Are PNC Financial shares in your portfolio?
Financial services institution PNC Financial (NYSE:) The stock is back to oversold levels. The company beat analyst estimates with revenue in line during its fiscal 2022 first quarter.
Its commercial loans grew at the fastest organic rate since defensive drawdowns began during the pandemic. Interest rates rose due to negative effects in some financial markets.
The in nearly four decades has prompted the to forecast seven rate hikes this year. Banks are the main beneficiaries of rising interest rates as demand for loans increases.
The Company is well positioned to benefit from rising interest rates through net interest income growth and net interest margin (NIM) expansion.
The company is poised to reap the rewards of its previous acquisition of BBVA (BME:) as it sees 50% sales increases at its branches. Cautious investors looking for exposure to a performing bank can watch for opportunistic pullbacks in PNC Financial shares.
Publication of results for the first quarter of fiscal year 2022
On April 14, 2022, PNC Financial released its fiscal first quarter 2022 results for the quarter ending March 2022. The company reported earnings per share (EPS) of $3.29 compared to analysts’ consensus estimate of 2 $.78, a beat of $0.51.
Revenue rose 11.2% year-over-year (YoY) to $4.69 billion, beating analyst estimates of $4.72 billion. Net loan write-offs were $137 million or 0.19% of annualized average loans.
Net interest margin improved sequentially to 2.28% from 2.27% in the prior Q4 2021. Average loans increased 1% year-on-year to $290.7 billion. Average commercial loans increased by $1.8 billion.
Average consumer loans of $95.1 billion remained flat. Net loan write-offs increased by $13 million to $137 million. The Basel III Common Equity Tier 1 capital ratio was 9.9% as of March 31, 2022 and 10.3% as of December 31, 2022. The company increased its quarterly dividend by 20% to $1.50 per April 1, 2022.
Takeaways from the conference call
PNC Financial CEO Bill Demchak gave an upbeat account of the bank starting the year off to a strong start as it increased lending and securities and controlled spending while maintaining credit quality by maintaining reserves and strong capital levels.
Fees fell more than expected as the Russian-Ukrainian conflict hurt some capital markets. He looks forward to the increased benefits of rising interest rates as loan demand grows.
Sales per branch increased 60% in March 2022 compared to December 2021, thanks to improvements in mortgages, cards and investment products. Cash commercial lending was up $6 billion in the quarter and $7 billion excluding the impact of the PPP loan write-off and its increase in April.
He dwelt on share buybacks in the rising rate environment,
“We also remain active on the security side with net purchases of nearly $6 billion in the quarter. From a balance sheet perspective, stocks were offset by unrealized losses due to rising interest rates, which Rob will discuss in a few minutes.
“This does not impact our regulatory capital or earnings, but during the quarter we moved approximately $20 billion of our available-for-sale securities to help maturity limit future valuation changes. due to movements in interest rates.
“Importantly, we have seen a strong rebound in the performance of our securities. Overall, we believe we are well positioned to weather rising interest rates to generate net income growth. of interest and an expansion of the NIM throughout the year.”
PNC Financial Stock Chart
PNC Opportunistic Withdrawal Levels
Using rifle charts on the weekly and daily time frames provides an accurate view of the price action playing field for PNC stocks. The weekly carbine chart has formed an inverse puppy distribution through the $176.61 Fibonacci (fib) level and the lower weekly Bollinger® (BB) bands lie near the $169.78 fib.
The weekly 5-period moving average (MA) resistance drops to $186.06 with a 50-period MA at $196.13 and a 15-period MA at $198.26. The 200-period weekly moving average support stands at $149.26.
The weekly stochastic has formed a mini inverse staircase pup falling through the 20 band. The weekly buy of the market structure low (MSL) triggers on a break above $195.00.
The daily Rifles chart formed an inverse puppy breakdown, with the 5-period MA falling to $180.37, followed by the 15-period MA at $184.73 and the daily BB lowers at $169.50.
The daily 50-period MA resistance lies at $193.13 and the 200-period MA resistance at $197.29. The daily buy of MSL is triggered on a break above the $184.66 price level. The daily stochastic failed the 20-band reel and reversed to fall back below the 20-band on a mini stochastic reverse pup.
Cautious investors can watch for opportunistic pullbacks at the $171.12, $167.63, $158.64, $153.72, $151.62 and $146.06 levels. The upward trajectories range from the $193.03 fib level to the $226.25 fib level.