NEW YORK - PNC Financial the Pittsburgh, Pennsylvania based lender recorded a near record profit of $1.1 billion for the third quarter 2010. The bank was helped by the sale of PNC Global Investment division for $328 million, without this earnings would have been $1.56 a share instead of $2.07. PNC reversed liabilities they had accrued in the second quarter which impacted earnings by $86 million. Restructuring charges resulting from the acquisition of National City Corporation decreased by $10.5 million.
PNC operates its business in six segments, Retail Banking, Corporate Banking, Asset Management Group, Residential Mortgage Banking, Distressed Assets Portfolio and Other including BlackRock.
The Retail Banking division posted a loss of $7 million down from a profit of $80 million in Q2. The results were impacted by the implementation of "Regulation E" which pertains to overdraft charges. In Q4, PNC will incur another charge due to Regulation E which will impact earnings by an extra $32 million. Credit provisions which increased in Q3 are likely to decline in Q4.
The Corporate Banking Segment posted a profit of $427 million compared to $443 million in Q2. The company was hurt by lower revenues as well as a reduction in the value of PNC's mortgage servicing rights which reduced earnings by $72 million. The company had a $48 million benefit for credit losses compared to provisions of $97 million in the second quarter.
The Asset Management Group posted a gain of $44 million in Q3 compared to $28 million in Q2. The group benefited from a release of credit reserves.
Residential Mortgage Banking recorded a profit of $98 million compared to $92 million in Q2.
The Distressed Assets Portfolio recorded a profit of $17 million compared to a loss of $81 million in Q2. The company benefited from a sharp decrease in provisions.
Other including BlackRock, reported a profit of $196 million down from $219 million in Q2. The results were impacted by a reversal of certain accrued liabilities.
In Q4 Allan Edwards the CEO of The Markets Are Open expects PNC to record a profit of $890 million or $1.69 a share.
To see the full PNC report Click Here
Showing posts with label PNC Financial. Show all posts
Showing posts with label PNC Financial. Show all posts
Thursday, October 21, 2010
PNC Well Above Estimates (NYSE: PNC)
PNC Financial the Pittsburgh based bank and the nations sixth largest lender reported earnings of $1.1 billion or 2.07 a share. Allan Edwards the CEO of The Markets Are Open said yesterday he expected earnings of $1.1 billion. To see his comments from yesterday click here. The company reminded investors of the difficult environment despite the strong results. In the quarter shareholders equity improved to $29.4.
Wednesday, October 20, 2010
The PNC Is Right (NYSE: PNC)
PNC Financial the Pittsburgh based bank and the nations sixth largest lender is set to report its quarterly results tomorrow morning. The current consensus estimate calls for PNC to earn $1.36 a share. What is set in stone as of today is that PNC will earn $135 million profit on its BlackRock division as the company today reported profit of $551 million. BlackRock is a former subsidiary of PNC that is still 24.6% controlled by the company. Allan Edwards the CEO of The Markets Are Open is expecting earnings of $2.09 a share or $1.1 billion.Shares of PNC remained flattish on the day as investors await the earnings release.
To see the full PNC report Click Here
Tuesday, October 19, 2010
The PNC Rises to the Top (NYSE: PNC)
NEW YORK- PNC financial is the top major U.S. bank gainer on the day. The shares of the Pittsburgh based banking giant have begun to surge as investors have eased concerns about the foreclosure scandal. The scandal which swept across the United States last week involves banking employees not properly reviewing necessary documents and improperly foreclosing on homes. Analysts worry that the banks will face liabilities. One also has to wonder how much of the liability will be directed to the employees who committed these liabilities. Bank of America reported $3.1 billion of profit for their third quarter results today excluding a one time charge for the impairment of goodwill. This has sent financials mostly higher on the day. PNC will report its earnings on Thursday. Investors will pay special attention to the PNC report. PNC the 6th largest financial institution in the United States by assets and is largely regarded as the bank that did it the right way during the financial criss as it was not heavily involved in sub prime mortgage loans that have hampered Citigroup and Bank of America over the last two years.
