Several Insiders at PNC Financial Services Have Bought Stock Since US Banking Stocks Tanked

Insider transaction activity can help investors cut through market noise. Insiders are some of the most informed participants in the market meaning their buying and selling activity can provide investors with valuable trading signals.

In this report, we are going to highlight some interesting insider activity at PNC Financial Services Group Inc (PNC:US). PNC is one of the largest diversified financial services institutions in the US. Its services include retail and business banking, corporate banking, real estate finance, asset-based lending, wealth management, and asset management. It is listed on the New York Stock Exchange and currently has a market cap of approximately $47.50 billion.

Insider Buying at PNC Financial Services

Our data shows that since March 13, three insiders at PNC have purchased stock. Those who have bought shares include:

• Chairman, President, and CEO Bill Demchak (1,000 shares at a price of $129.70 per share on March 13)

• Chief Risk Officer Kieran Fallon (1,000 shares at a price of $125.45 per share on March 15)

• Board member Joseph Alvarado (1,000 shares at a price of $123.90 per share on April 21)

Top-level Insiders

There are a couple of things that stand out here.

Firstly, the CEO has purchased stock. CEOs tend to have a very good understanding of their business and that’s likely to be the case here, as Mr. Demchak has worked at PNC for over 20 years now. Previously, he served as CFO and Head of PNC's Corporate & Institutional Banking.

Secondly, the Chief Risk Officer has purchased stock. Generally speaking, Chief Risk Officers are quite risk averse. They only tend to buy stock if there is a very attractive risk/reward setup. 

Share Price Weakness 

PNC’s share price has taken a hit recently due to the banking crisis in the US. Back in late February, the stock was trading near $160. Today, however, it is under $120.

The bank’s Q1 2023 results were reassuring, however.

For the quarter, the company reported net income of $1.69 billion, up from $1.43 billion a year earlier. And earnings per share came in ahead of analysts’ forecasts, at $3.98 versus $3.67. Earnings were boosted by net interest income (NII), which jumped nearly 30% year on year.

At the end of the period, the bank’s deposits totaled $436.8 billion, up from $436.3 billion a year earlier. Meanwhile, its Basel III common equity Tier 1 capital ratio was an estimated 9.2%, versus 9.1% at December 31, 2022.

“PNC's first quarter results reflected the strength of our balance sheet and the power of our national franchise. During a quarter characterized by heightened market volatility, we grew deposits, increased our capital position, and drove strong financial results. At the same time, we controlled expenses well, achieved positive operating leverage and our credit quality metrics remained solid. Looking ahead, PNC remains well positioned to deliver for all stakeholders through the current environment and beyond," commented Chairman, President, and CEO Bill Demchak.

In light of these solid results, we see the insider buying here as a bullish development.