Pnc Financial Services Group, Inc. (the) · NYSE:PNC
Pnc Financial Services Group, Inc. (the) — Q4 2022 Earnings Presentation
23 slides from Pnc Financial Services Group, Inc. (the)'s earnings presentation, Jan 18, 2023
Slide 1: Fourth Quarter 2022 Earnings Conference Call
Fourth Quarter 2022 Earnings Conference Call January 18, 2023 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: Delivered Strong Full Year 2022 Results
Delivered Strong Full Year 2022 Results Net Income Capitalized on opportunities across our coast-to-coast franchise $6.1 billion Diluted Earnings Per Share Generated full year record revenue $13.85 Net interest margin expanded significantly Adjusted Diluted Earnings Per Share $13.96 Grew loa
Slide 4: Balance Sheet: Well-Positioned Balance Sheet
Balance Sheet: Well-Positioned Balance Sheet 4Q22 vs. 3Q22 4Q22 vs. 4Q21 Average balances, $ billions 4Q22 $ Change % Change $ Change % Change Commercial $221.6 $7.5 4% $27.8 14% Consumer $100.3 $1.4 1% $5.2 5% Total loans $321.9 $8.9 3% $33.0 11% Investment securities $142.9 $5.9 4% $15.1 12% Feder
Slide 5: Balance Sheet: Supporting Customer Loan Growth
Balance Sheet: Supporting Customer Loan Growth Continued Average Loan Growth Linked Quarter Change in Spot Loans +11% Year Over Year; +3% Linked Quarter Growth Driven by New Production in Commercial Loans $321.9 $313.0 6.00 % $304.8 330 + $9.4 + $1.2 $326.0 $288.9 $290.7 $221.6 $214.1 $300.0 $207.6
Slide 6: Balance Sheet: Strong Core Deposit Base
Balance Sheet: Strong Core Deposit Base Average Deposits Linked Quarter Change in Spot Deposits 4% Year Over Year Decline; 1% Linked Quarter Decline Continued Mix Shift into Interest-Bearing Deposits $452.8 $453.3 $438.2 + $12.0 $436.3 $446.5 $439.2 $434.9 $450.0 ( $13.9 ) 32% $400.0 $350.0 29% 1.07
Slide 7: Balance Sheet: Well-Positioned Securities Portfolio
Balance Sheet: Well-Positioned Securities Portfolio Reinvesting Maturing Securities at Higher Rates Securities Portfolio Highlights $142.9 $133.9 $134.7 $137.0 68% of portfolio in HTM at 12/31/22 140 $127.8 120 100 $2.4 billon of net purchases in 4Q22 2.36% Average balances, $ billions 2.10% P
Slide 8: Income Statement: Solid Performance
Income Statement: Solid Performance 4Q22 vs. 3Q22 2022 vs. 2021 $ millions 4Q22 $ Chg. % Chg. 2022 $ Chg. % Chg. Revenue $5,763 $214 4% $21,120 $1,909 10% Noninterest expense 3,474 194 6% 13,170 168 1% Pretax, pre-provision earnings (non-GAAP) $2,289 $20 1% $7,950 $1,741 28% Integration costs 9 8 n/
Slide 9: Income Statement: Diversified Business Mix
Income Statement: Diversified Business Mix Total Revenue Details of Revenue Record Quarterly Revenue +10% Year Over Year; +4% Linked Quarter 600 0 $5,763 4Q22 2022 $5,549 $ millions 4Q22 vs. 3Q22 2022 vs. 2021 $5,127 $5,116 $2,079 4.30 % $2,074 Net interest income $3,684 6% $13,014 22% 500 0 $2,265
Slide 10: Income Statement: Focused On Controlling Expenses
Income Statement: Focused On Controlling Expenses Noninterest Expense Noninterest Expense Detail Expenses Remain Well Controlled 4Q22 2022 $3,791 $ millions 4Q22 vs. 3Q22 2022 vs. 2021 $3,474 $3,244 $3,280 Personnel $1,943 8% $7,244 1% $3,172 $3,470 $3,400 $3,235 $3,280 $3,157 Occupancy 247 2% 992 6
Slide 11: Credit: Strong Credit Quality Performance
Credit: Strong Credit Quality Performance Credit Quality Metrics 4Q21 1Q22 2Q22 3Q22 4Q22 NPLs / Total Loans (Period End) 0.86% 0.78% 0.66% 0.66% 0.61% Delinquencies / Total Loans (Period End) 0.69% 0.58% 0.49% 0.52% 0.46% Nonperforming Loans (NPLs) 20% YoY Decline; 4% LQ Decline NCOs / Average Loan
Slide 12: Outlook: Full Year 2023 Compared to Full Year 2022