Monday, October 18, 2010
The PNC Nation (NYSE: PNC)
NEW YORK- PNC Financial has pounded higher in morning trade. Investors were pleased with the stronger than expected results of Citigroup the banking giant which has appeared to recover from the problems it faced in 2008 and 2009 which nearly led to its collapse. The banking giant reported net income of 7 cents a share or $2.2 billion. Investors are hoping that the major banks that report this week will also report strong results.
PNC Financial located in Pittsburgh Pennsylvania is largely regarded as the strongest and best run bank in the country. The company was not involved in many of the sub prime problems that plagued Bank of America, Wachovia and Citigroup. PNC has reassured investors that at least one bank in the U.S. still does it the right way. PNC has been a model for the banking community over the last two years as it has reminded other corporations that a bank can still be profitable without taking excessive risks.
To see the full PNC report Click Here
PNC Financial located in Pittsburgh Pennsylvania is largely regarded as the strongest and best run bank in the country. The company was not involved in many of the sub prime problems that plagued Bank of America, Wachovia and Citigroup. PNC has reassured investors that at least one bank in the U.S. still does it the right way. PNC has been a model for the banking community over the last two years as it has reminded other corporations that a bank can still be profitable without taking excessive risks.
To see the full PNC report Click Here
Sunday, October 17, 2010
The Warren Buffett Type (NYSE:WFC) Bank (NYSE:PNC) (NYSE:BRK.A)
Warren Buffett the legendary investor from Omaha Nebraska known to the investing community as the "Oracle of Omaha" for his ability to predict the future. Buffett has always been heavily invested in financial stocks since the future of money is easier to be guessed than the future of computer software. Buffett currently owns 39.3% of his portfolio in financial stocks and his company runs one of the largest insurance divisions in the world. Buffett owns 320 million shares or 6% of the outstanding stock in Wells Fargo the fourth largest financial institution in the United States.
Despite having such a large weighting towards financials Buffett is very particular about which banks he will invest in. This is likely why the the bank Buffet is heavily invested in, Wells Fargo is down very little in the last 2 years while many other banks such as Bank of America and Citigroup have lost over 70% of their value. In fact earlier this year Wells Fargo was more valuable than it had been two years before. This shows the quality that Buffett looks for in a financial institution. In order to find a Buffett like bank lets examine some of the reasons why he bought Wells Fargo in 1990.
"With Wells Fargo, we think we have obtained the best managers in the business, Carl Reichardt and Paul Hazen... Our purchases of Wells Fargo in 1990 were helped by a chaotic market in bank stocks... Wells Fargo is big - it has $56 billion in assets - and has been earning more than 20% on equity (ROE) and 1.25% on assets (ROA)."
The first priority of Warren Buffett is to choose a bank with the best managers and best culture. The next factor he looks for is its ROA and ROE. Wells Fargo has consistently earned more than 1.5% on assets and 20% over the last 20 years. PNC Financial would also be a Buffett like investment since it has consistently had an ROA above 1.5% and ROE above 20% over the last ten years. Buffett also looks for safety and just like Wells Fargo, PNC is down very little since the beginning of the financial crisis.
The second thing Buffett looks for is the amount of risk a bank has. He has stated "Because leverage of 20:1 magnifies the effects of managerial strengths and weaknesses, we have no interest in purchasing shares of a poorly-managed bank at a "cheap" price. Instead, our only interest is in buying into well-managed banks at fair prices."
Buffett mentions that because of the substantial leverage some banks use he would not be interested in investing in a bank even if was at a fair price because leverage could be to high. This can be seen in Deutsche Bank which has leverage of almost 65 to 1. The leverage is so high it has recently asked shareholders to undertake a capital raising initiative. Even with this capital offering Deutsche Bank will still use more leverage than the average bank. When this amount of leverage is used a mistake by management will be magnified. Most of the European Banks have substantially more leverage than that of the U.S. meaning Buffett would likely not be interested in them despite their low prices.
Most of the American banks use substantially less leverage today than the 20 to 1 mentioned by Buffett that the banks typically used in 1990. Currently, PNC has leverage of 11 to 1 and Wells Fargo leverage is 13 to 1. This means these banks are extremely safe and well capitalized. These are two investments Warren Buffett would make if he were to invest in a bank today.
