Guest Fast Pitch: Why you should buy PNC

Catherine Faddis, Grace Capital CEO, on the reasons to buy PNC. With CNBC’s Melissa Lee and the Fast Money traders, Guy Adami, Tim Seymour, Dan Nathan and Brian Kelly. For access to live and exclusive video from CNBC subscribe to CNBC PRO:

Check out shares of pnc jumping alongside the market today but it is still in the red on the year pnc following suit with the rest of the financials which are now the second worst performing sector in 2020. our next guest says the regional bank could be gearing up for a rebound joining us now for another guest fast pitch is kate faddis the ceo of grace capital

Kate great to have you with us what do you like about pnc i think pnc is fantastic for a number of reasons first of all it’s announced deal to buy the us assets of bbva is a game changer it gets pnc into the sun belt it gets pnc texas which is the crown jewel for banking assets and they’re going to get some great cost synergies out of the deal second thing i love

About pnc is it’s esg environmental social and governmental factors pnc is simply put a great corporate citizen okay they’ve pledged a billion dollars to help low-income communities and have pledged 30 million dollars just for covet relief third thing about pnc is its deposit franchise so you think about a bank you think it’s a commodity they take in deposits

They make loans and that’s it they get a little spread no not for pnc for pnc almost half of its revenue comes from fees that means its depositors like the bank they do business with it they’re not just parking their money there they’re using asset management insurance other things to allow them to make a fee last thing about pnc’s evaluation okay 12 return on

Equity which is great uh trading at under 1.2 times the price to book the price is right the dividend yield is north of 3 they’ve doubled their dividend in the last five years and the dividends should grow so buy pnc uh brian kelly one of our traders got a question for you kate bk yeah hey kate so i’m curious um about the new administration coming in is potentially

That they’re not very bank friendly you’ve got a bank here that’s trading 1.2 times book i’m curious you know one thought in the market is that banks are basically utilities and utilities trade at one times book banks have had a tough time trading above one time book over the last several years are you concerned about an unfriendly political environment i am not

Um i think if you look at historically banks have been protected too big to fail you name it i think they’re considered important assets they’re important to the economy and i’m not concerned about that in the least in those times though kate when banks were protected did their price to books fall and i’m asking this because they could be protected and they could

Be viewed as too big to fail but they could also be viewed as too big to fail because they are utilities and therefore they do command that lower price to book yes you know that is a good point um since 08 the bank environment has completely changed the regulatory environment environment has changed you have much better tighter regulation and this is good for the

Banks so i’m actually not concerned about this in the least i think um look at what’s happened with covid they needed the banks for the ppp loans i i think i’m very comfortable with the regulatory environment all right no more uh time here it is time to vote are you buying or selling kate’s pitch on pnc gaiadami what do you say mel can you read my uh white board i

Do know how to read uh it says i saw frank sinatra at the garden state arts center yes i did i did see frank sinatra at the garden state arts center and for most of our viewers they will know that the garden state art center is now the pnc center and brian and dan nathan was in my head sent me a chart in a commercial break highlighting that 160 was where we topped

Out last december that would put us at about 1.7 times tangible book that’s where it goes and that’s where you pull the rip cord well done on the power pitch all right so that is a buy that all boils down to a buy tim what do you say yeah look i’m i’m i’m banking on kate see wow um and i’m buying pnc too and i think it’s it’s a combination of yes the sweet spot

We talked about the asset class i’ll leave that alone uh bbva acquisition immediately accretive it overcomes the loss of the blackrock asset sale uh and i think a company that actually has more gearing to it in the future so they should trade at a premium and i think they will dan yeah i thought that was a great power pitch um by kate i’m not a buyer here at 140

And this is kind of consistent with what i was saying about buying these breakouts that’s a great fundamental case that she just made you don’t have to buy it at 140. it’ll likely be back at 1 30 in the next few weeks or so and if i’m wrong i’m wrong and by the way the first concert i ever went to guy 1979 the beach boys at the garden state arts center how about

That i love how that all comes full circle i really do uh brian kelly yeah you know what i’m with my brother from another mother dan nathan i i am concerned that this has gone too far too fast i think kate makes an excellent fundamental point but the stock’s gone from 105 to 140 in basically less than a month and so i think a lot of the regulatory concerns of

The new administration may not be priced in yet all right so our panel is tied on this two buys two cells kate before we turn it over to the viewers do you have one last final word one last appeal i i i’m gonna stick with what i’m saying big pia it’s it’s gone up a lot it’s gone up what 25 since they reported for the quarter uh but i’m gonna i’m gonna stick with

Pnc it’s a long term buy you gotta you gotta admit all right we’ll see what the viewers say kate thank you catherine faddis shepherd smith here thanks for watching cnbc on youtube

Transcribed from video
Guest Fast Pitch: Why you should buy PNC By CNBC Television