PNC Financial Services (NYSE:PNC) Group Inc shares climbed after the closely watched US regional bank reported first-quarter earnings which beat Wall Street estimates on revenue which jumped 59.9% on a year-over-year basis helped by higher deposits and interest rates.
For the period ended March 31, 2023, the Pittsburg-based bank reported earnings of 1.7 billion, or $3.98 per diluted share on revenue of $7.7 billion. The consensus earnings estimate was $3.60 per diluted share on revenue of $5.6 billion.
PNC, however, guided lower saying it now expects 2023 revenue of $21.97 billion to $22.18 billion. The company's previous guidance was revenue of $22.39 billion to $22.81 billion and the current consensus revenue estimate is $22.72 billion for the year ending December 31, 2023.
Investors reacted to the news, sending PNC shares up 1.3% to $121.41 in premarket trade.
PNC said it has maintained a “strong capital and liquidity” position.
On April 3, 2023, the PNC board of directors declared a quarterly cash dividend on common stock of $1.50 per share payable on May 5, 2023.
After the debacle in Silicon Valley Bank and Signature Bank last month, analysts will be watching US bank earnings carefully to see if skittish customers are pulling their money out of smaller US regional banks.
On that front, PNC appears to have weathered the storm well. The company reported that average deposits for the quarter were $436.2 billion, increasing $1.3 billion from the 4Q of 2022 due to higher consumer time deposits, partially offset by seasonally lower commercial deposits.
"Compared with the first quarter of 2022, average deposits decreased $17.1 billion primarily due to lower commercial deposits reflecting the impact of competitive pricing dynamics," the company said.
PNC operates in retail banking, institutional banking, asset management, residential mortgage banking and has a large non-strategic assets portfolio.
Contact the author Uttara Choudhury at uttara@proactiveinvestors.com
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