Pnc Financial Services Group, Inc. (the) · NYSE:PNC
Pnc Financial Services Group, Inc. (the) — Q1 2018 Earnings Presentation
25 slides from Pnc Financial Services Group, Inc. (the)'s earnings presentation, Apr 13, 2018
Slide 1: First Quarter 2018 Earnings Conference Call
Exhibit 99.2 First Quarter 2018 Earnings Conference Call April 13, 2018
Slide 2: Cautionary Statement Regarding Forward-Looking and Non-GAAP Financial Information
Cautionary Statement Regarding Forward-Looking and @®PNc Non-GAAP Financial Information Our m intended as a full business or financial review and should be viewed in the context of all of th lable by PI EC fil id website. outlook for earnings, revenues. expenses, capital ms liquidity tevels and rati
Slide 3: First Quarter 2018 Highlights
First Quarter 2018 Highlights = Delivered strong quarterly results Compared to 1017: = Higher net interest income and fee income — Net interest margin expansion — Grew loans and deposits — Continued to control expenses — Stable credit quality — Maintained strong capital returns — Benefited from a lo
Slide 4: Balance Sheet: Well-Positioned
Balance Sheet: Well-Positioned @PNc Change vs. ‘Average balances, $ billions 1018 417 1017 Highlights . quarter, loan: Total loans $221.1 $8.8 was offset by a decline in commercial loans = 4% year-over-year growth : $0.6 billion of eq to Investment securities $74.6 $04 $11.6) equity investments in 1
Slide 5: Balance Sheet: Loans
Balance Sheet: Loans Loan Growth 4% Year-Over-Year Growth $216.4 $212.3 1017 2017 3017 4017 1018 mmConsumer mmm Commercial -O=Total Loan Yield @PNc Highlights = Average commercial lending — Linked quarter growth in corporate banking. equipment finance, and business credit was offset by $1.5 billion
Slide 6: Balance Sheet: Deposits
Balance Sheet: Deposits Strong Deposit Base to Fund Loan Growth 85% Average Loan to Deposit Ratio $255 $256 ‘Average balances, $ billions 1017 2017 $259 3017 $261 4017 $261 1018 4 ~O-Deposit interest Rate it Retail Bank @PNc Consumer deposit beta: ~ Current Beta (D t-bearing non-matu 01 Change vs. A
Slide 7: Income Statement: High Quality Results
Income Statement: High Quality Results @PNC Change vs. $mitons tae aay 1417 Highlights Net interest income $2,361 $16 $201 *_Benefited from higher interest rates Linked quar income and Bininiitet setinconis TH780 (165) ab impact of 417 benefit from significant items Total revenue 4a (149) 227 = 6% y
Slide 8: Income Statement: Strong Revenue Trends
Income Statement: Strong Revenue Trends Revenue 6% Year-Over-Year Total R $4,260 $4,060 $4,125 $1,915 1017 2017 3Q17 4Q17 1018 MMENoninterest Income m—NII -O=NIM ~ NIl=Net interest incorne ~ NIM ~ Net interest margin Fee Income (Non-GAAP) - see reconciliation in Appendix @PNC Highlights Net interest
Slide 9: Income Statement: 1Q18 Noninterest Income
Income Statement: 1018 Noninterest Income Diverse Sources of Noninterest Income 6% Year-Over-Year Fee Income Growth $ millions @PNC Corporate Services = -6% LQ due to seasonally lower business activity f YOY reflecting growth in treasury management and leasing Residential Mortgage +234% driven by 4Q
Slide 10: Income Statement: Continued Focus on Expense Management
Income Statement: Continued Focus on Expense Management iscipli Expense While Investing in our Business $3,061 $2,402 92479 $2,456 1017 2017 3017 4Q17 1018 @PnNc Highlights * Year-over-year noninterest expense increased $125 million or 5%, reflecting overall business growth and acquisitions * Linked
Slide 11: Credit Quality: Remains Benign
Credit Qua y: Remains Benign PNC Nonperforming Loans $1,988 $1,957 ¢1,9731 $1,865 1017, 2017, 3Q17,-— 4Q17 1018 Delinquencies 1017, 2017, 3Q17,— 4Q17 1018 Accruing loans past due 30-days or mor Provision Net Charge-Offs $130 $125 $118 Bh gio $123 $68 $98 1017-2017, 3Q17, 4Q17,— 1018 ES ee le NCO / A
Slide 12: Outlook: Full Year 2018 Compared to Adjusted Full Year 2017
Outlook: Full Year 2018 Compared to Adjusted Full Year 2017 @PnNc Balance F Sheet Loans Up mid-single digits Revenue Up mid-single digits Income F Statement Noninterest expense Up low-single digits Effective tax rate Approximately 17% Guidance is based off of adjusted 2017 results (slide 24) | ~ Flr
Slide 13: Outlook: Second Quarter 2018 Compared to First Quarter 2018
Outlook: Second Quarter 2018 Compared to First Quarter 2018 Balance Sheet Income Statement Loans Net interest income Fee income Other noninterest income Noninterest expense Loan loss provision Up modestly Up low single-digits Up mid single-digits $225 - $275 million Up low single-digits $100 - $150
