Pnc Financial Services Group, Inc. (the) · NYSE:PNC
Pnc Financial Services Group, Inc. (the) — Q1 2022 Earnings Presentation
25 slides from Pnc Financial Services Group, Inc. (the)'s earnings presentation, Apr 14, 2022
Slide 1: First Quarter 2022 Earnings Conference Call
First Quarter 2022 Earnings Conference Call April 14, 2022 The PNC Financial Services Group
Slide 2: Cautionary Statement Regarding Forward-Looking and non-GAAP Financial Information
Cautionary Statement Regarding Forward-Looking and non-GAAP Financial Information 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 corpora
Slide 3: First Quarter 2022 Highlights
First Quarter 2022 Highlights Solid financial performance Reported Adjusted (non-GAAP) – Deployed liquidity by growing loans, purchasing securities and paying down borrowings EPS $3.23 $3.29 – Maintained strong credit quality and released additional reserves ROA 1.05% 1.07% – Strong momentum in le
Slide 4: Balance Sheet: Deployed Liquidity into Loans and Securities
Balance Sheet: Deployed Liquidity into Loans and Securities 1Q22 vs. 4Q21 1Q22 vs. 1Q21 Average balances; $ billions 1Q22 $ Chg. % Chg. $ Chg. % Chg. Total loans $290.7 $1.8 1% $52.6 22% Total loans excluding PPP loans $288.2 $4.0 1% $62.7 28% Investment securities $133.9 $6.1 5% $47.5 55% Federal R
Slide 5: Balance Sheet: Supporting Customers as Loan Demand Returns
Balance Sheet: Supporting Customers as Loan Demand Returns Average Loans Spot Loans Linked Quarter Growth of 1% Linked Quarter Growth of 2% 296 300 $288.9 $290.7 7.00 % ($1.6) $294.5 $193.8 $195.6 294 PPP Forgiveness $238.1 +$6.8 6.00 % 250 292 Remaining PPP balances $164.9 5.00 % are $1.8 billion 2
Slide 6: Balance Sheet: High Quality Low Cost Deposit Base
Balance Sheet: High Quality Low Cost Deposit Base Average Deposits Spot Deposits Seasonal Growth in Consumer Interest-Bearing Deposits Loan to Deposit Ratio of 65% Remains Historically Low 460 $452.8 $453.3 $457.3 465 415 $296.2 $299.6 0.15 % 455 $365.4 ($10.2) 365 $450.2 $252.1 0.10 % 450 315 +$3.1
Slide 7: Balance Sheet: Strategically Deploying Liquidity as Rates Rise
Balance Sheet: Strategically Deploying Liquidity as Rates Rise Average Securities and Federal Reserve Bank Balances Average Securities as a 160 Percentage of Average 8.00 % Interest Earning Assets 140 FRB Balances 27% 7.00 % Securities $133.9 120 Average 10-Yr Treasury Yield $127.8 6.00 % $120.6 100
Slide 8: Balance Sheet: Strategically Deploying Liquidity as Rates Rise
Balance Sheet: Strategically Deploying Liquidity as Rates Rise Composition of Securities Portfolio: 1Q22 Average Spot Securities Portfolio is High-Quality and Short Duration Impacted by Rising Rates 140 +$5.8 ($6.4) 135 $133.0 $132.4 Net Purchase Fair Value $48.4 Activity 130 Adjustment +109% YoY $6
Slide 9: Income Statement: Solid Results and Further Provision Recapture
Income Statement: Solid Results and Further Provision Recapture % Chg. 1Q22 vs. $ millions 1Q22 4Q21 1Q21 4Q21 1Q21 Revenue $4,692 $5,127 $4,220 (8%) 11% Noninterest expense 3,172 3,791 2,574 (16%) 23% Pretax, pre-provision earnings (non-GAAP) $1,520 $1,336 $1,646 14% (8%) Integration costs 31 438 6
Slide 10: Income Statement: Diversified Business Mix
Income Statement: Diversified Business Mix Total Revenue Details of Revenue 600 0 Net Interest Margin Poised To Move Higher With Rate Hikes Lower Capital Markets Revenue Pressured Noninterest Income 1Q22 vs. 4Q21 $5,127 2.50 % $ millions 1Q22 4Q21 $ Chg. % Chg. $2,862 $4,692 500 0 Net interest incom
Slide 11: Income Statement: Focused On Controlling Expenses
Income Statement: Focused On Controlling Expenses Noninterest Expense Noninterest Expense ex. Integration Expense Linked Quarter Decline Includes Impact of Cost Saves and Softer Fees 1Q22 vs. 4Q21 $3,791 $ millions 1Q22 4Q21 $ Chg. % Chg. $3,587 $3,172 $3,050 $3,352 $3,400 Personnel $1,717 $1,922 ($
Slide 12: Credit: Strong Credit Quality Performance
Credit: Strong Credit Quality Performance Credit Quality Metrics Nonperforming Loans (NPL) 1Q21 2Q21 3Q21 4Q21 1Q22 NPLs / Total Loans (Period End) 0.90% 0.94% 0.87% 0.86% 0.78% $2,779 Delinquencies / Total Loans (Period End) 0.48% 0.47% 0.51% 0.69% 0.58% $2,528 $2,480 NCOs / Average Loans 0.25% 0.4
Slide 13: Outlook: Second Quarter 2022 Compared to First Quarter 2022
Outlook: Second Quarter 2022 Compared to First Quarter 2022 ($ millions; except average loans, $ billions) 1Q22 2Q22 Guidance Average loans $290.7 Up 2 – 3% Net interest income $2,804 Up 10 – 12% Noninterest income $1,888 Up 6 – 8% Revenue $4,692 Up 9 – 11% Noninterest expense $3,172 Up 3 – 5% Net c
Slide 14: Outlook: Full Year 2022 Compared to Full Year 2021
Outlook: Full Year 2022 Compared to Full Year 2021 ($ millions; except loans, $ billions) 2021 2022 Guidance Average loans $268.7 Up approximately 10% Period-end loans (as of 12/31/21) $288.4 Up approximately 5% Revenue $19,211 Up 9 – 11% Noninterest expense excl. integration expense $12,269 Up 4 –
Slide 15: Cautionary Statement Regarding Forward-Looking Information
Appendix: Cautionary Statement Regarding Forward-Looking Information 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 inform
Slide 16: Cautionary Statement Regarding Forward-Looking Information
Appendix: Cautionary Statement Regarding Forward-Looking Information 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
Slide 17: Cautionary Statement Regarding Forward-Looking Information
Appendix: Cautionary Statement Regarding Forward-Looking Information − 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 obtain
Slide 18: Well-Reserved for the Current Environment
Appendix: Well-Reserved for the Current Environment 800 0 4.00 % Allowance for Credit Losses (ACL) 700 0 3.50 % $5,530 ($104) ($229) 600 0 3.00 % $5,197 Portfolio Economic / 500 0 2.50 % Changes Qualitative 1.92% Factors 400 0 2.00 % 1.76% 300 0 1.50 % ACL to Total Loans $ millions 200 0 ACL to Tota
Slide 19: Integration Costs Incurred Since Announcement
Appendix: Integration Costs Incurred Since Announcement Acquisition Integration Cost Update Approximately 98% of Integration Costs Incurred as of 3/31/22 Total Since $ millions 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 Announcement Write-offs $--- $--- $120 $--- $--- $--- $120 Contra-revenue Fee income $--- $--
Slide 20: Non-GAAP to GAAP Reconciliation
Appendix: Non-GAAP to GAAP Reconciliation Return On Average Tangible Common Equity (non-GAAP) For the three months ended $ millions Mar. 31, 2022 Dec. 31, 2021 Mar. 31, 2021 Return on average common shareholders’ equity 11.64% 9.61% 14.31% Average common shareholders’ equity $47,415 $50,375 $49,842
Slide 21: Non-GAAP to GAAP Reconciliation
Appendix: Non-GAAP to GAAP Reconciliation Tangible Book Value per Common Share (non-GAAP) For the three months ended $ millions, except per share data Mar. 31, 2022 Dec. 31, 2021 Mar. 31, 2021 Book value per common share $106.47 $120.61 $118.47 Tangible book value per common share Common shareholder
Slide 22: Non-GAAP to GAAP Reconciliation
Appendix: Non-GAAP to GAAP Reconciliation Adjusted Income Statement Results (non-GAAP) For the three months ended $ millions Mar. 31, 2022 Dec. 31, 2021 Mar. 31, 2021 Net interest income $2,804 $2,862 $2,348 Noninterest income 1,888 2,265 1,872 Total Revenue $4,692 $5,127 $4,220 Noninterest expense
Slide 23: Non-GAAP to GAAP Reconciliation
Appendix: Non-GAAP to GAAP Reconciliation Taxable-Equivalent Net Interest Income (non-GAAP) For the three months ended $ millions Mar. 31, 2022 Dec. 31, 2021 Sept. 30, 2021 June 30, 2021 Mar. 31, 2021 Net interest income $2,804 $2,862 $2,856 $2,581 $2,348 Taxable-equivalent adjustments 22 22 22 15 1
Slide 24: Non-GAAP to GAAP Reconciliation
Appendix: Non-GAAP to GAAP Reconciliation Noninterest Expense excluding Integration Expense and Adjusted Efficiency (non-GAAP) For the three months ended For the year ended $ millions Mar. 31, 2022 Dec. 31, 2021 Mar. 31, 2021 Dec. 31, 2021 Noninterest expense $3,172 $3,791 $2,574 $13,002 Integration
Slide 25: Non-GAAP to GAAP Reconciliation
Appendix: Non-GAAP to GAAP Reconciliation Adjusted Metrics (non-GAAP) For the three months ended Mar. 31, 2022 Adjusted (j-k) $ millions, except for ratios and EPS Reported (j) Integration Costs (k) (non-GAAP) Total revenue (a) $4,692 ($16) $4,708 Noninterest expense (b) 3,172 15 3,157 Pretax, pre-p
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