Zacks Analyst Blog Highlights: PNC Financial, Truist Financial, Fifth Third Bancorp, Bank of New York Mellon and Comerica


For immediate release

Chicago, IL – October 25, 2021 – announces the list of stocks featured on the Analysts Blog. Every day, Zacks Equity Research analysts discuss the latest news and events impacting stocks and financial markets. Stocks recently featured in the blog include: The PNC Financial Services Group, Inc. PNC, Truist Financial Corporation TFC, Fifth Third Bancorp FITB, The Bank of New York Mellon Corporation BK and Comerica Incorporated CMA.

Here are highlights from Friday’s analyst blog:

Bank Stocks Review: Third Quarter Earnings Season Edition

The big banks that released their third quarter 2021 results this week have beaten earnings estimates on reserve releases and the strength of commission revenue streams. These have contributed to overall profitability despite the continued low interest rate environment.

In addition, somewhat optimistic management expectations for the last quarter of the year and beyond as well as robust economic growth fueled bullish sentiment among investors. Thus, bank stocks have shown an optimistic position during the last five trading days.

During the third quarter, the steepening of the yield curve and a modest increase in loan demand drove net interest income (NII) while the growth in banks’ net interest margin was hampered by huge deposits on their balance sheets. Additionally, as banks continued to spend heavily on technology upgrades and began efforts to streamline their operations, spending increased in the quarter.

On the commission front, big bank finances were supported by strong performance in investment banking and equity trading, as well as decent banking operations, while income trading performance fixes were a bit disappointing. Consumer banking has improved, as evidenced by increased use of debit / credit cards and increased consumer confidence.

The release of reserves by the big banks (due to the improved economic outlook) supported results. Overall, banks’ balance sheets and liquidity positions remained strong.

(Read: Bank stocks review for the week ending October 8, 2021)

Major earnings of the week

1. PNC Financial Surprised 3.02% on Q3 2021 earnings thanks to a substantial recovery of credit losses. Adjusted earnings per share (excluding pre-tax integration costs related to the BBVA USA acquisition) of $ 3.75 exceeded Zacks’ consensus estimate of $ 3.64 and improved 42% in sequential.

2. Truist FinancialZacks ‘adjusted third quarter 2021 earnings of $ 1.42 per share significantly exceeded Zacks’ consensus estimate of $ 1.20. Net income jumped 46.4% from the previous year quarter. Results were supported by strong growth in commission income which, along with the benefits of provisions, was a driving force.

3. Fifth Third Bancorp reported adjusted third-quarter 2021 earnings (excluding the after-tax impact of certain items) of 94 cents per share, beating Zacks’ consensus estimate of 91 cents. Income growth, aided by commission income and NII, and the benefit of credit losses were positive winds. However, slightly higher expenses and a lower loan balance played a part in the spoilers.

4. Bank of New York Mellon Corp.Zacks ‘third quarter 2021 earnings of $ 1.04 per share exceeded Zacks’ consensus estimate of $ 1.02. Results from provision benefits and higher commission income. However, a decrease in the NII, an increase in fee waivers and higher expenses were the undermining factors.

5. Comerica delivered a surprise profit of 13.10% in the third quarter of 2021. Earnings per share of $ 1.90 easily exceeded Zacks’ consensus estimate of $ 1.68. Results were supported by earnings from provisions and growth in NII and commissions. Still, a reduction in loan volumes, higher expenses and a weak capital position were major concerns.

Price return

In the last five trading days, PNC Financial and Wells Fargo posted maximum gains, with their shares rallying at 6.8% and 4% respectively. On the other hand, shares of Citigroup and Capital One fell 2.5% and 1.6% respectively over the same period.

Over the past six months, shares of Capital One and PNC Financial have jumped 25.9% and 23%, respectively, while Bank of America has gained 22.1%.

And after?

Over the next five trading days, third quarter results for banks will continue to thrive. BancorpSouth Bank and Bank of Hawaii will release quarterly figures on October 25, Capital One on October 26, Prosperity Bancshares, Inc. on October 27, Huntington Bancshares and Hilltop Holdings on October 28, among others.

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Fifth Third Bancorp (FITB): Free Stock Analysis Report

The PNC Financial Services Group, Inc (PNC): Free Stock Analysis Report

The Bank of New York Mellon Corporation (BK): Free Stock Analysis Report

Comerica Incorporated (CMA): Free Stock Analysis Report

Truist Financial Corporation (TFC): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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