Slide 14: Cautionary Statement Regarding Forward-Looking Information
Appendix: Cautionary Statement Regarding Forward-Looking @®PNc Information includes “snapshot” PNC 1d is not ern eT fi It should not be viewed in isolation but rather inthe context of all ofthe information made available by PNC in its SEC filings, expenses, tax rates, capital eh liquidity levels, sS
Slide 15: Cautionary Statement Regarding Forward-Looking Information
Appendix: Cautionary Statement Regarding Forward-Looking Information * Our Th Tied on Gar curTeTt or at Us ote i cpectivel inthe lobar mortal his yer, including fb ‘4 pending. Other the US. 2.00 te the year. th its i bulet ‘ a i aR R) I id by Feds Reserve Board. . 's p ill depend on, among other thi
Slide 16: Cautionary Statement Regarding Forward-Looking Information
Appendix: Cautionary Statement Regarding Forward-Looking @®PNc Information B in our businesses, including, wt sence thpugh cheats use of systems and controls, third-party insurance, derivatives, and abies ment techniques, and fee Wing re ealatery coon and Unity r r equity interest ignificant extent
Slide 17: Basel III Regulatory Capital Ratios
Appendix: Basel III Regulatory Capital Ratios @®PNc Because PNC remains in the parallel run quatification phase forthe advanced approaches, PNC's regulatory risk-based capilal ratios in 2018 and 2017 are calculaled using (he standardized approach for determining risk-weighle the standardized approac
Slide 18: Basel III Regulatory Capital Ratios
Appendix: Basel Ill Regulatory Capital Ratios Basel Ill Common Equity Tier 1 Capital Ratios @PnNc Fully Phased-In Basel (Non-aae)* Basel i‘) 2017 War. 37, sn mitons 2018 Dee. . Dec.31, Mar. 91, (estimated) 2017" _ 2007 wor’ 2017 JComenon stock, related surplus, and retained earnings, net of treasury
Slide 19: Non-GAAP to GAAP Reconciliation
Appendix: Non-GAAP to GAAP Reconciliation @PNC Fee Income (Non-GAAP) For the three months ended % Change TO18vs. 1018 vs. $ in mittions 1018 4017 1017 4017 1017 Asset management $455 $720 $403 (37%) 13% Consumer services 357 366 332 (2%) 8% Corporate services 429 458 414 (6%) 4% Residential mortgage
Slide 20: Non-GAAP to GAAP Reconciliation
Appendix: Non-GAAP to GAAP Reconciliation Value per AAP) 5 in millions, except per share deta Mar.31 2018 Book value per common share $9159 Hrangible book value per common share Common shareholders’ equity $42,983 Goodwill and Other intangible assets (9.533) Deferred tax liabilities on Goodwill and
Slide 21: Non-GAAP to GAAP Reconciliation
Appendix: Non-GAAP to GAAP Reconciliation Pretax Pre-Provision Earnings (Non-GAAP) For the three months ended % Change — TO1evs. 1018vs. 1018 4017 1017 4017 1017 Net interest income $2361 $2,345 $2,160 1% 9% Noninterest income 1,750 1.915 1,726 (9%) 2% Total revenue $4,111 $4,260 $3,886 = (3%) 6% No
Slide 22: Non-GAAP to GAAP Reconciliation
Appendix: Non-GAAP to GAAP Reconciliation Return on Tangible Common Equity @PnNc 1S in mili Return on average common shareholders’ equity JAverage common shareholders’ equity Average Goodwill and Other intangible assets Average deferred tax liabilities on Goodwill and Other intangible assets JAverag
Slide 23: Other Noninterest Income
Appendix: Other Noninterest Income @PnNc Net Visa Activity For the three months ended Mar.31, Dec. 31, Sep. 30, Jun.30, Mar. 31, $ in millions 2018 2017 2017 2017 2017 Gains on Visa Sales $ - $ - $ - $ - $ 8 Derivative Fair Value Adjustments (2) (268) (12) (4) (16) Net Visa Activity $2 $ (28) $ 12)
Slide 24: 2017 Impact of Tax Legislation and Significant Items
Appendix: 2017 Impact of Tax Legislation and Significant Items @PNc 2017 Adjustments for Tax Legislation and Significant Items Tax Legistation Significant tems Flow visa Employee 17 Through MSR FairValue ——-PNC_— Real Estate Pension Total 2017 Reported Total Tax _impactof _FalrValue Derivative Found
Slide 25: 4Q17 Impact of Tax Legislation and Significant Items
Appendix: 4Q17 Impact of Tax Legislation and Significant Items 4Q17 Adjustments for Tax Legislation and Significant Items @PNC Flow visa Employee 401 Through MSR FairValue ——-PNC_— Real Estate Pension Total 4 Reported Total Tax _impactof _—FalrValue Derivative Foundation Dispositions Credits & Tax S
PNC Financial Services Group — Q1 2018 Earnings Presentation on 6ix