Pnc Financial Services Group, Inc. (the) · NYSE:PNC
Pnc Financial Services Group, Inc. (the) — Q2 2023 Earnings Presentation
26 slides from Pnc Financial Services Group, Inc. (the)'s earnings presentation, Jul 18, 2023
Slide 1: Second Quarter 2023 Earnings Conference Call
The PNC Financial Services Group Second Quarter 2023 Earnings Conference Call July 18, 2023 Exhibit 99.1
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 Solid Second Quarter 2023 Results
Delivered Solid Second Quarter 2023 Results 2 Continued to execute on our strategic priorities Grew consumer households and commercial relationships Increased capital position Well-controlled expenses Maintained strong credit quality Improved Stress Capital Buffer to regulatory floor of
Slide 4: Balance Sheet: Well-Positioned Balance Sheet
Balance Sheet: Well-Positioned Balance Sheet 3 2Q23 vs. 1Q23 2Q23 vs. 2Q22 Average balances, $ billions 2Q23 $ Change % Change $ Change % Change Total loans $324.5 ($1.0) -- $19.7 6% Investment securities $141.0 ($2.4) (2)% $6.3 5% Federal Reserve Bank (FRB) balances $30.6 ($2.9) (9)% ($8.7) (22)% D
Slide 5: Balance Sheet: Large and Diversified Lending Franchise
Balance Sheet: Large and Diversified Lending Franchise 4 Av er ag e ba la nc es , $ b ill io ns $97.2 $98.9 $100.3 $100.9 $101.3 $207.6 $214.1 $221.6 $224.6 $223.2 $304.8 $313.0 $321.9 $325.5 $324.5 3.29% 3.98% 4.75% 5.29% 5.57% 2Q22 3Q22 4Q22 1Q23 2Q23 Consumer Commercial Total Loan Yield − YoY rep
Slide 6: Balance Sheet: Strong Deposit Mix
33% 28% 27% 67% 72% 73% 0.12% 1.66% 1.96% 2Q22 1Q23 2Q23 Balance Sheet: Strong Deposit Mix 5 − IB Deposits represent interest-bearing deposits and NIB Deposits represent noninterest-bearing deposits. − Cumulative deposit beta is calculated as the increase in the rate paid on interest bearing deposit
Slide 7: Balance Sheet: High-Quality, Short-Duration Securities and Swaps
Balance Sheet: High-Quality, Short-Duration Securities and Swaps 6 Average Securities Duration of 4.2 Years $134.7 $143.4 $141.0 1.89% 2.49% 2.52% 2Q22 1Q23 2Q23 $42.3 $41.7 $39.9 0.97% 1.48% 1.73% 6/30/22 3/31/23 6/30/23 Notional Receive-Fixed Swaps Duration of 2.3 Years -3% -5% -8% -11% -15% -21%
Slide 8: Income Statement: Solid Results
Income Statement: Solid Results 7− Pretax, pre-provision earnings (non-GAAP) – See Reconciliation in Appendix. − Net interest margin is calculated using taxable-equivalent net interest income, a non-GAAP measure, a reconciliation of which is provided in the Appendix. Three Months Ended Six Months En
Slide 9: Income Statement: Broad Based Revenue Businesses
Income Statement: Broad Based Revenue Businesses 8 $ m ill io ns Total Revenue 3% YoY Growth; 6% LQ Decline $3,051 $3,585 $3,510 $2,065 $2,018 $1,783 $5,116 $5,603 $5,293 2.50% 2.84% 2.79% 2Q22 1Q23 2Q23 Details of Revenue Net Interest Income NIMNoninterest Income $ millions 2Q23 2Q23 vs. 1Q23 2Q23
Slide 10: Income Statement: Well-Controlled Expenses
Income Statement: Well-Controlled Expenses 9 Noninterest Expense Focused on Controlling Expenses $3,244 $3,321 $3,372 2Q22 1Q23 2Q23 Details of Expenses $ m ill io ns 2Q23 vs. 1Q23 2Q23 vs. 2Q22 $ millions 2Q23 $ % $ % Personnel $1,846 $20 1% $67 4% Occupancy 244 (7) (3)% (2) (1)% Equipment 349 (1)
Slide 11: Credit: Strong Credit Quality Performance
Credit: Strong Credit Quality Performance 10 − NCOs / Average Loans represent annualized net charge-offs (NCOs) to average loans for the three months ended. − Delinquencies represent accruing loans past due 30 days or more. Delinquencies to Total Loans represent delinquencies divided by period-end l
Slide 12: Outlook: Third Quarter 2023 Compared to Second Quarter 2023
Outlook: Third Quarter 2023 Compared to Second Quarter 2023 11 − 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, reven
Slide 13: Outlook: Full Year 2023 Compared to Full Year 2022
Outlook: Full Year 2023 Compared to Full Year 2022 12 − Refer to Cautionary Statement in the Appendix, including economic and other assumptions. Does not take into account impact of potential legal and regulatory contingencies. − Period-end loans, average loans, net interest income, noninterest inco
Slide 14: Cautionary Statement Regarding Forward-Looking Information
