33 slides from Pnc Financial Services Group, Inc. (the)'s earnings presentation, May 28, 2014
Slide 1: The PNC Financial Services Group, Inc. Investor Meetings Second Quarter 2014
Exhibit 99.1 The PNC Financial Services Group, Inc. Investor Meetings Second Quarter 2014
Slide 2: Cautionary Statement Regarding Forward-Looking Information and Adjusted Information
Cautionary Statement Regarding Forward-Looking Information and Adjusted Information Our presentation includes “snapshot” information about PNC used by way of illustration. It is not intended as a full business or financial review and should be viewed in the context of all of the information made ava
Slide 3: Agenda
Agenda Performance overview Executing our strategic priorities Continued focus on expense management and capital strength 3
Slide 4: PNC's Leading Franchise
PNC’s Leading Franchise (1) March 31, 2014 U.S. Rank Deposits $222B 7 th Assets $323B 7 th Branches 2,703 4 th CO KS ATMs 8,001 3 rd Asset Management TX A top 10 U.S. bank-held wealth manager Corporate & Institutional Retail Banking A leader in serving middle-market, Footprint covering nearly half o
Slide 5: Significant Tangible Book Value Growth
Significant Tangible Book Value Growth Tangible Book Value Per Common Share (1) % change 12/31/2009 to 3/31/2014 PNC $56.33 $26.15 12/31/09 3/31/14 12/31/2009 PNC data has been updated to reflect the first quarter 2014 adoption of Accounting Standards Update (ASU) 2014-01 related to investments in l
Slide 6: Strong Financials
Strong Financials Up 40% Y/Y (1) (2) Financial Drivers FY13 vs. FY12 Growth Revenue 3% Noninterest Income (3) 17% Noninterest Expense (3) (8%) Pretax Pre-Provision 26% Earnings (4) ( 1)Net income from continuing operations. For FY10, this excludes income from discontinued operations of $373 million.
Slide 7: 1Q14 Highlights
1Q14 Highlights Successful first quarter – Continued loan and deposit growth – Reduced expenses – Improved credit quality – Seasonal trends impact Stronger capital position – Pro forma fully phased-in Basel III common equity Tier 1 capital ratio of 9.7% (1) – Capital actions Increased quarterly comm
Slide 8: Strong First Quarter Business Drivers and Results
Strong First Quarter Business Drivers and Results 1Q13-1Q14 1Q13-1Q14 1Q13-1Q14 1Q14 Loan growth (1) Noninterest income growth Expense growth (2) Return on avg. assets Adjusted JPM noninterest income growth was PNC 7% (3) KEY BAC CMA RF USB WFC MTB CMA BAC FITB BBT KEY STI COF BAC RF BBT WFC FITB ST
Slide 9: Revenue Growth and Efficiency Improvement Opportunities
Revenue Growth and Efficiency Improvement Opportunities Strategic Priorities Targeted Outcomes (1) Drive growth in acquired & underpenetrated Expand markets market share Capture more investable assets Deepen relationships Redefine the Retail Banking business Increase Build a stronger fee income Resi
Slide 10: Deeper Penetration in Underpenetrated and Acquired Markets
Deeper Penetration in Underpenetrated and Acquired Markets Total Corporate Banking and AMG sales Deepening client relationships Northeast Midwest Southeast (1) Product Growth Corporate Banking Primary Clients (2) Actual Annualized Actual Annualized Annualized Total Corporate Banking and AMG cross-sa
Slide 11: Strong Performance in Demographically Attractive Southeast Markets
Strong Performance in Demographically Attractive Southeast Markets (1) Retail Banking Corporate & Institutional Banking Total DDA Households (2) Average Total Loans Average Total Loans $6.3 $5.8 Asset Management Group Residential Mortgage Banking Assets Under Referral Sales Loan Origination Volume M
Slide 12: Capturing More Investable Assets
Capturing More Investable Assets AMG - Assets Under Administration (AUA) 1Q14 Highlights Total investable assets opportunity of $1.9 trillion across our existing Retail Banking clients (1) 8% Southeast market represents CAGR $800B (2) potential high net worth investable assets Asset Management Group
Slide 13: Transforming our Retail Banking Model
Transforming our Retail Banking Model Transitioning model based on innovation and premium value Old Model New Model Outcomes Responses Expectations of “free” New checking continuum Changing customer preferences Enhance customer experience and brand Reduced revenue sources Value-based revenue model E
Slide 14: Retail Banking – Redefining the Branch Network
Retail Banking – Redefining the Branch Network Successfully migrating customers to self-service – ATM/Mobile usage increasing Total deposit transactions 1Q13 1Q14 Retail Banking Headcount (HC) Digital Consumer Customers (1) 12 month change (Dec. 2012 vs. Dec. 2013) Investment Professionals Call Cent
Slide 15: Retail Banking – Redefining the Branch
Retail Banking – Redefining the Branch Investing in technology Current technology initiatives – Video advisor – Employee tablet SM – Video wall – DepositEasy ATMs New branch formats – Flexible spaces – New sales and services focus Future technology initiatives – Assisted ATM – Video teller – Instant
Slide 16: Building a Stronger Residential Mortgage Banking Business
Building a Stronger Residential Mortgage Banking Business 2014 industry volume (1) expected to be lowest since 1997 Closing purchase applications faster than industry (2) (5) PNC outpacing industry Continued upward trend in customer loyalty (3) (6) 1Q13 vs. 1Q14 Change in Total Fundings (4) (1) Sour
