Pnc Financial Services Group, Inc. (the) · NYSE:PNC
Pnc Financial Services Group, Inc. (the) — Q4 2020 Earnings Presentation
22 slides from Pnc Financial Services Group, Inc. (the)'s earnings presentation, Jan 15, 2021
Slide 1: Fourth Quarter 2020 Earnings Conference Call
The PNC Financial Services Group Fourth Quarter 2020 Earnings Conference Call January 15, 2021 Exhibit 99.2
Slide 2: Cautionary Statement Regarding Forward-Looking and Non-GAAP Financial Information
Cautionary Statement Regarding Forward-Looking and Non-GAAP Financial Information 2 Our earnings conference call presentation is not intended as a full business or financial review and should be viewed in the context of all of the information made available by PNC in its SEC filings and on our corpo
Slide 3: 2020 Highlights
2020 Highlights 3 Solid financial results: – Broad based businesses drove record revenue – Positive operating leverage – Strong capital, liquidity, and reserve positions Strategically positioned for the future: – Sold stake in BlackRock – Announced plans to redeploy proceeds into the acquisition
Slide 4: Balance sheet highlights: average balances
Change vs. Average balances, $ billions 4Q20 3Q20 4Q19 Highlights Commercial $170.3 ($5.3) $9.5 Linked quarter decline reflects lower utilization, partially offset by higher multifamily warehouse lending Consumer 75.5 (2.0) (2.6) Linked quarter decline primarily reflects lower auto and home equi
Slide 5: Balance Sheet: Well Positioned with Substantial Low Cost Funding
5 Balance Sheet: Well Positioned with Substantial Low Cost Funding A ve ra ge b al an ce s, $ b ill io n s $238.9 $243.6 $268.1 $253.1 $245.8 $287.8 $289.7 $335.2 $350.5 $359.4 83% 87% 75% 70% 66% 50% 60% 70% 80% 90% 100% 110% 120% 130% 0 50 100 150 200 250 300 350 400 4Q19 1Q20 2Q20 3Q20 4Q20 Loans
Slide 6: Income Statement: Solid Results in a Challenging Environment
Income Statement: Solid Results in a Challenging Environment 6 Change vs. Change vs. $ millions 4Q20 3Q20 FY20 FY19 Full Year Highlights Revenue $4,208 ($73) $16,901 62 Record full year revenue Noninterest expense $2,708 $177 $10,297 ($277) Full year expenses well-controlled; down 3% Pretax, pre
Slide 7: Income Statement: Broad Based Businesses Drove Record Revenue
$6,144 $6,469 $6,874 $6,955 $9,108 $9,721 $9,965 $9,946 $15,252 $16,190 $16,839 $16,901 2.87% 2.97% 2.89% 2.53% 1.80% 2.00% 2.20% 2.40% 2.60% 2.80% 3.00% 3.20% 3.40% 0 2000 4000 6000 8000 10000 12000 14000 16000 18000 20000 2017 2018 2019 2020 Noninterest Income NII NIM 7 Income Statement: Broad Bas
Slide 8: Income Statement: Well Controlled Expenses
$10,398 $10,296 $10,574 $10,297 68% 64% 63% 61% 50.00% 55.00% 60.00% 65.00% 70.00% 75.00% 0 2000 4000 6000 8000 10000 2017 2018 2019 2020 Noninterest Expense Efficiency Ratio 8 Income Statement: Well Controlled Expenses Noninterest Expense Improving Efficiency Ratio Details of Noninterest Expense $
Slide 9: Credit: COVID-19 High Impact Industries
Credit: COVID-19 High Impact Industries 9 $9.7 billion Commercial & Industrial Loans ($7.8 billion excluding PPP Loans) $7.5 billion Commercial Real Estate and Related Loans Leisure Recreation: Restaurants, casinos, hotels, convention centers Healthcare Facilities: Elective, private practices Other
Slide 10: Credit: Customer Need for Hardship Relief Declining
10 Credit: Customer Need for Hardship Relief Declining Consumer and Retail Small Business Customer Balances in Hardship Assistance − Govt. guaranteed / investor owned includes govt. insured or guaranteed loans and investor owned mortgages; $2.9 billion and 57,000 accounts remain in assistance. − Exi
Slide 11: Credit: Well Reserved for the Current Environment
11 Credit: Well Reserved for the Current Environment − NCO / Average Loans represents annualized net charge-offs (NCO) to average loans for the three months ended. − Allowance for Credit Losses (ACL) is Allowance for Loan and Lease Losses plus Allowance for Unfunded Lending Related Commitments. − De
