Sunday, January 27, 2013

PNC Earnings Review: Poised to Perform

PNC Financial Services reported QE December 2012 financial results on January 17

PNC earnings performance slowed from the prior quarter yet was a solid increase from the prior year. Earnings per share of $1.24 was down -24% QoQ but up an impressive +46% YoY. CEO James Rohr overall delivered a good quarter.

Financial position continues impressive with very strong capital. Net loans are almost 60% of total assets, which should translate into ongoing profits. Risk management appears very good. Operating expenses and losses continue high historically in relation to gross revenues, mostly due to the RBC Bank (USA) acquisition and merger.

At QE 12-31-12, I have rated PNC Financial Services an "A-" on a scale of A+ to G-. This is an upgrade from "B+" at the prior QE 9-30-12. The median rating is "D" and the average rating at QE 9-30-12 was "C". Financial position is weighted more than financial performance. The QE 9-30-12 bank ratings review is here.

"PNC expanded its businesses significantly in 2012," said James E. Rohr, chairman and chief executive officer. "Our balance sheet strength along with our committed employees allowed us to grow customers, loans and deposits across our franchise and expand into Southeastern markets. While we are pleased with the progress we have made, our financial results do not yet reflect the full potential from our investments. Our commitment to revenue growth, expense reduction and efficient capital management in 2013 should position PNC to deliver even greater shareholder value."


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