PNC Financial Services (PNC)

PNC has long been stagnant. Rohr stated 5 years ago that the stock would break 100. Still yet to be seen. PNC hovers but never reallly moves.

PNC has held their own during this financial crunch, but the crunch is not over. They are overexposed in some of their Northeast markets. They have taken on 2 projects in the Pittsburgh area that are running over budget. Three PNC Plaza will now cost $200 million, up from the original budget of $179. AND...this project is subsidized with public (ie: taxpayer) funds.

Another quality bank being pulled down by others.

8.3 P/E (ttm) and 3.1% Dividend Yield makes this attractive. But mainly I like this stock based on my personal experience with the local branch - great customer service is often a reflection of the management. (Washington Mutual, btw, who advertise their phenomenal customer focus, has been just horrible in my personal experience)

The PNC Financial Services Group, Inc. is a diversified financial services company in the United States, engaged in retail banking, corporate and institutional banking, asset management, and global fund processing services. The company operates directly and through its subsidiaries, in its primary geographic markets in Pennsylvania, New Jersey, Delaware, Ohio, Kentucky and the greater Washington, D.C. area. It also provides certain asset management and global fund processing services internationally.

In 2006, company reported a strong performance with record net income with $8.73 earning per diluted share. Non-performing assets decreased 10% mostly due to principal reductions and payoffs. Deposits contribute around 65% to total funding requirements of the company, which is expected to grow as their banking sector is on path of expansion.

Since two years retail banking has been contributing around 48%-50% to revenues. Retail banking revenues grew 9% in 2006 while expenses increased 6% from the 2005 level. Taking a cue from the same, management is working to increase its retail franchise as evident by the acquisition of Mercantile Bancshares (MRBK), which is expected to close in March 2007.

PFPC’s revenue increased by 19% due to benefit of deferred tax reversal, increased servicing revenue and disciplined expense control. PFPC has won a large customer bid which will come online in the first quarter of 2007, which will add to its revenue significantly. Management has streamlined PFPC’s expenses and strengthens its sales force to remain competitive. Management will continue to invest in this business segment focusing on high growth opportunities such as managed accounts and offshore servicing.

Corporate and Investment bank’s revenue fell by 3.5% mainly due to higher loan loss provisions. With the acquisition of Harris Williams, its fee income increased by 32% and is expected to follow the suite in 2007. Strategically moving, the company is going strong with intentions of acquisitions and stock repurchases in order to effectively manage its excess capital. With an outstanding credit quality, the stock seems to find place in investors’ horizon.

The markets structured value weighs heavily on corporate bystanders in such a booming yet competitive banking age. When banks compete they make structure most of the time no one wins except for the account holders.

Some fear that PNC became toxic with the NCC deal. I believe they got a steal! This well run conservative bank that will increase its fee income as it grows its footprint.

PNC stole NCC

Well managed bank with little exposure to the mortgage backed securities bringing other financial institutions to their knees. Well managed credit risk will allow this bank to pick up other distressed banks as the crisis continues. Expect an acquisition in the not too distant future. Look for PNC to survive the crisis a little bit bigger, or acquired at a hefty premium to their current share price. Either way is a win for stockholders.

Claims they are well-capitalized and seeking new credit customers... Plus they grew revenues in 2008. Not bad. I've also been a retail customer since 1997.

Comparatively solvent other than surprises with NCC acquisition, with locations and major markets which were either (1) dull and less involved in the real estate bubble, or (2) its DC service area which should be comapratively stable

PNC has proved to be a good performer-one of the best. It has not invested much on the so-called bad markets as has been apparent in the the recent months with their peers. Very strong company, if you ask me, witha very strong base.

Amidst turmoil in the financial sector this week and over the past year, the following is a list of Pennsylvania-based banks and financial services companies with market caps over $100M that have recorded stock price gains over the past year.

The 11 companies are listed in descending order by 52-week stock price performance (through 9/14/08) and include the following top performers: Univest – biggest gainer at 38%, First Commonwealth (which I wrote about 15 months ago with a yield over 6%) – biggest dividend yield at 5.4%, and PNC Financial – biggest market cap at $25.3B. With Dow component American International Group (AIG) down over 30% on Friday, and other blow-ups this week such as Lehman Brothers (LEH) and Washington Mutual (WM), the strength in these Keystone State banks is notable and reflects investor confidence in their management and business fundamentals.

Company Name (Ticker), 52-Week Change, Market Cap, Dividend Yield

Univest Corp. of PA (UVSP) +38.0%, $380M, 2.7%
Beneficial Mutual Bancorp (BNCL) +27.9%, $991M, 0%
Republic First Bancorp (FRBK) +23.2%, $108M, 0%
Citizens & Northern Corp. (CZNC) +21.4%, $197M, 4.4%
First Commonwealth Financial (FCF) +15.7%, $924M, 5.4%
Bryn Mawr Bank Corp. (BMTC) +6.7%, $199M, 2.4%
PNC Financial Services (PNC) +6.6%, $25.3B, 3.6%
Abington Bancorp (ABBC) +6.5%, $248M, 2.0%
S&T Bancorp (STBA) +3.5%, $954M, 3.6%
ESB Financial Corp. (ESBF) +2.9%, $126M, 3.9%
Northwest Bancorp (NWSB) +1.7%, $1.4B, 3.1%
My favorite picks going forward include PNC, FCF, and NWSB.

The management was smart enough to get TARP money to fund a large acquisition which will make them the 5th largest bank in the country. They have sucessfully managed the merger of The Bank of Lancaster County, a profitable bank hurt by an internal fraud scheme. The stock has been hit with the rest of the sector, but will emerge stronger and more profitable than most.

Trouble here

Down she goes...

New 52 week low. Double down on losing position.

uptick rule

bottom fishing

got shafted on ncc, so they better improve for my .0392 shares