Outlook: Full Year 2023 Compared to Full Year 2022 ($ millions; except loans, $ billions) 2022 2023 Guidance Period-end loans (as of 12/31/22) $326.0 Up 2% - 4% Average loans $307.7 Up 6% - 8% Revenue $21,120 Up 6% - 8% Noninterest expense $13,170 Up 2% - 4% Effective tax rate 18.2% 18% − Refer to C
Slide 13: Outlook: First Quarter 2023 Compared to Fourth Quarter 2022
Outlook: First Quarter 2023 Compared to Fourth Quarter 2022 ($ millions; except average loans, $ billions) 4Q22 1Q23 Guidance Period-end loans (as of 12/31/22) $326.0 Stable Average loans $321.9 Up 1% - 2% Net interest income $3,684 Down 1% - 2% Fee income $1,832 Down 3% - 5% Other noninterest incom
Slide 14: Appendix: Cautionary Statement Regarding Forward-Looking Information
Appendix: Cautionary Statement Regarding Forward-Looking Information We make statements in this presentation, and we may from time to time make other statements, regarding our outlook for financial performance, such as earnings, revenues, expenses, tax rates, capital and liquidity levels and ratios,
Slide 15: Appendix: 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 16: Appendix: Cautionary Statement Regarding Forward-Looking Information
Appendix: Cautionary Statement Regarding Forward-Looking Information − Changes to laws and regulations, including changes affecting oversight of the financial services industry; changes in the enforcement and interpretation of such laws and regulations; and changes in accounting and reporting standa
Slide 17: Integration Costs Incurred Since Announcement
Appendix: Integration Costs Incurred Since Announcement Acquisition Integration Cost Update No Further Acquisition Related Integration Costs Expected Total Since $ millions 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 Announcement Write-offs $--- $--- $120 $--- $--- $--- $--- $--- $--- $120 Contra-r
Slide 18: 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 Dec. 31, 2022 Sept. 30, 2022 Dec. 31, 2021 Book value per common share $99.93 $97.59 $120.61 Tangible book value per common share Common shareholders
Slide 19: Non-GAAP to GAAP Reconciliation
Appendix: Non-GAAP to GAAP Reconciliation Return On Average Tangible Common Equity (non-GAAP) For the three months ended For the year ended $ millions Dec. 31, 2022 Sept. 30, 2022 Dec. 31, 2021 Dec. 31, 2022 Dec. 31, 2021 Return on average common shareholders’ equity 14.19% 14.97% 9.61% 13.52% 10.78
Slide 20: Non-GAAP to GAAP Reconciliation
Appendix: Non-GAAP to GAAP Reconciliation Adjusted Income Statement Results (non-GAAP) For the three months ended For the year ended $ millions, except per share data Dec. 31, 2022 Sept. 30, 2022 Dec. 31, 2021 Dec. 31, 2022 Dec. 31, 2021 Net interest income $3,684 $3,475 $2,862 $13,014 $10,647 Nonin
Slide 21: Non-GAAP to GAAP Reconciliation
Appendix: Non-GAAP to GAAP Reconciliation Pretax, Pre-Provision Earnings (non-GAAP) ` For the three months ended For the year ended $ millions, except per share data Dec. 31, Sept. 30, Change Dec. 31, Dec. 31, Change 2022 2022 ($) (%) 2022 2021 ($) (%) Total revenue $5,763 $5,549 $214 4% $21,120 $19
Slide 22: Non-GAAP to GAAP Reconciliation
Appendix: Non-GAAP to GAAP Reconciliation Taxable-Equivalent Net Interest Income (non-GAAP) For the three months ended For the year ended Dec. 31, Sept. 30, June 30, Mar. 31, Dec. 31, Dec. 31, Dec. 31, $ millions 2022 2022 2022 2022 2021 2022 2021 Net interest income $3,684 $3,475 $3,051 $2,804 $2,8
Slide 23: 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 Dec. 31, 2022 Sept. 30, 2022 Dec. 31, 2022 Dec. 31, 2021 Noninterest expense $3,474 $3,280 $13,170 $13,002 Integrati
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