Despite having such a large weighting towards financials Buffett is very particular about which banks he will invest in. This is likely why the the bank Buffet is heavily invested in, Wells Fargo is down very little in the last 2 years while many other banks such as Bank of America and Citigroup have lost over 70% of their value. In fact earlier this year Wells Fargo was more valuable than it had been two years before. This shows the quality that Buffett looks for in a financial institution. In order to find a Buffett like bank lets examine some of the reasons why he bought Wells Fargo in 1990.
"With Wells Fargo, we think we have obtained the best managers in the business, Carl Reichardt and Paul Hazen... Our purchases of Wells Fargo in 1990 were helped by a chaotic market in bank stocks... Wells Fargo is big - it has $56 billion in assets - and has been earning more than 20% on equity (ROE) and 1.25% on assets (ROA)."
The first priority of Warren Buffett is to choose a bank with the best managers and best culture. The next factor he looks for is its ROA and ROE. Wells Fargo has consistently earned more than 1.5% on assets and 20% over the last 20 years. PNC Financial would also be a Buffett like investment since it has consistently had an ROA above 1.5% and ROE above 20% over the last ten years. Buffett also looks for safety and just like Wells Fargo, PNC is down very little since the beginning of the financial crisis.
The second thing Buffett looks for is the amount of risk a bank has. He has stated "Because leverage of 20:1 magnifies the effects of managerial strengths and weaknesses, we have no interest in purchasing shares of a poorly-managed bank at a "cheap" price. Instead, our only interest is in buying into well-managed banks at fair prices."
Buffett mentions that because of the substantial leverage some banks use he would not be interested in investing in a bank even if was at a fair price because leverage could be to high. This can be seen in Deutsche Bank which has leverage of almost 65 to 1. The leverage is so high it has recently asked shareholders to undertake a capital raising initiative. Even with this capital offering Deutsche Bank will still use more leverage than the average bank. When this amount of leverage is used a mistake by management will be magnified. Most of the European Banks have substantially more leverage than that of the U.S. meaning Buffett would likely not be interested in them despite their low prices.
Most of the American banks use substantially less leverage today than the 20 to 1 mentioned by Buffett that the banks typically used in 1990. Currently, PNC has leverage of 11 to 1 and Wells Fargo leverage is 13 to 1. This means these banks are extremely safe and well capitalized. These are two investments Warren Buffett would make if he were to invest in a bank today.
Thursday, October 14, 2010
PNC The Shining Bank On The Hill (NYSE:PNC)
PNC Financial has continued to out duel rival bank in terms of stock and earning performance as the financial crisis which began in 2007 comes to and end. PNC is able to do this because of its CEO James Rohr who took over in 2000. In 2007 Rohr was awarded the American Banker of the year. Under Rohr PNC has taken risk management seriously, Rohr stated, "we changed the risk management profile of the company and adopted a very strong risk management culture with a moderate risk profile." The result was that PNC strayed from risky lending and leveraged buyouts. This received complaints from investors early on in the decade but today PNC towers over most of its competition. In 2002 the Securities and Exchange Commission accused PNC of "materially false and misleading" statements when it reported its 2001 fourth-quarter and full-year earnings. PNC agreed to pay $25 million in penalties. This scandal also caused changes to PNC's risk management and the company decided to exceed the highest standards. This tight risk management will help PNC in the ongoing credit foreclosure scandal. It is likely a company of such quality will be better off than the companies who have processed foreclosure documents to quickly.
Wednesday, October 13, 2010
The Shining PNC on The Hill (NYSE:PNC)
New York- The shining light on top of the hill was PNC Financial today. The stock finished even on the day despite most of the financial sector falling. The banks began the day with rosy numbers from J.P. Morgan which investors decided to sell. Investors decided to use J.P. Morgan's strong results as a springboard to sell all the major U.S. financial institutions. Bank of America was also down significantly on the day. However, PNC Financial stayed higher as investors view the bank as the "Shining City on The Hill."PNC Financial is both a super community bank as well as a National Bank. Currently PNC is the 6th largest bank in the United States according to deposits. PNC is scheduled to report earnings on October 21.
To see the full PNC report Click Here
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