The Banking and Strategy Initiative

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Bank Earnings Season 2Q 2014: PNC Financials gets to a $2 Earnings score

PNC , the biggest in its segments in the South and even back west, returns the best ROTA in the segment its compared to and we have decided to follow it with US Bancorp in those willing and able to lend to the large US Consumer and Mortgage markets. Signature Bank and others continue also to be better performers with key niche advantages but would scale up business only in select geographies despite access to capital and premium customer

Second quarter NII dropped 3% over the linked quarter but was a healthy $2.1 Bln while Fee income growth reflected improvement in mortgage business. The bank also attributed increase in Non interest Expenses to seasonal factors but is probably less concerned about expense bills at this time as it grows business

Commercial lending made up for cuts in the consumer business, RE developers probably making the $3.3 Bln addition. The bank as a midcap also showcases a stronger edge in Loan Deposit ratio up at the 90% mark and invested a $200 mln ( not so bad for a bank its size getting a regular program) in buybacks

ROA is 1.31% as it expects to ramp up business better in the second half. It remains to be seen how it manages its debt portfolio with the changing interest rates choking many bond investors despite the long ramp up to soften the blow

Fee income grew in double digits in Consumer and Corporate services (Comml Bank) as well. RMBS accounted for $26 mln of the Mortgage fee income increase, from higher loan sales.

 

 

 

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This entry was posted on July 16, 2014 by in Uncategorized.

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