As the Q4 earnings season wraps, let’s dig into this quarter’s best and worst performers in the diversified banks industry, including PNC Financial Services Group (NYSE: PNC) and its peers.

At their core, diversified banks take in deposits and engage in various forms of lending, which means revenue is generated through interest rate spreads (difference between loan and deposit rates) and fees. Other revenue comes from adjacent services such as wealth management, card and account fees, and products such as annuities. These institutions benefit from rising interest rates that improve NIMs (net interest margins), digital transformation reducing operational costs, and expanding wealth management services as populations age. However, they face headwinds including fintech competition disrupting traditional models (how disruptive is crypto?), stringent regulatory requirements increasing compliance costs, and cybersecurity threats requiring substantial technology investments. Economic downturns also pose risks through potential loan defaults and compressed margins during accommodative monetary policy periods.

The 7 diversified banks stocks we track reported a mixed Q4. As a group, revenues were in line with analysts’ consensus estimates.

Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 10% since the latest earnings results.

Best Q4: PNC Financial Services Group (NYSE: PNC)

Tracing its roots back to 1852 when Pittsburgh's industrial boom demanded stronger financial institutions, PNC (NYSE: PNC) is a diversified financial institution that provides retail banking, corporate banking, and asset management services through a coast-to-coast branch network.

PNC Financial Services Group reported revenues of $6.10 billion, up 9% year on year. This print exceeded analysts’ expectations by 2.2%. Overall, it was a very strong quarter for the company with a beat of analysts’ EPS estimates and an impressive beat of analysts’ tangible book value per share estimates.

PNC Financial Services Group achieved the fastest revenue growth of the whole group. Investor expectations, however, were likely higher than Wall Street’s published projections, leaving some wishing for even better results (analysts’ consensus estimates are those published by big banks and advisory firms, not the investors who make buy and sell decisions). The stock is down 6.1% since reporting and currently trades at $201.99.

Is now the time to buy PNC Financial Services Group? Access our full analysis of the earnings results here, it’s free.

Bank of America (NYSE: BAC)

Tracing its roots back to 1784 and now serving approximately 67 million consumer and small business clients, Bank of America (NYSE: BAC) is a global financial institution that provides banking, investing, asset management, and risk management products and services to individuals, businesses, and governments.

Bank of America reported revenues of $28.55 billion, up 7.1% year on year, outperforming analysts’ expectations by 3.5%. The business had a satisfactory quarter with an impressive beat of analysts’ revenue estimates but a narrow beat of analysts’ EPS estimates.

Bank of America scored the biggest analyst estimates beat among its peers. Although it had a fine quarter compared its peers, the market seems unhappy with the results as the stock is down 12.1% since reporting. It currently trades at $47.96.

Is now the time to buy Bank of America? Access our full analysis of the earnings results here, it’s free.

Weakest Q4: Citigroup (NYSE: C)

With operations in nearly 160 countries and a history dating back to 1812, Citigroup (NYSE: C) is a global financial services company that provides banking, investment, wealth management, and payment solutions to consumers, corporations, and governments.

Citigroup reported revenues of $19.9 billion, up 2.1% year on year, falling short of analysts’ expectations by 2.7%. It was a slower quarter as it posted a significant miss of analysts’ revenue estimates and a significant miss of analysts’ EPS estimates.

Citigroup delivered the weakest performance against analyst estimates and slowest revenue growth in the group. As expected, the stock is down 7.8% since the results and currently trades at $107.23.

Read our full analysis of Citigroup’s results here.

U.S. Bancorp (NYSE: USB)

With roots dating back to 1863 and a presence across 26 states primarily in the Midwest and West, U.S. Bancorp (NYSE: USB) is one of America's largest banks providing lending, deposit services, wealth management, payment processing, and merchant services to individuals and businesses.

U.S. Bancorp reported revenues of $7.36 billion, up 5% year on year. This print beat analysts’ expectations by 0.5%. Aside from that, it was a mixed quarter as it also recorded a narrow beat of analysts’ net interest income estimates but a slight miss of analysts’ tangible book value per share estimates.

The stock is down 5.6% since reporting and currently trades at $51.37.

Read our full, actionable report on U.S. Bancorp here, it’s free.

Truist Financial (NYSE: TFC)

Born from the 2019 merger of BB&T and SunTrust in one of the largest banking combinations since the 2008 financial crisis, Truist Financial (NYSE: TFC) is a bank holding company that offers a wide range of financial services including consumer and commercial banking, wealth management, insurance, and lending solutions.

Truist Financial reported revenues of $5.30 billion, up 3.6% year on year. This result was in line with analysts’ expectations. More broadly, it was a slower quarter as it recorded a slight miss of analysts’ net interest income estimates and a narrow beat of analysts’ EPS estimates.

The stock is down 8.1% since reporting and currently trades at $45.18.

Read our full, actionable report on Truist Financial here, it’s free.

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