Pnc Financial Services Group, Inc. (the) · NYSE:PNC
Pnc Financial Services Group, Inc. (the) — Q2 2022 Earnings Presentation
23 slides from Pnc Financial Services Group, Inc. (the)'s earnings presentation, Jul 15, 2022
Slide 1: Second Quarter 2022 Earnings Conference Call
Second Quarter 2022 Earnings Conference Call July 15, 2022 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: Second Quarter 2022 Highlights
Second Quarter 2022 Highlights Net Income Solid financial performance $1.5 billion – Generated strong revenue growth with higher net interest and noninterest income Diluted Earnings Per Share – Net interest margin expanded 22 basis points $3.39 Adjusted Diluted Earnings Per Share – Well-controlled
Slide 4: Executed Conversion…Now Focused on Growing the Franchise
Executed Conversion…Now Focused on Growing the Franchise Announced agreement Received regulatory Closed Completed Completed actions to realize to buy BBVA USA approval for acquisition acquisition conversion $900 million of cost saves November 2020 May 2021 June 2021 October 2021 Year-End 2021
Slide 5: Balance Sheet: Well-Positioned Balance Sheet
Balance Sheet: Well-Positioned Balance Sheet 2Q22 vs. 1Q22 2Q22 vs. 2Q21 Average balances; $ billions 2Q22 $ Chg. % Chg. $ Chg. % Chg. Commercial $207.6 $12.0 6% $31.8 18% Consumer $97.2 $2.1 2% $17.4 22% Total loans $304.8 $14.1 5% $49.2 19% Investment securities $134.7 $0.8 1% $26.2 24% Federal Re
Slide 6: Balance Sheet: Supporting Customer Loan Growth
Balance Sheet: Supporting Customer Loan Growth Well-Positioned to Execute Linked Quarter Change in Average Loans 5% Growth 310 Executing on BBVA USA Opportunities ($1.2) $304.8 BBVA USA Exits and PPP Forgiveness $304.8 PPP Acquisition 300 Closed 6/1/21 $291.3 $288.9 $290.7 +$13.2 Forgiveness $303.5
Slide 7: Balance Sheet: Strong Core Deposit Base
Balance Sheet: Strong Core Deposit Base Composition of Deposit Portfolio: 2Q22 Average Linked Quarter Change in Average Deposits ~70% of Interest-Bearing Deposits are Consumer Deposits Loan to Deposit Ratio of 71% Remains Low 455 $453.3 +$1.5 Consumer ($8.3) $446.5 $206.0 Commercial 445 Consumer Int
Slide 8: Balance Sheet: Well-Positioned Securities Portfolio
Balance Sheet: Well-Positioned Securities Portfolio Average Securities Linked Quarter Change in Period End Securities Reinvesting Maturities at Higher Rates 60% of Securities are Designated as HTM $134.7 + $3.4 ( $3.1 ) 140 $133.9 3.50 % $132.4 $132.7 $127.8 $120.6 $132.3 $68.1 $20.1 Net Purchase Fa
Slide 9: Income Statement: Generated 7% Positive Operating Leverage
Income Statement: Generated 7% Positive Operating Leverage % Chg. 2Q22 vs. $ millions 2Q22 1Q22 2Q21 1Q22 2Q21 Revenue $5,116 $4,692 $4,667 9% 10% Noninterest expense 3,244 3,172 3,050 2% 6% Pretax, pre-provision earnings (non-GAAP) $1,872 $1,520 $1,617 23% 16% Provision for (recapture of) credit lo
Slide 10: Income Statement: Diversified Business Mix
Income Statement: Diversified Business Mix Total Revenue Details of Revenue 22 Basis Points of Net Interest Margin Expansion Net Interest Income +9%; Noninterest Income +9% 600 0 2Q22 vs. 1Q22 $ millions 2Q22 1Q22 $ Chg. % Chg. $5,197 $5,127 $5,116 4.30 % Net interest income $3,051 $2,804 $247 9% 50
Slide 11: Income Statement: Focused On Controlling Expenses
Income Statement: Focused On Controlling Expenses Noninterest Expense Noninterest Expense Detail Expenses Remain Well Controlled; +2% Linked Quarter 2Q22 vs. 1Q22 $3,791 $3,587 2Q22 1Q22 $ Chg. % Chg. $ millions $3,172 $3,244 $3,050 $3,352 $3,400 $3,235 Personnel $1,779 $1,717 $62 4% $3,157 $2,949 7
Slide 12: Credit: Strong Credit Quality Performance
