Why PNC Financial Shares Are Sliding Today

PNC Financial Services Group PNC Q2 revenues increased 3.5% Y/Y to $5.293 billion, missing the consensus of $5.450 billion. 

EPS of $3.36 came above the consensus of $3.28.

"For the second quarter, PNC delivered solid financial results and maintained strong credit quality metrics, reflecting the power of our national franchise and the competitive positioning of our balance sheet in the current environment," said Bill Demchak, PNC Chairman, President, and CEO. 

Net interest income of $3.5 billion increased by 15%, reflecting higher interest-earning asset yields and balances, partially offset by increased funding costs.

A net interest margin of 2.79% increased by 29 basis points, reflecting the benefit of higher yields on interest-earning assets.

Average deposits of $425.7 billion decreased by $20.8 billion Y/Y. It included the impact of quantitative tightening by the Federal Reserve, increased customer spending, and consumer tax payments.

Provision for credit losses of $146 million in Q2 reflected portfolio activity and changes in macroeconomic variables. 

"The Federal Reserve's annual stress test recently demonstrated PNC's through-the-cycle financial strength and stability, and starting in the fourth quarter, our stress capital buffer requirement will improve to the regulatory minimum of 2.5%," Demchak added. 

Dividend

On July 3, 2023, the PNC board of directors raised the quarterly cash dividend on common stock to $1.55 per share, an increase of 5 cents per share. The dividend, with a payment date of August 5, will be payable the next business day.

Price Action: PNC shares are trading lower by 3.22% at $123.07 in the premarket session on the last check Tuesday.