Pnc Financial Services Group, Inc. (the) · NYSE:PNC
Pnc Financial Services Group, Inc. (the) — Q4 2017 Earnings Presentation
23 slides from Pnc Financial Services Group, Inc. (the)'s earnings presentation, Jan 12, 2018
Slide 1: Fourth Quarter 2017 Earnings Conference Call
Exhibit 99.2 Fourth Quarter 2017 Earnings Conference Call January 12, 2018
Slide 2: Cautionary Statement Regarding Forward-Looking and Non-GAAP Financial Information
Cautionary Statement Regarding Forward-Looking and @®PnNcC Non-GAAP Financial Information Qur earnings conference call presentations not intended as 2 fll business or financial review and shouldbe viewed in the context of all of the ilable by PNC websit utlook for earnings, revenues, expenses, capit
Slide 3: 2017 Highlights
2017 Highlights @PnNc * Delivered high quality results — Higher net interest income and noninterest income — Grew loans and deposits — Continued focus on expense management — Stable credit quality — Maintained strong capital return and liquidity position « Continued to deliver on our strategic prior
Slide 4: Balance Sheet: Grew Loans and Deposits
Balance Sheet: Grew Loans and Deposits @PNc Change vs. Average balances, $ billions 4Qn7 3017 4are Highlights Commercial lending $148.5 $1.6 $9.9 = Broad based growth across C&IB businesses Consumer lendin: 72.7 03 03 * Behe a ng 7 partially offset by lower home equity and education Total loans $221
Slide 5: Income Statement: High Quality Results
Income Statement: High Quality Results @Pnc Change vs Change vs. $ mitons AIT FYI6 4ai7___-3017 Hightights Net interest income $9,108 $717) $2,346 a te eens Noninterest income 7,221 450 1,915 135" eeeaae Dus sree Sramihiiecaatd fesincomnd Total revenue $16,329 $1,167 | $4,260 $195 Noninterest expens
Slide 6: Income Statement: Tax Legislation and Significant Items
Income Statement: Tax Legislation and Significant Items @®PNc Federal tax legislation — $1.2 billion net income tax benefit primarily from the revaluation of deferred tax liabilities Previously announced significant items — $200 million contribution to the PNC Foundation funded with BlackRock stock,
Slide 7: Income Statement: Impact of Tax Legislation and Significant Items
Income Statement: Impact of Tax Legislation and Significant Items @PNC 4017 Adjustments 4017 FY 2017 Tax Significant J -——J Legistation Items Total Reported | Adjusted | Reported | Adjusted $rrillions al (el) tarB-C] o | oa (el tec] Net interest income $26 $- $26 $2345 $2371 $9,108 $9,136 Fee income
Slide 8: Income Statement: Total Revenue
Income Statement: Total Revenue Total Revenue Solid Year-Over-Year Growth $16,329 $16,301 $15,162 2016 2017 2017 Adjusted WNoninterest Income mNII ONIM = NIl- Net interest income NIM Net interest margin @Pnc Highlights Reported net interest income increased by $717 million or 9% compared to 201 = Dr
Slide 9: Income Statement: 2017 Noninterest Income
Income Statement: 2017 Noninterest Income @PNc FY17 Record Fee Income Corporate Services $ millions Residential Mortgage Increase primar ees cord 7 M&A advisory fees as \weasury manage! amentand loan syndications fees S017. $29 lion, 725.0 . Ices 967 1 erillion negative impoct due to RMSR fair value
Slide 10: Income Statement: Continued Focus on Expense Management
Income Statement: Continued Focus on Expense Management @PnNc Expense Highlights While Investing in our Businesses Reported noninterest expense increased by $10,398 $922 million or 10% $9,896 Achieved $350 million Continuous Improvement Program target in 2017 — 2018 target of $250 million 4Q17 inclu
Slide 11: Credit Quality: Stable
y: Stable Credit Que Nonperforming Loans $2,144) ] $1,996 §1,95718 g1,07 fF 4016 1017-2017, 3Q17,— 47 Provision $88 $98 416 1017, 2017, 3Q17,— 417 PNC Delinquencies $1,576 $1,384 ¢1, 326mm 910419 4Q16 1017 2017 3Q17 Accruing loans past due 30-days or mor Net Charge-Offs TT 4a = 1017-2017, 3017 4Q17