Slide 17: Building Best In Class Technology & Operations
Building Best In Class Technology & Operations Establishing a foundation to support our scale and effectively respond to rapidly changing environments Providing ability to grow with existing investments Creating a competitive advantage – improved operational efficiency and business agility Focused P
Slide 18: Continued Focus on Expense Management
Continued Focus on Expense Management Noninterest Expense Trends (1) Highlights Decreased expense reflected our disciplined expense management Down 8% Efficiency ratio (3) of 60% in 1Q14 2014 Expense Management Opportunities Down 4% (2) Lowering service delivery costs Branch reconfiguration and cons
Slide 19: Capital Strength Reflected in Stress Test
Capital Strength Reflected in Stress Test Company Reported Basel I Tier 1 Basel I Tier 1 Common Ratio (9/30/13) Common Ratio Variance (1) BBT USB STI PNC FITB KEY CMA RF WFC MTB JPM COF BAC Source: The Board of Governors of the Federal Reserve Dodd-Frank Act Stress Test, March 2014: Supervisory Stre
Slide 20: Strong Capital Build
Strong Capital Build Strong Capital Position Provides Capital Flexibility Highlights Capital priorities: – Build capital to support client growth and business investment – Maintain appropriate capital in light of economic uncertainty – Return excess capital to shareholders, subject to the CCAR proce
Slide 21: Relative Returns and Valuation
Relative Returns and Valuation ROAA (1) ROACE (2) Current 3/31/14 3/31/14 Price/TBV (3) WFC 1.59% USB 14.4% USB 2.76x COF 1.57 WFC 14.2 MTB 2.23 USB 1.55 COF 10.8 WFC 2.01 PNC 1.35 PNC 10.4 BBT 1.98 BBT 1.27 BBT 10.3 COF 1.58 RF 1.08 JPM 9.7 FITB 1.51 KEY 1.07 KEY 9.4 PNC 1.48 MTB 1.06 FITB 8.9 STI
Slide 22: Key Takeaways
Key Takeaways Strong financial results Strategic priorities provide opportunities for continued profitability driven by revenue growth and improved efficiencies Capital flexibility positions us well for returning capital to shareholders 22
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Slide 24: Cautionary Statement Regarding Forward-Looking Information
Cautionary Statement Regarding Forward-Looking Information Appendix 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 informa
Slide 25: Cautionary Statement Regarding Forward-Looking Information (continued)
Cautionary Statement Regarding Forward-Looking Information (continued) Appendix PNC’s ability to take certain capital actions, including paying dividends and any plans to increase common stock dividends, repurchase common stock under current or future programs, or issue or redeem preferred stock or
Slide 26: Cautionary Statement Regarding Forward-Looking Information (continued)
Cautionary Statement Regarding Forward-Looking Information (continued) Appendix 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 third-party insurance, derivatives, a
Slide 27: Notes
Notes Appendix Explanatory Notes (A) Tangible book value per common share calculated based on tangible common shareholders' equity (common shareholders' equity less goodwill and other intangible assets, other than servicing rights, net of deferred tax liabilities on such intangible assets) divided b
Slide 28: Transitional Basel III and Pro forma Fully Phased-In Basel III Common Equity Tier 1 Capital Ratios
Transitional Basel III and Pro forma Fully Phased-In Basel III Common Equity Tier 1 Capital Ratios Appendix As a result of the staggered effective dates of the final U.S. capital rules issued in July 2013, as well as the fact that PNC remains in the parallel run qualification phase for the advanced
Slide 29: Transitional Basel III and Pro forma Fully Phased-In Basel III Common Equity Tier 1 Capital Ratios
Transitional Basel III and Pro forma Fully Phased-In Basel III Common Equity Tier 1 Capital Ratios Appendix Transitional Basel III Pro forma Fully Phased-In Basel III Dollars in millions Mar. 31, 2014 Mar. 31, 2014 Dec. 31, 2013(a) Mar. 31, 2013(a) Common stock, related surplus, and retained earning
Slide 30: Tangible Book Value per Common Share
Tangible Book Value per Common Share Appendix Tangible book value per common share is a non-GAAP financial measure and is calculated based on tangible common shareholders’ equity divided by period-end common shares outstanding. We believe this non-GAAP financial measure serves as a useful tool to he
Slide 31: Non-GAAP to GAAP Reconcilement
Non-GAAP to GAAP Reconcilement Appendix For the year ended $ in millions Dec. 31, 2013 Dec. 31, 2012 % Change Net interest income $9,147 $9,640 -5% Noninterest income $6,865 $5,872 17% Total revenue $16,012 $15,512 3% Noninterest expense (1) ($9,681) ($10,486) -8% Pretax pre-provision earnings (2) $
Slide 32: Non-GAAP to GAAP Reconcilement
Non-GAAP to GAAP Reconcilement Appendix For the three months ended $ in millions Mar. 31, 2014 Mar. 31, 2013 % change Asset management $364 $308 Consumer services $290 $296 Corporate services $301 $277 Residential mortgage $161 $234 Deposit service charges $147 $136 Net securities gains $10 $14 Net
Slide 33: Peer Group of Banks
Peer Group of Banks Appendix The PNC Financial Services Group, Inc. PNC BB&T Corporation BBT Bank of America Corporation BAC Capital One Financial, Inc. COF Comerica Inc. CMA Fifth Third Bancorp FITB JPMorgan Chase JPM KeyCorp KEY M&T Bank MTB Regions Financial Corporation RF SunTrust Banks, Inc. ST