Bearish Financial stock to watch: PNC Financial Services Group Inc (NYSE: PNC)

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PNC Financial Services Group Inc (NYSE: PNC) stock fell 3.63% on January 15th, 2020 (Source: Google finance) and continued its bearish momentum on January 16th, 2020 falling over 2.4% (as of 10 am GMT-5; Source: Google finance). For the first quarter 2020 compared to fourth quarter 2019 results, the company expects average loans to be up approximately 1%. The company expects total net interest income to decrease by approximately 1% due to one less day in the quarter. The company expects fee income to be down by about 3%. The company expects other non-interest income to be in the range $300 million and $350 million, excluding net securities and Visa activity. The company expects expenses to be decline in the mid-single digit range, and the company expects provision to be between $225 million and $300 million.

The bank’s net income attributable to common shareholders increased to $1.30 billion in the quarter ended Dec. 31, from $1.27 billion a year earlier. For the fourth quarter, the company delivered the net interest income of $2.5 billion was down 1% from the third quarter. Lower loan and securities yields were substantially offset by lower funding costs. Net interest margin declined 6 basis points to 2.78% in the fourth quarter, mostly due to the effect of lower interest rates primarily LIBOR. The non-interest income was up 7% in the fourth quarter compared to the third quarter. Fourth quarter fee income of $1.7 billion increased 1% compared to the third quarter.

For the fourth quarter, expenses rose by $139 million or 5% linked quarter. Personnel rose $68 million on the back of higher benefits including a special year-end grant to more than 51,000 of the employees, mainly in the form of health savings account contributions, of aggregate $25 million. Equipment expense rose $57 million mainly due to $50 million of technology related write-off. These write-offs were mainly from the benefit of the tailoring rule which now allows the company to decommission compliance and regulatory systems that are no longer required.

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