Post Earnings Coverage as PNC Financial's Q1 Diluted EPS Beat Estimates
Upcoming AWS Coverage on SunTrust Banks Post-Earnings Results
LONDON, UK / ACCESSWIRE / April 21, 2017 / Active Wall St. announces its post-earnings coverage on The PNC Financial Services Group, Inc. (NYSE: PNC). The Company reported its financial results for the first quarter fiscal 2017 (Q1 FY17) on April 13, 2017. The Pittsburgh, Pennsylvania-based bank's revenue and net income per diluted share improved on a year-over-year basis, outperforming market consensus forecasts. Register with us now for your free membership at: http://www.activewallst.com/register/.
One of PNC Financial Services' competitors within the Money Center Banks space, SunTrust Banks, Inc. (NYSE: STI), released its Q1 2017 results on Friday, April 21, 2017. AWS will be initiating a research report on SunTrust Banks in the coming days.
Today, AWS is promoting its earnings coverage on PNC; touching on STI. Get our free coverage by signing up to: http://www.activewallst.com/register/.
Earnings Reviewed
In the three months ended on March 31, 2017, PNC Financial's total revenues came in at $3.88 billion, up 6% from $3.67 billion in the year ago same quarter. Total revenue numbers for the reported quarter topped market expectations of $3.77 billion. During Q1 FY17, PNC Financial's net interest income was $2.16 billion, rising 3% from $2.10 billion in Q1 FY16. Meanwhile, total noninterest income rose 10% to $1.72 billion in Q1 FY17 from $1.57 billion in the prior year's same quarter.
The regional bank reported net income attributable to diluted common shares of $963 million, or $1.96 per diluted share in Q1 FY17, compared to $850 million, or $1.68 per diluted share, in Q1 FY16. Quarterly net income per diluted share topped analyst's expectations of $1.84 per diluted share.
Performance Metrics
During Q1 FY17, PNC Financial reported total average loans of $212.83 billion, rising from $207.49 billion in Q1 FY16. Total average deposits also grew up to $260.71 billion in Q1 FY 17 from $250.36 billion in Q1 FY16.
In Q1 FY17, PNC Financial's return on average assets stood at 1.19%, compared to 1.07% in the previous year's comparable period. The Company's return on average common equity was increased to 9.50% in Q1 FY17 from 8.44% reported in the year ago same quarter. The bank's efficiency ratio was 62% in Q1 FY17 and in Q1 FY16. Moreover, PNC Financial's net interest margin for the reported quarter improved two basis points to 2.77% from 2.77% in Q1 FY16.
During Q1 FY17, total interest earning assets grew to $321.09 billion from $310.75 billion in Q1 FY16. Furthermore, yield on these assets rose to 3.22% in Q1 FY17 from 3.15% in Q1 FY16. The Company reported non-interest expense of $2.40 billion in Q1 FY17, which came in 5% above $2.28 billion reported in the year ago same period.
As on March 31, 2017, the bank's transitional BASEL III Common equity Tier 1 capital ratio was 10.5%, compared with 10.6% as on March 31, 2016. During Q1 FY17, non-performing assets fell to $2.21 billion, or 0.94% of total loans, from $2.55 billion, or 1.10% of total loans in Q1 FY16. During the quarter, net loan charge-offs were $118 million, or 0.23% of average loans, versus the prior-year's same quarter net charge-offs of $149 million, or 0.29% of average loans.
Segment Performance
For the reported period, Retail Banking net interest income came in flat at $1.12 billion. Meanwhile, the segment's noninterest income fell to $603 million in Q1 FY17 from $633 million in Q1 FY16. Additionally, the segment's net income declined in Q1 FY17 to $213 million from $243 million in the prior year's comparable quarter.
Corporate & Institutional Banking's net interest income grew to $839 million in Q1 FY17 from $817 million in Q1 FY16. Noninterest income also surged in Q1 FY17 to $524 million from $441 million the last year's comparable quarter. Furthermore, the segment's net income improved to $484 million in Q1 FY17 from $398 million in Q1 FY16.
During Q1 FY17, the Asset Management Group segment reported net interest income of $71 million compared to $77 million in Q1 FY16. However, the segment's noninterest income grew to $218 million in Q1 FY17 from $203 million in Q1 FY16. Meanwhile, the segment's net income fell by $2 million, y-o-y to $47 million in Q1 FY17.
Dividend and Share Repurchase
In separate press release on April 04, 2017, PNC Financial's Board of Directors declared a quarterly cash dividend on the common stock of $0.55 per share. The dividend is payable on May 05, 2017, to shareholders of record at the close of business April 17, 2017.
In Q1 FY17, the Company returned $0.9 billion of capital to shareholders, or 92% percent of Q1 FY17's net income attributable to diluted common shares, through a buyback of 5.0 million common shares for $0.6 billion and through dividends on common shares amounting to $0.3 billion. Furthermore, on January 30, 2017, the Company announced a $300 million increase to its common stock share repurchase programs, which now provide for repurchases of up to $2.3 billion through the four quarter period ending June 30, 2017.
Stock Performance
On Thursday, April 20, 2017, the stock closed the trading session at $118.83, rising 2.02% from its previous closing price of $116.48. A total volume of 2.05 million shares have exchanged hands. PNC Financial Services' stock price surged 33.46% in the past six months and 38.45% in the previous twelve months. Furthermore, since the start of the year, shares of the Company have gained 2.54%. The stock is trading at a PE ratio of 15.61 and has a dividend yield of 1.85%.
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