PNC Financial Services GroupPNC

Morningstar Rating

Stock Research and Analysis

by Jim Sinegal

We think PNC Financial Services Group has avoided most of the troubles in subprime mortgages and other high-risk loans affecting many of its peers. However, we think management's decision to purchase a dying National City in late 2008 adds a substantial Read more

Bulls Say

PNC has a history of making shrewd acquisitions. The National City merger could prove to be its biggest and best purchase.

PNC has a decent handle on risk, avoiding subprime mortgage lending and other questionable practices that have come back to haunt some of its competitors.

A dividend cut and stock sale have boosted the company's tangible common equity ratio, which now appears to be acceptable to regulators following the government stress tests.

PNC's fee-based businesses will help offset increasing credit costs. Read more

Bears Say

PNC will not be able to avoid substantial losses in business loans and commercial real estate loans as the recession deepens.

PNC entered highly competitive markets in the mid-Atlantic with its recent acquisitions, and National City adds exposure to depressed regions of the Midwest.

PNC will have its hands full with the National City acquisition for some time.

PNC has not yet redeemed the government's preferred stock investment, potentially indicating financial weakness. Read more

Strategy

PNC's focus on risk management has served it well in recent years, in our opinion. PNC maintains a moderate risk profile and a diverse portfolio of commercial, mortgage, home equity, and real estate Read more

Management

We think PNC merits a B Stewardship Grade. We'd like to see the chairman and CEO roles separated but believe James Rohr has done a great job during his time at the top. We also appreciate PNC's more-than-adequate disclosure practices, including its Read more

Profile

Headquartered in Pittsburgh, PNC has four major lines of business. In addition to retail and commercial banking, PNC offers services to asset management companies through Read more

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