Top-level insiders such as C-suite executives tend to have a good understanding of their companies’ prospects. If they’re buying company stock, it’s a sign that they’re confident about the future and that they expect the stock to rise.

In this report, we are going to highlight a substantial stock purchase from a top-level insider 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 $65.33 billion.

Insider Buying at PNC Financial Services

2iQ data shows that on January 20, Chairman, President, and CEO William Demchak purchased 6,550 PNC shares at a price of $153.38 per share. This trade cost the insider approximately $1.0 million and increased his holding to 482,924 shares.

Banking Veteran

Mr. Demchak has considerable company and industry experience.

He joined PNC in 2002 as CFO and in 2005 was named head of PNC's Corporate & Institutional Banking, responsible for its middle market and large corporate businesses, as well as capital markets, real estate finance, equity management, and leasing. He was elected President in April 2012, CEO in April 2013, and Chairman in April 2014.

Before joining PNC, he served as the Global Head of Structured Finance and Credit Portfolio for JP Morgan Chase.

Given his experience, he is likely to have a good understanding of his firm’s prospects.

Share Price Fall

PNC shares recently took a hit after the company missed Q4 earnings estimates.

For the period, adjusted earnings per share came in at $3.49 versus analysts’ forecast of $3.95.

However, the Q4 results weren’t terrible.

For the period, net interest income was $3.7 billion, up 6% on Q3, driven by higher interest-earning asset yields and balances. Net interest margin (NIM) was 2.92%, an increase of 10 basis points.

And the company reported average loans of $321.9 billion, an increase of 3% of the prior quarter.

On the back of this performance, PNC returned $1.2 billion to shareholders through buybacks and dividends.

Looking ahead, management was confident about the future.

“As we enter 2023, we are well positioned to continue generating value for our stakeholders," said Mr. Demchak.

In light of the rising NIM here, we see the insider trade as a bullish signal.

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