This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

10 Cheapest Bank Stocks for 2013

7. PNC Financial Services Group

Shares of PNC Financial Services Group (PNC) of Pittsburgh closed at 57.46 Friday, returning 2% year-to-date, following a 3% decline during 2011.

The shares trade for 1.1 times tangible book value, and for 8.7 times the consensus 2013 EPS estimate of $6.59. The consensus 2014 EPS estimate is $6.93.

Based on a quarterly payout of 40 cents, the shares have a dividend yield of 2.78%.

Oppenheimer analyst Terry McEvoy on Nov. 26 reiterated his "Buy" rating for PNC, but lowered his price target to $72 from $75, "in light of the compression in bank stock valuations and the negative EPS revisions post 3Q12 earnings."

PNC reported third-quarter net income of $825 million, or $1.64 a share, increasing from $546 million, or 98 cents a share in the second quarter, and $834 million, or $1.55 a share, in the third quarter of 2011. The sequential earnings improvement reflected second-quarter items totaling $403 million after tax, or 76 cents a share, including "$284 million after tax, or $.54 per diluted common share, for a provision for residential mortgage loan repurchase obligations, noncash charges of $85 million after tax, or $.16 per diluted common share, related to redemption of trust preferred securities and integration costs of $34 million after tax, or $.06 per diluted common share."

During the third quarter, PNC's net interest margin -- the difference between the average yield on loans and securities investments and the average cost for deposits and borrowings - narrowed to 3.82% from 4.08% the previous quarter and 3.89% a year earlier. The company said the sequential margin decline included 16 basis points "due to lower purchase accounting accretion."

McEvoy said that "PNC provides guidance on potential levels of purchase accounting accretion and believes levels will decline $400M in FY13 to ~$650M. We understand that this revenue is not 'core' in nature but that it does flow into capital. Backing out purchase accounting accretion from our 2013E EPS would suggest 'core' earnings of ~$5.35."

The analyst is still positive on PNC, because the company's acquisition of RBC Bank (USA) in the first quarter "provides the right size retail platform in that it allows PNC to be a known banking entity without the expense drag of having a branch on every corner. PNC is ahead of the industry when it comes to transitioning customers into less expensive non-branch delivery channels."

PNC Chart PNC data by YCharts

Interested in more on PNC Financial Services Group? See TheStreet Ratings' report card for this stock.
5 of 11

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
BAC $11.14 -7.10%
C $34.97 -6.50%
COF $59.99 -3.00%
JPM $52.96 -4.60%
RF $7.10 -5.50%


Chart of I:DJI
DOW 15,670.39 -244.35 -1.54%
S&P 500 1,830.02 -21.84 -1.18%
NASDAQ 4,266.33 -17.2620 -0.40%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs