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

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What led to Volatility: PNC Financial Services Group Inc (NYSE: PNC) stock fell over 1.6% on 16th January, 2019 (as of 10:42 am GMT-5; Source: Google finance). Total revenue for the fourth quarter of 2018 decreased $17 million compared with the third quarter and increased $80 million compared with the fourth quarter of 2017. Net income of $1.4 billion for the fourth quarter decreased $49 million, or 4 percent, compared with the third quarter.

Overall Financials Update: the company’s average loans increased $2.6 billion, or 1 percent, to $225.9 billion in the fourth quarter compared with the third quarter. Average commercial lending balances grew $2.3 billion reflecting seasonal growth in PNC’s multifamily agency warehouse lending within the real estate business and loan growth across the corporate banking, business credit and equipment finance businesses. Average consumer lending balances increased $.3 billion due to growth in residential mortgage, credit card, auto and unsecured installment loans partially offset by lower home equity and education loans. Overall credit quality remained strong. Nonperforming assets of $1.8 billion at December 31, 2018 decreased $17 million, or 1 percent, compared with September 30, 2018. Net charge-offs were $107 million for the fourth quarter compared with $91 million for the third quarter.

Moreover, average deposits increased $4.0 billion, or 2 percent, to $266.5 billion in the fourth quarter compared with the third quarter reflecting seasonal growth in commercial deposits.  Average investment securities increased $1.4 billion, or 2 percent, to $82.1 billion in the fourth quarter compared with the third quarter. Average balances held with the Federal Reserve decreased $2.4 billion to $16.4 billion compared with the third quarter, and December 31, 2018 balances decreased $9.1 billion to $10.5 billion compared with September 30, 2018 reflecting short-term investments in resale agreements over year end. PNC returned $1.2 billion of capital to shareholders in the fourth quarter through repurchases of 6.1 million common shares for $.8 billion and dividends on common shares of $.4 billion. For the full year 2018, PNC returned $4.4 billion of capital to shareholders through repurchases of 19.9 million common shares for $2.8 billion and dividends on common shares of $1.6 billion. In November 2018, PNC announced an increase to authorized repurchases of up to an additional $900 million in common shares, an addition to previously announced share repurchase programs of up to $2.0 billion through the end of the second quarter of 2019.

 

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