Pnc Financial Services Group, Inc. (the) · NYSE:PNC
Pnc Financial Services Group, Inc. (the) — Q4 2021 Earnings Presentation
27 slides from Pnc Financial Services Group, Inc. (the)'s earnings presentation, Jan 18, 2022
Slide 1: Fourth Quarter 2021 Earnings Conference Call
The PNC Financial Services Group Fourth Quarter 2021 Earnings Conference Call January 18, 2022 Exhibit 99.2
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: 2021 - A Transformational Year In Review
2021 - A Transformational Year In Review Achieved Substantial Progress Towards Strategic Priorities By… 2 BBVA USA Acquisition Low Cash ModeSM Growing… Innovating… Distribution and Capabilities Digital Enhancements Completed in under a year Became coast-to-coast franchise Presence established
Slide 4: Innovating For An Increasingly Digital World
Innovating For An Increasingly Digital World 3 Strategic Innovations in 2021 Launched Low Cash ModeSM, a solution that puts customers in control of their finances in moments when funds are low Early developer of QR code technology for easier payment enablement with Zelle Partnered with Akoya t
Slide 5: Full Year 2021 Highlights
Full Year 2021 Highlights 4− Adjusted metrics are calculated without the impact of $438 million and $798 million in pre-tax integration costs for 4Q21 and 2021, respectively. See non-GAAP reconciliations in the appendix for calculations of ROTCE (Return on Average Tangible Common Equity) and adjuste
Slide 6: Balance Sheet: Well-Positioned to Serve Customers
Balance Sheet: Well-Positioned to Serve Customers 5 4Q21 vs. 3Q21 4Q21 vs. 4Q20 Average balances; $ billions 4Q21 $ Chg. % Chg. $ Chg. % Chg. Total loans $288.9 ($2.4) (1%) $43.1 18% Total loans excluding PPP loans $284.3 $2.3 1% $51.1 22% Investment securities $127.8 $7.2 6% $42.1 49% Federal Reser
Slide 7: Balance Sheet: Solid Core Growth Trends
Balance Sheet: Solid Core Growth Trends 6 Average Loans Core Growth Primarily Driven by Commercial Loans $225.5 $242.5 $282.0 $286.6 $286.6 $284.3 ($4.7) +$2.3 $238.1 $255.6 $291.3 $288.9 0 50 100 150 200 250 300 1Q21 2Q21 3Q21 4Q21 Core Loans PPP Loans − Core loans exclude PPP loans. − LQ – Linked
Slide 8: Balance Sheet: Well-Positioned For Rising Rates
Balance Sheet: Well-Positioned For Rising Rates 7 Av er ag e ba la nc es , $ b ill io ns Average Securities and Federal Reserve Bank (FRB) Balances $85.2 $78.3 $80.1 $75.1 $86.4 $108.5 $120.6 $127.8 1.34% 1.59% 1.32% 1.53% 0.00 % 0.50 % 1.00 % 1.50 % 2.00 % 2.50 % 3.00 % 3.50 % 4.00 % 0 20 40 60 80
Slide 9: Income Statement: Generated Full Year Record Revenue
Income Statement: Generated Full Year Record Revenue 8 − Non-GAAP reconciliations in the appendix slides. − Integration costs include integration expense of $391 million, $235 million, $733 million, and $7 million in 4Q21, 3Q21, 2021, and 2020 respectively, and contra-revenue of ($47) million, ($8)
Slide 10: Income Statement: Diversified Business Mix
Income Statement: Diversified Business Mix 9 Total Revenue Noninterest Income Ratio of 45% for 2021 vs. 41% in 2020 $1,872 $2,086 $2,341 $2,265 $2,348 $2,581 $2,856 $2,862 $4,220 $4,667 $5,197 $5,127 2.27% 2.29% 2.27% 2.27% 2.00 % 2.10 % 2.20 % 2.30 % 2.40 % 2.50 % 0 100 0 200 0 300 0 400 0 500 0 60
Slide 11: Income Statement: Focused On Controlling Expenses
Income Statement: Focused On Controlling Expenses 10 $ m ill io ns $2,568 $2,949 $3,352 $3,400 $2,574 $3,050 $3,587 $3,791 1Q21 2Q21 3Q21 4Q21 Noninterest Expense Integration Expense Noninterest Expense LQ Increase Reflects Integration Costs and Continued Strong Fee-Based Revenues Noninterest Expens
Slide 12: Credit: Strong Credit Quality Performance
Credit: Strong Credit Quality Performance 11 − Delinquency amounts as of 9/30/21 and 6/30/21 have been revised to align the methodology of residential real estate loans from the BBVA USA acquisition to PNC’s methodology. − NCOs / Average Loans represent annualized net charge-offs (NCO) to average lo
Slide 13: Outlook: Full Year 2022 Compared to Full Year 2021
Outlook: Full Year 2022 Compared to Full Year 2021 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. − Average loans, period-end loans, revenue, and noninterest expense excl
Slide 14: Outlook: First Quarter 2022 Compared to Fourth Quarter 2021
Outlook: First Quarter 2022 Compared to Fourth Quarter 2021 13 − 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 excluding PPP loans, net interest income, fee i