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 7) - Hes Ca
Slide 13: Outlook: 1Q18 Compared to Adjusted 4Q17
Outlook: 1818 Compared to Adjusted 4017 @PnNc Balance Sheet Loans Up modestly Net interest income Stable Fee income Down low mid-single digits Income an Statement Other noninterest income $250 - $300 million Noninterest expense Down low-single digits Loan loss provision $100 - $150 million Guidance
Slide 14: Cautionary Statement Regarding Forward-Looking Information
Appendix: Cautionary Statement Regarding Forward-Looking Information cue prey West pol el oe ieee eon revow shouldnt bevwewed he anafon bu rathorn the content ofall the formatian made aes by PNC in its SEC fl eussnensenpet santa rlanicapsal al lnwiryiatle apd ites asset levels, assot quality tran it
Slide 15: Cautionary Statement Regarding Forward-Looking Information
Appendix: Cautionary Statement Regarding Forward-Looking @®PNc Information + Our potential legal Th eased an ou eurrant weet that ot d tive r. g id ae pees eee ee one euS edi 2017, : dbend PNC : ij chasahol Serodiaal bled parte Reser Board. — \ At depend final ! Ys balance sheet. In addition, ratios
Slide 16: Cautionary Statement Regarding Forward-Looking Information
Appendix: Cautionary Statement Regarding Forward-Looking @®PnNcC Information . in our businesses, including, third-party insurance, derivatives, and capital management techniques, and pital and B equity interest in BlackRock, Inc. and rely toa aie extent on. information privat to us by BlackRock. Ri
Slide 17: Basel III Regulatory Capital Ratios
Appendix: Basel III Regulatory Capital Ratios @®PnNcC As a result of the phased-in periods included in the final U.S. Basel III regulatory capital rules (Basel III rules), as well as the fact that PNC remains in the parallel run qualification phase for the advanced approaches, PNC's eagle yet based
Slide 18: Non-GAAP Basel III Regulatory Capital Ratios
Appendix: Non-GAAP Basel III Regulatory Capital Ratios @®PNc Transitional Basel III and Pro forma Fully Phased-In Basel III Common Equity Tier 1 Capital Ratios Wie Transtanal | Pro ora Fuly Phasedin Basel (Now GAAP 2017 Transitianal Basel estimated) December31 September 30 | December 31 | ‘December
Slide 19: Non-GAAP to GAAP Reconciliation
Appendix: Non-GAAP to GAAP Reconciliation @PNC Full Year 2016 207 Flow Visa ployee Tirough —_RMSR Far Value PC, RealEstate Paton Reported Reported Tax mpacict_alrvaie Deriatve Foundation Dipetion Cede & Adjusted ( (GAAP) Legislation BlackRock Adjustment Adjustment ion _and Exits Cash ___Etfoct_ _(No
Slide 20: Non-GAAP to GAAP Reconciliation
Appendix: Non-GAAP to GAAP Reconciliation @PNC Quarterly Zor _s017 7a7 Flow i Employes Through MSR FairValue —_—-PNC_——Real Estate Pension Tox __impactof_FairValue Derivative Foundation Dispositions Credits & Tax Adjusted Legislation BlackRock Adjustment Adjustment Contribution _andExits __Cash Effe
Slide 21: Non-GAAP to GAAP Reconciliation
Appendix: Non-GAAP to GAAP Reconciliation Adjusted Metrics 2077 Roported 2017 Adjusted (GAAP) Adjustments: (Non-GAAP) [Return on average assets ' Net income $ 538 $ «0m $ KAT Average assets anne an769 Return on average assets 1.45" 1.20 [Return on average common shareholders’ equity * ‘Net income at
Slide 22: Non-GAAP to GAAP Reconciliation
Appendix: Non-GAAP to GAAP Reconciliation @PnNc Tangible Book Value per Common Share change aha 12/3177] Dec.31, Sep.30, Dee. 31, vs. 6 in millions, except per share data 2017 2017 2016 _9/s0rt7_ra/st/6 [Book value per common share $ 919% $ 89.05 $ 859% 3% Th HTangibte book vatue per common share Co
Slide 23: Other Noninterest Income
Appendix: Other Noninterest Income @PnNc Net Visa Activity |s Dec. 31,2017 Sep. 30,2017 _Jun.30,2017__Mar.31,2017 _Dec. 31,2016 Gainon Visa sales $ $ - $ $ Derivative fair vatue adjustments * (2) a) (2a) |Net visa activity $ $ (2 $ @ $ $ (2a)
PNC Financial Services Group — Q4 2017 Earnings Presentation on 6ix