Appendix: Cautionary Statement Regarding Forward-Looking Information 13 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 rati
Slide 15: Cautionary Statement Regarding Forward-Looking Information
Appendix: Cautionary Statement Regarding Forward-Looking Information 14 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
Slide 16: Cautionary Statement Regarding Forward-Looking Information
Appendix: Cautionary Statement Regarding Forward-Looking Information 15 − 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 sta
Slide 17: Granular Deposit Base
Appendix: Granular Deposit Base 16 Composition of Deposit Portfolio 54% of Total Deposits are Insured Total Deposits $427 Billion as of 6/30/23 Commercial Deposits $206 billion at 6/30/23 89% Insured 20% Insured 80% Uninsured Consumer Deposits $221 billion at 6/30/23 Granular Deposit Base ~$11,100 A
Slide 18: Office Represents 2.7% of Total Loans
Appendix: Office Represents 2.7% of Total Loans 17 Non-Office CRE, 8.5% Office CRE, 2.7% Total $321.8 Billion PNC’s Commercial Real Estate (CRE) Portfolio Total Loans as of 6/30/23 $ billions 6/30/23 % of Total Loans Multifamily $14.8 4.6% Office 8.7 2.7% Industrial / Warehouse 3.9 1.2% Retail 2.8 0
Slide 19: Office CRE Portfolio
Appendix: Office CRE Portfolio 18 Office Portfolio Multi-Tenant 57% Single- Tenant 16% Medical 14% Government 10% Other 3% $8.7 billion Geographic Diversification By Metropolitan Statistical Area Key Office Portfolio Metrics Conservative Underwriting Methodology Suburban 44% Central Business Distric
Slide 20: Non-GAAP to GAAP Reconciliation: Return On Average Tangible Common Equity
Appendix: Non-GAAP to GAAP Reconciliation 19 Return On Average Tangible Common Equity (non-GAAP) For the three months ended $ millions June 30, 2023 Mar. 31, 2023 June 30, 2022 Return on average common shareholders’ equity 13.01% 16.11% 13.52% Average common shareholders’ equity $41,747 $40,462 $41,
Slide 21: Non-GAAP to GAAP Reconciliation: Pretax, Pre-Provision Earnings
Appendix: Non-GAAP to GAAP Reconciliation 20 Pretax, Pre-Provision Earnings (non-GAAP) For the three months ended For the six months ended $ millions June 30, 2023 Mar. 31, 2023 June 30, 2022 June 30, 2023 Net interest income $3,510 $3,585 $3,051 $7,095 Noninterest income 1,783 2,018 2,065 3,801 Tot
Slide 22: Non-GAAP to GAAP Reconciliation: Taxable-Equivalent Net Interest Income
Appendix: Non-GAAP to GAAP Reconciliation 21 Taxable-Equivalent Net Interest Income (non-GAAP) For the three months ended For the six months ended $ millions June 30, 2023 Mar. 31, 2023 June 30, 2022 June 30, 2023 Net interest income $3,510 $3,585 $3,051 $7,095 Taxable-equivalent adjustments 37 38 2
Slide 23: Non-GAAP to GAAP Reconciliation: Tangible Book Value per Common Share
Appendix: Non-GAAP to GAAP Reconciliation 22 Tangible Book Value per Common Share (non-GAAP) For the three months ended $ millions, except per share data June 30, 2023 Mar. 31, 2023 June 30, 2022 Book value per common share $105.67 $104.76 $101.39 Tangible book value per common share Common sharehol
Slide 24: Non-GAAP to GAAP Reconciliation: Common Equity Tier 1 Ratio, including AOCI
Appendix: Non-GAAP to GAAP Reconciliation 23 Common Equity Tier 1 Ratio, including AOCI (non-GAAP) June 30, 2023 (estimated), $ in millions Common Equity Tier 1 Capital June 30, 2023 (estimated), $ in millions Risk-weighted assets Common stock, related surplus and retained earnings, net of treasury
Slide 25: Non-GAAP to GAAP Reconciliation: Tangible Common Equity Ratio
Appendix: Non-GAAP to GAAP Reconciliation 24 Tangible Common Equity Ratio (non-GAAP) For the three months ended $ millions June 30, 2023 Tangible common shareholders’ equity Common shareholders’ equity $42,083 Goodwill and other intangible assets (11,357) Deferred tax liabilities on goodwill and oth
Slide 26: Expectations for Preferred Dividends
Appendix: Expectations for Preferred Dividends 25 Preferred Dividends For the three months ended For the year ended $ millions Mar. 31, 2023 June 30, 2023 Sept. 30, 2023 Dec. 31, 2023 Dec. 31, 2023 Preferred Dividends $68 $127 $104 $117 $416 The above represents our current estimate for preferred di
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