Slide 12: Credit: Attribution of Change in Reserve Levels Under CECL
$3,702 $6,590 $6,440 $5,945 $753 $2,135 $158 $8 $97 $398 1 2 3 4 5 6 7 8 9 10 12 Credit: Attribution of Change in Reserve Levels Under CECL − Figures in millions. − Excludes Allowances for Investment Securities and Other Financial Assets. − ACL at 1/1/20 is Allowance for Credit Losses inclusive of $
Slide 13: Update on BBVA USA Acquisition
Update on BBVA USA Acquisition 13 Progress to Date Next Steps Formed Enterprise Integration Working Group comprised of business and functional leads across PNC Held multiple virtual town hall meetings with BBVA team members Filed key regulatory applications in December Confirmed system and a
Slide 14: Outlook: First Quarter 2021 Compared to Fourth Quarter 2020
Outlook: First Quarter 2021 Compared to Fourth Quarter 2020 14 − Refer to Cautionary Statement in the Appendix, including economic and other assumptions. Does not take into account impact of potential legal and regulatory contingencies. − Average loans, net interest income, noninterest income, and n
Slide 15: Outlook: PNC Standalone FY 2021 Compared to FY 2020
Outlook: PNC Standalone FY 2021 Compared to FY 2020 15 − Refer to Cautionary Statement in the Appendix, including economic and other assumptions. Does not take into account impact of potential legal and regulatory contingencies. − Average loans, revenue and noninterest expense outlook represents est
Slide 16: Cautionary Statement (Appendix)
This presentation includes “snapshot” information about PNC used by way of illustration and is not intended as a full business or financial review. It should not be viewed in isolation but rather in the context of all of the information made available by PNC in its SEC filings. We also make statemen
Slide 17: Cautionary Statement: economic assumptions
Our forward-looking financial statements are subject to the risk that economic and financial market conditions will be substantially different than those we are currently expecting and do not take into account potential legal and regulatory contingencies. These statements are based on our view tha
Slide 18: Cautionary Statement: risks
− Results of the regulatory examination and supervision process, including our failure to satisfy requirements of agreements with governmental agencies. − Impact on business and operating results of any costs associated with obtaining rights in intellectual property claimed by others and of adequacy
Slide 19: Appendix: Oil & Gas Loans
Appendix: Oil & Gas Loans 19 1.4% $241.9 billion − Excludes securitizations. Total Loans As of 12/31/20 $ billions $0.9 billion Exploration & Production (0.4% of Loans) Utilization Rate 29% $3.4 billion Outstanding Loan Balance Oil / Gas Mix 46% / 54% Reserve-Based Structure 84% $1.6 billion Midstre
Slide 20: Appendix: Non-GAAP to GAAP Reconciliation: Return on Tangible Common Equity
Appendix: Non-GAAP to GAAP Reconciliation 20 Return on Tangible Common Equity (Non-GAAP) $ millions Dec. 31, 2020 Dec. 31, 2019 Dec. 31, 2020 Sep. 30, 2020 Return on average common shareholders' equity 15.21% 11.50% 11.16% 11.76% Average common shareholders' equity 47,892$ 44,606$ 49,525$ 49,099$ Av
Slide 21: Appendix: Non-GAAP to GAAP Reconciliation: Tangible Book Value per Common Share
Appendix: Non-GAAP to GAAP Reconciliation 21 Tangible Book Value per Common Share (Non-GAAP) $ millions, except per share data Dec. 31, 2020 Sept. 30, 2020 Dec. 31, 2019 12/31/20 vs. 9/30/20 12/31/20 vs. 12/31/19 Book value per common share $119.11 $117.44 $104.59 1% 14% Tangible book value per comm
Slide 22: Appendix: Non-GAAP to GAAP Reconciliation: Pretax, Pre-Provision Earnings
Appendix: Non-GAAP to GAAP Reconciliation 22 % Change % Change Dec. 31, 2020 Dec. 31, 2019 2020 vs. 2019 Dec. 31, 2020 Sep. 30, 2020 4Q20 vs. 3Q20 $9,946 $9,965 (0%) $2,424 $2,484 (2%) 6,955 6,874 1% 1,784 1,797 (1%) $16,901 $16,839 0% $4,208 $4,281 (2%) 10,297 10,574 (3%) 2,708 2,531 7% $6,604 $6,2
PNC Financial Services Group — Q4 2020 Earnings Presentation on 6ix