Slide 15: Cautionary Statement Regarding Forward-Looking Information
Appendix: Cautionary Statement Regarding Forward-Looking Information 14 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 inf
Slide 16: Cautionary Statement Regarding Forward-Looking Information
Appendix: Cautionary Statement Regarding Forward-Looking Information 15 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 17: Cautionary Statement Regarding Forward-Looking Information
Appendix: Cautionary Statement Regarding Forward-Looking Information 16 Business and operating results are affected by our ability to identify and effectively manage risks inherent in our businesses, including, where appropriate, through effective use of systems and controls, third-party insurance
Slide 18: COVID-19 High Impact Industries
Appendix: COVID-19 High Impact Industries 17 − PPP Lending within the Commercial Real Estate and Related Loans category is not material. − Balances exclude securitizations. − Commercial & Industrial loans exclude PNC Real Estate business loans. Commercial real estate and related loans include commer
Slide 19: Oil & Gas Loans
Appendix: Oil & Gas Loans 18− Balances exclude securitizations, loans held for sale, and commercial real estate loans. $1.3 billion Exploration & Production (0.5% of Loans) Utilization Rate 27% $3.7 billion Outstanding Loan Balance Oil / Gas Mix 64% / 36% $1.4 billion Midstream and Downstream (0.5%
Slide 20: Well-Reserved for the Current Environment
Appendix: Well-Reserved for the Current Environment 19 Allowance for Credit Losses (ACL) ACL 9/30/21 ACL 12/31/21 $ m ill io ns $168 $303$6,001 $5,530 2.07% 1.92% 0.00 % 0.50 % 1.00 % 1.50 % 2.00 % 2.50 % 3.00 % 3.50 % 4.00 % 0 100 0 200 0 300 0 400 0 500 0 600 0 700 0 800 0 Portfolio Changes Econom
Slide 21: Integration Costs Incurred Since Announcement
Appendix: Integration Costs Incurred Since Announcement 20 Acquisition Integration Cost Update Remaining Integration Costs to be Incurred in 2022; Approximately 95% of Integration Costs Incurred So Far Quarterly Full Year Total Since $ millions 4Q20 1Q21 2Q21 3Q21 4Q21 2020 2021 Announcement Write-o
Slide 22: Non-GAAP to GAAP Reconciliation: Return On Average Tangible Common Equity
Appendix: Non-GAAP to GAAP Reconciliation 21 Return On Average Tangible Common Equity (non-GAAP) For the three months ended For the year ended $ millions Dec. 31, 2021 Sept. 30, 2021 Dec. 31, 2020 Dec. 31, 2021 Dec. 31, 2020 Return on average common shareholders’ equity 9.61% 10.95% 11.16% 10.78% 15
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 Dec. 31, 2021 Sept. 30, 2021 Dec. 31, 2020 Book value per common share $120.61 $121.16 $119.11 Tangible book value per common share Common shareho
Slide 24: Non-GAAP to GAAP Reconciliation: Adjusted Income Statement Results
Appendix: Non-GAAP to GAAP Reconciliation 23 Adjusted Income Statement Results (non-GAAP) For the three months ended For the year ended $ millions Dec. 31, 2021 Sept. 30, 2021 Dec. 31, 2020 Dec. 31, 2021 Dec. 31, 2020 Net interest income $2,862 $2,856 $2,424 $10,647 $9,946 Noninterest income 2,265 2
Slide 25: Non-GAAP to GAAP Reconciliation: Taxable-Equivalent Net Interest Income
Appendix: Non-GAAP to GAAP Reconciliation 24 Taxable-Equivalent Net Interest Income (non-GAAP) For the three months ended For the year ended $ millions Dec. 31, 2021 Sept. 30, 2021 June 30, 2021 Mar. 31, 2021 Dec. 31, 2020 Dec. 31, 2021 Dec. 31, 2020 Net interest income $2,862 $2,856 $2,581 $2,348 $
Slide 26: Non-GAAP to GAAP Reconciliation: Noninterest Expense and Adjusted Efficiency
Appendix: Non-GAAP to GAAP Reconciliation 25 Noninterest Expense excluding Integration Expense and Adjusted Efficiency (non-GAAP) For the three months ended For the year ended $ millions Dec. 31, 2021 Sept. 30, 2021 Dec. 31, 2021 Dec. 31, 2020 Noninterest expense $3,791 $3,587 $13,002 $10,297 Integr
Slide 27: Non-GAAP to GAAP Reconciliation: Adjusted Metrics
Appendix: Non-GAAP to GAAP Reconciliation 26 Adjusted Metrics (non-GAAP) For the year ended Dec. 31, 2021 $ millions, except for ratios and EPS Reported (j) Integration Costs (k) Adjusted (j-k) (non-GAAP) Total revenue (a) $19,211 ($65) $19,276 Noninterest expense (b) 13,002 733 12,269 Pretax, pre-p
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