked the stocks with the expectation of the zero interest rate policy.
Investment-Grade Bond Funds Witnessed Inflows for the Third Week
The flows into investment-grade bond funds were positive for the week ending October 28. This was the third consecutive week of inflows.
Microsoft Led the High-Grade Bond Issuance Last Week
US corporates were the biggest issuers of high-grade bonds in the week ending October 30. They accounted for 67.1%, or $25.7 billion, of all the issues.
Why Did Investment-Grade Corporate Bonds’ Issuance Rise?
There were investment-grade corporate bonds worth $38.2 billion issued in the primary market in the week ending October 30—the highest since September 18.
Assessing Market Regulations: Headed for a Liquidity Crunch?
Some market participants point out that regulations give cause for worry about bond market liquidity because they hinder banks’ market-making capabilities.
The US Monetary Policy: Fischer and Brainard Speak Out
With regard to US monetary policy, there’s been a lot of emphasis on the timing of the first increase in the federal funds rate. The path of the funds rate is more important than the first increase.
Analyzing Commercial and Industrial Loan Growth
After peaking in 1Q15, commercial and industrial growth slowed down in April and May. The growth was 10.4% in April and 9.5% in May 2015.
J.P. Morgan Leads in Loan and Deposit Growth
J.P. Morgan is the leader in generating market revenue and investment banking fees. It generated more in the last five years than all its competitors.
Why PNC Financial Has Been Pricing at a Premium
PNC Financial (PNC) successfully diversified its banking operations by extending offerings in asset management, consumer services, and investment banking.
SunTrust Bank’s Deposit Growth Lower than Industry Average
STI’s deposit growth is clearly lagging behind the industry average. Other banks are experiencing strong growth in this area.
BB&T to Expand Its Footprint in Ohio and the Mid-Atlantic Region
BB&T’s Susquehanna acquisition will significantly expand BB&T’s Mid-Atlantic footprint. The deal is valued at ~$2.5 billion. It will close in the second half of 2015.
Valuation of PNC Bank is close to historical mean
PNC stock was trading at a PBV ratio of 0.75 in November 2012. Since then, the stock has seen a smart move up and trades at a PBV multiple of ~1.08.
PNC Bank’s financial strengths outweigh its weaknesses
PNC Bank has done a good job at reducing its non-interest expenses, but the bank’s efficiency ratio still remains above 60%.
Why the auto finance market share needs to be protected
Auto finance is a business where Capital One (COF) grew rapidly. The bank entered the market in 1997. Since then, it has been able to build a sizeable market share.
Analyzing Capital One’s business segments
Capital One (COF) can be understood best by breaking it into different business segments—Credit Card, Consumer Banking, and Commercial Banking.
What are Capital One’s three main subsidiaries?
Capital One is organized into subsidiaries. Capital One’s principal subsidiary is a limited purpose credit card bank. It’s chartered in Virginia.
Capital One’s history: From credit cards to a diversified bank
Capital One’s history is shorter than other banks. In 1994, Signet Financial Corp. spun off its credit card business into a separate subsidiary—Capital One.
Non-interest expense management can improve at PNC Bank
PNC’s net interest expenses stood at ~$9.5 billion at the end of 2014, $193 million lower than 2013 after curtailing salary and miscellaneous expenses.
PNC Bank loan book carries some risks
PNC Bank’s loan book is skewed toward a few types of loans: commercial and industrial loans and 1–4 Family First Liens, about 44.5% of its total loans.
Does PNC Bank remain a strong long-term play?
With a strong presence in the East, South, and Midwest, PNC Bank offers community banking, wholesale banking, corporate banking, and asset management.
Why qualitative analysis should matter to Wells Fargo investors
Before investing, it’s important to analyze a bank qualitatively, as well as quantitatively. Qualitative analysis is more likely to determine how well a bank will perform over the long-term.
Overview: The way traditional banks make money
Generally, the interest charged from those who took the loans is higher than the interest paid to depositors—the difference in the interest earned and interest paid is the interest income that is essentially the money made by the bank from its core operations.