Credit: Strong Credit Quality Performance Credit Quality Metrics Nonperforming Loans (NPLs) 2Q21 3Q21 4Q21 1Q22 2Q22 NPLs / Total Loans (Period End) 0.94% 0.87% 0.86% 0.78% 0.66% $2,779 Delinquencies / Total Loans (Period End) 0.47% 0.51% 0.69% 0.58% 0.49% NCOs / Average Loans 0.48% 0.11% 0.17% 0.19
Slide 13: Outlook: Third Quarter 2022 Compared to Second Quarter 2022
Outlook: Third Quarter 2022 Compared to Second Quarter 2022 ($ millions; except average loans, $ billions) 2Q22 3Q22 Guidance Average loans $304.8 Up 1% – 2% Net interest income $3,051 Up 10% – 12% Noninterest income $2,065 Down 3% – 5% Revenue $5,116 Up 4% – 6% Noninterest expense $3,244 Stable to
Slide 14: Outlook: Full Year 2022 Compared to Full Year 2021
Outlook: Full Year 2022 Compared to Full Year 2021 ($ millions; except loans, $ billions) 2021 2022 Guidance Average loans $268.7 Up approximately 13% Period-end loans (as of 12/31/21) $288.4 Up approximately 8% Revenue $19,211 Up 9% – 11% Noninterest expense excl. integration expense (non-GAAP) $12
Slide 15: Appendix: Cautionary Statement Regarding Forward-Looking Information
Appendix: Cautionary Statement Regarding Forward-Looking Information 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 ratios,
Slide 16: Appendix: 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 17: Appendix: Cautionary Statement Regarding Forward-Looking Information
Appendix: Cautionary Statement Regarding Forward-Looking Information Legal and regulatory developments could have an impact on our ability to operate our businesses, financial condition, results of operations, competitive position, reputation, or pursuit of attractive acquisition opportunities. Re
Slide 18: Appendix: Well-Reserved for the Current Environment
Appendix: Well-Reserved for the Current Environment 600 0 4.00 % Allowance for Credit Losses (ACL) 3.50 % 550 0 $5,197 ($114) +$60 $5,143 3.00 % 500 0 Portfolio Economic / 2.50 % Changes Qualitative Factors 450 0 2.00 % 1.76% 1.65% 1.50 % ACL to Total Loans 400 0 $ millions ACL to Total Loans 1.00 %
Slide 19: Appendix: Integration Costs Incurred Since Announcement
Appendix: Integration Costs Incurred Since Announcement Acquisition Integration Cost Update Approximately 99% of Integration Costs Incurred as of 6/30/22 Total Since $ millions 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 Announcement Write-offs $--- $--- $120 $--- $--- $--- $--- $120 Contra-revenue Fee incom
Slide 20: Appendix: Non-GAAP to GAAP Reconciliation
Appendix: Non-GAAP to GAAP Reconciliation Tangible Book Value per Common Share (non-GAAP) For the three months ended $ millions, except per share data June 30, 2022 March 31, 2022 June 30, 2021 Book value per common share $101.39 $106.47 $120.25 Tangible book value per common share Common shareholde
Slide 21: Appendix: Non-GAAP to GAAP Reconciliation
Appendix: Non-GAAP to GAAP Reconciliation Adjusted Income Statement Results (non-GAAP) For the three months ended $ millions, except per share data June 30, 2022 March 31, 2022 June 30, 2021 Net interest income $3,051 $2,804 $2,581 Noninterest income 2,065 1,888 2,086 Total Revenue $5,116 $4,692 $4,
Slide 22: Appendix: Non-GAAP to GAAP Reconciliation
Appendix: Non-GAAP to GAAP Reconciliation Taxable-Equivalent Net Interest Income (non-GAAP) For the three months ended $ millions June 30, 2022 Mar. 31, 2022 Dec. 31, 2021 Sept. 30, 2021 June 30, 2021 Net interest income $3,051 $2,804 $2,862 $2,856 $2,581 Taxable-equivalent adjustments 25 22 22 22 1
Slide 23: Appendix: Non-GAAP to GAAP Reconciliation
Appendix: Non-GAAP to GAAP Reconciliation Noninterest Expense excluding Integration Expense and Adjusted Efficiency (non-GAAP) For the three months ended For the year ended $ millions June 30, 2022 Mar. 31, 2022 June 30, 2021 Dec. 31, 2021 Noninterest expense $3,244 $3,172 $3,050 $13,002 Integration
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