Pnc Financial Services Group, Inc. (the) · NYSE:PNC
Pnc Financial Services Group, Inc. (the) — Q3 2020 Earnings Presentation
21 slides from Pnc Financial Services Group, Inc. (the)'s earnings presentation, Oct 14, 2020
Slide 1: Third Quarter 2020 Earnings Conference Call
Exhibit 99.2 Third Quarter 2020 Earnings Conference Call October 14, 2020 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: Third Quarter 2020 Highlights
Third Quarter 2020 Highlights Net Income . Solid results despite an uncertain economic environment $1.5 billion . Strong revenue growth and expense Diluted Earnings Per Share management resulted in positive operating $3.39 leverage and efficiency improvement Operating Leverage . Provision decreased
Slide 4: Balance Sheet: Substantial Flexibility in a Challenging Environment
Balance Sheet: Substantial Flexibility in a Challenging Environment Change vs. Average balances, $ billions 3Q20 2Q20 3Q19 Highlights . Linked quarter decline reflects lower utilization Commercial $175.6 ($13.7) $14.1 . Year-over-year growth includes PPP originations . Linked quarter reflects lower
Slide 5: Well Positioned with Strong Capital, Reserves and Liquidity
Well Positioned with Strong Capital, Reserves and Liquidity Basel III Common Allowance for Credit Losses Loan to Equity Tier 1 to Total Loans Deposit Ratio Record High Level Significant Loss Absorbing Ability Reflects Strong Deposit Growth 11.7% 2.55% 2.58% 11.3% 83% 75% 9.6% 70% 1.28% 9/30/19 6/30/
Slide 6: Balance Sheet: High Quality Loans Funded with Low Cost Deposits
Balance Sheet: High Quality Loans Funded with Low Cost Deposits Loans Deposits 6% Year-over-Year Growth 26% Year-over-Year Growth $268.1 $350.5 $335.2 $253.1 $189.3 $248.6 $237.7 $241.4 $175.6 $161.5 $279.1 $207.0 4.47% 1.02% Average balances, $ billions Average balances, $ billions 0.23% 3.37% 3.32
Slide 7: Income Statement: Strong Revenue Growth and Expense Control
Income Statement: Strong Revenue Growth and Expense Control Change vs. $ millions 3Q20 2Q20 3Q19 Highlights . LQ decline primarily due to lower earning asset yields and lower Net interest income $2,484 ($43) ($20) loan balances partially offset by lower funding costs . LQ increase driven by higher a
Slide 8: Income Statement: Generating Positive Operating Leverage
Income Statement: Generating Positive Operating Leverage Managing Expenses in a Difficult Revenue Environment 3Q20 versus 3Q19 YTD ‘20 versus YTD ‘19 Revenue Growth +0.9% +1.4% Net Interest Income (0.8)% +0.6% Noninterest Income +3.4% +2.6% Expense Decline (3.5)% (2.9)% Operating Leverage +4.4% +4.3
Slide 9: Credit: COVID-19 High Impact Industries
Credit: COVID-19 High Impact Industries $18.3 billion Outstanding Loan Balances ($16.4 billion excluding PPP Loans) $10.5 billion Commercial & Industrial Loans ($8.6 billion excluding PPP Loans) $4.8 billion / 67% Utilization Leisure Recreation: Restaurants, casinos, hotels, convention centers Inclu
Slide 10: Credit: Customer Need for Hardship Relief Declining
Credit: Customer Need for Hardship Relief Declining Consumer and Retail Small Business Customer Balances in Hardship Assistance $1.1 billion Scheduled to exit $13.7bn $6.9bn assistance in the next 6 weeks 319,000 129,000 Accounts Accounts 92% Accounts current or less than 30 days past due 85%+ Of ba
Slide 11: Credit: Well Reserved for the Current Environment
Credit: Well Reserved for the Current Environment Net Loan Charge-Offs Delinquencies 250 0.01 0.015 1400 0.013 1200 200 $236 0.008 $1,348 $1,310 $1,238 0.011 1000 0.009 150 0.006 800 $155 $155 0.007 600 100 0.004 0.57% 0.005 0.35% 0.51% 0.50% 400 $ millions 0.26% $ millions 0.003 50 0.24% 0.002 200
Slide 12: Credit: Attribution of Change in Reserve Levels Under CECL
Credit: Attribution of Change in Reserve Levels Under CECL Allowance for Credit Losses $158 $8 Portfolio Changes: Includes loan originations / runoff, $6,590 changes in credit quality, aging of existing portfolio, Portfolio Economic / $6,440 utilization changes, and charge-offs and recoveries Change
Slide 13: Outlook: Fourth Quarter 2020 Compared to Third Quarter 2020
Outlook: Fourth Quarter 2020 Compared to Third Quarter 2020 Balance Average loans Down low-single digits Sheet Net interest income Stable Noninterest income Down high-single digits Fee Income Stable Income Statement Other noninterest income $275 - $325 million Noninterest expense Up approximately 1%
Slide 14: 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 15: 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: 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, consumer protection, bank capital and liquidity standards, pension, bankruptcy and other industry aspects, and changes in
Slide 17: Oil & Gas Loans
Appendix: Oil & Gas Loans $3.6 billion Outstanding Loan Balance Total Loans As of 9/30/20 $1.0 billion Exploration & Production (0.4% of Loans) $ billions Utilization Rate 31% Oil / Gas Mix 49% / 51% 1.4% Reserve-Based Structure 75% $249.3 billion $1.6 billion Midstream and Downstream (0.6% of Loans
Slide 18: Non-GAAP to GAAP Reconciliation: Return on Tangible Common Equity
Appendix: Non-GAAP to GAAP Reconciliation Return on Tangible Common Equity (Non- GAAP) For the three months ended Sept. 30, June 30, Sept. 30, $ millions 2020 2020 2019 Return on average common shareholders' equity 11.76% 30.11% 11.56% Average common shareholders' equity $49,099 $47,854 $45,127 Aver
Slide 19: Non-GAAP to GAAP Reconciliation: Tangible Book Value per Common Share
Appendix: Non-GAAP to GAAP Reconciliation Tangible Book Value per Common Share (Non- GAAP) % Change 9/ 30/ 20 9/ 30/ 20 $ millions, except per share data Sept. 30, June 30, Sept. 30, vs. vs. 2020 2020 2019 6/ 30/ 20 9/ 30/ 19 Book value per common share $117.44 $115.26 $103.37 2% 14% Tangible book v
Slide 20: Non-GAAP to GAAP Reconciliation: Pretax, Pre-Provision Earnings
Appendix: Non-GAAP to GAAP Reconciliation Pretax, Pre- Provision Earnings (Non- GAAP) For the three months ended % Change Sept. 30, June 30, Sept. 30, 3Q20 3Q20 $ millions 2020 2020 2019 vs. 2Q20 vs. 3Q19 Net interest income $2,484 $2,527 $2,504 (2%) (1%) Noninterest income 1,797 1,549 1,738 16% 3%
Slide 21: Non-GAAP to GAAP Reconciliation: Fee Income
Appendix: Non-GAAP to GAAP Reconciliation Fee Income (Non-GAAP) For the three months ended % Change 3Q20 3Q20 $ millions 3Q20 2Q20 3Q19 vs. 2Q20 vs. 3Q19 Asset management $215 $199 $213 8% 1% Consumer services 390 330 402 18% (3%) Corporate services 479 512 469 (6%) 2% Residential mortgage 137 158 1
PNC Financial Services Group — Q3 2020 Earnings Presentation on 6ix